THE BUSINESS OF DIVING

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THE BUSINESS OF DIVING (AKA DIVE SHOP ECONOMICS
101) KEN KURTIS NAUI INSTRUCTOR OWNER, REEF
SEEKERS DIVE CO.
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• Diving
• is an expensive
• adventure sport
• that attracts
• the cheapest SOBs
• in the world

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• SCUBA STATISTICS
• 1½ 2½ MILLION ACTIVE DIVERS
• AVERAGE 10-12 DIVES/YEAR
• MORE ACTIVE IN CA/FLA
• MOST NEVER GO BEYOND BASIC O/W
• AVERAGE 89 FATALITIES/YEAR
• AVG 4 DEATHS ANNUALLY IN SoCAL

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There are roughly 1500 dive shops in the U.S.
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DIVE INDUSTRY 2008 733.9M 2007 803.3M 2006 7
62.2M 2005 717.3M
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DIVE INDUSTRY 2008 - 9 2007 5 2006 6
2005 Base - 0
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AVG DIVE STORE 2008 494,130 2007 541,121 2006
480,350 2005 464,589
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EQUIPMENT ONLY 2008 285,276 2007 308,744 2006
362,518 2005 351,942
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EQUIPMENT ONLY 2008 - 8 2007 - 15 2006 3
2005 Base - 0
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INSTRUCTION 2008 68,337 2007 67,041 2006 69,
198 2005 64,840
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AS UNITS (SKU) 2008 688,747 2007 687,408 2006 7
25,938 2005 N/A
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NEW DIVERS SPEND 300 - CLASS 200 - DIVES 500
GEAR 1000 TOTAL 165,000,000 OVERALL (22
TOTAL)
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TOTAL INDUSTRY SALES (2006) 762,245,390
AVERAGE/STORE 480,350
AVERAGE/DIVER 305 - 635
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58 OF THE TOTAL DOLLARS (440M) COMES FROM
EQUIPMENT SALES
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14 OF THE TOTAL DOLLARS (103M) COMES FROM
INSTRUCTION
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25 (187M) OF THE TOTAL DOLLARS COMES FROM DIVE
TRAVEL, BOTH LOCAL AND FOREIGN
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THE INDUSTRY CERTIFIES 165,000 NEW DIVERS
ANNUALLY AVERAGE - 110/SHOP
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Most dive shops 1. Lure in new students 2.
Sell them classes 3. Sell them personal gear 4.
Hope to sell them gear 5. Then start looking
for a new class.
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Problems this creates 1. Cards are good for
life 2. Many dont buy gear 3. But they
want to go dive 4. Shop has nothing to offer
them 5. Because theyre reinventing their
customer base.
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HIGHEST PROFIT MARGIN IS IN GEAR
PEOPLE MOST LIKELY TO BUY NEWBIES
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THE ONE PERSON THEORY 494,130 ANNUALLY OPEN
308 DAYS/YEAR 1604.32/DAY
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ONE GOOD SALE CAN LITERALLY MAKE OR BREAK YOUR DAY
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• Typical expenses shops deal with
• Rent
• 2. Employee expense
• 3. Other fixed overhead
• 4. Merchandise expense
• 5. Marketing (Yellow Pages, website, mail).

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Reef Seekers expenses from 2005 TOTAL INCOME -
639,039
RENT - 56,604 UTILITIES - 11,497 SALARIES -
75,601 TAXES/W-COMP - 11,823 MARKETING -
23,163 LOCAL TRIPS - 81,026 FOREIGN TRIPS -
86,916 SALES TAX - 27,674 INSTRUCTORS -
8,704 CREDIT CARDS - 13,457 MERCHANDISE -
195,927
TOTAL EXPENSES - 636,371 PROFIT - 2,668
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• Obstacles to success
• Customer loyalty
• 2. Economy
• 3. Territory
• 4. Hobbyist mentality
• 5. Manufacturers

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THAT ALL BEING SAID . . . ITS A FANTASTIC
SPORT WITH PEOPLE WHO LOVE WHAT THEYRE
DOING KEEPING IT ALL GOING
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AS A NEW INSTRUCTOR, WHAT DO YOU OFFER THE
SHOP, AND THE CUSTOMER?
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PROMOTE THE STORE AS OFTEN AS YOU CAN
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WHAT THAT MEANS UNDERSTAND POLICIES WEAR THEIR
GEAR ATTEND THEIR FUNCTIONS BRAND
LOYALTY UNDERSTAND THE PERSONALITY LEARN NAMES
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WATCH THEIR OTHER INSTRUCTORS
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• Some things to think of doing
• that make you more valuable
• to a dive shop
• REFRESHERS
• GENERAL PRACTICE
• POOL DIVES
• INTRO DIVES
• NON-CERT RATINGS
• PHOTO
• . . . and much more

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VIDEO PHOTOGRAPHY
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EMPLOYEE or INDEPENDENT CONTRACTOR??
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1099 vs W-2 IRS Form 2016 Schedule
C Deductions??? Business license Workmans
comp??? Hobbyist
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GOOD INSTRUCTORS CREATE GOOD DIVERS GOOD DIVERS C
REATE GOOD BUSINESS
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PRETTY FISH
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THE BUSINESS OF DIVING (AKA DIVE SHOP ECONOMICS
101) QUESTIONS???
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THE BUSINESS OF DIVING (AKA DIVE SHOP ECONOMICS
101) BUT WAIT . . . THERES MORE (LETS TAKE A
SHORT BREAK)
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WHEN SOMETHINGGOES WRONG
EXPERT WITNESSFORENSIC CONSULTANT LA COUNTY
CORONER
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EXPERT WITNESS REPORTS DEPOSITIONS FORM
OPINIONS TESTIFY ADVISE COUNSEL
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C S I SCUBA
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TWO ANSWERS WE SEEK
1. Cause of death
2. Manner of death

• Homicide
• Suicide
• Accident
• Natural

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2 THINGS WE DO EXAMINE THE GEAR EXAMINE THE
DIVER
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WHATWEFIND
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DIVER ERROR
FAILURE TO MONITORAIR SUPPLYLACK OF
TRAININGBUDDY SEPARATIONPANIC
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DIVER ERROR
MEDICALPROBLEMS
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DIVING IS SIMPLE
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It will alwaysbe cheaperto refundthe
customerthan it ever will beto pay offthe
estate.
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Reverse engineeryour class.If somethingwere to
go wrong,where would peoplepoint fingers?
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Did you do the thingsthat will enable youto
sleep at night?
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FATAL PROBLEMS
BENDS (rarely)EMBOLISMDROWNING
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SCUBA Deaths LA County

• 1994 5 fatalities
• 1995 5 fatalities
• 1996 4 fatalities
• 1997 2 fatalities
• 1998 4 fatalities
• 1999 1 fatality
• 2000 4 fatalities
• 2001 3 fatalities
• 2002 3 fatalities
• 2003 5 fatalities
• 2004 3 fatalities
• 2005 5 fatalities
• 2006 6 fatalities
• 2007 3 fatalities
• 2008 6 fatalities

15 years 59 fatalities
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SCUBA Deaths LA County
23 fromchartereddive boats
15 years 59 fatalities
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SCUBA Deaths LA County
13 weredivingCasino Point
15 years 59 fatalities
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SCUBA Deaths LA County

• 3 natural causes
• 3 with alcohol/drugsas a factor
• 2 undeterminedcause of death

15 years 59 fatalities
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DIVING COMMUNITY WANTS TO KNOW WHAT HAPPENED
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• GET EXPERTS
• GET REPORTS
• GET INFOFROM DIVERS

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NATIONAL FATALITIES 2003-2005
266 total
10-17 1 gt1 18-29 28 11 30-39 37
14 40-49 76 29 50-59 93 35 60-69 19
7 70 6 2
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NATIONAL FATALITIES 2003-2005
OVERALL
BAD LUCK
BAD HEALTH
BAD DIVING
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70
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NATIONAL FATALITIES 2003-2005
266 total 63 bad health
10-17 0 0 18-29 2 3 30-39 6
10 40-49 19 22 50-59 31 49 60-69
9 14 70 1 2
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WHAT DOES IT MEAN ??
1. Would this have happenedon this day time
regardless?
2. Would this have happenedeventually, but
divingaccelerated the timeline?
3. Was there a predispositionand the
physiological stress of divingis the tipping
point?
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PRETTY FISH
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C S I SCUBA
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If somethinggoes wrong . . .STOPAbort the
dive.Fix the problem.
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Reverse engineeryour dive.If somethingwere to
go wrong,where would peoplepoint fingers?
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We can learn somethingfrom every accident.Make
sure youre notthe next statistic.
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QUESTIONS?
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WHEN SOMETHINGGOES WRONG
KEN KURTISEXPERT WITNESS - FORENSIC CONSULTANT
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