Do you want to start a skydiving business? If YES, here is a detailed guide on how to start an indoor or outdoor skydiving business.
Skydiving is a sport where people literally throw themselves out of airplanes just for the fun of it. Okay, the sport is not that harsh, but I guess you get the drift. Today, you will find that people are getting more adventurous and are engaging themselves in competitive sports and recreational activity, and one of such activities is skydiving.
This extreme sport comes with a huge amount of risk because you have to jump off from an airplane while being hooked on to a harness and a parachute. However, this is not a dangerous activity as you may have been thinking. But that does not negate the fact that you ought to be mentally and physically prepared before you can engage in this sporting activity.
If you are a professional skydiver, then you may even be thinking along the lines of starting your own skydiving business. Aside from sharing your skills to enthusiasts, you can also obtain additional income from other viable sources.
A skydiving business is not an ordinary venture to start up. It requires both knowledge and skills to be able to start and operate the business. Here are steps you ought to follow if you want to start your own skydiving business in the United States.
Steps to Starting a Skydiving Business Successfully
Table of Content
- 1. Plan your business
- 2. Choose the service to offer
- 3. Get a business plan
- 4. Find The Right Airfield
- 5. Form a legal entity
- 6. Register for taxes
- 7. Open a business bank account and credit card
- 8. Set up business accounting
- 9. Obtain necessary permits and licenses
- 10. Get Business Insurance
- 11. Define your brand
- 12. How to keep customers coming back
- 13. Establish your Web Presence
1. Plan your business
A clear plan is essential for the success of any business. It will help you map out the specifics of your business and discover some areas that have been outside your radar as an outsider.
Skydiving business owners have reported starting up operation for as little as $10,000, but that’s usually when they already have their own airplanes and pilot’s license and can recruit volunteer jumpmasters. This just means that you are starting your operation with just the bare necessities. More typical startup costs are much higher, and can include these elements;
- Licenses, certification and legal costs — $5,000
- Airplane and liability insurance — $6,000
- Multiple rigs and gear — $40,000
- Pilot, fuel, maintenance and plane rental or purchase – $50,000 to $100,000-plus to purchase small Cessna
- Sales and marketing — $1,000
With startup costs as high as they are, it may be best to look into investing options. Considering the dangerous nature of this activity, though, confident investors may be hard, but not impossible to find.
Your largest ongoing expense is likely to be plane fuel and other expenses related to your air costs. One business owner spoke of spending $200,000 a year on fuel, but your costs will be highly variable depending on your annual number of days of operation and flights per day as well as prevailing fuel costs, which can rise and drop unexpectedly.
As your business grows, you’ll also encounter the cost of hiring employees for such duties as packing parachutes, conducting training classes and generating sales. These positions might also be filled by experienced skydivers who’ll work for free jumps. You need to thoroughly investigate your options before you start.
2. Choose the service to offer
There are several niches in the skydiving business, and before you start, you need to choose the niche that favours you better. For this reason, you need to choose the services to offer in your skydiving business. Some of the services you can look to include;
Indoor skydiving facilities give you the ability to conduct training and activities in a safe environment that is completely independent of outside weather conditions. The downside? Cost. Construction of an indoor wind tunnel is expensive, possibly even cost-prohibitive for startup entrepreneurs. Budget carefully if you plan to offer expanded training activities indoors.
Military Business Training
The increased use of private para-military personnel has created a market for parachute schools capable of training private security personnel in HALO (High Altitude/Low Opening), HAHO (High Altitude/High Opening) and other skydiving techniques. Tap into this market segment and you have the potential to generate a significant revenue stream from corporate clientele.
In the USA you need eight hundred skydives under your belt before you can take others along for the ride as a Tandem Instructor.
The skydiving industry is built on a foundation of income generated by tandem skydiving, and as such, there is a steady demand for reliable, personable instructors to introduce the general public to the world of freefall. For many tandem instructors, taking tandem students for their first jump is an amazing privilege that gives them repeated access to the energy and thrill of what it is like to skydive for the first time.
Teaching others to jump by themselves is for many professional skydivers the best job they can have. At skydiving school, they’re passing their passion for the sport on to eager new students who have caught the skydiving bug the same way they did. The most common method of achieving a skydiving license is through the Accelerated Freefall Course. To be an AFF instructor you need 500 jumps.
Very simply, coaching means passing on skills you have learned to other people who are already qualified skydivers. While you can become a qualified coach relatively early in your jumping career, to develop the skill, knowledge, and reputation to turn coaching into real money takes vastly longer.
There are coaches out there who make a living just from working as a coach, but almost all of them have passed through some or all of the other positions listed above to get there. This is a complex area best learned about in the field, and while it is entirely possible down the road, it is best thought of as a way of supplementing your work and providing some variety for the time being.
Ambitious skydiving entrepreneurs routinely create auxiliary revenue streams. Everything from the sale of parachuting equipment to on-site cafes or restaurants hold possibility as supplemental profit centers, depending on the needs and buying habits of your customer base.
3. Get a business plan
Just like starting any other business, a skydiving business also requires all the necessary planning that would serve as your guide. Before anything else, creating a business plan is the foremost thing to consider. In developing the business plan you should include your goals and visions of what you aim for your business.
The planning would start from the searching of location where you can establish your skydiving business. Obviously, you should select a strategic location ideal for skydiving purposes. Make sure that you inquire about the necessary requirements that the state would ask from you before you can operate such business.
Again, if you are planning to start a skydiving business, you are required to hire a skydiving instructor. Anybody is not allowed to do skydiving without obtaining training a from professional skydiver. In this kind of business you should also offer skydiving class and training where in individuals can apply for certification after completing the course.
4. Find The Right Airfield
A crucial step in starting a skydiving business is the epic-level ‘house-hunting’ that has to be done to find the right airfield home. You can start your search on familiar territory and then take your search further outward. If you are having some issues with this, you can hire the services of a real estate guru.
5. Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation. But if you are starting a sky diving business, it is highly advisable that you choose a limited liability company (LLC) or corporation.
Establishing a legal business entity like an LLC or corporation protects you from being held personally liable if your skydiving business is sued. You can start an LLC yourself and pay only the minimal state LLC costs or hire a Business Formation Service for a small additional fee.
You will also 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.
6. Register for taxes
To conduct your business properly and without harassment from the IRS, you will need to register for a variety of state and federal taxes. In order to register for taxes you will need to apply for an EIN. It’s really easy and free, and you can even get your EIN in one day.
7. Open a business bank account and credit card
Using dedicated business banking and credit accounts is essential for personal asset protection when it comes to running a business.
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.
You should also endavour to 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.
8. Set up business accounting
Setting up a skydiving business can cost a bundle. 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.
9. 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. This is especially so with a skydiving business. This is because of the high levels of risk involved in this business.
Several federal licenses and permits must be obtained before you can operate this type of business. Your pilots must be licensed, and there are other regulations for the operation of aircraft for commercial purposes. A list of these regulations (Federal Aviation Regulations) and permits can be found with further research.
In addition, certain state permits and licenses may be needed to operate a skydiving business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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. You can also get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
It is also strongly recommended to have your customers sign liability waivers. This is to absolve your business of certain avoidable liabilities.
10. 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 well being 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.
You equally need commercial vehicle insurance to cover bodily injury and property damage expenses for you or any of your employees who drive on the job. Rates for this policy depend on your and your employees’ driving records, but commercial vehicle insurance usually costs between $1,200 and $2,400 for cars and between $800 and $2,000 for trucks.
You also need insurance for your airplanes as they are the most valuable asset of 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.
You need workers’ compensation to cover your employees if they’re injured on the job – not all states require this one, though. Rates for these policies vary by state, from $0.75 per $100 in employee wages in Texas to $2.74 per $100 in employee wages in Alaska.
Speak to an insurance agent to determine what other types of coverage your business might need.
11. 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. One way you can promote and market a skydiving business is to use your website and social media to draw interest. See if coffee houses and bars will allow placement of your business cards and consider advertising online where your target audience hands out or on billboards near your airport location.
12. How to keep customers coming back
Once you have gotten your first divers, you would need them to keep coming back. You can generate first-time and repeat business by providing discounting on the usual rate. Run limited time specials in social media and package rates for several jumps.
13. Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can get professional help when setting up your website so it doesn’t look tacky. It won’t do your reputation any good to set up a business as big as skydiving but your crappy website keeps pushing people away. You can also use social media to attract new clients or customers.