How to Start a Submarine Tour Business

Start a submarine tour business by following these 10 steps:

1. Plan your Submarine Tour Business
2. Form your Submarine Tour Business into a Legal Entity
3. Register your Submarine Tour Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Submarine Tour Business
6. Get the Necessary Permits & Licenses for your Submarine Tour Business
7. Get Submarine Tour Business Insurance
8. Define your Submarine Tour Business Brand
9. Create your Submarine Tour Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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 Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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%. 

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your submarine tour business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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. 

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.