Start a submarine tour 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 guide to starting your submarine tour 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 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 submarine tour business?
A new submarine tour business incurs a number of standard start-up expenses, including licenses and certifications, payroll, rent/mortgage for office space, website, attorney’s fees, and business and liability insurance. Your greatest expense, however, will lie in the submarines themselves. The price tag of a private sub ranges anywhere from $1 million to over $20 million, depending upon payload capacity, size, customized features, and maximum depth.
What are the ongoing expenses for a submarine tour business?
Like most small businesses, your budget should include standard expenses such as mortgage/rent for office space, website fees, utilities costs, insurance, and payroll. Your submersible watercraft should also be on a routine maintenance plan, ensuring every guest has a safe underwater experience. One submarine tour business estimates between $3,000 and $4,000 per day in operating costs.
Who is the target market?
While the target market was previously limited to travelers able to afford the somewhat hefty price tag, the industry is starting to see some changes. Start-up and ongoing expenses are taking a downward turn, making it an affordable experience for travelers of all tax brackets.
How does a submarine tour business make money?
Tour guests pay submarine tour businesses to take them on guided underwater tours.
How much can you charge customers?
The price for an underwater tour varies, depending upon location, tour specifics, and group size. An organization based out of Curacao charges $800 for a 90-minute shipwreck and reef tour, while an underwater tour of the Titanic comes with a price tag of over $105,000 per person.
How much profit can a submarine tour business make?
If your business operates six tours per day, with six people per tour, at a cost of $210 per ticket, this would generate a revenue of $7,560. With operating costs at $3,500 per day, this would yield a profit of $4,060 per day.
How can you make your business more profitable?
Entrepreneurs are encouraged to invest profits back into the business and get creative with the experiences they offer. One submarine tour business based out of St. Lucia now offers guests the opportunity to spend the night underwater. The submarine comes with a full staff and private room, costing almost $275,000 per night. Business owners should also capitalize on the fact that consumers love to purchase merchandise related to their experience. Merchandise sales can generate additional revenue between 10% and 15%.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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 submarine tour business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also 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.
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?.
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.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
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.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Submarine Tour 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.
In addition, certain local licensing or regulatory requirements may apply. For more 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.
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.
How to promote & market a submarine tour business
Submarine tours are firmly rooted in the tourism industry, offering travelers across the globe a unique opportunity to explore the unexplored. Business owners should work closely with local, regional, and international travel organizations. This offers networking opportunities and will help ensure your business has a positive reputation throughout the community.
Your marketing strategy should also include advertising in travel magazines, websites, online publications, and social media. Travel agents are also an excellent resource for gaining new customers.
How to keep customers coming back
Given the unique nature of the submarine tour experience and your reliance on nature to deliver a spectacular adventure, it is critical that you and your team pay careful attention to every detail. Your guests may not encounter all the underwater wildlife they expected, but if the watercraft is clean and the staff is attentive, word will spread throughout the community.
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.
Start A Submarine Tour 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?
Ideally, a submarine tour business owner should have a strong business background, significant investment capital, and experience in the tourism industry. Knowledge of the area they plan to host tours and a passion for the ocean and its inhabitants would prove beneficial.
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 submarine tour business?
A business of this magnitude means managing a number of moving parts. Operators will take guests on guided tours, while the maintenance team is there to ensure each submersible is well-maintained. This is all for naught, however, unless a strong marketing strategy is in place, with team members working tirelessly to ensure a steady stream of tour guests. Additional activities should include facility maintenance, employee certification and training, and administrative tasks.
What are some skills and experiences that will help you build a successful submarine tour business?
What are some skills and experiences that will help you build a successful submarine tour business?
A comprehensive understanding of the tourism industry, including the most scenic and desirable underwater regions, is critical. New business owners who do not possess a strong business background should consider taking a business course at their local college or hiring an expert to assist them with the myriad of decisions to be made. Strong interpersonal skills and general advertising knowledge is also beneficial for a relatively niche business, such as this.
What is the growth potential for a submarine tour business?
Due to burgeoning consumer interest and the development of newer, safer underwater technology, the underwater tourism industry has recently realized significant growth. Entrepreneurs striving for long-term growth and success are encouraged to thoroughly research high-demand areas and identify needs that are not currently being met.
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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 submarine tour business?
Due to high start-up and ongoing expenses, entrepreneurs considering this business venture are encouraged to conduct thorough research prior to developing their business plan. A detailed plan ensures potential unexpected costs and roadblocks are considered, thus maximizing profits.
How and when to build a team
Before your submarine takes its first flight, you will need to surround yourself with a knowledgeable and dedicated team. Enlist the help of an attorney to ensure all legal and liability concerns are addressed. An accountant should oversee the financials. Additionally, piloting a submersible watercraft requires a specific set of skills - the safety of your customers is dependent on you hiring the very best guide for the job.