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1.0 Executive Summary
The purpose of this business plan is to showcase the development and continued expansion of a yacht charter service based in Miami, Florida. Yacht Charter Service, LLC (“the Company”) was founded by John Peters. The business will arrange for all facets of yacht travel on behalf of its client base. The Company, in order to be a preferred provider of chartering services among wealthy people, will implement a number of marketing strategies to properly position the business in this competitive market. At this time, the Company is seeking $300,000 of capital from an investor in order to launch operations.
1.1 The Services
As stated above, the Company will be actively involved with providing access to a number of different yachts and marine vessels that are operated by third party companies. Management has already begun to develop relationships with companies that provide yachts on a global basis. This will allow Yacht Charter Service, LLC to provide its services to people anywhere in the world.
In regards to fees, the Company will receive a commission of 10% to 15% of the face value of the entire cost of the charter. These fees will depend on the total amount spent with a smaller percentage commission highly expensive charters. At the onset of operations, the Company will have all the necessary licensure to operate in this capacity.
The third chapter of this business plan will document the service and operations of this yacht chartering business.
1.2 Financing
Management intends to work with a private investor in regards to securing the capital needed to launch operations. A total investment of $300,000 is needed. The terms of this investment between the funding source and the Yacht Chater Service are to be determined. The Company will principally use the funds for the following:
- Initial marketing towards a wealthy demographic base
- Working capital
- Capital for developing ongoing relationships with yacht and marine vessel operators
Moving forward, Yacht Charter Service could easily secure additional capital as needed given the highly predictable income from providing charters on a monthly basis. The global nature of operations will further make the business a strong candidate for this type of capital.
1.3 Mission Statement
Management’s mission is to provide its client base with outstanding ocean experiences that they will remember for a lifetime.
1.4 Management Team
John Peters has more than 15 years of experience in the field of yacht chartering. He will be able to develop an expansive client base of wealthy individuals that will continually use the Company for their chartering arrangement needs.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will continue to expand its relationship with yacht and marine vessel operators. This will provide a greater degree of service to clients as they will be able to select from a number of different vessels for their travels. This will also allow the Company to provide service among all major global markets.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Yacht Charter Service, LLC.
2.2 Required Funds
An investment from a private source will be secured to launch the operations of this enterprise. The funding will be used as follows:
2.3 Investor Equity
Management intends to sell a 50% interest in the business in exchange for the capital sought in this document.
2.4 Management Equity
John Peters, once the capital has been secured, will have a 50% ownership stake.
2.5 Exit Strategy
The demand for yacht and boat chartering services that are profitable is immense. Given the economic security of these businesses (as they cater to wealthy people), the P/E ratio is usually four to six times earnings. Management has no intention of divesting the business within the first three years of operation.
3.0 Operations
As stated in the executive summary, the Company will be actively involved with providing a wide range of yacht charters among a number of different vessel sizes. The Company, through its expansive marketing apparatus, will have access to hundreds of different types of boats, yachts, and marine vessels on a global basis. The Company will provide services for charters of all sizes ranging from $10,000 to short-term weekend getaways to over $250,000 for week long excursions on massive yachts. The Company will not directly own any vessel and will only work in a chartering capacity.
The business will hire a number of agents that will work on behalf of the business in order to effectively place clients with the yacht of their choice. The business will also coordinate its efforts with third-party yacht charters for co-brokering opportunities. This is important for a few reasons. First, it will allow Yacht Charter Service to more effectively source vessels on behalf of clients. Second, it will provide ongoing opportunities for the Company to foster ongoing relationships with similar companies in this field. Third, it will significantly boost the brand name awareness of this business within this industry.
The Company’s fees will continue to range from 10% to 15% of the total face value of the transaction. Management anticipates that the average charter fee will be $8,000.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
A this time, the economic climate within both the United States the world is moderate. The issues stemming from the COVID-19 pandemic have greatly subsided, and the world economy has experienced substantial growth over the past two years. Interest rates as well as the inflation rate have declined. It is expected that there will be continued and ongoing improvement to the economy over the next three years.
Yacht charter services are relatively immune from negative changes in the economy. This is principally due to the fact that these business address the travel needs of wealthier people. Given this wealth, they are less swayed by negative changes in the economy. Only a severe and sustained global recession would impact the Company’s ability to operate at a profit.
4.2 Industry Analysis
Globally, there are approximately 2,000 companies that arrange for marine vessel, boat, and yacht chartering services. Each year, these entities collectively generate nearly $20 billion of revenue.
The wealth among the top 1% of the world’s population continues to expand. The demand for luxury services, like yacht chartering, will continue to remain strong among these individuals. The future growth rate of this industry will be similar to that of the global economy as a whole.
4.3 Customer Profile
Among individuals that will use the Company’s services, the following profile is noted:
- Annual household income in excess of $750,000
- Will spend $10,000 to $20,000 on their yacht charter
- Lives within 100 miles of the East or West Coast
For corporations that will use the Company’s services, the following profile will be used within the Yacht Charter Service’s marketing operations:
- Annual revenues exceeding $20 million
- Will spend $20,000 to $250,000 on their yacht charter
- Is using the charter for client entertainment or for executive corporate retreats
In this section, you can refine the demographic analysis specific for the niche that you are seeking to develop in this industry. A major focus of your research should be on the income and wealth of your target market.
4.4 Competition
Yacht chartering is a competitive industry. As such, these entities must find ways to differentiate themselves from other market agents. Most importantly, this yacht charter business will focus on providing broad access to a number of vessels on a global basis. This will provide the Company with a strong differentiating factor. As part of the competitive analysis, you should determine which market agents will be your direct competition. This includes examining their advantages, estimated revenues, estimated number of employees, and other corporate attributes.
5.0 Marketing Plan
Once a yacht charter service establishes an ongoing client base of wealthy individuals and corporations, the ongoing marketing needs tend to decline unless the entrepreneur wants to expand operations. Additionally, the marketing plan specific to this type of business should focus heavily on developing a reputation for luxury and cost effectiveness.
5.1 Marketing Objectives
- Develop a content rich website that showcases the types of yachts and charters that can be acquired through the business.
- Maintain ongoing relationships with third party yacht charter companies as well as travel agencies.
- Use targeted social media advertising among the wealthy demographics discussed earlier.
5.2 Marketing Strategies
The Company’s website will list all available yachts, vessels, and watercraft available for chartering through the business. This website will also feature numerous videos that showcase the operations of the business. Management will work with a widely recognized web development firm in order to provide users with a state-of-the-art content viewing experience when they bring up the Company’s website.
Management will work with a widely recognized advertising agency in order to place half-page and full-page advertisements among lifestyle magazines, financial publications, medical journals, and other publications that are frequently ready by wealthier people. This will further create a globally known name for Yacht Charter Service, LLC.
The Company will use targeted social media advertising among people that have recently conducted searches for yacht/boat charters. These ads will be targeted among people that have a median household income in excess of $500,000.
The Company will also maintain ongoing relationships with travel agencies and other yacht chartering companies. In regards to travel agencies, the Company will be able to provide this service in tandem with travel firms that do not have their own internal boat/yacht chartering division. By partnering with these entities, the Company will further generate a highly predictable stream of business. Partnerships with other yacht chartering companies will further allow the business to have reciprocal business. In some cases, these entities will be able to have revenue sharing arrangement with the Company when specialized services are needed.
5.3 Pricing
The business will charge 10% to 15% of the total charter from each client. Additional fees may be charged for specialized excursion services.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
- The Company will acquire $300,000 of investment capital.
- The principal use of these funds will be for initial marketing and working capital purposes.
7.2 Sensitivity Analysis
The Company’s revenues are only modestly sensitive to negative changes in the economic climate. As has been one of the central points of this business plan, the Company is catering to the needs of wealthy people. Given their immense incomes and assets, they will able to afford yacht charters at all times. This will greatly contribute to the continued economic stability and viability of this business.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
