Question Buying a shop

[Eric Sedletzky]

Dive shops are like art galleries, they’re a business of passion. I know so many people that got into a “bucket list” type of hobby business because they just wanted a crack at living their dream. They think they are somehow different from all the other failed businesses that came before them and if they just had a chance to prove to the world that they are better and know the secret.
Dive shops are a brutal business, especially now with the competition from the internet.
You will have to personally study the area and the market. What kind of diving, who is your market, is there a need you will be filling or are you just going to be another dive shop lined up wanting a little slice of the pie. What kind of rent/lease will you be paying and what is the location like. Will you sell gear and service regs - you will need to get trained for that for each brand and there is an insurance rider to pay for that liability.
Are you going to run trips? How are you going to set yourself apart from the other shops to make people go through you instead of the guy down the street?
Expect to work 12 to 14 hour days by the time the day is over and everything is taken care of once you clean all the gear, service equipment, do the orders etc. that is if there are customers coming through all day. You will be spending hours with customers explaining stuff only for them to tell you “I’ll think about it”.
Some days there won’t be a single customer and you will be stressing wondering how you will make it. You might do pretty good sometimes, then sub minimum wage other times.
If you don’t have grey hair now, don’t worry you will.
Not trying to scare you but do your research otherwise that nest egg could evaporate really quickly and you will have nothing.

 

[grantwiscour]

A different approach might be an AirBnB type accomodation with a compressor, tanks and weights that could/would take divers out for dives. Some have a similar model that provides a revenue stream and some diving.

 

[DiveLikeAMuppet]

Dive shops are like art galleries, they’re a business of passion.

Art galleries are a tax evasion scheme for the rich .

I think you can have an acceptable lifestyle if you find the right location that attracts enough tourists and enough young DM/instructor hopefuls that you can work to death for less than minimum wage. I know of a fairly successful diveshop on Malta like that. Successful means not going bankrupt. The owner is not making a killing but survives, can teach random courses out of interest (while being burned out) and has few instructors and DMs who survive on what's less than minimum wage (think raising a family with a small kid while having flat mates) because Malta can get them an EU passport if they stay long enough.

With family or kids, you need healthcare.

You can also look at specialised or high end shops. There seems to be a social media war between Protec Tulum and Under the jungle in Mexico right now. Both charge more per day than a standard dive shop dreams to make per course, but the market is probably a bit down as both spam socials with elaborate content every day (wasn't happening last season).

 

[bhend16]

Art galleries are a tax evasion scheme for the rich .

I think you can have an acceptable lifestyle if you find the right location that attracts enough tourists and enough young DM/instructor hopefuls that you can work to death for less than minimum wage. I know of a fairly successful diveshop on Malta like that. Successful means not going bankrupt. The owner is not making a killing but survives, can teach random courses out of interest (while being burned out) and has few instructors and DMs who survive on what's less than minimum wage (think raising a family with a small kid while having flat mates) because Malta can get them an EU passport if they stay long enough.

With family or kids, you need healthcare.

You can also look at specialised or high end shops. There seems to be a social media war between Protec Tulum and Under the jungle in Mexico right now. Both charge more per day than a standard dive shop dreams to make per course, but the market is probably a bit down as both spam socials with elaborate content every day (wasn't happening last season).

I have thought about the high end shop and it for sure interests me. The EU passport definitely holds a strong draw for me and my wife. There are some shops that are currently for sale in Spain that have been open for more than a decade of operation and appear to be profitable but with out looking at their books its hard to tell.

We have been looking at Belize pretty heavily as well, to be closer to family in the States.

 

[NothingClever]

I have thought about the high end shop and it for sure interests me. The EU passport definitely holds a strong draw for me and my wife. There are some shops that are currently for sale in Spain that have been open for more than a decade of operation and appear to be profitable but with out looking at their books its hard to tell.

We have been looking at Belize pretty heavily as well, to be closer to family in the States.

Not sure what kind of timeline you’re on but a phased approach might be worth considering.

You’re in the Research phase right now.

The next phase could be Manage a Shop to gauge if this industry is where you really want to pour your family’s energies and resources. Managing will get you in the game without the inextricable risk of ownership. Managing will provide access to a much greater pipeline of industry information thus enabling you to research locations, customer volume in that area, business financing, area services, etc. Obviously a key requirement in this phase is to find an owner you get along with.

The third phase would be Purchase and Operate a Business - game on, you’re committed but also warmed up.

The last phase is Transition - that means expansion of the existing footprint, expansion in number of locations, selling the business or closing/liquidating and then moving to your final retirement location.

I’d read some of the BDI products and work out a telecon or lunch with Darcy.

That may prevent some years of misfires and costly mistakes.

 

[bhend16]

Not sure what kind of timeline you’re on but a phased approach might be worth considering.

You’re in the Research phase right now.

The next phase could be Manage a Shop to gauge if this industry is where you really want to pour your family’s energies and resources. Managing will get you in the game without the inextricable risk of ownership. Managing will provide access to a much greater pipeline of industry information thus enabling you to research locations, customer volume in that area, business financing, area services, etc. Obviously a key requirement in this phase is to find an owner you get along with.

The third phase would be Purchase and Operate a Business - game on, you’re committed but also warmed up.

The last phase is Transition - that means expansion of the existing footprint, expansion in number of locations, selling the business or closing/liquidating and then moving to your final retirement location.

I’d read some of the BDI products and work out a telecon or lunch with Darcy.

That may prevent some years of misfires and costly mistakes.

All of that makes a ton of sense.

I am working on getting my DM and then continuing to push to OWSI. I am hoping that working as a DM, even in Colorado, will help me make the right choice. We are not looking to jump this second into ownership but we are looking at it in the next two years or so.

 

[kensuf]

All of that makes a ton of sense.

I am working on getting my DM and then continuing to push to OWSI. I am hoping that working as a DM, even in Colorado, will help me make the right choice. We are not looking to jump this second into ownership but we are looking at it in the next two years or so.

Can you make enough to support a family of four? Possibly, I know several shop owners in diving destinations that are earning a living. But I also know several that went belly up over the years.

I think the idea of going and working in the industry for a bit to see if it's what you really want to do is the best suggestion I've read on ScubaBoard in a long time. Become an instructor, go teach for a bit and see if you really connect with the students and enjoy it, get trained as a repair/service tech, and start working in a shop. Get trained on compressor maintenance/repair (it's easy until something breaks, then...), and if your long term goals involve owning a shop at a destination, work on getting hours towards a captains license and learning some basic boat maintenance.

When it comes to the final stage of owning/operating a shop, there will be a lot to consider including the local laws regarding business ownership / immigration, market saturation, availability of insurance, hiring, etc.

 

[chrisch]

I have thought about the high end shop and it for sure interests me. The EU passport definitely holds a strong draw for me and my wife. There are some shops that are currently for sale in Spain that have been open for more than a decade of operation and appear to be profitable but with out looking at their books its hard to tell.

We have been looking at Belize pretty heavily as well, to be closer to family in the States.

Spain is suffering from climate change issues that mean water is short in the south of the country. The Canaries are a popular winter destination but the diving is not so good - Lanzarote is best. There are quite a few legal issues in Spain as well to take into account.

If you want an EU passport then I suggest buying a property in Portugal is an easier option. If you have an income you can get a visa to live there which covers the Schengen area. There is a reasonable dive scene in the southern part with the Atlantic coast being hit by the waves and weather, but can be good if you can get out.

I run my own business (non dive) and cannot imagine anything worse than running a dive centre or similar.

 

[ofg-1]

Diving is a business where you can spend thousands to make hundreds.

 

[NothingClever]

Much like motorcycle racing...if you want to win a small fortune, start with a large one.