Setting up a dive shop!

[Marky mark]

Hi There

I wonder if any of you out there could give me some advice. Me and a couple of friends are looking at buying a dive center. Having worked for other shops for a while I feel its time to go alone and have our say on what and what not to do. Thing is none of us have owned one before, just looking to see if anyone can give us any tips! Maybe things we may have overlooked, and maybe some funny stories. !

We are all experienced instructors, and have dived in many places around the world. At the moment we are thinking/looking at Dahab, Perhentians, Koh Chang or Canary Islands. Any thoughts on these? We will go anywhere.! Finally, anyone think it is better to buy and existing center or start from new.

Thanks alot

 

[Greg D.]

Good luck Marky Mark!

Keep your prices within reason to online shops, and make sure you have the service to make your shop be the place peopld want to shop. In a service based industry, if you dont fill your customer needs someone else will.

 

[nwdiver2]

How to make a small fortune in the dive industry; START WITH A LARGE FORTUNE.

Really,

1) Pick an area where you can control the Company not some local or partner’s wife who is a local.
2) If the costs to buy are too high build from the ground up and expand as business expands.
3) All partners must be prepared to last the 2-3 years of low low, or no income.
4) Have a partnership agreement in place before you start, written down and signed and agreed on by all partners, in year 3 when someone skips with the bank account because they felt they were owed it, you have to prepared.
5) Pick partners with complimentary skills not the same skills, you only need one person in some positions not 3.
6) start a complimentary business such as a coffee shop next door you can use to draw clients, a free $2.00 breakfast before the dive day will get you an amazing amount of traffic.

Good Luck look at it as a business not just a lifestyle and you may be still in it in 10 years.

 

[Tavi]

Where ever yo decide to go, If you buy an existing shop you already have a customer base, and 1 less competitor!!

 

[scubatoys]

It may be different in your area... but around here, most dive shop owners decide to sell as they are not making money. Why someone would want to buy a business that is going out of business is a surprise to me. For example, I have a friend that bought a dive shop that was not doing too well, without a lot of inventory for $150,000 then put about another $100,000 into it. And this was a rent property - they did not own the building. As I tried to explain, if you rented the place next door to him, and invested the $250,000 would you have a better shop? And how long would the other guy last since he's on his last legs anyway?

Use the rule of thumb that you never buy a business for more than 3 times the after tax profit - after paying the people running it, plus hard assets.

For example, if a shop makes the owner $60,000 in a year, and he worked the shop personally along with employees, what would it cost to hire someone to do the work he did... Let's say $40,000... then that shop is worth 3 * 20,000 plus asset value.

And the 3 might even be a bit high... safter at 2 - 2.5.

 

[The Kraken]

Mark,
Having worked with some people starting businesses, may I offer you a suggestion?

After determining what all of the operating costs and expenses will be for 1 year (excluding inventory costs), divide the figure by 52 to see how you will have to take in per week, and then divide that number by 6 to see how much you need to sell per day.

You will need to make that much profit every day just to keep the doors open, and that doesn't include the cost of your inventory or any profit to be made for growth.

It can be a very sobering number.

the K