Start a scuba diving business by following these 10 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 guide to starting your scuba diving business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
Who 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.
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.
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.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Scuba Diving Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your scuba diving business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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.
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.
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.
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.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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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.
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.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Scuba Diving Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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 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 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.
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Take the Next Step
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.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
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.)
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.