The business of boating – how do chartering businesses work?
If you aren’t familiar with the ins and outs of a boat, then chances are you aren’t familiar with a chartering business. Getting a good understanding of a chartering business is a great idea if you are planning a holiday, interested in a business opportunity or simply keen to see more of the open water. There are many facets to a chartering business you may want to know, depending on what your end goal is. No matter what your interest, take the time to check out this simple guide to how chartering businesses work.
Ease the pressure
A chartering business is a great way to ease the pressure on your back pocket, especially if you already own or are interested in purchasing a boat. Boat chartering means using your asset for both private and commercial purposes, like tours or even accommodation. Chartering is the term used to advertise a vessel that is available for hire on any number of different levels. Whether you run a guided tour, overnight stays or even simply offer the vessel and nothing else. A chartering business is a great way to subsidise the monetary investment required to maintain your boat, which will help ease the pressure on your investment and enhance your time on the water.
Licenses and insurance
A fundamental part of any business, whether it be on land or the open water, is having the right permission, licenses and insurance. A chartering business requires a captain who has a license to carry any given number of passengers. In addition to being able to carry passengers, you need to protect yourself against any potential liability. Ensure you have the necessary insurances, such as public liability and property insurance. If your boat is damaged, that is a potential loss of income, so being protected is the best way for any charter business to operate. Depending on whether you have the capability and vessel to do overnight stays, you may need to investigate any additional licenses or permissions required.
Chartering businesses can work on a number of different fee arrangements. You can choose between a ‘per passenger’ fee, or alternatively you may want to opt for a packaged approach. Packaging your services may help with marketing and advertising, but if you end up with the top end of group sizes, your business may become unprofitable. The fee arrangement can be a mix of both and as a lot of charter businesses do, you can choose to tailor package to individual requirements. This approach does require a bit more effort in managing customer contact, but it will ensure success in the long run and give you a greater understanding of your business.
Depending on your skill set and ability, you may want to consider additional services. A lot of charter businesses utilise their boat for more than just lounging on the open water. Additional services and activities such as fishing, diving or catering are great diversification tools to help a charter business stand out. These generally work by creating unique experience packages for customers. Of course, you will need the relevant licenses and equipment to make this happen, but the opportunity to market is much greater.
A chartering business is a great way to make use of an asset that is otherwise dormant for potentially long periods of time. If you already own or are considering buying a boat then it is a great way to ease the pressure on your back pocket. It also stands alone as a great business opportunity for a curious entrepreneur as well. Offering supplementary services and learning new skill sets are all ways in which you can create a profitable boat charter business.