Kellee Toner

RCLS 455-Resorts
Feasibility Study
Due Date: May 8, 2016

Business Description
For my business, I plan to open a kayak and snow sport rental business on
Rimrock Lake, which is located off of Highway 12 in the Wenatchee National Forest,
approximately a 45-minute drive from Yakima, Washington. Rimrock Kayak Rentals and
More is going to focus on kayak and paddle board rentals in the summer months while
also providing skis and snowboards in the winter months. Considering that Rimrock
Lake is on the way up to White Pass Ski Resort, offering these winter sport rentals will
allow the business a more year round operation opportunity.
Rimrock is a large lake that allows for all types of summer activities but not
everyone wants to just go boating so for the summer months we will offer one-person
and two-person kayaks with paddles included, stand up paddle board rentals, along
with life jackets and helmets to rent with any summer activity. On the way up to White
Pass Ski Resort we will offer a stopping point where snow enthusiasts can rent
snowboards, skis, helmets, boots and poles. We want to offer a less expensive option
for the individuals who want to be outside enjoying nature and having a great time.
The main focus of the business is to allow customers a fun and exhilarating
experience without having to worry about purchasing and hauling their own gear up to
the lake or the mountain. Our mission is to provide an affordable and easily accessible
rental option to the individuals looking to get outside and enjoy what nature has to
offer. Although there are a few other rental shops in the area, including at the ski resort
and on the way up to the lake, we plan to offer a more affordable option to our clients.

We are different from what already exists on the market because being directly
on the lake will make renting a kayak or paddle board much less of a hassle and allow
for much more ease than having to worry about hauling it up on your car or in a trailer.
The nearest kayak rental store to Rimrock Lake currently is located approximately 35minutes away in the town of Naches, Washington, which is just outside of Yakima.
Although this shop is directly on the way up to lake, you must figure out how to get
your kayak up there all on your own. Having kayaks directly on the lake shore will allow
for great ease. The only other snow sport rental shop near the lake is at the ski resort.
The rental department at White Pass is a great money maker for them but as I know
from experience you must wait in long line to check out your gear. By stopping to get
their rental gear before they get up to the mountain, it will allow our customers more
time on the mountain and less of a hassle trying to check out their gear. Offering lower
prices and specials on our snow rentals will also help to bring in more customers.
Rimrock Kayak Rentals and More is a general partnership business. There are
two owners who are involved with all of the purchasing, managerial and business
decisions that are made for the company. Both of the owners are liable for anything
and everything that happens at or with the business and the businesses profits will be
taxed as ordinary personal income for both of them. The business will not be working in
conjunction with any other businesses in the surrounding areas.

Regulatory and Risk Analysis

To run our rental business, we would need a Yakima County Business License
and a Recreational Vehicle Rental License. In terms of insurance needs, our company
would need:
- General Liability: this policy provides both defense and damages if you, your
employees or services cause or are alleged to have caused bodily injury or
property damage to a third party.
- Professional Liability Insurance: covers a business against negligence claims
due to harm that results from mistakes or failure to perform.
- Property Insurance: this provides coverage to equipment, signage, inventory
and furniture in the event of a fire, storm or theft.
- Workers Compensation Insurance: this will cover medical treatment, disability
and death benefits in the event and employee is injured or dies as a result of
their work with the business.
- Business Interruption Insurance: this compensates a business for its lost
income during a disaster or catastrophic event and the businesses operations
are interrupted.
- Life Insurance: protects and individual against death.
- Inland Marine Coverage: covers your equipment on your business premises or
off the premises, regardless of who is handling it.
- Rental Agreement: this will allocate responsibility for the loss or damage of the
rental items, as well as liability claims related to their use.

All of the insurance types are intended to not only protect the business directly but to
also protect the employees, equipment and the renters. When operating a rental
business, we will be inclined to pay income taxes, charge sales tax and pay property
taxes.
In addition to licensing and insurance there are many regulations the will need to
be followed. These regulations, according to the Washington State Legislature are listed
below:
- RCW 79A.60.190: Operation of personal watercraftProhibited

activities Penalties
(1) A person shall not operate a personal watercraft unless each person
aboard the personal watercraft is wearing a personal flotation device
approved by the commission.
(3) A person shall not operate a personal watercraft during darkness.
(4) A person under the age of fourteen shall not operate a personal
watercraft on the waters of this state.
(6) A person shall not lease, hire, or rent a personal watercraft to a
person under the age of sixteen.

- RCW 79A.60.160: Personal flotation devices requiredPenalty

(1) No person may operate or permit the operation of a vessel on the
waters of the state without a personal flotation device on board for
each person on the vessel. Each personal flotation device shall be in
serviceable condition, of an appropriate size, and readily accessible.

(4) No person shall operate a vessel under nineteen feet in length on the
waters of this state with a child twelve years old and under, unless the
child is wearing a personal flotation device that meets or exceeds the
United States coast guard approval standards of the appropriate size,
while the vessel is underway.
- RCW 79A.60.498: Uniform regulation of business and professions act
(1) The uniform regulation of business and professions act, chapter
18.235 RCW, governs unlicensed practice, the issuance and denial of
licenses, and the discipline of licensees under this chapter.
All of these regulations must be followed by our business and our clients. We will
announce all rules and regulations to our clients before they leave with their rented
items.
In dealing with risk management, there are plenty of things to be concerned
about. The major concern would be the safety of our clients who are coming and
renting our equipment. To ensure their safety we need to do thorough checks of every
piece of equipment that we have, every single time that it is returned from being used.
We also will do bi-weekly checks on the equipment before we open on the specified
days of the week. When checking the equipment, we will provide the employees with a
checklist that correlates with each piece of equipment. All types of equipment will have
their own inspection sheet, as they will have different specifications and pieces to look
over. If a piece of equipment is found to not be in accordance with our safety standards
we will take it off of the rental line and either get it fixed or if the damage to bad, we

will get rid of the piece of equipment. To ensure that we are covered, all checklists will
be kept as evidence that the equipment passed inspection for five years. If it ever
comes into question the safety of a certain piece of equipment we will be able to
provide the inquiring party with the inspection.
Before anyone leaves with any piece of equipment, we will do a tutorial on how
to properly use that item. This can include: the proper way to get in a kayak, how to
stand up on a paddle board, the correct way to paddle a kayak and paddle board, the
proper way to put on a life vest, snowboard boots, ski boots, helmets and the proper
way to connect to the bindings on a snowboard or a pair of skis. Although we wont be
offering lessons we will briefly go over how to safely snowboard and ski. Also, before
they leave they must sign a waiver release form, releasing the business from any
liability if they were to get injured while using the equipment.
Location Analysis
Rimrock Lake is located right off of Highway 12, 10 miles east of White Pass, on
a major throughway connecting Yakima, Washington to the west side of the state
coming to an end at I-5 just below Chehalis, Washington. It is a heavily traveled byway,
that sees many people traveling for recreation, work and family purposes. Rimrock is a
storage reservoir for the Yakima Project, an irrigation project run by the United States
Bureau of Reclamation, getting its water from the Tieton River. It sits at an elevation of
2,927 and is six miles long by approximately one mile wide.
Placing our business right off of Highway 12 will allow our business to be seen
very well. With all of the traffic passing by each day, we will be able to advertise to

people from both the west side and east side of the state. Our business will also be
located next to a small resort that already has an established location at Rimrock Lake.
At the resort they offer cabins, camping sites and a restaurant. Having our business
near them will allow us to attract some of their customers to come and rent recreation
equipment. Having a centrally located location between both sides of the state will
allow us to attract a diverse population. We will be able to service individuals from the
city life and individuals from the country life.
Although Rimrock Kayak Rentals and More will be located 45 minutes from a
major city, having the highway as the only form of travel allows for a quick and easy
trip up to the lake. This location stands out compared to others in this type of business
because we are located directly on the lake, which allows for ease and simplicity when
wanting to go kayaking.
The one downside about this location is natural disasters can play a role in how
well our business runs. Just this past winter Highway 12 was shut down for about a
week due to a snow and mudslide that washed away multiple sections of the highway.
This caused all of the current local business to have to be shut down, meaning they
werent able to have any income. If this were to happen again, we would lose money
during our winter rental season. I dont foresee any natural disasters happening during
the summer months that would take away from our kayak and paddle boarding rentals.
They seem to be doing road construction quite frequently on Highway 12, which might
detour some people from traveling across it, which in turn would mean less people
coming in to rent equipment.

Management Analysis
Management and staffing needs are as follows:
Position

# of Personnel Pay Rate

Equipment
Manager
Rental
Staff
Mechanic

Hours Per
Week

Number of
Weeks

Personnel
Subtotal

$20.00

40

52

$83,200.00

$11.00

25

52

$71,500.00

$19.00

40

52

$79,040.00

Finance
Manager

$20.00

40

52

$41,600.00

Marketing
Manager

$20.00

40

52

$41,600.00

Total Personnel Cost

$316,940.00

Equipment Needed:
- One-Person Kayaks: Pelican Trailblazer 100 Kayak, stable enough for
beginners, this sit-in kayak is well equipped for comfort and performance.
Comes with adjustable foot pegs, a seat pad and padded backrest. These
will be used as our individual rented kayaks.
- Two-Person Kayaks: Pelican Unison 136T Kayak, made to accommodate two
beginner or intermediate level kayakers. Comes with a cockpit table with day
hatch and bottle holder. These will be used as our duo kayaks, for customers
that want to ride together.
- Kayak Paddles: Airhead Aluminum Kayak Paddle with Asymmetrical Blade, with
an asymmetrical design it is designed to equalize the force of both sides of the
blade when paddling.
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- Stand Up Paddle Board with Paddle: Lifetime Amped 11 Stand-Up Paddle Board
with Adjustable Paddle, includes a leash loop attachment and adjustable
paddle. This package will supply everything that is needed for our paddle board
rentals.
- Life Jackets (Adult): DBX Vector Series Nylon Life Vest. We will order these in
multiple sizes to accompany any person that needs one.
- Life Jackets (Youth): ONeill Youth Superlite Life Vest. We will order these is
multiple sizes to accompany any child that needs one.
- Snowboards (Adult): Burton Ready to Ride Snowboard Package comes with the
board, bindings and a carry bag. We will order these in multiple sizes so that
we are able to accompany any person that is in need of a snowboard.
- Snowboards (Youth): Burton Youth Chopper Marvel Snowboard Package comes
with board, bindings and carry bag. We will order these in multiple sizes so that
we are able to accompany any child that is in need of a snowboard.
- Ski Package (Adult): K2 Shreditor 112 Skis with Bindings have a healthy tip
and tail rocker for surfing the pow with just enough camber and side cut to
carve up the groomers. We will order these in multiple sizes so that we are
able to accompany any person that is in need of a set of skis.
- Ski Package (Youth): K2 Juvy Skis with Bindings, built light and stable,
composite core flexes easily yet absorb the impact of hard landings. We will
order these in multiple sizes so that we are able to accompany any child that
is in need of a set of skis.

- Snowboard and Ski Helmet (Adult): Bolle Adult B-Wild Snow Helmet secure fit
with a ventilation system. We will order these in multiple sizes so that we are
able to accompany any person that is in need of a helmet.
- Snowboard and Ski Helmet (Youth): Giro Youth Launch Jr. Snow Helmet. We
will order these in multiple sizes so that we are able to accompany any child
that is in need of a helmet.
- Telephone: this will be used to take reservations from customers and general
communication throughout the business.
- Miscellaneous Tools: our mechanics will need a variety of tools to fix the
equipment that is broken and keep the building and grounds nice.
- Hoses: these will be used to rinse down the equipment after it has been
returned.
- Sanitizing Spray: this will be used on the helmets, life jackets and boots to
ensure that they are all sanitary for the next use.
- Signage: to help us advertise the business and direct people to where we are
located.
- Business Cards: this will allow customers to take our information home with
them and have our contact information for the next time they return.
- Industrial Shelving: we will put this in the back of our facility to hold all of our
rental equipment.
- Industrial Grade Docks: we will have two of these out on the lake to help our
customers get into and out of the kayaks.

10

- Desk Top Computers: we will use these to check-in and check-out equipment
and to take customers payments.
- AED: these are necessary to have in the event one of our customers has a
medical emergency.
Facility:
- We will build a large industrial facility that sits close to Highway 12 and is very
visible to the traffic driving by. This facility will have a front office and lobby
area where the customers are able to come in and look at examples of the
equipment and try on the equipment. The front office is where they will do
all of the paper work for the rental (i.e. payment, waiver release and rental
agreement form). In the back of this building we will have a large storage
space to house all of our rental equipment. All of the equipment will be
organized on shelves and racks by type, age and size so that it is easy and
quick to find when needed. There will also be a large shop that is closed off
in the very back so that the mechanics are able to work on the equipment
when needed. A large garage door will be placed in the rental storage area
so that the kayaks and paddle boards can easily be distributed with less
distance to be carried to the lake.
- The entire front area will be a fully paved parking lot and there will be
paved pathways all the way down to the lake bed.
- We will also build multiple docks out on the lake to help assist our customers
getting into/on and out of/off of the kayaks and paddle boards.

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- At the front of our parking lot, next to the highway, we will have a large neon
sign with Rimrock Kayak Rentals and More on it, along with the other services
that we offer. There will also be a sign on the front and the back of the building
so you know what the building is whether you are coming from the road or
returning back from the lake.
Specialized Instructions:
- All Washington Boating rules and regulations must be followed when renting
out equipment (i.e. no children under 16, no rentals near dark).
- All equipment must be thoroughly checked over before and after rental.
Scheduling:
- Rimrock Kayak Rentals and More will be open daily from 8:00-7:00, with times
varying during day light savings time.
- All rentals must be back on the premises 30 minutes before closing time.
- There will always be (1) Equipment Manager, (2) Rental Staff and
(1) Mechanic on site at all times during operating hours.
Downtime:
- There is no planned downtime but in the case that it is a low snow year, we
reserve the right to close down the business until there is sufficient snow for
the ski resort to open.
Subcontracted Services:
- We will not need any subcontracted services as we will take care of all service
needs in house.

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Market Analysis
Our target market is outdoor enthusiasts of all ages that come from all walks of
life. We strive to get customers who are beginners at kayaking, paddle boarding, skiing
and snowboarding all the way to individuals who are advanced at these activities. We
will be an affordable rental business that individuals from each end of the financial
spectrum will be able to afford a nice leisurely day.
We will have two separate business that will provide us with possible competition
when it comes to rentals. The first will be a business that offers kayak rentals that is
located 45-minutes east of Rimrock Lake. We feel that we will be able to fairly compete
with this business because our customers wont have to worry about how they are
going to safely and successfully transport the kayaks to and from the lake. With our
business they will be able to walk directly to the lake, with no transportation needed.
The second competition will be White Pass Ski Resorts rental department. Although the
ease of renting right at the ski resort is appealing, we are located only 10 miles east of
the resort and our rentals will be at a lesser cost than what the resort charges. Also, the
lines at the ski resort can get a bit tedious, so by stopping ahead of time, customers are
able to skip the long lines. I feel that with the proper marketing, Rimrock Kayak Rentals
and More will be able to successfully compete and even takeover the completion in the
area.
We are going to position ourselves in the market by offering top of the line rental
items at an extremely affordable price. By doing this we will be able to attract
customers that previously used the other businesses in the area. We will also do plenty

13

of marketing to all of the major cities were our customers will be traveling from.
Sending out coupons will also be a way that we will get more customers to come use or
rental services.
The Outdoor Foundation and The Coleman Company, Inc. reported that 21.7
million Americans-7.4 percent of the population-enjoyed paddling on rivers, streams
and lakes in 2014. Paddlers averaged seven annual outings in 2014, up from 6.8 in the
year before. Collectively Paddling participants made nearly 216 million outings
(Paddlesports). In 2014, kayaking made up 4.4% of the total paddling usage, with
stand-up paddle boards making up 0.9% of the overall total. Since 2011, kayaking has
been the most popular paddling activity and has constantly been on the rise (2015).
In 2015, the number of snowboarding participants jumped from 7,339,000 in
2014 to 7,676,000 participants. For skiing, the number of participants jumped from
9,004,00 to 9,378,000 in 2015. The statistics also show that there is a greater number
of males (61.5% for snowboarding and 58.8% for skiing) participating in the snow
sports than there are females (38.4% for snowboarding and 41.5% for skiing). The
average median age for snowboarding and skiing in 2015 was 25-35 years old (2015
SIA).
From these numbers I feel that all of the equipment that we plan to offer is still
rising in popularity, therefor it would be a good idea for us to provide these services.
Our summer sport activities are having the greatest rise in popularity, so we will focus
greatly on that aspect but owning a business like this in Washington and being next to

14

a major ski resort, I believe our average numbers will be higher than the national
average for snow sport participation.
Financial Analysis
The major start-up costs are listed below in a spread sheet under Capital Costs.
Also included are smaller and reoccurring costs that we will encounter as we run the
business listed in a spread sheet under Supplies List (As Needed). The total start-up
cost with both spread sheets combined is $1,054,373.69. Day to day operating costs
will vary depending on how many employees we have working (see employee spread
sheet), how much we have to spend on parts to repair the equipment and how many
rentals we have on that particular day.
With a start-up cost of $1,054,373.69, we will need to obtain outside financial
help to be able to finance Rimrock Kayak Rentals and More. Both of the owners have
saved $200,000 each for a total of $400,000 that we have in hand. To be able to start
up the business we will need to obtain a loan from the bank for $750,000.00. Since the
owners have $400,000.00 saved they are going to be putting that money towards the
Capital Budget and the Supplies List for the start-up, putting the loan money directly
towards the $750,000.00 needed to build the facility. Since the Capital Supplies and the
Supplies List, not including the facility cost, are only a total cost of $304,373.69, that
will leave us with a contingency of $95,626.31.
Financing through a local bank, we will have a monthly payment of $3,125.00 for
20 years at a 3% interest rate. Once our company gains notoriety and starts attracting
a large customer base we will begin to gain revenue. After approximately 3-5 years we

15

will be able to reevaluate our financial situation and decide if we are able to increase
our mortgage payments or not. After we have the loan and facility completely paid off
and officially own the business and facility, we will gain an extra $3,125.00 in revenue
per month or $37,500.00 per year.
Capital Expenses
Item

Price

Quantity

Total Cost

One-Person Kayak

$199.98

25

$4,999.50

Two-Person Kayak

$649.99

25

$16,249.75

Kayak Paddle

$41.99

80

$3,359.20

Stand-Up Paddle Board with Paddle

$449.99

20

$8,999.80

Adult Snowboard Package

$499.99

40

$19,999.60

Youth Snowboard Package

$209.95

40

$8,398.00

Adult Snowboard/Ski Helmet

$99.99

90

$8,999.10

Youth Snowboard/Ski Helmet

$60.99

90

$5,489.10

Adult Ski Package

$389.83

40

$15,593.20

Youth Ski Package

$259.95

40

$10,398.00

Adult Life Jacket

$39.99

50

$1,999.50

Youth Life Jacket

$29.95

50

$1,497.50

Miscellaneous Tools

$15,500.00

$15,500.00

Signage

$4,000.00

$4,000.00

Business Cards (1000 pack)

$55.00

$55.00

Industrial Shelving

$20,000.00

$20,000

Desk Top Computer

$850.00

$3,400.00

Industrial Grade Dock

$75,000.00

$150,000.00

AED Kit

$1,169.99

$2,339.98

Facility

$750,000.00

$750,000.00

Total Capital Supplies Cost

$1,051,277.23

16

Supplies List (As Needed)

Item

Price

Quantity

Total

Telephone

$75.99

$303.96

Hoses

$50.00

10

$500.00

Sanitizing Spray

$30.00

$150.00

Trash Cans

$65.00

10

$650.00

Trash Bags (Box of 200)

$35.00

10

$350.00

Hose Nozzles

$12.00

15

$180.00

First Aid Kit

$42.50

$212.50

Cleaning Supplies

$150.00

$450.00

Janitorial Equipment

$300.00

$300.00

Total Supplies Cost

$3,096.46

Grand Total (Capital and Supplies)

$1,054,373.69

Projected Revenues:
Equipment

Price Per Day

Deposit

One-Person Kayak

$35.00

$250.00

Two-Person Kayak

$45.00

$500.00

Stand-Up Paddle Board

$35.00

$500.00

Life Jacket (Adult)

$10.00

$30.00

Life Jacket (Youth)

$5.00

$25.00

Snowboard Package (Adult)

$40.00

$200.00

Snowboard Package (Youth)

$30.00

$200.00

Ski Package (Adult)

$40.00

$200.00

Ski Package (Adult)

$30.00

$200.00

Helmet (Adult)

$10.00

$75.00

Helmet (Youth)
$5.00
$60.00
**All packages include the necessary accessories (paddles, boots and/or poles)
During the summer months we project that each item (both kayak types, paddle board
and both life jackets) will be rented out on average 20 times per day for a daily total
income of $2,600.00 and a monthly total (based on a 30-day month) of $78,000.00. For
17

the winter months we project that each item (snowboard packages, ski packages and
helmets) will be rented out on average of 20 times per day for a daily total income of
$3,100.00 and a monthly total (based on a 30-day month) of $93,000.00.
Feasibility Recommendations
The feasibility recommendations for Rimrock Kayak Rentals and More would be
to amend the basic concept and conduct a new feasibility study. We came to this
conclusion because we really need to focus our study more on the winter months to
determine if it is feasible for the business to be operating during that time. We will need
to look more into how many clients we will get instead of them going directly to the ski
resort to purchase their rentals. We feel that our business would be highly feasible with
our summer months plans due to us being the only kayak and paddle board rental shop
directly on the lake. We would also want to look into bringing in at least one if not two
more owners who can help add more up-front money to get the business started. This
will allow us to take out a smaller financial loan, which in turn will raise our monthly
revenue because we wont be paying as large of monthly payment to the bank for our
loan. Possibly getting rid of the winter sport rentals and adding in more partners to the
ownership, our business has a chance of becoming more feasible.

Enterprise

Pessimistic (based on

Realistic (based on 20

Optimistic (based on

5 rentals per day)

rentals per day)

50 rentals per day)

$ Equity

$ Net Profit

$1,054,373.69

-$520,125.00

ROI
%

$ Net Profit

ROI
%

$ Net Profit

ROI
%

Rimrock
Kayak
Rentals and

-4.9

$2,080,500.00

1.97

$5,201,250.00

4.9

More

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References
13 types of insurance a small business owner should have. (2012). Retrieved from
http://www.forbes.com/sites/thesba/2012/01/19/13-types-of-insurance-a-smallbusiness-owner-should-have/#978d9dd94fd7
2015 SIA snow sports fact sheet. (2015). Retrieved from
http://www.snowsports.org/research-surveys/snow-sports-fact-sheet/
2015 special report on paddlesports. (2015). Retrieved from
http://c.ymcdn.com/sites/www.americancanoe.org/resource/resmgr/Generaldocuments/OIF_PaddlesportsResearch_201.pdf
Equipment rental insurance. (2016). Retrieved from
https://www.trustedchoice.com/small-business-insurance/artsentertainment/equipment-rental/
FLOW adventures rental page. (2016). Retrieved from http://www.flowadventures.com/Rentals.aspx
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http://www.dickssportinggoods.com/family/index.jsp?categoryId=4417979&sr=1&o
rigkw
Paddle accessories. (2016). Retrieved from https://www.rei.com/search.html?q=
Paddlesports report 2015. (2015). Retrieved from
https://outdoorindustry.org/article/paddlesports-report-2015/
Regulation of recreational vessels. (2016). Retrieved from
http://app.leg.wa.gov/RCW/default.aspx?cite=79A.60
Rimrock lake. (2016). Retrieved from http://wdfw.wa.gov/fishing/washington/629/

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