Start a scuba diving business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your scuba diving business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the initial costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you. Skip on ahead to the Business Overview for more detailed answers to all your questions.
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your scuba diving business is sued. Consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
STEP 4: Open a business bank account
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand.
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Scuba diving affords an unparalleled experience with the underwater world. However, safe diving requires training, equipment, and often a guide. Scuba diving businesses provide divers with the training, equipment, and local knowledge they need to have a fun and safe time under water.
With between 2.7 and 3.5 million active scuba divers in the United States and 6 million worldwide, there is significant demand for scuba lessons and guided dives.
Who is this business right for?
While scuba diving businesses can generate sizable profits, most business owners don’t get into this type of work solely for the financial return on investment. Instead, they’re passionate scuba divers themselves and are drawn to the scuba lifestyle. They like the idea of making money doing a sport they love.
What happens during a typical day at a scuba diving business?
A typical day at a scuba diving business is full of activity. Business owners and employees spend time:
- Servicing equipment (e.g. refilling air tanks, checking masks, etc.)
- Maintaining the business’ building and boat (if they’re owned)
- Teaching in classroom settings
- Going on guided dives
- Ordering more supplies and equipment
- Filing paperwork for students (see Skills & Experiences)
What is the target market?
Most open water divers are affluent, typically owning their home and having an annual household income between $100,000 and $150,000. They have enough discretionary income to spend on vacations and pricey recreational sports, such as scuba diving.
How does a scuba diving business make money?
A scuba diving business primarily makes money by charging customers for classes or guided dives. Many businesses also rent equipment, including necessary essentials, optional dive computers and underwater cameras to generate additional revenue.
What is the growth potential for a scuba diving business?
Because diving requires an intimate knowledge of the local underwater features, most scuba diving businesses have just one location. If well chosen, this location can provide access to multiple dive sites.
What are some skills and experiences that will help you build a successful scuba diving business?
Business owners should themselves be competent and experienced dive instructors, certified with either the Professional Association of Diving Instructors (PADI) or the Scuba Schools International (SSI).
The scuba diving business will be affiliated with one of these organizations. Which of the two organizations a business is affiliated with has a significant impact on what the business is responsible for and what support it receives.
In PADI’s system, instructors themselves certify students. This means that instructors are responsible for purchasing training materials and filing paperwork upon course completion. They communicate directly with PADI and can even run a business entirely on their own.
Despite their independence, many instructors partner with diving businesses. In these arrangements, businesses usually provide facilities, equipment and marketing. Businesses can expect only basic support from PADI.
In SSI’s system, it’s the businesses that certify students. Instructors still teach courses, but businesses order training materials, file certification paperwork and communicate with SSI. Instructors work for the businesses and can’t themselves certify students.
Thus, businesses that work with SSI are responsible for the entire training process. SSI also provides more support for businesses, although the support packages come with price tags.
What are the costs involved in opening a scuba diving business?
The startup costs for a scuba diving business are significant, for businesses must have:
- A commercial space for teaching classes
- A boat for getting to open-water dive sites
- Equipment for students to use
- Property and liability insurance policies
Equipment costs alone can run nearly $1,000 per set, for each student needs a regulator, air tank, wetsuit, booties and other items. Businesses that need to keep startup costs low can rent commercial space and a boat on an as-needed basis.
In total, business owners should expect to spend between $10,000 and $50,000 to start up a new scuba diving business.
Established businesses can sell for much more. At the time of writing, the prices for successful businesses in North America ranged from $30,000 to $1.5 million.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a scuba diving business?
Most people picture scuba diving businesses in tropical locations, but diving businesses can be opened anywhere where there’s open water. Businesses in colder places have limited seasons and may not get much tourist business, but they can still see a decent demand for classes from local divers who want certifications before traveling to more scenic dive spots. (Open water is required for many certifications.)
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Growing Your Business
How to promote & market a scuba diving business
Social media is a natural way to market a scuba diving business, for many social media platforms are highly visual and people love sharing their underwater photos. Encouraging customers to post pictures on Pinterest, Instagram, and Facebook can be excellent marketing for a business.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Scuba diving businesses can set themselves apart from competition by hiring highly qualified instructors. Instructors with multiple credentials can teach more advanced classes, and those that are experts on the local dive spots will enrich customers’ experiences on guided dives.
How and when to build a team
Because there’s a lot of work to do, business owners normally hire a few employees from the outset. Instructors, dive guides and shop assistants are among the first employees or independent contractors that business owners bring on.
Federal Business Licensing Requirements
It is important that you follow all state and federal regulations for scuba diving licensing and instructor licensing. More information can be foundhere.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a scuba diving business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Certificate of Occupancy
A scuba business is generally run out of a storefront or diving facility. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a scuba diving business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your scuba diving business will be in compliance and able to obtain a CO.
How much can you charge customers?
The prices for scuba diving classes and tours range depending on the duration, level of expertise and location. For example, National Aquatic Service in Syracuse, NY has a learn-to-dive program for $399. Multi-night scuba vacations on liveaboard boats can cost thousands of dollars per person.
What are the ongoing expenses for a scuba diving business?
The ongoing expenses for a scuba diving business are significant. They include:
- Boat and facility maintenance costs
- Fuel costs
- Salaries and wages for employees
- Equipment replacement costs
Because equipment is used regularly and sometimes abused, it needs to be replaced frequently. A wetsuit that would last a single individual years, for instance, might need to be replaced in just a few months.
SSI-affiliated businesses must also purchase training materials for students, but these are usually passed on directly to students.
How much profit can a scuba diving business make?
Even though scuba diving businesses have substantial expenses, successful ones can bring in significant revenues. A class of just 12 beginner divers could bring in nearly $4,800, and guided tours with groups can bring in much more. It’s these revenues that make established businesses worth so much more than starting a new business normally costs.
How can you make your business more profitable?
Scuba diving businesses can add revenue streams by renting equipment to private divers when the equipment isn’t being used by a class. They also can offer to service students and private divers’ gear.
Business owners who are extremely familiar with a particular dive spot might bring in a little additional revenue by writing a book on scuba diving in the area.