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1.0 Executive Summary
Boat Rental Service, LLC (“the Company”) will provide small boats, jet skis, wave runners, and other watercraft for rent from its location in Key West, Florida. At this time, the Founder (Michael Rivers) is seeking $500,000, via an SBA loan, to commence operations. The business will continually expand its fleet of boats and watercraft for rent on a yearly basis. As Key West is a major tourist destination, the business will operate on a year-round basis.
1.1 The Services
The business will generate substantial per hour fees from rental of its watercraft. A major focus of these operations will be on people that want to enjoy fishing excursions. The business will maintain in-house maintenance operations in order to ensure that the fleet is fully operational at all times. The business will coordinate its marketing efforts with area hospitality businesses for referrals.
In addition to the rental of boats, the Company will provide guided wave runner tours. This will produce substantial fees on a daily basis. The Company will have a fleet of 15 wave runners that will be available for both rental and touring purposes.
The third section of this business plan will document the operations of Boat Rental Service, LLC.
1.2 Financing
Management is seeking $500,000 via a loan. This document assumes that the Company will receive a 10 year loan carrying an 8.25% interest rate. The funds will be allocated towards the following:
• Location development in Key West
• Boat and wave runner inventories
• Working capital
• Initial marketing
On an as needed basis, the Company will be able to acquire additional rounds of capital in order to further expand operations given the large tangible asset base of the business. However, this business plan assumes that the Company will finance its growth with retained earnings.
1.3 Mission Statement
Boat Rental Service, LLC’s mission is to provide cost effective boat rentals, jet ski and wave runner rentals, and guided tours to residents and tourists within Key West.
1.4 Management Team
Michael Rivers is an experienced entrepreneur. He will be able to quickly bring the operations of Boat Rental Service to profitability while expanding profitability on a yearly basis.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will continually expand its fleet of boats, jet skis, and wave runners. After Year 3, Management may establish additional locations throughout the State of Florida given the immense amount of tourism within this market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Boat Rental Service, LLC. The business is registered as a limited liability company in the State of Florida.
2.2 Required Funds
As discussed in the executive summary, the Company is seeking $500,000 in order to commence operations in Key West. The Owner will contribute $100,000 towards the venture. The funds are to be used as follows:
2.3 Management and Investor Equity
Michael Rivers retains a 100% ownership interest in Boat Rental Service, LLC. He also serves as the sole member.
2.4 Exit Strategy
Given the highly predictable income generated from boat and wave runner rentals, the Company could receive a sales premium of up to three times the previous year’s EBITDA. However, Management intends on operating this business for at least ten years. In the event of a business sale, the Company will hire a qualified M&A consultant to help facilitate the transaction.
3.0 Operations
At the onset of operations, Boat Rental Service will have four boats and fifteen wave runners in its fleet. The Company will generate per diem fees of $750 to $1,000 for boat rentals. For wave runners and jet skis, the business will charge $75 per hour of usage. For guided tours of Key West on wave runners, the business will charge $150 per participant. These tours will last approximately two hours.
The Company will require that all guests complete a wavier and leave a deposit. For boat rentals, a $2,500 hold on a credit card will be required. The business will also provide a boat operator when requested by a customer for an additional fee. Customers can also have planned fishing excursions arranged through Boat Rental Service, LLC.
In order to ensure 100% capacity usage, the business will directly employ a marine mechanic to ensure that all watercraft and vessels are in proper working order at all times. Although this will contribute to a higher payroll cost, the business will be able to operate more cost effectively as a whole as repairs can be done on a same day basis.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
The US economy is doing very well. Interest rates have declined, and asset prices are increasing substantially. The issues regarding inflation are also abating. It is expected that a more measured approach will be taken in regards to adjustments to interest rates. As the cost of capital declines, Boat Rental Service may acquire a line of credit in order to continually purchase wave runners, jet skis, and other watercraft.
It should be noted that the Key West market area receives substantial traffic on a year-round basis, and the Company will be able maintain a highly level of fleet occupancy at all times. Only a severe and sustained economic recession would impact the overall profitability of the Company.
4.2 Industry Analysis
There are 4,000 operators of locations that provide boat and watercraft rentals to the general public. Each year, these businesses produce $3.5 billion of revenue while employing 15,000 people. The future growth rate of this industry will be similar to that of the economy as a whole.
One of the trends within this industry is to use online booking applications in regard to reserve boats and watercraft. As will be discussed in the next section of the business plan, the Company will use multiple application suites in order to boost the fleet occupancy rates.
4.3 Customer Profile
Any person that enjoys fishing, wave runners, jet skis, and water based excursions is a potential customer for Boat Rental Service. Management anticipates a broad range of demographics that will use the Company’s services.
This business will operate in the Key West market given the wealth and substantial tourism. Each year, approximately two million people visit this market. On average, the Company anticipates that people that rent watercraft from the business will have an annual income exceeding $100,000.
4.4 Competition
Within Key West, there are other operators that provide boats, wave runners, jet skis, and other watercraft for rental and excursion use. The business will maintain a competitive advantage given that the business will have highly controllable operating costs which will allow Boat Rental Service, LLC to remain pricing competitive at all times. The business will also benefit from its ongoing referral relationships with hospitality businesses on the island.
5.0 Marketing Plan
The Company will use online marketing strategies as well as referral arrangements with hospitality businesses in Key West in order to drive rentals. The business will use state-of-the-art reservation booking technology on its website while also enrolling among portals that allow individuals to make hospitality focused reservations.
5.1 Marketing Objectives
• Foster paid referral relationships with hospitality businesses and short-term rental owners in this market.
• Maintain a state-of-the-art website that has ecommerce functionality for reservations and ID verification.
• Develop relationships with travel agents that will recommend Boat Rental Service, LLC to their clients.
5.2 Marketing Strategies
Foremost, Boat Rental Service, LLC intends on developing ongoing relationships with hospitality businesses in the Key West market. At hotels, motels, and other places of lodging – the business will distribute brochures that showcase the operations of the Company. The Company will pay hospitality business owners a 10% commission for each referral.
The Company’s website, as discussed above, will feature reservation functionality that will allow customers to reserve boats and watercraft for their trips. This platform will undergo search engine optimization so that when queries for watercraft rentals in Key West are completed – the platform will appear frequently in the search engine results. Management will coordinate its SEO efforts with a recognized regional firm. The website will also be registered among online portals that focus on vacation planning. The links back to the website will contribute to the SEO campaigns undertaken by the business.
In addition to the Company’s website, the business will maintain pages among all major social media platforms with a focus on Instagram and Facebook. The business will post image of its boats and power watercraft while also sharing videos of customers enjoying their tours and excursions. The business, during the quieter fall and winter months, will offer discounts on fishing excursions that can be arranged through the business.
The business will also market the Company’s operations among travel agents and agencies on a nationwide basis. The business, in exchange for placement, will pay a fee equal to 15% of the rental fee. This will further allow the business to maintain a very high occupancy rate for its fleet. In order to attract travel agents, the business will list its operations among numerous platforms for these entities to review.
To a more modest extent, the business will maintain a print advertising campaign within Key West. The business will distribute flyers while also using billboards during the busy summer months.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Boat Rental Service, LLC will acquire a $500,000 SBA loan in order to develop its operations in Key West.
• Michael Rivers will contribute $100,000 towards the development of the location.
7.2 Sensitivity Analysis
Boat Rental Service’s revenues are moderately sensitive to a potential economic recession. In this event, fewer tourists are expected to go to Key West on vacation. However, this is a wealthier market area, and the business will receive reservations through ecommerce operations on a nationwide basis. The Company will implement fiscally sound operating protocols in order to ensure that its underlying costs and debt obligations can be satisfied on a monthly basis.
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
