Starting a new business venture takes a lot of dedication and determination. Although opening a jet ski rental business seems straightforward, there are key details you should understand before you jump in.
From marketing and insurance, to choosing a location and purchasing your fleet of jet skis, launching a rental business is more challenging than it looks. Here’s everything you need to know about how to open a jet ski rental store.
How Does a Jet Ski Rental Business Work?
A jet ski rental business generates income by renting out jet skis to beach-goers during the summertime. Jet ski rental businesses typically charge their customers hourly.
You may be wondering, how much does a jet ski rental business make? Here is an example of a pricing structure that determines jet ski rental profitability:
- 1 Hour: $100
- 2 Hours: $180
- 4 Hours: $300
- Full-Day: $500
- Full Weekend: $800
- Full Week: $1,300
As you can see, you can charge your customers depending on how long they want to rent the jet ski. Location also makes a difference. Jet ski rental businesses at a busy resort area or beach can charge more than those located at a quiet lake or marina.
With a jet ski rental business plan, choosing an optimal location is half the battle. The other half is actually setting up a sustainable business and running marketing campaigns.
If you are wondering, “is a jet ski rental business profitable?” or “are jet ski rentals a profitable business?” the answer is yes.
What Is a Jet Ski Rental Company’s Business Model?
When setting up a jet ski rental business, you’ll need to complete the same steps as any other business.
These steps include:
- Writing a business plan and generating jet ski business ideas
- Choosing and renting a location
- Registering your business
- Creating a website
- Renting an office facility
- Purchasing jet skis and safety equipment
- Hiring employees
- Creating a maintenance schedule
- Marketing your jet ski rental business name
Water sports are considered to be a luxurious activity and are increasing in demand over the years. Launching a rental jet ski business may be an excellent way to generate hands-off income once the business is up and running.
What Are the Costs of Running a Jet Ski Rental Business?
Since jet ski rental companies vary significantly in size, the cost of running the business depends on a few factors. The determining factors include:
- How many employees do you have
- Office rent
- Coast rent
- Utility bills
- Maintenance and repair
- Fuel costs
- Weekly advertising campaigns
It’s important to take all of these costs into consideration.
How Much Does it Cost to Start a Small Jet Ski Rental Business?
The most expensive aspect of starting a jet ski rental business model is purchasing the jet skis. You’ll first need to decide how many jet skis you want to have available. Remember that you’ll also need an additional jet ski for your crew members to use when customers travel outside of the designated boundaries.
In general, jet skis range anywhere from $4,000 to $30,000. The exact price depends on what model it is and if it’s new or used. Purchasing used jet skis from a reputable dealer is a great way to cut the initial costs of opening a jet ski rental business.
Other costs include:
- Registering a business entity: ~$750
- Legal expenses for obtaining permits and licenses: ~$1,500
- Marketing campaign expenses: ~$10,000
- Insurance policy coverages (workers’ compensation, general liability, property-casualty): ~$30,000
- Accounting, CRM, and payroll software: ~$3,000
- Leasing a facility for the company: ~$20,000
- Operational costs (employee salaries, utility bills, etc.): ~$15,000
- Website creation: ~$1,000
Keep in mind; these estimates allow you to see the full picture of launching a jet ski rental business.
How Can My Jet Ski Rental Business Reach Customers?
The key to a successful jet ski rental company is choosing a location where water sports are in demand. For this reason, it’s extremely important to conduct thorough research as you’re choosing a location.
Many open bodies of water don’t allow jet skies because of shallow waters and protected marine life. Furthermore, you’ll need to acquire the proper licenses and insurance when starting a jet ski rental business.
These certifications vary from state to state, so it’s vital to conduct proper due diligence for your specific location.
In terms of how to grow a jet ski rental business, you’ll need to use a combination of offline and online marketing strategies. Offline marketing campaigns include:
- Displaying flyers in hotels and resorts
- Offering commission when tour guides bring customers
- Partnering with travel agents to add jet skis to the travel package
- Promoting your jet ski rental company through local newspapers, radio, TV stations, and travel magazines
Online marketing campaigns include:
- Running social media ads
- Using social media to promote your offers organically
- Using customer testimonials on your website
- Sending out email campaigns
By combining online and offline strategies, you can get the word out about your business.
What KPIs Can I Use to Understand How Well My Jet Ski Rental Business Performs?
Tracking your KPIs or key performance indicators is the best way to understand if your business is running efficiently.
1. Washout Percentage
Washout percentage is a jet ski business KPI that determines how much revenue each jet ski generates for your business. Take the total rental income for each jet ski and subtract the original purchasing price, carrying costs, and maintenance expenses over its lifetime.
The washout percentage will help you find the real-world profitability of each jet ski. It also helps you plan for the future by showing you what sale price to look for on a similar jet ski.
2. Income-to-Maintenance Ratio
It’s important to avoid keeping jet skis that require constant maintenance. Faulty jet skis make you lose out on profit when they’re being repaired. Customers will also be upset when their jet ski stops working as they’re using it.
So monitor your income-to-maintenance ratio to see how much each jet ski earns compared to how much it costs to maintain it.
3. Schedule Adherence
Schedule adherence is how well customers adhere to the reservations they book. For example, if only 60% of customers show up for their reservations, you may want to deploy a more extensive scheduling process with deposits.
The Importance of Reservation and Inventory Management
In the modern age of the internet, it’s important to offer comprehensive and convenient reservation services for your customers. Potential customers should be able to easily book a reservation on your website without having to call your customer service line.
Furthermore, it’s essential to avoid inventory issues where a customer books a reservation during a particular time when your jet skies are already completely booked.
An effective reservation management system is designed to automatically manage reservations and bookings. It automates a lot of tasks you’d have to complete by hand and prevents costly mistakes.
Start a Jet Ski Rental Business Today
Starting a jet ski rental business is a great way to pursue a full-time venture that generates enough profit to live a comfortable life. However, you most likely need help if you haven’t had any entrepreneurial experience before.
Luckily for you, Quipli offers advanced software that makes it easy for you to accept customer orders and receive online payments. Furthermore, we provide unmatched control over rental inventories and easy scheduling.
Contact Quipli Rental Software today to get started on a business venture that has the potential to change your life.