How to start a kayak rental business step by step

by Akseli L.

07 June 2022
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Running a canoe and kayak rental business can be a lot of fun. You can meet great people, enjoy the outdoors, and stay close to a hobby you love. However, if you want to start a canoe and kayak rental business, you'll need to take care of lots of serious things too.

This guide will take you through the steps involved in creating a canoe and kayak rental business, from registering the company, securing permits, insurance, and inventory, and marketing your business.

So let's jump in.

Table of contents

What is a kayak rental business?

Starting a kayak rental business

Business setup and administration

Get necessary permits and licenses

Kayak rental business insurance

Buying the kayaks and other necessary equipment

Plan your operations

Create a kayak rental website

Marketing and growing your business

What is a kayak rental business?

A canoe and kayak rental business provide boats for people to take out and use on waterways. While many people love this activity, not everyone can afford their own canoe or kayak. And that's where rentals paddle in.

These small businesses help consumers rent kayaks or canoes by the hour or by the day. Sometimes these services operate online, while typically, companies in this field operate near waterfront hotels, attractions, or outdoor destinations.

1. Starting a kayak rental business

1.1. Come up with a business plan

Any venture, business or otherwise, starts with a solid business plan.

One of the first things you should consider is what type of canoe and kayak rental business you want to be. There are a few different operating formats to choose from. Each has its pros and cons.

1.1.1. Supply to marinas or waterfront hotels

Some canoe and kayak rental businesses partner with a local marina or waterfront hotel. The upside of this approach is that you can position your business in a prime location. The downside is that you will need to split revenues. This option can work if you can be assured of enough foot traffic to turn a tidy profit.

1.1.2. Rent space at a waterfront location

Renting space at a waterfront location can be expensive, but a canoe and kayak rental business thrives only if there are enough customers. A location near a waterfront is the safest bet for a kayak rental business to ensure steady customer flows.

It also opens up some related commercial opportunities if you have extra space. For example, you can rent space to store people's personal canoes at your lockup. There are many people who have their own boat but lack storage, so you can use them to supplement your rent.

1.1.3. Rent kayaks from your home

You can operate a canoe and kayak rental business from your home if you're lucky enough to have sufficient storage space. However, there are significant logistical challenges to overcome. While it's more cost-effective than hiring premises, you'll miss out on foot traffic. That said, people have made this approach work e.g. via the delivery model.

The second and third options will give you more control, autonomy, and ultimately, more profit. However, the onus will be on you to generate customers. In certain scenarios, partnering with a busy marina or hotel will be the right choice.

1.2. Think about the location

Business location is one of the most important things to think about. Turning a profit relies on a constant stream of customers. Finding a site that will provide you with foot traffic is essential.

Once you've decided on location (or at least shortlisted a few places) and you've figured out what type of kayak rental business you're going to be, it's time to ask some key questions.

Some of the questions in your business plan should be:

  • Who is your target market?

  • How can you reach them?

  • What sort of sales can you expect?

  • What sort of overheads or business expenses will you have?

  • What advantages or disadvantages do you have over your competitors?

Answering these questions objectively might cause you to rethink your location or business type. But don't worry. That's a good thing.

For example, if a few companies already offer similar services within a particular catchment area, you need to determine how you'll outmuscle them. Will your service be cheaper, more accessible, or just plain better? What value can you provide customers that don't exist currently?

Alternatively, you can choose to tap an underserved market. It could be worth exploring if you find a great place that doesn't have a good kayak or canoe rental business already. But before you jump in, ask yourself the question: why is there no canoe and kayak rental business operating in this location?

1.3. Market research

Doing market research is essential before opening a canoe and kayak rental business. You need to understand who your customers are and what they want. Will you serve people close to a city who like to take a break and get out on the water? Or will tourists looking for an exciting day out make up your target market?

Do people who use canoe and kayak rentals also like other things like paddleboarding? Are there other water-related opportunities you could exploit, like renting fishing equipment or fishing kayaks?

Many of these questions will be answered by which body of water you set up nearby. What rental equipment you stock will be defined by the possible activities. So, find out as much as you can about your local canoe and kayak rental scene and see where you can fit in.

A good business overview should take in everything from finances, customers, location, and marketing and explore several ways to identify and capitalize on related revenue streams.

1.4. How much will it cost to set up a canoe and kayak rental business?

If you want to get hold of starting capital, you'll need a clear idea of startup costs and other expenses your rental business will incur.

1.4.1. Kayak rental business startup costs

  • Canoes and kayaks

  • Life jackets

  • Paddles

  • Business insurance

  • Website

  • Van to transport boats

  • Location rental deposit

  • Permits and licenses

1.4.2. Kayak rental business ongoing costs

  • Leasing storage space

  • Location rental

  • Insurance

  • Staff

  • Maintenance

It could cost somewhere in the region of $20,000 to $40,000 to get your business off the ground. If you have the money to invest, that's great. If not, a detailed breakdown of costs will be necessary to secure financing from the bank or backers.

2. Business setup and administration

OK, this might not be the most inspiring part of starting a kayak rental business. But, it's probably the most important. Any new business needs to comply with a variety of rules and regulations.

2.1. Come up with a name for your business

There is one exciting thing you should do before opening a business bank account and deciding on what type of business entity you will be, and that's coming up with the name for your kayak rental service!

Coming up with a business name is essential. You should brainstorm a few ideas and settle on something memorable and simple that makes your service obvious.

SEO tip: If online marketing will be a big part of your approach, it can be a good idea to work your service into your name. Even something as simple as "Bob's Kayak Rentals" should match the search terms your potential customers will use.

2.2. Buy a website name

You should be on the lookout for website URLs during the naming process. Some kayak rental operations run on social media platforms; however, most businesses have a proper web presence. So, find a website name that's not taken, and register it. We'll come back to the website building part in a later section.

2.3. Form a business entity

In the US, you've got four main choices when deciding how you'll legally run your business. They are listed below. Note, that there are differences in the business entity legislation from country to country. So, consider these more as general guidelines, and at the end of the day, always rely on your local authorities. That being said, let's move on.

  • Partnership

  • Corporation

  • Sole proprietorship

  • Limited Liability Company (LLC)

Each of these structures has its pros and cons. But which business structure is best for a kayak rental business?

A business partnership is a good choice if you are starting a business with someone else. However, it does mean that you are financially responsible for your partner's actions. On the other hand, a corporation can be a good choice for some businesses because they separate your business assets from your personal property and assets. However, this business structure is far more complex to set up and maintain.

So, this leaves you with two of the more common options that kayak rental business owners typically choose: sole proprietorship or LLC.

Setting up as a sole proprietor is easy and inexpensive. However, if anything happens to the business, you are personally liable. So think this through carefully.

However, setting up a limited liability company (LLC) protects your personal assets in the event of any business problems or debts. This liability protection makes LLCs a good choice for kayak rental businesses.

2.4. Register for taxes

Before you open your own business, you need to register for state and federal taxes. You'll need an Employer Identification Number (EIN) to do this. These are easy to access (and free!) through the IRS, via their website, phone, or mail.

Otherwise, it's essential to register your details because running a small business in some states means you'll need to pay sales tax.

Depending on which legal entity you choose, you may have some options about how you are taxed. You can read more about this on the IRS website.

2.5. Set up a business bank account

It's crucial to have separate bank accounts for your business and personal spending. There are a few good reasons for this, but primarily it:

  • protects your personal assets

  • helps you accurately track your business account

  • is much easier when it comes to doing your taxes

Some new business owners make the mistake of not having a separate bank account. But it's vital to do, especially if you want to build up business credit to help with cash flow or eventually secure expansion loans with low-interest rates.

3. Get necessary permits and licenses

When it comes to legal and regulatory aspects of setting up a business, always rely on the information provided by your local authorities. The following chapter applies to companies that are being set up in the US.

By this stage, you should already have an EIN and tax permits sorted out. However, there are other business licenses and permits you'll need to acquire to run a legit kayak rental business.

If you want to start a kayak rental business, you'll need to apply for permits from local, state, and federal governments. Additionally, depending on local regulations and the body of water you want to service, you might need a watercraft license.

This depends on which state you want to start your kayak business in. Some of the things you could need are a local business license, a health license, and a permit from the Occupational Safety and Health Administration, alongside industry-specific licenses.

Consult the US Small Business Administration guidelines to see what is required in your state.

This is an essential step that you shouldn't overlook. If you are struggling to get your head around it, it's worth speaking to a professional who understands your local and state laws. Failure to get the right permits or licenses can lead to heavy fines.

Two other things that you need to consider are a liability waiver and a certificate of occupancy.

3.1. Liability waiver

Every canoe and kayak rental business needs a liability waiver. Kayaking is a high-risk activity, and while you need to ensure your equipment is safe and up to standard, you can't afford to open yourself up to legal action in the event of an accident.

The best course of action here is to draw up a liability waiver for your customers to sign. These legal agreements mean you won't be personally liable for accidents as long as you follow safety procedures.

You can find templates for these forms online.

3.2. Certificate of occupancy

If you are running your canoe and kayak rental business from a physical location, you need to obtain a certificate of occupancy (COA).

If you are leasing a location, the landlord is generally responsible. But before you sign any agreement, ensure that your landlord has a COA and that it covers a kayak rental business.

If you purchase a location, you need to get a COA from a local government agency.

4. Kayak rental business insurance

The next step on the path to a successful canoe and kayak rental business is to get insurance. This step is mandatory if you want to run a legitimate business.

There are a few different options you have when insuring a canoe and kayak rental business, but two of the most popular that you'll need are:

General liability insurance: This type of insurance will help protect you and your business from third-party claims of bodily injury or property damage. Considering the typical environment and risks involved in kayak rentals, general liability insurance is essential.

Worker's compensation insurance: Again, because of the risks involved with kayaking and watersports, you'll need a policy that protects your workers in case of accidents. Of course, these insurance policies should also cover injuries that don't happen on the water.

Insurance for a canoe and kayak rental business will be more expensive than policies for other businesses. The reason for this is that they carry a higher risk.

If you want to save money, you should shop around and compare multiple quotes. But remember, the cheapest policy won't always be the best one. You need to consider deductibles, coverage limitations, and exclusions.

The key takeaway is to get insurance to protect your business and rental equipment from the unexpected.

5. Buying the kayaks and other necessary equipment

You can't generate kayak rental revenues without some kayaks.

We've touched on your business start-up costs and ongoing expenses in the business plan section above. So, by this stage, you should have a rough idea of what it will cost to put together a fleet of boats.

Let's look at some of the items that kayak rental companies will need for a successful business.

5.1. Canoes and kayaks

There is a significant overlap between the canoe and kayak communities. While one person might prefer a kayak, not offering canoes can eat into your potential customers and revenues.

A lot of this will depend on:

  • Your location

  • Nearby bodies of water (lake, rapids, river, etc.)

  • The type of service you want to offer.

Canoe and kayak rental businesses often offer both options because they:

  • Cater to more interests

  • Accommodate more groups of people

  • Canoes allow two people to pair up

Ultimately, this is something you will need to decide for yourself.

When selecting canoes or kayaks, in addition to the price, you should consider the equipment's durability and suitability to your services and environment.

5.1.1. Rental grade

Rental grade canoes and kayaks might carry a higher price tag, but they are designed to meet the needs of commercial kayak rental. A large part of your audience is likely to be inexperienced users, and rental grade kayaks are designed to be strong, easy to handle, and less likely to tip.

They won't always look the best, and they aren't exactly low-cost investments, but they will stand a lot of wear and tear and require less maintenance.

5.1.2. Construction materials

Another thing to consider is construction materials. There are all sorts of canoes and kayaks available which are designed for different purposes and environments. After all, choosing the boats' construction material comes down to the type of use your boats are expected to have. If you plan on offering services that offer access to whitewaters or rapids, you'll need to buy boats that can take more stress from rocks. On the other hand, more conventional gear is sufficient for paddling in less intensive environments.

5.1.3. High-grade touring kayaks

These kayaks are longer, more maneuverable, and easier to move in a straight line. These boats might be a good option if you plan to offer full-day tours that cover a larger surface area.

5.1.4. Where to buy your canoe and kayak rental equipment

One more thing to consider is where to buy your fleet of boats from. Buying in bulk, directly from the manufacturer, can help you save money. However, to access these bulk discounts, you may need to buy a large stock level.

Otherwise, you can use a local supplier or outdoor store. However, not all retailers will offer the appropriate type of product for the rough and tumble world of commercial canoe and kayak rental.

As for costs, a single-person kayak will run you about $300 up to more than $1000, depending on the style and quality, while a canoe could cost somewhere between $750 and $1500.

5.2. Paddles

If you want to run a canoe and kayak rental business, you'll need to buy paddles for each type of boat. Some key points to remember:

  • Canoes are two-person, so you'll need two single-bladed paddles for each boat

  • Kayaks require one double-bladed paddle per boat

  • You'll need to buy a range of sizes to suit children and adults.

Depending on size and quality, paddles will cost you between $20 to $60.

5.3. Life jackets

Life jackets should be mandatory for all your customers. You'll need to purchase a range of sizes to suit different body proportions. Additionally, make sure you buy life jackets that are approved by your local authorities (e.g. approved by the US coast guard or/and have CE and ISO marks).

Life jackets could cost between $20 to $60 each.

5.4. Transport van

Another considerable expense you'll need to think about is a van to transport canoes and kayaks. Most canoe and kayak rental businesses need a van to transport their equipment at some stage. However, you could theoretically forgo this purchase if you are posted at one location — where all your boats are stored.

Similarly, you may also need to purchase a canoe and kayak trailer to transport your equipment around.

A used van costs around $5,000 and upwards, while a trailer could cost $2000 or more. A great alternative to buying a van is to lease one. Leasing helps you get access to a vehicle without heavy upfront investment.

5.5. Other expenses to consider

There are a couple of other expenses that you should consider for your rental business. For example:

Lockers: When your customers go out on the water, you'll need to offer them somewhere to put their clothes and possessions.

POS system: While many people are moving towards online payment, there is still a considerable cash economy, especially among foot traffic. You'll need a point-of-sale system and a cash register to take in money, especially if a significant portion of your business comes from walk-in customers.

Safety equipment: Safety equipment for kayaking can include things like a bilge pump, whistles, tow bags, first-aid kits, etc. While not all of these items are strictly necessary, exploring little extras is recommended.

Reach in cooler: If your business is located on a marina or lakefront, selling cool drinks, ice cream, and other refreshments offer a secondary revenue stream. Finding ways to cross-sell can be very important in companies with fine margins. Snacks and drinks are some of the best low-cost investments out there.

6. Plan your operations

Any small business needs to have a solid operational plan to survive. So before you hire employees, you need to figure out how your rental business will run on a day-to-day basis.

The next chapters will cover some of the big things you need to plan in advance. TL;DR: there's a lot of admin work in managing everything from your inventory to orders. Plus it's probably more rewarding to serve customers and create experiences for them. Therefore, you might want to look at kayak rental software to help automate as much of the repetitive work as possible.

6.1. Inventory management 

How are you going to keep track of your boats and equipment? What system will you have in place to ensure that you don't lose any equipment and have all your gear maintained properly?

Inventory management is the process of sourcing, storing, tracking, scheduling, maintaining, and recycling your equipment as effectively as possible. It is hands down one of the most important operational processes of a rental business as it has a high impact on both sales and costs.

From Rentle you get free rental inventory management software. Yes – it's completely free and definitely better than a spreadsheet!

6.2. Kayak maintenance

Kayaks and canoes will pick up dirt and grime from use. What policies can you implement to ensure they are fit for customer use and fixed up when things go wrong. Some rental businesses schedule weekly or daily inspections to ensure their goods are at the right level.

6.3. Order management

Scheduling bookings and fulfilling orders can become hectic during the high season. Therefore, we recommend using an automated system that calculates the availabilities of your gear and tells where they are needed next.

If you want to take bookings online, you'll need a website, an online booking system, a way to process payments, and a system to keep all your online and in-store bookings in sync.

6.4. Scheduling

Any kayak rental business that takes a mix of walk-in and online orders needs a system that tracks and updates the availability in real-time. Furthermore, you might need to include buffer times before and after every booking to ensure you have enough time to prepare and maintain your boats.

7. Create a kayak rental website

You can find some rental companies online that operate via social media accounts. However, a website is essential if you want to build trust and leverage organic search and digital marketing to their full potential. Your potential customers will research destinations and kayak and canoe rental businesses before making any bookings. A good website will give them the information they need to feel assured they can trust you.

In the distant past, building a website meant either learning to code or paying a web developer. However, these days there are user-friendly website builders that have all the features you need to build a professional-looking website via drag-and-drop interfaces. You don't necessarily even need a separate website builder and hosting because Rentle provides small businesses with a ready-made rental website. It's easy to customize, it's SEO optimized, and comes with an integrated online booking calendar and payment processing – everything under one roof.

Your kayak business website doesn't need to be too flashy or complex. It doesn't even need to be updated every day (as long as the critical information is up-to-date). It just needs to be functional enough so that users can easily find the information they need. This means your website should have clear navigation and structure. These aspects lay the foundation for an overall outstanding user experience.

On a solid foundation, it is easy to build a great website. Make sure your website has high-quality photos of your business and equipment, compelling copywriting, transparent pricing details, and clear contact information. To increase online sales, you should also provide your customers with a way to book and pay for kayak and canoe rentals online because only a small proportion actually takes the effort to send an email or call you to book equipment.

There are also other factors on how a functional and converting website can help your business. For example, online bookings are often quicker to process because you have the customer's details ready and payment is taken care of. This saves you time, which is especially important on the busiest days of the season. What's more, customers who have committed to your service online are unlikely to miss out, even if it's raining a little outside.

8. Marketing and growing your business

If you're lucky enough to snag a location at a marina or one of your local parks near the waterfront, you're likely to have a lot of foot traffic during the summer, which could provide you with a steady stream of customers.

However, in most situations, you'll need to actively market your business to ensure sustainable growth and success. There are several approaches that you can take here. Below are listed some of the most potential marketing ideas for kayak and canoe rental businesses.

8.1. Content marketing

We've already covered how building a website will help you take bookings. However, it can also serve you as a great platform for marketing.

Content marketing is the process of producing compelling content about and around your services for your target audience. Whether you write a blog, shoot Youtube videos, or host a podcast, the purpose of the content is to attract, engage, and retain your audience.

If you produce a series of blogs or video content that offers valuable information, it can rank well and continue to deliver results for years. For example, you can produce equipment reviews, kayaking content, recommend routes and places to see, or anything that you feel would interest your audience.

Helpful content builds trust and helps establish your brand as the local kayaking authority. Producing high-quality content also improves your SEO and chances to rank on the first page of Google. The downside is that a content marketing approach can take months to have an effect. Most companies will need to hit the ground running, so they may not be able to afford to wait. Nevertheless, we recommend including content marketing as part of your marketing strategy because of the long-term benefits.

8.2. Paid ads

Paid or search ads are another excellent way to promote your service and drive revenues. Facebook and Google, for example, are suitable and cost-effective venues for advertising a kayak rental business. These platforms use their knowledge of your audience's demographics, interests, and geographical location to deliver your ads to the people they think are the most interested in your products and services.

Pay-per-click (PPC) ads can be one of the most influential and cost-efficient ways to reach your audience and provides several other benefits. It gives you a lot of control over how and where you spend your budget as well as provides you with data and insights about the ad performance.

Of course, PPC ads require constant spending. Unlike with organic traffic, once you stop paying, that source of customers is turned off. However, paid online advertising is one of the quickest and most responsive ways to gain customers. It is definitely worth experimenting with whether paid online ads will deliver you profitable results. Not least because it's super fast and the results are easy to measure. 

8.3. Social media marketing

Social media is a great way to establish a presence for your brand but also to connect with your target audience. Regular posts and hashtags are solid ways to drive awareness and audience engagement.

Additionally, your social media account offers a way to communicate with prospective customers by answering questions, sending out offers, or running competitions or giveaways.

Creativity, authenticity, and regularity are keywords for success in social media.

8.4. Local partnerships

Local partnerships with hotels, marinas, restaurants, tourist boards, etc. can be an excellent way to reach people visiting your area. You can incentivize local businesses with a referral fee or leave flyers or promotional materials on their premises. This could produce a very steady flow of customers in the right situations. Sometimes the basics work best.

8.5. Directories, listings, and marketplaces

Recreational rental companies whose customer base is largely dependent on tourists and leisure visitors should research the relevant directory and listing sites, create profiles on them, and continuously optimize the profiles. Tripadvisor and Yelp, for example, are hugely popular among people who are looking for activities and services in nearby areas and encourage people to leave reviews of companies they have done business with.

The power of these reviews is undeniable. The reviews will help you to be seen by more people as well as get listed in periodical top listings that help you build an image as the best-of-class service in your area. Therefore, you should also actively encourage happy customers to leave reviews of your business on these platforms. A good and low-effort way is to send an automated Thank You email right after your customer's booking has ended.

Conclusion

Starting a kayak and canoe rental service requires a large initial outlay and a good amount of administration before you even begin to hire employees and market to customers. However, it can be a hugely fulfilling job that brings you a lot of joy and purpose.

Of course, services like this are mainly seasonal. While that can be a good thing (who doesn't like three to six months off per year?), if it's your full-time gig, you need to make sure you generate enough revenue during peak times to support you through the lower months.

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Akseli L.

A marketer who gets excited about all things e-commerce. Outside of office hours, you'll most likely find Akseli from the countryside, hiking and shooting landscapes.

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