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H20 Sports Life: A New Chapter in the Story of a Serial Entrepreneur…

Thought it would be worthwhile to document our journey to create H2O Sports Life.  I hope it may help others navigate their path thru entrepreneurship to successfully start a business.  Now, we are still in the early stages (opened Nov 1st 2020) of this venture so success is far from certain for us but maybe this will provide some insight into our thought process, up to this point.

Origin?

I had owned and operated a jet ski rental business in Virginia Beach, Va in 1993 and 1994 (yep, telling my age a bit).  Always loved the business.  They would come back and laugh and say things like, did you see Dad fall off the jet ski, etc.  There are so few businesses where customers are happy to pay you for what they experience.  At the time, I was in the military and a transfer to Florida stopped me from being able to continue.  In Florida at the time, competition was everywhere so it went to the back burner of things to do in the future.

So, fast forward 27 years, my wife Melinda and I were floating around a jet ski on the lake this past summer 2020.  The conversation came up to start focusing on a life we enjoy and what that would look like.  We agreed to try a wake board camp and jet ski rentals starting in 2021.

Tail Wagging The Dog Effect…

And then the conversation expanded.  We should sale wakeboards and related equipment.  After all, if we’re going to be dealing with people that love wakeboarding, we should not let those hardgood sales go elsewhere.  When we reached out to some suppliers, the general consensus was that we could buy their equipment, at wholesale, but we had to have a retail storefront.  They had enough web only suppliers and were not adding to that list.

At first we thought we could do a small storefront close to the lake.  It would be a good check-in location for camps, jet skis, etc.  But then it’s a long timeframe between end of summer and the start of the next for carrying a year round lease.

We decided to add snowboards, snow skis, related equipment and apparel to the list.  That’s our winter time love!  Of course, for that to make sense, we chose a prime retail space, about 20 mins from the lake, opposed to something in the rural area close to the lake we’re on.

I’m still not sure if we’ve completely diverted from the original goal of a life we enjoy to a retail employee at this point.  After all, summer is not here yet.

jet ski rentalThe High Level Business Model?

The overall model consists of our website, which sales both products and services (camps and jet skis rentals) and the retail store, selling both products and services (including additional services of heat molding boots, snow ski waxing/tuning/binding mountings) as well.  I’ve had a lot of businesses over the years and have found, for the most part, that businesses have 3 major cost legs  (location/utilities/insurance, labor and product costs).  If you can cut out one of those legs, the likelihood is higher that you can successfully operate it.

In the past, I’ve had vending machines, a jet ski rental biz, a restaurant (don’t do it!), a consulting company, an oil recycling company and a rental real estate company, to name a few of my ventures.  I continue to operate the consulting biz (20 years now) and the rental real estate biz (10 years now) but overall, I’ve been pretty statistical with about 4 out of 5 attempts not succeeding.

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An aside.  At this point, I’d like to mention my definition of entrepreneurship, after doing it most of my life.

Work long hours, save everything (not borrow from friends and family) and gamble on something you have some control over.  If it fails, which it probably will, repeat.  I’m not saying this to discourage.  Every failure is a learning process and believe me, those lessons stick.  On the follow-up gambles, you tend to apply those lessons and refine the craft.

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Companies like a restaurant, have all 3 of those cost legs making it difficult to succeed.  Our consulting company has 1 of those legs (labor), making it the easiest to manage.  Real Estate Rentals have 2 of the legs (location and property management for labor), making the difficulty to cash flow positive, a bit more difficult but possible.

So, now we’re attempting retail.  A business that does have all 3 legs of cost.  Makes me wonder if I had forgotten all of the mistakes of the past…  Combine those costs with the competition in retail from online retailers and it seems like it would have been a rational decision to run!  So, we convinced ourselves as follows:

  1. Winter specialty.  People that buy snow skis, usually want to try on the boots for comfort and fit.  Boots are also heat molded so the buyer needs to be at a retail shop for them to heat mold to the foot.  Once the boots are chosen, the bindings need to be mounted to the skis based on the chosen boot.  Again, not something easily done via online only sales.
  2. Winter Services. (no product cost, ignoring wax cost) People that snowboard or snow ski also need their equipment waxed and tuned annually.  It doesn’t make sense to ship that off to have done.
  3. Winter Equipment Rentals. (minor product cost) Yes, you can rent equipment at the slopes but there are definitely crowds to deal with and you’re moved through like cattle.  Easier to handle this at a non-slope adjacent facility.  The equipment has a long life so the cost is spread over the life.
  4. Summer Specialty. When we needed a new wakeboard, something good, we would have to drive an hour.  In our store, we can talk about the differences between continuous, hybrid and 3 stage boards.  The differences between a skimmer and a wake surf.  In-Store product knowledge is rare for this category.  Certainly nice to have local options with meaningful conversations.
  5. Summer Services. (minor product cost) Wake board camps do include the cost of a boat, fuel and maintenance but the equipment tends to have a long life so the cost is spread over the life.
  6. Summer Equipment Rentals. (minor product cost) Jet Skis include the equipment cost, fuel and maintenance but the equipment tends to have a long life so the cost is spread over the life.
  7. MAP Pricing enforcement.  MAP is Manufacturer Advertised Pricing.  It’s the minimum that we can advertise a product for.  You can’t undermine this price through gifts, loyalty programs or anything else that attempts to circumvent the intent.  In these specialty industries, if we break the rules, we cannot purchase products from the supplier next year.  They don’t kick you out the on the first mistake but if you’re intently doing it, better find some different suppliers for next year.  This enforcement means that Amazon and other retailers are not advertising anything we carry, for a lower price.  It’s a safety mechanism that keeps small retailers relevant.  Without this, we would have never ventured down this path.

With the web site and retail store both driving products and services, we are attempting to drive the same sales from different sales channels.  We felt the model of services from a retailer was unique.  After all, how many retail stores offer services.  Yes, there is Best Buy with the Geek Squad and it’s probably what saved them from the path Borders Books took (yes, an old reference).

Future posts will dive into some of the moving pieces, including vendors, technologies, marketing and results we’ve seen.  Follow us for updates and support small businesses:

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Visit our retail store at: 1020 South Main St; Kernersville, NC 27284

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I have spent over 25+ years on the water with these people. Safety is #1! Teaching people how to learn these sports is fun and exhilarating, For everyone involved! I can not even count how many people we have taught how to ski, wake board, surf, and even how to properly ride a tube. Good equipment, safety training, and years of teaching knowledge make for an unforgettable experience !! Well worth the price for a new skill and an unforgettable memory!!! Remember the first time you rode a bike without training wheels? UNFORGETTABLE !!

-Chris D.