Re: Marine repair shop....small business start up advice.
Your insurance agent, to the extent he deals with any commercial lines (which is likely), should be able to set you up with insurance. Last I checked, at least in Ohio, it was called "Marine Artisans" insurance. It's an entirely different animal than general business insurance because you're an entirely different risk profile - you may have to differentiate certain things like how much of your work is power vs. sail, mechanical vs. fiberglass, cosmetic vs. structural, etc. Your insurance will likely come from what's called an "excess and surplus" line, which many popular insurers offer and some insurers actually specialize in.
To put my comment about business plans into context a bit more; your two most important resources are generally time and money. So if spending 10 hours on a well-constructed formal business plan doesn't save you 10 hours down the road, what's the point in doing it? The idea must be in your head before you write it down, and what exactly do you gain by telling yourself what you already know? This is not to reflexively say that you shouldn't write a plan; rather, that you have to sit down and figure out if you'll break-even on your resource input (which in this case is time).
If you're getting into formal market research, keep a few points in mind. First, garbage in garbage out. Whenever you do research you're actually collecting data, not information. Information happens once the data is processed. Second, know what is and isn't a causal relationship. If you aren't careful, or don't have a research background, it's very easy to look at data (or information) and draw conclusions that aren't there. An example: a few years ago college recruiters were pressuring their universities for higher salaries. Invariably they had graphs showing that the number of applicants doubled (or in some cases tripled) and wanted exorbitant bonuses because they were bringing in a lot of extra money. Many universities bought it, and unfortunately didn't keep the receipt. As it turns out, the causal relationship was not between recruiting efforts and college applicants, rather it was between the economy and college applicants. In a declining economy, more people were going to school.
To add one tidbit to Sandbar's advice on cost analysis - wrap your brain around the concept that sunk costs must be completely ignored if you want to make good business decisions. The resource (be it money or time) is gone, using it to shape your current strategy will almost always result in you making the wrong decision. The is a distinction the professionals understand and it's why some people are always managing to make money no matter the conditions. Example: you borrow 100k from the bank to invest in this business and expect it to return 110k after two years. After one year you realize that you actually needed to borrow 120k (you forgot a 20k piece of equipment that is vital to your operations) to make this thing work so you go back to the bank asking for another 20k. The manager says "no" and his logic is that they've given you 100k and have nothing to show for it, so why on earth would they give you an additional 20k?!?! The reason is simple - giving you the extra 20k is the only way to make this thing work and it's the only way they're going to see a any returns from the first 100k. Sunk cost are just that: sunk.
Keep in mind that once you get your documentation back from the State, you are a bona fide business. That's what makes you legit. All owning a shop does is prove that you can own a shop. While there are certain benefits to a shop; my point was that you can actually sit down and do the math to figure out if it's a good decision. Shops cost money, and that money has to come from somewhere. For instance, if having a shop would let you bring in 10k/yr of income you currently can't get (as in literally impossible), then a shop would be a wise business decision if you paid less than 10k/yr to keep and maintain it. Keep in mind that in many places industrial space is almost given away, but the maintenance can make or break you (or curing deficiencies found during inspection). Ten years ago they were almost giving warehouses away here; if you're married to the idea of a shop it might be wise to see if you can find someone who has an entire warehouse they only use a small fraction of (I have a friend who continually tries to get me to rent a 15,000 sq. ft. wing of his warehouse for $1,000/mo, including two overhead cranes and a 14' door).
Yes, customers are paying for your education. They're also paying for your food, and your house, and your car, and your shop if you get one. That's just the nature of the relationship. I don't think customers have a problem paying more hours at a lower rate, considering your situation. The point I was making is that customers often associate price with value, and you really don't want to put yourself in a position where you've built a business around people who value your work at $25/hr. Why? Because once you get past the learning curve, they're still going to value your work at $25/hr. That's why I think it's much better to eat hours than it is to bill yourself low. The customer is still paying the same in total, you're still making the same in total, and now they at least value your work more (at $90/hr). I completely understand guilt, but make sure you go about dealing with it the right way (a way that doesn't involve cutting your own legs out from under you).
Yes, used parts is a delicate situation. The fundamental issue here, from my perspective, is how much you're willing to hang your reputation on someone else's parts. The problem is once you get involved in sourcing used parts, you're also getting involved in some of the liability if it doesn't work out. Customer's who deal with a lot of used parts are typically either really knowledgeable, or really cheap. You can generally tell the difference if you talk to them long enough, but the really cheap ones rarely turn out being customers you want to keep in the long run. You'll be fine, provided they understand that your time isn't free if they have to source the same used part multiple times before getting one that works. There is a lot of false economy when it comes to buying parts.
Unfortunately, when you're dealing with customers there are certain lines of reasoning that are true but you're forbidden from making. Boating isn't in everyone's financial best interest; and for some boating just isn't in the cards. Because there are so many cheap boats out there, a lot of people are trying to get on the water with no idea of how much of a financial commitment it is. Sometimes it's better to not explicitly have this conversation with a customer, but keep in mind that people will dump boats as "payment" for your services. I don't know about you, but I work for cash. I have enough projects for the year. So you have to be mindful here that if the value of your services starts to approach a certain percentage of the value of the boat, you might be wise to come up with some sort of payment structure that doesn't involve keeping your fingers crossed that they'll bother paying up when the job is done.
Finally, I think there are three things customers in this market pay a premium for: time, expertise, and speed. Everybody misses the part about speed. Around here, the season is six months long if you're a real die hard. There's a certain value in not having your boat tied up for eight weeks getting repaired (not because of parts, but because the guy "couldn't get to it"). And if you can master the art of efficient turnaround, you can likely name your price and never want for work.
art of your costs analysis should be once you have established (or are comparing options) look at fixed and variable costs. This will assist you to assess profit margins. One model is that a profitability of 33% is OK (that is of revenue, a third goes to fixed and variable cost, 1/3 to wages and 1/3 to profit (so you can grow).