Do you want to know how much money jet ski rental businesses make yearly? If YES, here are 7 factors that determine the profit margin for jet ski business owners. Whenever any entrepreneur wants to start a new business, one of the first questions that they usually ask is how profitable the business is or how much they are likely to make on the average daily, weekly or yearly from the business.
This narrative also applies to entrepreneurs who are looking towards opening a jet ski rental business. In order to give an idea of the amount a jet ski rental business owner is expected to make daily, weekly, monthly or yearly, you should clearly define the services that jet ski rental businesses offer.
A well – established jet ski rental business is expected to rent out different types of jet skis basically for fun or for tournament; they engage in inshore and coastal jet ski rental, offshore jet ski rental, tournament and commercial jet ski rental and of course merchandise sales.
Operators in the industry vary greatly in size, ranging from large operators with a fleet of different sizes and models of jet skis to single jet ski owner-operators and part-time rental companies that also engage in the rental of jet skis.
With that in mind, we can estimate what a jet ski rental business that offers the services listed above is expected to make and it is important to point that there is no one mold-fits -all when it comes to how much a jet ski rental owner is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average jet ski rental business can make yearly and these factors are;
7 Factors That Determine How Much Money Jet Ski Rental Businesses Make Yearly
Table of Content
- 1. The Size and Capacity of the business
- 2. The Location the Jet Ski Rental Business
- 3. The Type of Services that are Available in the Jet Ski Rental Shop
- 4. The Management Style of the Jet Ski Rental Shop Business
- 5. The Business Approach of the Jet Ski Rental Shop
- 6. The Advertising and Marketing Strategies Adopted by the Jet Ski Rental Business
- 7. The Number of Years the Jet Ski Rental Business is in Existence
- The Estimated Profit Margin for a Jet Ski Rental Business
1. The Size and Capacity of the business
No one can conveniently state the amount a jet ski rental owner is expected to make yearly if you do not know the size and capacity of the business and the number and types of jet skis they have available for rental. As expected, a jet ski rental business that has only a handful of jet skis is expected to make far less than a jet ski rental that has several brands up for rent.
Establishing a Jet Ski rental business can be expensive because the start-up kits and the Jet Skis are truly expensive, and also maintenance cost and even fuelling can also be expensive as well. Jet Skis are majorly imported from Japan because Kawasaki and Yamaha happen to be the major manufacturers. Typically, new jet skis range from $5,000 to $20,000 depending on the quality, style and features equipped on a jet ski. But the cost to own a jet ski goes much further.
2. The Location the Jet Ski Rental Business
We must not rule out the fact that the spot a jet ski rental shop is located is a major factor that will determine the amount the owner is expected to earn monthly. If a jet ski rental shop is located in a frequently visited beach, then the owner of the shop is expected to make more money.
The truth is that you will struggle to make good money from your jet ski rental shop if you locate the business in a beach that attracts pretty low visitors. Besides, Jet Ski rental businesses can only be restricted to a certain geographical area, which is why before starting this type of business, you must ensure that you are in a place where this type of business thrives.
3. The Type of Services that are Available in the Jet Ski Rental Shop
Another important factor that will determine how much a jet ski rental shop owner is expected to make yearly is the type of merchandize rented out. You will agree that the money a jet ski rental shop that offers robust services such as providing jet skiing lessons will be far larger than what a jet ski rental shop that only offer jet ski rental services is expected to make monthly.
4. The Management Style of the Jet Ski Rental Shop Business
Another key factor that will determine the amount a jet ski rental shop owner is expected to make yearly is the management style of the owner. Trust me, the results you will get when you are a good manager will definitely be different from a jet ski rental shop owner with poor management style and customers services will make. The idea is that a good jet ski rental shop owner will not just retain their old customers (members), they will also keep getting new customers.
5. The Business Approach of the Jet Ski Rental Shop
There are different business approaches that a jet ski rental shop owner can choose from and no doubt it will greatly influence the amount they are expected to make monthly and yearly. Of course, we know that a jet ski rental shop owner may decide that they want to operate only one location and do their marketing alone and they can also decide to go into franchising and also partner with other businesses that will recommend clients to them.
It is easier to find jet ski rental shops that operate franchises partnering with jet skiing sport clubs, tours and guide firms et al make more money. In essence, a well – organized jet ski rental shop that works with others will surely make more money than a jet ski rental shop that only operates from one location.
6. The Advertising and Marketing Strategies Adopted by the Jet Ski Rental Business
Another key factor that will determine the amount a jet ski rental shop owner can make yearly is the advertising and marketing strategies adopted by the business. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.
But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a jet ski rental shop owner that is engaging in aggressive advertising and marketing to make same amount yearly with a jet ski rental shop owner that is passive with its advertising and marketing.
7. The Number of Years the Jet Ski Rental Business is in Existence
Lastly, another key factor that will determine the amount a jet ski rental shop owner is expected to make on a yearly basis is the number of years the shop is in existence. In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is well – managed.
For example, in your first fiscal year (FY1) you might make a hundred thousand dollars (100,000), in your second fiscal year (FY2) you might make one hundred and fifty thousand dollars ($150,000) and in your third fiscal year (FY3) you might make two hundred and fifty thousand dollars ($250,000).
In other to maximize profits, you should try as much as possible to keep the capital investment at a minimum, and ensure that your jet ski rental shop is far more capital efficient.
The Estimated Profit Margin for a Jet Ski Rental Business
Findings shows that Profitability and Market Outlook for the Jet ski rental industry is put at 8.35 percent annual growth rate projection, so there is plenty of opportunity for jet ski rental businesses to make gains. Apart from the cost of the jet skis, you will need to consider the finance for fuel, maintenance, and advertising when calculating your profit margin. A typical total cost of renting a jet ski is $30 per day.
This price depends on a large number of variables including the location, insurance, extra fees and charges and your choice of jet ski. Extra costs such as prepaid fuel or GPS can make a significant increase to your final price. In essence, the profit margin of renting a jet ski will range from 10 percent and above all things been equal.