# How do Charter Boats make money?



## phantomcc (May 25, 2010)

How do Charter Boats make money?
I mean with fuel costs (especially when you are trolling)
Slip fees, reinvestment in tackle and repairs,
Insurance,
Must be the love of the game.


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## BlaineAtk (Jun 8, 2010)

Wirelessly posted

Depends on the type of charter.... I assume head boats you can figure out. I hear bill fishing charters are like $5500-$6500 though I have never been on one, but can see the profit margin. Just a guess though....


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## SouthAlabamaSlayer (Oct 13, 2011)

Let's do the math. It's different for inshore and offshore, this is an example of offshore.

$140 per person x 18 people = $2,520
Say they run an 8 hour trip and burn $400 in diesel. 
Say they use $100 in bait and tackle.
That leaves $2,000 per trip.
If they run only 50 trips per year, that leaves $100,000 after trip expenses. With $30,000 in boat maintenance/costs they make a profit of $70,000. 

Inshore captains run more trips per year and have less boat maintenance.


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## Realtor (Oct 1, 2007)

SouthAlabamaSlayer said:


> Let's do the math. It's different for inshore and offshore, this is an example of offshore.
> 
> $140 per person x 18 people = $2,520
> Say they run an 8 hour trip and burn $400 in diesel.
> ...


not so fast grasshopper, Insurance(s), slip fees, maintenance, safety equipment, Licenses, tax receipts, advertising, boat payments.... the list keeps going.....


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## SouthAlabamaSlayer (Oct 13, 2011)

Realtor said:


> not so fast grasshopper, Insurance(s), slip fees, maintenance, safety equipment, Licenses, tax receipts, advertising, boat payments.... the list keeps going.....


I lumped that into the costs/maintenance. I know it's not the simple but I was trying to give a general example of expenses.


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## Evensplit (Oct 2, 2007)

...office expenses, bank fees, credit card fees, payroll, training expenses...

For every dollar in "profit" (income minus fuel, bait, ice, and the other direct expenses for each trip) plan on putting 30-40 cents in your pocket, the rest goes to "the man".


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## Tyler Massey (Oct 2, 2007)

It's a tough buisness!! There are more expenses than most probably think..


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## Brad King (Sep 30, 2007)

Tyler Massey said:


> It's a tough buisness!! There are more expenses than most probably think..


 Amen to that!


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## Fairwaterfishing (Mar 17, 2009)

It averages around $100,000 in expenses per year per boat my size in everything you do. What you make over that can go into your pocket unless you need to repower or something very unexpected comes up. Its hard work for 6 months with marketing, boat work, engine work, tackle work, booking trips and last but not least trying your best to run at least 125 trips, and make customers happy. But! If you do make it in the summer months you then have the option to have the fall and winter OFF!! I have been lucky enough to be able to wake my son up for school everyday and to be able to deer hunt a bunch. I have also not made it and worked all winter just to keep cash flow enough going for another year. Having good credit and the ability to creative finance is also a plus..


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## Outside9 (Apr 30, 2008)

I'm sure it is a tough business, but they don't stay in business without making money every year. The guys that do good are the ones who have been around a long time.

I have some friends in the business and they say when the season is in they lose track of the days. Up way before dayllight, fish hard, come in and sleep just to do it again the next day.


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## NoMoSurf (Oct 2, 2007)

I've been thinking of booking a trip to the rigs for tuna, dolphin, aj's etc. 99% of the charters that I have looked at from Appalachicola to Venice LA have all been X amount of dollars for y number of hours + Fuel!

Keep in mind, there are also those charter captains that start a "business" to report losses on their taxes and have a "free" new center console to use for themselves. They run charters, but nowhere near enough of them to be profitable. 

Before I get jumped on for that comment, I know OF someone that did that.


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## Realtor (Oct 1, 2007)

NoMoSurf said:


> I've been thinking of booking a trip to the rigs for tuna, dolphin, aj's etc. 99% of the charters that I have looked at from Appalachicola to Venice LA have all been X amount of dollars for y number of hours + Fuel!
> 
> Keep in mind, there are also those charter captains that start a "business" to report losses on their taxes and have a "free" new center console to use for themselves. They run charters, but nowhere near enough of them to be profitable.
> 
> Before I get jumped on for that comment, I know OF someone that did that.


teach me how to get a "free" new center console to use just for myself. I knew I was doing it wrong.....


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## LITECATCH (Oct 2, 2007)

A boat that can carry 18 people and only burn 400 in diesel????!! WOW i want one of those!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


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## LITECATCH (Oct 2, 2007)

I am still bleeding from buying diesel today!


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## Fairwaterfishing (Mar 17, 2009)

LITECATCH said:


> A boat that can carry 18 people and only burn 400 in diesel????!! WOW i want one of those!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


I can!! My boat burns on average around 10 gallons an hour per trip. I ran a 12 hour on saturday in 4 to 6 foot seas when 36 miles one way and burnt 115 gallons. 14 passengers. Twin Cummins 6bt. 14 knot cruse. When snapper season begins I will not burn over 40 gallons on my 6 hour trips.


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## NoMoSurf (Oct 2, 2007)

Realtor said:


> teach me how to get a "free" new center console to use just for myself. I knew I was doing it wrong.....


Write off cost of boat as business costs and write off the depreciation as depreciation of business assets.

Not "free" but a lot cheaper than just going and buying one.

My wife audits corporate tax. She says that you would be amazed at the crap people write off. Or try. haha

I didn't say it was legal or ethical. I'm just saying what the guy did.


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## SouthAlabamaSlayer (Oct 13, 2011)

LITECATCH said:


> A boat that can carry 18 people and only burn 400 in diesel????!! WOW i want one of those!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


Bottom fishing charters do it all the time!


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## chad403 (Apr 20, 2008)

I believe the lively one, gambler, native son, etc probobly all burn less then a 100 gallons


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## wardicus79 (Apr 12, 2012)

Most boats in destin are in the 200 $ an hour range now.. So I think a profit can definately be made . It's not a simple family fishing trip anymore it a 1000$ expense on top of a vacation . But I can't afford vacation so I couldn't afford the trip anyway. However every yr people do all while being allowed less fish and ridiculous seasons . It's a real shame.


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## Spoolin Up (May 3, 2011)

Fairwaterfishing said:


> I can!! My boat burns on average around 10 gallons an hour per trip. I ran a 12 hour on saturday in 4 to 6 foot seas when 36 miles one way and burnt 115 gallons. 14 passengers. Twin Cummins 6bt. 14 knot cruse. When snapper season begins I will not burn over 40 gallons on my 6 hour trips.


Cummins 6bt is the key here fuel efficiency.


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## sealark (Sep 27, 2007)

No comment, But I have to raise the following flag on a lot of posts on this one.


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## LITECATCH (Oct 2, 2007)

I have Cummins in my other boat and i get great fuel economy with it. But you can't haul 18 people with it. I cruise it at 21 knots and she tops at 27 knots. Much faster than my Topaz. I am currently looking for a set of 6BTA5.9's @ 370 hp to put in her.


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## Burnt Drag (Jun 3, 2008)

LITECATCH said:


> A boat that can carry 18 people and only burn 400 in diesel????!! WOW i want one of those!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


Do you have an $300,000 lying around? I took 20 yesterday on 70 gallons.


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## Burnt Drag (Jun 3, 2008)

LITECATCH said:


> I have Cummins in my other boat and i get great fuel economy with it. But you can't haul 18 people with it. I cruise it at 21 knots and she tops at 27 knots. Much faster than my Topaz. I am currently looking for a set of 6BTA5.9's @ 370 hp to put in her.


You'll probably get < 2000 hours if you run them on the pins. You're asking alot to get 370 hp out of a 5.9. If you have the space, consider the 3126 cat or the 8.3 cummins. You can squeeze 450 out of the cat or 500 out of the cummins.


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## John B. (Oct 2, 2007)

sealark said:


> No comment, But I have to raise the following flag on a lot of posts on this one.


x2

Sent from my LG G2X using Forum Runner


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## LITECATCH (Oct 2, 2007)

I don't agree with running on the pins. I have old 3208 @ 320 hp (when new) in her now. I can add the inline Cummins and loose close to 800 pounds per engine. That in itself will help my cruise speed and fuel burn. Not to mention added HP. I know the Cummins 370's are really 355 hp. Cummins rates their engines different.


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## Lickety-Split (Oct 3, 2007)

I invite anyone who wants a free boat to jump right in and enjoy the ride...it will be the most expensive boat they will ever own...lol


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## kandv2000 (May 10, 2012)

It seems like the ones who are consistantly good and have good crews make a comfortable living. They have a high rate of repeat customers and dont have to scramble to stay booked. There are several fly by nights, and they usually dont last long.


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## specktackler57 (May 15, 2011)

i m just glad there are guys that are willing to put that much work into something that benifits all of us.i wish they made more.hard work.i only crewwed for 2 summers and it is tough work.catchumup.


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## Fairwaterfishing (Mar 17, 2009)

The newer electronic motors get even better fuel efficiency than mine. Cummins has a 6.7 liter QSB out that can push 400 hp out and get the hours. I just like the ole manual type engines that I can still work on. The new electronic engines are common rail fuel systems with no injector pump. It takes a pro to work on.


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## baldona523 (Mar 2, 2008)

sealark said:


> No comment, But I have to raise the following flag on a lot of posts on this one.


What is that far off?

I also know multiple inshore guides that got into the business planning on being part time to support buying a nice boat and it worked into a full time job. 

I have fished on multiple 35-45 ft boats with 10-12 people for bottom fishing out of Niceville and had well under $500 fuel bills. That's running from niceville there and back and going much further than most charters go. Most mates get a good chunk of their pay from tips so you don't have any employees. 

Offshore charters do have a high bottom line, but many have been around for a long time and should have their boat well paid for. 

It is not an easy business and long hours, but there is good money to be made. Everyone thinks they should be making more than they do.


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## Outside9 (Apr 30, 2008)

Fairwaterfishing said:


> The newer electronic motors get even better fuel efficiency than mine. Cummins has a 6.7 liter QSB out that can push 400 hp out and get the hours. I just like the ole manual type engines that I can still work on. The new electronic engines are common rail fuel systems with no injector pump. It takes a pro to work on.


Wasn't John Deere trying to break into the marine market several years back? I wonder how that worked out?


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## Fairwaterfishing (Mar 17, 2009)

John Deeres are some great motors. I have friends that bought a set and are still running them with over 10,000 hours on them. The sad thing is that they just didn't take off, and cummins pretty much took over. Yanmar didn't even take hold around here. Repowering a big boat is just like repowering a small boat you want motors that have local support and you are able to buy parts and theres always someone around that can work on them. Thats why you see so many Yamaha outboards its not that they are best motors its that there everywhere and the dealers are everywhere.


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## Lickety-Split (Oct 3, 2007)

If you work at it as a capt. and have good equipment and a good plan to keep cost of goods sold you can make money... I'm always asking the old salts how I can save and be more profitable... Tom has help me make a few decisions himself. I no longer have a 60 kt boat but I still can cruise at 40 and do a lot better on fuel with right props for what I'm doing...plenty fast and much more fuel ecom and less load on motors to extend my replacement hrs... 2011 motors with 1200hrs on them...it won't take long to get my 7500 on them. And they will be new again. But the point of this thread was to point out how hard it is to make it with cost always going up and less time to make money every year...it took me 3 years to make my first profit and it wasn't much. Doing much better now though...bottom line you ain't smarter nor will you out work the old dusty crusties...you're better off listening to them.


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## hsiF deR (Oct 4, 2009)

baldona523 said:


> What is that far off?
> 
> I also know multiple inshore guides that got into the business planning on being part time to support buying a nice boat and it worked into a full time job.
> 
> ...


I agree with you. 

I am curious what is BS. As far as writing off a boat and getting it for free, well I assume that he meant GREATLY discounted. Via using it or its components as a tax write off.
I always _heard (no experience)_that you could write off your boat as a second home (the interest on the loan) if it had a head and a galley......
All this being said, if you think its BS for someone to get creative with their taxes well.........


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## NoMoSurf (Oct 2, 2007)

hsiF deR said:


> I agree with you.
> 
> I am curious what is BS. As far as writing off a boat and getting it for free, well I assume that he meant GREATLY discounted. Via using it or its components as a tax write off.
> I always _heard (no experience)_that you could write off your boat as a second home (the interest on the loan) if it had a head and a galley......
> All this being said, if you think its BS for someone to get creative with their taxes well.........


What I meant by it was pretty much exactly what you said. The free part was not literal. But if the business is run half assed and not turning a profit, the boat can be written off as losses and/or depreciation. 

The free part comes in where the "owner" uses it for his own personal use whenever he wants because he didn't bother booking a charter....

I never said that all or even most charter captains do this. I just said that I happened to know of a guy that did. I don't even recall his name. I just remember how crappy I thought it was at the time that I met him. 

My nephew in law used to run a 42' (I think) Hatteras out of Gulfport. He and his partner made good money for several years, but he gave it up for an easier life in the "real" world. It's a hard life out there on the water. And as much as I love being out there, I wouldn't want to make my living on it.

As for the BS comments. If they were aimed at me... It concerns me very little. Like was said above. If they think no one gets creative with their taxes... They probably think ARS are endangered too.


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## sealark (Sep 27, 2007)

Let me clarify. I was not refering to the charter part it was some of the statistics that were being said. All as a poke in fun no offense intended. For what it's worth I ran a 40 ft boat with chartes for many years. Always made a little profit. The main thing is loving the water and fresh air. I doubt if there's anyone chartering that doesn't love just being on the water.


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## Fairwaterfishing (Mar 17, 2009)

Damn am I an old dusty crusty now?


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## sealark (Sep 27, 2007)

I would think the dusty part is dried salt water spray. No dust out there.


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## Lickety-Split (Oct 3, 2007)

NoMoSurf said:


> What I meant by it was pretty much exactly what you said. The free part was not literal. But if the business is run half assed and not turning a profit, the boat can be written off as losses and/or depreciation.
> 
> The free part comes in where the "owner" uses it for his own personal use whenever he wants because he didn't bother booking a charter....
> 
> ...



As a charter boat you can only legally run a loss for 3 out of 5 years. If you continue to run a loss or break even. You would violating the IRS's "hobby-loss rule" with which they can accuse you of doing just what you are talking about. In the event you cannot prove you were trying to turn a profit. You would be subject to fines and all back taxes on "costs of doing business" as they will be deemed non deduct able along with all the past depreciation you've taken on equipment. Not only that you may also be prosecuted for tax evasion. Most industries have something similar but fishing charters operate under a much stricter requirements under the "hobby loss rule". It's not like many farmers or other heavy equipment owners could, under any circumstance, call what they do a hobby...we have a little larger target on our back. Because of exactly what you are talking about.


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## Hook line stinker (Jul 19, 2012)

Lickety-split nailed it with the hobby-loos provisions.


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## NoMoSurf (Oct 2, 2007)

Lickety-Split said:


> As a charter boat you can only legally run a loss for 3 out of 5 years. If you continue to run a loss or break even. You would violating the IRS's "hobby-loss rule" with which they can accuse you of doing just what you are talking about. In the event you cannot prove you were trying to turn a profit. You would be subject to fines and all back taxes on "costs of doing business" as they will be deemed non deduct able along with all the past depreciation you've taken on equipment. Not only that you may also be prosecuted for tax evasion. Most industries have something similar but fishing charters operate under a much stricter requirements under the "hobby loss rule". It's not like many farmers or other heavy equipment owners could, under any circumstance, call what they do a hobby...we have a little larger target on our back. Because of exactly what you are talking about.


Makes sense. Like I said earlier. I didn't say it was legal or ethical. haha
I don't know what ever became of the guy or his "business". I don't even recall his name. This was 10 years ago or so.


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## fishnhuntguy (Feb 8, 2012)

*Here's a thought*

Take fuel and docking out of the equation and open up a Kayak charter business. Still have ins., licences, taxes, tackle, gear, ect.. Then you have to find clients that want to paddle. Thats the hard part


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## Lickety-Split (Oct 3, 2007)

Fairwaterfishing said:


> Damn am I an old dusty crusty now?


More so than I...not by age but experience...I mean it as a compliment I promise...just like you mean it as a compliment when you say monkey boat,lol


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## chad403 (Apr 20, 2008)

3208 are ole reliables but are thirsty.


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## flex (Feb 26, 2013)

just like any business if you find your customers fish and they have a good time they keep coming back.. if you suck at it then you don't last long unless you come from old money and can afford to lose money in the long run to do something you love. =


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