Friday, January 29, 2010

Former Crystal-Pierz Marine exec
launches Your Boat Club

Minneapolis / St. Paul Business Journal - by John Vomhof Jr. Staff writer
Read article on Minneapolis/St. Paul Business Journal site

Luke Kujawa, former president and CEO of Crystal-Pierz Marine, is setting sail on a new boating business in the wake of a deal to sell the majority of his family's boat dealerships.

Kujawa launched Your Boat Club at the Minneapolis Boat Show last weekend. The club operates like a time share for boats, with members paying an annual fee and monthly dues for unlimited access to fishing boats, speed boats and pontoons.

We want to take as many of the costs, limitations and hassle that we can out of boating, Kujawa said. What's left is flexibility and fun with your family on the water.

Your Boat Club will start with 40 boats at three Minnesota locations: Prior Lake, Ramsey and Brainerd. However, Kujawa said the business model is designed to accommodate rapid growth. He hopes to expand to between 25 and 30 locations throughout the Upper Midwest within three to five years, and the company also might consider selling franchises at some point.

While the company favors locations on the water, it also will consider centrally located spaces in resort towns, such as a vacated service station. The club also will deliver boats to its customers for an additional fee.

Your Boat Club is split into two main types of memberships: the entry-level Explorer package at an annual fee of $1,500 and the higher-end Voyager package at an annual fee of $2,500. Both packages require a one-year commitment and include unlimited boat usage. Explorer allows members to reserve boats for just one day at a time, whereas the Voyager package allows members to book three days at a time.

From there, memberships are broken into three tiers - or piers as the club refers to them - based on the quality of boat that the member wants. Pier 1, which has an average boat value of $16,995, costs $89.95 per month; Pier 2, which has an average boat value of $29,995, costs $199.95 per month; and Pier 3, which has an average boat value of $39,995, costs $299.95 per month.

The total annual cost of club membership will be about half the cost of owning a boat, Kujawa said. The club will be capped at about 300 memberships to ensure members have access to boats when they want them. It's a concept that takes awhile to explain, but once people understand it, the response is overwhelmingly positive.

Tom Jacob, owner of the Excelsior-based Excel Boat Club, said the economics of a boat club make sense for many consumers, especially in light of the recession.

Everyone in Minnesota thinks they have to own their boat, but when they stop and think about how much they'll really use it, it makes more sense to cut some of the costs and let someone else handle the maintenance, he said. If you boat 40 or 50 times a year, don't come see me or Luke - go buy a boat. But if you're only going to boat 10 times a year, then a boat club is probably a great fit.

Excel Boat Club is at full capacity with 180 members for its 20 boats. The company, which has operated on Lake Minnetonka for 10 years, added a second location in Bayport on the St. Croix River last year.

The nation's largest club is the Cincinnati-based Freedom Boat Club, which has several thousand members at its 57 locations in 13 states, mostly in the eastern United States.

Kujawa said he's been developing the business model for Your Boat Club for several years, but the recent sale of five of the seven Crystal-Pierz Marine stores to Bass Pro Shops created an opportunity for him to pursue it full time. I actually wanted to do this as part of Crystal-Pierz, but as the market fell off, we just didn't have the time or resources to launch it.

Your Boat Club has four corporate employees in addition to Kujawa and his business partner, Michael Jellish, at the company's 2,600-square-foot headquarters in the Lumber Exchange building in downtown Minneapolis. The company also will hire site managers and seasonal help for its various locations.

Your Boat Club

Founder: Luke Kujawa
Headquarters: Minneapolis
Locations: Prior Lake, Ramsey and Brainerd
Description: Club members pay an annual fee and monthly dues for unlimited access to boats.
Founded: 2010
Revenue: Not applicable
Employees: 6
Web: YourBoatClub.net