Getting Started in the Business

Question
Hi Mike,

If you were to start into the Dive Business today, what approach would you recommend?

I have a strong accounting, computer, able body, and Open Water Dive Cert..  I also have about 100K and have no strings.  Can go anywhere in the world.

I've been considering a LiveAboard business model or the Dive Shop model.

Any suggestion, thoughts or reads that will help me along the way.

Thank you ahead of time,

Nick

Answer
Hi Nick

Wow...that's quite a question.  I could write a book on the answer to that one!!

First, I've addressed significant parts of that question in a couple of my previous answers so I'd suggest that you refer to those for much of your information.  I'm not ducking the question but you'll see that I've written several pages on this subject so there's no point in just repeating it.

There is always room for another GOOD dive shop.  You don't say where you live but I'll assume that you're within reach of a diveable body of water and have significant diving experience.  Your Open Water certification tells me that that may not be the case.  That's not to say that lots of diving experience is necessary but it will provide credibility when you try to "sell" your dive shop services to potential customers.  Your customers MUST feel that you know more than they do (and trust your judgment) when they come to you for advice.  You might want to team up with an experienced diver to bridge this gap.

Many dive shops start out with good intentions (I'm not talking about the business plan) but seem to lose it over time and then they become just another mediocre dive shop.  If you truly LOVE the sport, then maintaining a positive attitude for your shop isn't much of a problem.  It's THAT attitude which makes a good dive shop.  

If your customers feel that you REALLY care about them and are willing to go the extra mile to assist them, then they'll come back.  More importantly, they'll spread the word and that's the best advertising you can possibly get.  It doesn't matter whether your dive operation is a land-based shop or a liveaboard...it's the attitude that really counts.  I know there are business professors (some of mine included) who would take issue with my statement. However, I can tell you from 20 years of experience that customer service (attitude) is the best business practice you can employ.  While it's certainly true that a good business plan and proper accounting practices will tell you whether your pricing and spending practices are likely to ensure a successful business from an accounting perspective, it all becomes irrelevant if you don't have the customer base.  Your business plan will include an analysis of your potential customer base but it's all based on statistics and it's not a perfect tool.  In a nutshell, go visit other dive shops and see what they're NOT doing.  How did you feel when you walked in and how did you feel when you walked out?  If you didn't like the feeling then THAT'S what you can do to separate yourself from the competition. Nick, I think you get my point.  Attitude and customer satisfaction are absolutely CRITICAL to the long-term success of your dive business.

Next, where should you put your business?  I've had some experience in doing business in other countries and I'd recommend against it as a general rule.  Your investment could be at risk without the protection of the business laws in this country.  Things like local customs practices, import taxes, duties, fees and the threat of nationalization will hang constantly over your head if you're set up outside the U.S.  It probably won't happen but it COULD.  I'd prefer not to take the risk.

Where SHOULD you set up your business?  For a land-based business, I'd look at locating near some unique or especially desirable dive destination.  That way, you'll cut your overhead since you'll already be on location.  Of course, good negotiating skills will be required to get a good location at a reasonable price.  You can also buy an established dive business but be sure to find out why the business is for sale in the first place.

One important factor to consider is that you need to like living where you set up your business.  If you don't like living there, don't set up a business there either.

The liveaboard business is extremely competitive and you can get into trouble in a hurry if you're not very familiar with the costs associated with operating a large vessel.  That option will require a lot of study before making any investment.  I wouldn't recommend taking that route if this is your first introduction into the operation of a dive business.

Nick, your accounting and computer background are certainly going to be helpful.  I think you need to learn more about the dive industry before you make any investment into a dive business.  Try checking online search engines for articles on the diving industry and look into diving tradeshows.  These shows frequently have experts giving classes on running a dive business.  They can give you far more information than I can provide in this brief answer.

Well, Nick, this should at least give you some food for thought.  While I'm not trying to be discouraging, I would like to leave you with a feeling of caution.  Give some really serious thought to what you're getting into before putting your money at risk.  I love the diving industry and it's been very good to me.  I've also seen lots of dive shops (and liveaboards) fail after four or five years because they just didn't fully appreciate the complexity of their business.

Best of luck, Nick, and please write back if I can assist you further.

Sincerely,

Mike Giles
Mike's Dive Center
mikescuba.com