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How to Start a Canoe and Kayak Rental Business

How to Start a Canoe and Kayak Rental Business

How to Start a Canoe and Kayak Rental Business

How to Start a Canoe and Kayak Rental Business

How to Start a Canoe and Kayak Rental Business

Many people enjoy canoeing and kayaking but don’t do it enough to invest in their own equipment or don’t want to lug it with them on vacation.  If you love being on the water, a canoe and kayak rental business could be an opportunity for you to start your own company.  You could do what you love, spend a lot of time outdoors, and make a living.

Depending on the climate or seasonality of tourists, a kayak and canoe rental business is one that can often be operated all year as a full-time operation or part-time.

Business Overview

A canoe and kayak rental business rents canoes, kayaks, and paddleboards to customers by a body of water for recreational purposes.  They can be rented by the hour or for a half or full-day.  Sometimes they offer guided tours for customers as well.   The business supplies all the safety and other equipment necessary.

Industry Summary

According to IBIS World, the kayak rental business has grown at an average of .3% per year for 5 years to reach $57.3 million in 2021.  According to a report published by ACA Paddlesports, in 2019, 22.6 million people in the United States participated in paddlesports, which is 7.6% of the population.

The industry was affected by the pandemic but is expected to rebound.  Paddlesports have grown in popularity due to the increased focus on physical fitness, particularly among women.  However, the increased availability and affordability of canoes and kayaks have kept the rental market from growing at a higher rate.

Target Market

Your target market will be health-conscious consumers or people who like canoeing and kayaking recreationally.  Tourists are often a large part of the market, depending on your location.

Skills, Experience, and Education Useful in Running a Canoe and Kayak Rental Business

There are several specific skills that you will need to open a canoe and kayak rental business.

  • Experience.  Experience in kayaking and canoeing is essential, as well as knowledge of safety equipment and practices.
  • Certifications. You probably are not required to have specific certifications to have non-motorized water vehicles, depending on the requirements in your area, but a Boater Safety Course and a Water Rescue Certification would be a good idea. You and your staff should also have first aid and CPR certification.  If you or your staff will be on the water with customers, you should have boat over boat rescue training.
  • Business knowledge and experience.  You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to be able to provide great customer service, so your customers keep coming back..

Checklist for Starting a Canoe and Kayak Rental Business

If you’re thinking about starting a canoe and kayak rental business, it’s important to do your research first. Here is a checklist to help you get started.

Step 1: Write a Business Plan

After coming up with the idea, the next step in starting your canoe and kayak rental business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, what makes your business better than competitors, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related: How to write a business plan

Step 2: Name the Business

Finding the perfect canoe and kayak rental business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Related: Tips for naming a canoe and kayak rental business

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a canoe and kayak rental business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.

Some popular LLC formation services include:

IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Select your Location

You need a location near a body of water and enough space to store your watercraft.  It may be a good idea to partner with another waterfront business or marina to utilize their space and gain visibility to potential customers.

Another consideration for a location is to have secure, indoor storage space for the equipment during the off-season.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

For kayak and canoe rental businesses, some form of boat safety and transportation licensing and regulations are required at the state level.  In addition, there are general business registrations that may be needed, such as a local business license, sales tax permit, and an Employer Identification Number.  

Related: What licenses do canoe and kayak rental businesses need?

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a canoe and kayak rental business is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

A canoe and kayak rental business will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a canoe and kayak rental business include social media marketing, giveaways, and online advertising.

Also, consider investing in a good website, as many people will make reservations online versus calling. Having a website that is frustrating to use may tempt customers to use another rental service.

Working with waterfront hotels, marinas, and other places can also help let people visiting your area know that this activity exists.

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free logo makers from BrandCrowd and Canva.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a canoe and kayak rental business. A couple of these include:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost of insurance for a kayak rental business will be more expensive than many other types of business due to the safety liability involved.

To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

In addition to a good insurance policy, don’t forget to create a liability waiver to minimize your liability in case of an accident.

Related: Common types of insurance a business may need

Step 10: Hire Employees

You may need employees to help you run your canoe and kayak rental business.  Make sure that you select people with appropriate experience and training.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

While smaller operations may be able to operate with just the owner, you will likely at least need to hire employees during the peak season and on Saturdays and Sundays to help with checking customers, shuttling customers back to their vehicles, and retrieving the canoes and kayaks.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your canoe and kayak rental business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business


How much does it cost to start a canoe and kayak rental business?

Here are the typical costs you will face when you open a canoe and kayak rental business.

– Space rental deposit for boats and equipment $1,500 – $5,000
– Equipment such as life jackets and paddles $1,000 +
– Canoes and Kayaks $10,000 +
– Training and licensing $500 – $1,000
– Vehicle and trailer to transport boats for long trips $20,000 +

How much does a canoe and kayak rental business owner make?

Rental rates for 2-4 hours are $20 – 40 per canoe or kayak and $40 to $70 for a day.  If you make $60 per canoe or kayak per day, with 20 total boats, and you do that 2/3 of the year, your rental revenues would be $288,000 per year in revenue.

In most locations, a rental operation will be seasonal, and busiest during the summer. Be sure to budget for the off-season.

Are there grants to start a canoe and kayak rental business?

It’s extremely rare to find a grant to start a canoe and kayak rental business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a canoe and kayak rental business?

The NAICS code for a canoe and kayak rental business is 532284, which is classified under Recreational Goods Retail.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code and how to find yours

How to Start a Canoe and Kayak Rental Business

How to Start a Canoe and Kayak Rental Business

Greg Bouhl

Greg Bouhl

Welcome! My name is Greg Bouhl, and I have over 21 years as an entrepreneur, educator, and business advisor, where I worked with over 1,600 entrepreneurs to help them start and grow their businesses.

As a small business advisor, I got fed up with clients finding inaccurate and outdated information when they were researching how to start a business online, so I launched StartingYourBusiness.com to be a trusted resource.

I'm constantly adding and revising this site, but if there is a question you have about starting a business or need help finding something, please ask!

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