Kayaking is a popular outdoor recreational activity that allows people to explore lakes, rivers, and coastlines up close. 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 on vacation.

Whether you’re drawn to the tranquil lakes or fast-flowing rivers, turning your passion for paddling into a business is both fulfilling and profitable. But where do you start? In this guide, we’ll provide an overview of the kayak rental industry and steps to launch your own successful kayak rental operation.

Business Overview

A kayak rental business involves acquiring a fleet of kayaks, canoes, and paddleboards, along with safety equipment to rent out hourly, daily, or weekly to customers. This is often paired with renting gear like paddles, life jackets, dry bags, and racks or trailers to transport the kayaks. Some businesses also offer guided tours for customers as well.

Many kayak rental operators start out small, renting just a few kayaks from a trailer or dock. As the business grows, additional kayaks and gear are added to the rental fleet. Popular kayak rental locations include beaches, rivers, lakes, and reservoirs near metropolitan areas.

Depending on the climate or seasonality of tourists, a kayak rental business is one that is often operated part-time, though some operate as a full-time operation throughout the year.

Industry Summary

The kayak rental industry is a segment of the broader outdoor recreational industry. It has seen significant growth in recent years, driven by an increased interest in outdoor activities and adventure tourism. According to IBISWorld, the kayak rental industry has grown at an average of 1% per year over the last 5 years and generated $56.7 million in 2022.

Locations near national parks, tourist hotspots, and even urban lakes and rivers have seen a surge in kayak rental businesses. But that’s just the tip of the iceberg. As more people seek out healthier, more active lifestyles, the demand for such recreational activities is expected to soar even higher.

Checklist To Start Kayak Rental Business

Starting a kayak rental business requires more than just knowledge about kayaking. From market research and legal paperwork to branding and building customer relationships, each step requires your attention. But don’t worry, our checklist aims to equip you with the knowledge to launch a successful kayak rental business

Step 1: Assess the Market

So, you’ve got the passion for paddling and the itch to turn it into a business. That’s a great start. However, even before you paddle out into the world of kayak rentals, you’ve got to answer one big question: Is there enough demand for this business in your area? Knowing this can save you from sinking a bunch of time and money into a venture that’s destined to be all wet.

Why focus on demand first? Simple. No matter how fantastic your kayaks are or how unbeatable your prices are, if there aren’t enough people interested in renting kayaks, you’re paddling upstream without a paddle. Assessing demand gives you a chance to pivot or refine your business idea, ensuring you’re meeting a real need. You’re looking for indicators that say, “Yes, this location needs a kayak rental service.”

How to Research Demand

When it comes to figuring out whether there’s enough interest for a kayak rental business, you’ve got several routes to explore:

• Local surveys: A good, old-fashioned survey can offer insights into local interest. Use social media or local events to distribute your survey and offer a small incentive to boost participation.
• Social media: Social media platforms like Facebook, Yelp, or TripAdvisor that tourists might use to research your area can be great sources of market data. You can monitor conversations about kayaking and even check out comments about competitors to get a better understanding.
• Competitor analysis: Take note of existing kayak or water sports rental services nearby. Are they thriving? If yes, why? If not, what’s missing? Be a customer for a day and observe the volume and type of traffic they get.
• Tourism stats: Check local tourism websites for the number of visitors to nearby water bodies. The more footfall these areas get, the higher the potential demand for kayak rentals. Also, talk with the office to see what people are looking for when coming to the area and how your kayak rental business can fit in.
• Online searches: Tools like Google Trends can help you gauge interest in kayaking or water sports in your chosen area. If there’s an uptick in searches, chances are there’s some level of demand.

Step 2: Write a Business Plan

Once you have a better understanding of the market and are armed with data that this is still a great opportunity, creating a business plan is the next step. A business plan serves as a roadmap, outlining the steps you need to take to launch and grow your business. It also helps to clarify your business concept, identifies potential challenges, sets out goals and measures for success, and helps you to communicate your vision to potential investors or lenders.

If funding is needed, there are a few sections that I would recommend spending some extra time on. These would include:

Market Analysis

In this section, you outline why your kayak rental business will succeed. But don’t just tell; show them with data. Highlight the customer demand you’ve discovered during your research phase. Break down the demographics of your customer base and how you’ll meet their specific needs. Are you close to a national park that attracts millions? Is there a void in the market you intend to fill? Lenders want to see that you’ve done your homework and understand your market inside out.

Management Team

A kayak rental business may seem straightforward, but when a bank or investor is evaluating a business plan, they know that the people behind the business are often as important, if not more so, than the business idea itself. Lenders and investors want to see that the management team has the necessary skills, experience, and commitment to make the business a success. Include information about each team member’s background, relevant experience, roles, and responsibilities.

Location

In the kayak rental business, location is more than just real estate; it’s your primary resource. Your choice of location directly influences your potential customer base, operating costs, and even the types of kayaks and equipment you’ll need. Are you near a tranquil lake, a bustling tourist beach, or a popular fishing spot? Explain why this spot is the best fit for your business model and how it aligns with your market research. A lender wants to see that your location will contribute to, not hinder, your business growth.

Financial Projections

Numbers speak volumes, especially in a business plan aimed at securing funding. This section should outline your revenue model, expenses, and cash flow forecasts. Be sure to factor in the seasonality of the kayak rental industry, accounting for leaner months and planning for sustainability. Banks and investors will scrutinize these numbers to make sure they’re realistic and indicate profitability. They want to ensure that their investment will see returns and that your business has a financial buffer to weather any storms.

One Last Bit of Advice

Before you present your plan to any lender or investor, get a second set of eyes on your business plan. Whether it’s a fellow small business owner or an accountant, having someone else scrutinize your plan can give you valuable insights. They might spot pitfalls you didn’t see or affirm that your plan is solid, giving you an extra boost of confidence before you walk into that bank or investor meeting.

Related: How to write a business plan

Step 3: Source Funding

You’ve done your homework, researched the market, and got your business plan ready to go. Now comes the part where you need to actually finance this dream. For a kayak rental business, you’ve got several options for funding. However, each comes with its own set of conditions and caveats. Here’s what you need to know.

Personal savings: A lot of people kick things off with their personal savings. It’s a straightforward option: you control the money, and there are no interest rates to worry about.

If your savings alone aren’t enough, you’ll need to explore additional funding avenues. The most common ones include:

Bank loans: When most people think of funding a business, they think of a traditional bank loan. Here, your investment (typically 15% at a minimum), credit score, and collateral become really important. Banks look for low-risk borrowers, so the stronger your credit and assets, the better your chances of securing a loan. If a bank finds your business proposition too risky, they may still agree to lend money under an SBA loan guarantee, which reduces the bank’s risk while helping you get the funds you need.

Friends and family: Many entrepreneurs turn to their personal networks for funding. If you decide to go this route, make sure to put all agreements in writing. A handshake is friendly, but a written contract keeps relationships intact and expectations clear for both parties.

Microloans: For those who need smaller amounts of money or don’t qualify for a traditional loan, microloans can be a viable alternative. These are smaller loans, usually under $50,000, provided by economic development organizations. Some of these programs even offer business training along with the financial support, which can be a nice added bonus for those just getting started.

Local Investors: While not as common for kayak rental businesses, local investors can sometimes provide funding. These might be individuals interested in supporting local businesses or who have a specific interest in outdoor recreational activities. However, securing investment can be challenging, as many investors are looking for businesses with high growth potential and scalability

Related: Finding the money to start a business

Step 4: Acquire a Location

Finding the right location is one of the most important decisions when starting a kayak rental company. Your location not only determines foot traffic and visibility but also influences the types of kayaking experiences you can offer, such as tranquil lake paddling, ocean kayaking, or river expeditions.

Convenient access and visibility to potential customers is key. Look for sites near marinas, parks, hotels, camping areas, and other outdoor recreation hubs.

Look into zoning laws and waterway regulations in your chosen location. Certain areas may require specific permits or might not allow commercial activities at all. Check with local authorities about what’s required; you don’t want to sign a lease only to find out that your type of business isn’t allowed there.

In addition to being convenient for customers, also think about the infrastructure you’ll need. This includes storage space for kayaks and equipment, a small office for administrative work, and perhaps a retail space for additional revenue streams like selling snacks or kayaking gear. The facility should also have easy access to the water, like a dock or a gently sloping beach.

Last, another consideration is having secure, indoor storage space for the equipment during the off-season.

Of course, the cost of leasing or buying property has to align with your budget and financial projections. Keep in mind that locations in high-traffic tourist areas are likely to be more expensive than more secluded spots. Weigh the benefits against the costs. Sometimes, paying a premium for a high-traffic area can pay off in the form of higher revenue.

Step 5: Register the Business

You’ve got your plan, your funding, and the passion to make it happen. Now it’s time to dot the i’s and cross the t’s. I’m talking about registering your business and making it legal. For a kayak rental business, you’ll need to focus on a few key areas: business structure, name registration, and licensing.

The rules can vary from state to state, so be sure to double-check the specifics for your area. Let’s dive in.

Choosing a business structure: First, you’ll need to decide what type of business structure best suits your needs. The four primary types are:

• Sole proprietorship: This is the simplest form to set up and the least costly. It’s just you, running the business. The downside? You’re personally liable for any debts or issues.
• Partnership: Similar to a sole proprietorship but for two or more people. You’ll share in the profits, losses, and responsibilities. And like sole proprietorship, personal liability is a consideration.
• Corporation: A more complex structure that offers the owners liability protection. It’s more costly to set up and requires staying on top of administrative requirements.
• Limited Liability Company (LLC): This is a hybrid of a sole proprietorship/partnership and a corporation. It offers liability protection without some of the administrative burdens of a corporation.

If liability is a concern, and in a business where physical activity is involved – it should be, the LLC or corporation is preferred as they provide more robust protection against personal liability. In contrast, while a sole proprietorship is easier and less expensive to set up, it exposes you to personal financial risk if the business runs into legal issues.

Related: Comparison of business structures

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips for naming a canoe and kayak rental business

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

For kayak and canoe rental businesses, some form of boat safety and transportation licensing and regulations are required at the state level. Also, if your business is near a protected wildlife area, you may need special permission from environmental agencies.

Even if you aren’t required to have specific certifications, requiring staff to take a Boater Safety Course and a Water Rescue Certification would be a good idea, along with first aid and CPR certification.  

In addition, general business registrations 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: Purchase Equipment & Begin Setting Up

Now comes the exciting part: getting your hands on kayaks and setting up your location. Here are a few things to consider.

Purchasing Equipment

The backbone of your kayak rental business will be your fleet of kayaks. Quality should be your top priority when purchasing kayaks because it affects not only the safety of your customers but also the longevity of your assets.

• Selecting kayaks: Research kayak types like recreational, fishing, and tandem, and determine how many of each to acquire based on expected demand. While recreational kayaks are going to be less expensive, only buy from reputable kayak brands known for quality and durability. If possible, shop end-of-season sales to get deals on rental fleet items.
• Additional equipment: Besides kayaks, you’ll need other essential equipment like paddles, life jackets, bilge pumps, spray skirts, and paddle floats. Some businesses offer premium rentals that include additional safety gear.
• Consider transportation: If you are going to be transporting customers and or kayaks, consider the vehicles you will need.

Setting Up Your Location:

After securing your equipment, the next step is to set up your rental location. Here are some key considerations:

• Storage: You’ll need a secure place to store your kayaks and equipment. This could be a building on your property or a rented space nearby. Make sure the area is large enough to store all your equipment.
• Customer area: Create a welcoming customer area where people can inquire about rentals, sign waivers, and receive safety instructions. This area should be clean, comfortable, and have clear signage.
• Launching area: If possible, set up a launching area near your rental location. This area should be safe and easily accessible for your customers. A dock or gently sloping beach would be ideal.
• Signage and visibility: Ensure your business is easily visible from the main road or trail. Clear signage directing customers to your location is crucial.

Step 7: Hire 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.

If employees will be hired, it’s important to understand the legal requirements that come with being an employer. These typically include:

Employer Identification Number (EIN): If you haven’t already obtained an EIN for registration purposes, you’ll need one now. An EIN is used by the IRS to recognize businesses with employees.

Employment eligibility verification: As an employer, you’re required to verify an employee’s eligibility to work in the U.S. This typically involves completing an I-9 form for each employee.

State reporting: Each state has different reporting requirements for new hires. Be sure to check your state’s regulations and comply accordingly.

Workers’ compensation: Most states require businesses with employees to carry workers’ compensation insurance. This protects both your business and your employees in case of a workplace injury.

Labor laws: You must also comply with federal and state labor laws, which cover areas like minimum wage, overtime pay, record keeping, and youth employment.

Related: Hiring your first employee

Step 8: Create a Marketing Strategy

Marketing your kayak rental business goes beyond slapping a sign on the front door; you need a well-thought-out strategy to attract customers.

At the core, a kayak rental business isn’t really in the business of renting kayaks. You’re selling an experience, and it just so happens that kayaks are the vehicle for taking part in that experience. Highlight the unique aspects of your location, the thrill of kayaking, and the memorable experiences your customers can expect.

For starters, you should invest in a user-friendly website with an online booking system, making it easier for customers to reserve their kayaks, as many people prefer to make reservations online versus calling. Having a website that is frustrating to use may tempt customers to use another rental service.

Another effective method is social media advertising, where, using platforms like Facebook and Instagram, you can showcase your kayaks, picturesque waterways, and satisfied customers in real-life action. Don’t forget email newsletters for special promotions and events; these can help you keep in touch with your existing customers and prompt repeat business.

Claiming your business on online directories like Yelp and TripAdvisor and claiming your Google Business Profile is another key move. These platforms not only improve your online visibility with basic info like hours of operation, location, and contact information but also allow customers to leave reviews, helping you build credibility.

Offline, consider collaborating with local hotels or tourism offices; they can recommend your services to tourists looking for fun activities. Also, 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

Step 9: Prepare to Launch!

Alright, you’ve gotten this far; that’s no small feat. But before you officially launch your kayak rental business, there are probably still a few more things to iron out. Some common tasks include:

Business insurance: You’ll need to secure appropriate insurance coverage to protect your business from potential risks. This could include property insurance, general liability insurance, and commercial auto insurance if you’re transporting kayaks.

We recommend getting at least three insurance quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price.

Bookkeeping: Set up a bookkeeping system to track your finances. It could be as simple as a spreadsheet, detailed as accounting software like Wave Accounting (FREE) or Quickbooks, or hiring an accountant.

Contracts: These could include rental agreements, liability waivers, and vendor contracts. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful, though it’s advisable to work with a lawyer to ensure these documents are legally sound.

Bank account: Open a separate bank account for your business to keep your finances organized and make tax time easier.

Management software: There are several industry-specific software options you might consider. Booqable, Rentle, and Checkfront are all popular choices for rental businesses. They can help with booking management, inventory tracking, and point-of-sale transactions.

Pricing: Decide your pricing strategy. Will you offer hourly rates, half-day or full-day rentals? Will there be group or off-season discounts?

Credit card processing: Being able to accept credit cards will make it easier for customers to do business with you. Services like Square or Stripe can help with this.

Industry associations: Joining organizations like the American Canoe Association, the Outdoor Industry Association, or the Professional Stand Up Paddle Association can provide networking opportunities, industry insights, and potential discounts on equipment and supplies.

Grand opening: Plan a grand opening event that makes a splash – literally. Offer special rates, partner with local businesses, and make it a day to remember.