Rental Business Startup Advice

So youíre considering starting a rental business? There are many factors to consider before you go and spend lots of money on equipment. I'll try to cover the most important ones. These opinions were gained from my experiences in/around various PWC Rental and Tour businesses in South Florida but should be applicable at most other locations. Here goes !

  1. LEGAL ITEMS - You should be incorporated to protect yourself from personal liability in case of an accident. Good insurance is also a must ! You need to have a good rental contract that covers just about every conceivable problem or situation. In a contract you need to address liability in case of an accident, terms if the customer is late returning, and coverage for damage (don't forget time for lost rentals in case the watercraft is rendered inoperable in an accident or swamping/grounding).

  2. LOCATION - Your location is very important to the success of a rental operation. If you are considering a tourist-type area, you need to find a location with good traffic and not much competition. This is becoming harder every day !

  3. LAWS - You need to familiarize yourself with the rules and regulations governing the rental and operation of PWC in the area you are considering. I have personally seen people go and spend a fortune on equipment, just to find that they can't operate in the marina or beach they had their eye on! You may also need to get a permit or municipal license to operate in the town/area you choose. Make sure you know those hidden costs in advance!

  4. NAVIGATION - Once you have chosen your location, you need to decide where you are going to allow your customers to ride. They need sufficient area away from your rentals, other rentals, and other boat traffic. Your customers should be able to find their way back to you, and should have sufficient space (wide and deep!) to prevent running into anything. Quite a few areas now restrict PWC to designated areas, so make sure to research that before buying your equipment too!

  5. SAFETY - You need to find out what safety equipment the Coast Guard requires for the location you have chosen. When I was in the business, I also went even farther than recommended equipment. All Sea Doo watercraft had signal flares and an anchor onboard, and when I sent out a single rider, I even provided a cellular phone in a waterproof case (West Marine sells them). Life jackets must be Coast Guard approved, and should have 4 or more buckles and wide straps for impact resistance.

  6. COMPETITION - Check out the competition in the area you are considering. See where they ride, how much they charge, and see where they advertise for business. It is even a good idea to go and rent from a nearby business to see how they operate. I have always believed that working with the competition is much more beneficial than having problems with them. Once you are in business, a suggestion would be to go and introduce yourself to your competition. Let them know that you don't want to step on their toes and you can save yourself a battle for customers. Nothing is worse than having a price war when you first start up ! In my past dealings, I had an agreement with a nearby watersports company that was beneficial to both of us. If I had too many customers (or people I couldn't accommodate), I sent them to him. He did the same.

  7. ADVERTISING - I have found that nothing works as well as a coupon or discount for generating business. I found that I could have a higher than expected rental rate, then offer 15 or 20 percent off coupons, and I had great response! I also benefited from the occasional customer who would walk up and pay full price! As for the yellow pages, I have found that an ad is important, but in this case, the size of the ad doesn't really matter. Most rental customers will call every rental business and price shop, so be prepared to give a discount. I found that if I could get a customer on the phone, I could offer them incentives for choosing me over my competition. The best incentive you can offer is extra time added to the rental. The reason I say this is because on a one or two hour rental, if you offer an additional 15 minutes, the customer will usually forget or be too tired to use the extra time!

  8. EQUIPMENT -I wish that PWC manufacturers still made the slow skis of the early/mid 90ís! Why? They were the best skis for rentals! The older models were slow (40mph), so novice riders didnít get in trouble as often as with the new 55+ mph skis offered today. With the Sea Doo 587/657 Rotax, a renter could ride for 4 hours before adding 8 gallons of gas. Now youíre lucky to get 3 hours on 15 gallons (not to mention oil used)! Finally, parts were cheap and the rotary motors arenít as temperamental as the RAVE motors.
    Since this site is a Sea Doo oriented site, you probably know what I'm going to say next. There are several reasons why I would choose Sea Doo watercraft over other brands. As for other watercraft, I am primarily going to compare the pros and cons of Sea Doo to Yamaha, because they are the rental craft of choice for many operations across the country. I have owned and rented both brands and here's why I recommend the Sea Doo (used GTS in mid 90ís then GTI late 90ís):

    A. Price. Sea Doo dealers offer better discounts to rental businesses than Yamaha (as of late 90ís).
    B. Stability. The Sea Doo GTI/GTX is more stable and rides better in rough conditions than Yamaha. Two people can put their weight on one side of a GTI/GTX and it won't roll. Try that on most Yamaha and you'll be swimming!
    C. Storage. The GTI/GTX has a small and large front storage compartment which is easy to access.
    D. Maintenance. Yamaha has been a reliable ski as far as maintenance, with one exception. When water enters the engine of a Yamaha (which will happen at some point in your experiences with rentals), the reed valves will be ruined if the motor is cranked (which will happen too!). This is a problem not only because of the cost (approx. $100 to fix), but because of the down time. If water enters a Sea Doo, in most cases no damage will occur due to the fact that Sea Doo (GTI with 717) uses a durable rotary valve.
    E. Fuel. Sea Doo watercraft are better on fuel (as of late 90ís) than Yamaha. On a 1 hour rental, I found that Sea Doo used approximately 1 gallon less than Yamaha. I know that saving 1 gallon on an hour rental doesn't seem big now, but think about the long term savings.

    Whatever Sea Doo model you choose, try to go with 1993 or newer since that's the year they really started working the bugs out of the electrical system. The GTS/GTX 1st gen hull style also has an optional touring seat (getting hard to find nos or used) that really makes the ride nice too!

    If I were starting a business again, I would go with the '94 orí 95 GTX models. The reason is they ride nice and have a 657 that doesn't use much fuel or oil. They also have a bronze pump that is really durable in case rocks get run through it (it will happen). They are both similar looking (green seat/hood) too so the fleet would match. The 1995 would be the preferable one since it has fixed mirrors and the styling is a little more modern than the 1994. Also, in 1996 they started using DESS security lanyards which can be a pain in rentals.
    The only problem with renting older models is if you have any competition renting new ones, people will want them instead. If you consider newer ones, the DI models (a but expensive & temperamental) have an optional learning key that restricts speeds which is nice in rentals. I personally would stay away from the RAVE 787 or larger engines since they are a bit more temperamental and use more fuel/oil. If you want a newer looking 3 pass ski, you could get 1997 or newer GTI models (717) and put GTX graphics/body parts on them to update to look like up to 2002 models. Most people won't know the difference!

If you have any other suggestions, e-mail me.