Did you know that many watersport operators consistently leave money on the table without realizing how much profit they could have made by capitalizing on existing rentals and tours? Learn different ways of maximizing your profits for rocking this season!
Hey everyone and welcome to episode 17 of the Weekly Wave podcast presented by WaveRez. I’m your host Greg Fisher, and today we’ll be talking about ways you can maximize your profits with your watersport business.
This is one of my favorite conversations to have since there are so many ways to increase your profits without ever buying new equipment or adding additional locations. Sometimes we need to look inwards, which means taking a deeper look at our current operation rather than looking elsewhere. Let’s first talk about expenses, since this is usually where I see the most leakage.
One of the biggest reasons why you are not maximizing your profit is due to your equipment not running. In previous episodes, we talked about choosing new equipment opposed to used. There are pros and cons to both, but new equipment is less prone to maintenance issues and will give you better runtime. The lack of basic mechanical understanding is very common in most operations, and this should be part of training your crew. Small repairs are common, and you don’t want them causing unnecessary revenue loss on your busiest weeks.
Another expense you should be watching closely is your credit card processing fees. The average operator will pay roughly 3% of their sale towards credit card processing. More operators are now seeing a larger percentage of their sales being processed through credit cards from online bookings. It’s ideal to bid out your credit card processing every 2 years. Never sign an agreement that is more than that. Watch out for agreements that automatically renew after 2 years, and have autonomy to change the rates. Even a 1% difference can mean a significant amount of profit added back to your bottom line.
When it comes to the revenue side, there are a few things your business should be doing to increase your profits. First off, make sure you are upselling. Some ideas might include branded merchandise, sundries, cancellation protection, damage protection, photo packages, and added equipment rental. For those that use reservation systems like WaveRez, you can easily add them in the online checkout flow as an added option. Upsells are by far the best way to increase the average spend by customers, and some of these ideas cost nothing up front to implement.
The next thing you can do is implement dynamic pricing. As mentioned in the previous episode, it’s ideal to charge higher prices for dates and times that are in high demand. If you don’t have a reservation system like WaveRez that can automatically update pricing on the fly, you can still do this manually. If you are unsure what to charge, start small and gather feedback from your crew to see what customers are willing to tolerate. It might take a few months to get it right, but dynamic pricing is sure to increase your bottom line.
Let’s face it, if you want to maximize your profit on your rentals and tours, it’s going to take some creativity and some hustle. Always be thinking about efficiency, because after all, this is what ultimately separates the good companies from the great.
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