Have you ever been in a kayak? Who provided it for you? Did you own it? Did your friend own one? While there are some people that actually own their own kayaks, I’m guessing that yours was a rental.
Starting Your Own Kayak Rental Business
If you want to create a passive income with a kayak rental business, you’re obviously going to have to be near a lake. I happen to live near Lake Michigan, which is absolutely beautiful in the summer time. In my area, there are definitely seasons when kayak rental is not possible (like, at least 6 months out of the year when it’s snowing), but let’s see how profitable it would be to rent out kayaks for the other 6 months.
It doesn’t have to be much, but you’ll have to have some sort of property where you rent out your kayaks. You could rent a small area from a local business and put up a portable shed to keep it cheap. It’s not a bad idea considering the potential market is still a little uncertain (after all, we are just starting this venture and can’t predict exactly what will happen). Because your plot is so small and you aren’t really bothering your “landlord”, the rent is cheap at $300 a month.
In order to rent out some kayaks, it might be a good idea to own some. To get started, let’s say that we buy 5 kayaks at $400 a piece. A total expense of $2,000.
Along with these, you’ll need some life jackets – a random set of 10 costs you $200.
Also, if you want to make your business 100% passive, you’ll have to pay an employee. It’ll cost you $8 an hour, 7 days a week, for 8 hours a day. For the 6 months, this will cost you $11,648.
There’s only one way to earn an income in this business – rent out your kayaks! Your location is near the beach and you have signs advertising your business (there’s really no need to advertise any other way – all the water lovers can see your business as they walk down to the beach). Here are the average rates:
- $10 per hour
- $30 for a 1/2 day (4 hours)
- $50 for a full day (8 hours)
We’re obviously not going to be able to rent out all 5 kayaks all day, every day, so what’s a realistic expectation? For the span of 6 months, let’s say that, on average, we rent out 2 kayaks for a half day. That’s a total of $60 a day.
Is It Worth It?
With the given scenario, what are the total expenses?
- $2,000 for the kayaks
- $200 for the life-jackets
- $300 rent for 6 months = $1,800
- Employee = $11,648
- Total 1st Year Expense = $15,648
What is our estimated income?
- $60/ day for 180 days = $10,800
If this was the true structure of our kayak rental business, we’d be losing about $5,000 in that first year, and then continue to lose about $3,000 in the years after that.
How to Make This Venture Profitable?
A sure-fire way to make this business profitable is to do the work yourself. By sitting at the kayak rental, you’d save $11,648, which would earn you a profit of $6,800 for that first summer, rather than running your business into a deficit.
If you still want to keep it passive, perhaps you could run your business by appointment only. You’d rent out fewer kayaks, but you wouldn’t have to pay your employees to sit around and do nothing this way either (they’d only have to meet your clients for the appointment times). I assume that this method would soon swing your business in the black again.
What do you think about this passive income idea? Would you ever try it?