The Business Of Submarines

Transcription

Over six billion people live
upon our planet.
Three fourths of its surface is
covered with water.
Within those depths, a
fabulous wonderland awaits.
Replete with creatures
remarkable and unique.
A proven business
opportunity now exists...
To show tourists the wonders
of the subsea world.
U.S. SUBMARINES, INC.
Written by: L. Bruce Jones
Copyright 2008, U.S. Submarines, Inc. All rights reserved.
1
Contents
WARNING & COPYRIGHT NOTICE ............................................. 2
CONTENTS ............................................................................... 3
INTRODUCTION ......................................................................... 4
THE OPPORTUNITY ................................................................... 5
THE ADVANTAGES OF OPERATING A TOURIST SUBMARINE ........... 6
THE TOURIST SUBMARINE INDUSTRY ......................................... 8
OPERATING LOCATION SELECTION ............................................ 11
INFRASTRUCTURE REQUIREMENTS ............................................ 13
FINANCIAL CONSIDERATIONS ................................................... 15
COMMON MISTAKES & DIFFICULTIES ...................................... 18
THE FUTURE OF TOURIST SUBMARINES .................................... 19
BUSINESS & TECHNICAL SUPPORT ........................................... 22
SUPPORTING DOCUMENTS ....................................................... 23
AVAILABLE SUBMARINES: THE ARGOS .................................................... 24
AVAILABLE SUBMARINES: THE SPT-16 .................................................. 25
AVAILABLE SUBMARINES: THE VOYAGER I & II ...................................... 26
AVAILABLE SUBMARINES: THE DEEPSTAR ............................................... 27
ARTICLE: THE ANATOMY OF A TOURIST SUBMARINE ................................ 28
NEW CONSTRUCTION: DEEPVIEW 66 TECHNICAL DESCRIPTION ................. 30
ARTICLE: SAFETY & SUBMARINE DESIGN ............................................... 36
ARTICLE: PREPARING THE COMPREHENSIVE BUSINESS PLAN ..................... 38
3
A serious opportunity to enter a fascinating
and profitable business.
P
roven profitability and market differentiation.
These are the results of tourist submarine operations across the globe. Last year this industry carried over 2 million passengers and enjoyed $150
million in revenue; and the story
has just begun.
Passenger submarines represent
successful, tried and true technology and demonstrated profitability. Since the first contemporary
tourist submarine went into operation in 1985, over 45 purpose-built
vehicles have entered service. No
longer are trained divers the exclusive visitors to the subsea
world. Now, regardless of age or
physical condition, passengers can
directly experience the myriad
denizens of the deep from the air
conditioned comfort of a contemporary tourist submarine.
Clearly, the economic imperative has driven the rapid
growth of this highly profitable industry. Under correct
conditions, all the capital equipment and pre-development expenses can be amortized in an 18-month pe-
riod. If you have an interest in profitability and the requisite business acumen – you should seriously consider
a tourist submarine operation.
U.S. Submarines, Inc. is uniquely
positioned to provide you with complete support for the establishment
of a successful tourist submarine
operation. From site feasibility
analysis, comprehensive business
plans, capital acquisition assistance,
site selection and submarine purchase, to crew acquisition and training, pre-marketing and operational
planning, U.S. Submarines can provide a complete turn-key business
solution or we can assist you with
any particular aspect of developing
the business.
The following pages will provide
you with relevant information on
the tourist submarine industry, the financial profitability of operations and the logistics requirements. The
highly informative supporting documentation section
contains information on available submarines and additional industry-specific articles.
4
Hawaii
Cuba
Mallorca
Martinique
The Canary Islands
The Bahamas
St. Thomas
Okinawa
5
The advantages of operating a tourist
submarine should not be overlooked.
T
he most successful tourist submarine operating today has gross revenues of US$1 million
per month derived from a single 48-passenger
submarine and associated souvenir sales. Annual net
pre-tax revenue from this operation is in excess of $7
million. The profits are based on a 10-12 dive per day
schedule, 330 operating days per year, a 90% passenger load factor and a ticket price of $95. While this
operation is, indeed, quite successful, it suffices to illustrate the profit potential of a tourist submarine operating business.
In any location at which a passenger submarine operates, it is notably unique in its ability to capture a significant portion of the tourist arrivals. In some island
locations, over 25% of incoming tourists will enjoy the
submarine experience before they depart.
Across the globe, interest in the underwater world is
growing rapidly. Today, travel tourism is the world’s largest single employer representing 6% of the world’s population and an annual turnover of two trillion dollars.
The marine leisure sector is the fastest growing segment of the travel industry, as is evidenced by the success and growth of public and private aquariums and
marine parks, the cruise ship industry, seaside destination resorts, harbor and dinner cruises and sport diving.
in its natural setting can people be effectively motivated
to act to protect the marine environment. And tourist
submarines themselves are entirely nonpolluting, with
battery powered electric thrusters that emit no hydrocarbons or other effluents. The submarines operate at
low speeds, and are extraordinarily maneuverable so
that they never come in contact with coral reefs or marine life. In fact, these vehicles are routinely approved
to operate in the most ecologically sensitive marine parks
and preserves.
Tourist submarines constitute the only direct experience
that most people will have with the undersea world.
Passengers of any age and physical condition can enjoy
a comfortable and safe experience that is so unique it
boasts a 95+% satisfaction level. And after having carried millions of passengers, the industry enjoys a perfect safety record without a single serious injury to any
passenger.
No other marine leisure experience can compare with a
dive on a contemporary tourist submarine, and wherever a tourist submarine operates, it is sure to be the
most popular amenity in the area. Tourist submarines
are available in a wide variety of sizes and configurations to match a variety of operating conditions and
Tourist submarines also promote environmental stewardship, for only in seeing and appreciating marine life
locations. Smaller submarines in the 10-16 passenger
size range can operate profitably in more isolated locations with fewer tourists while large 66 passenger subs
are best suited for popular tourist destinations.
6
The forward pilot’s viewports of virtually all tourist subs are quite large and provide exceptional viewing.
The interior of this 16-passenger tourist submarine is quite large for its size with a 2.45 meter (8.0 foot) diameter
passenger compartment. This submarine is rated to dive to 100 meters and is available for sale.
7
The tourist submarine industry enjoys a history of
unique profitability and growth.
T
he first tourist submarine, the Auguste Piccard,
was built for the 1964 Swiss National Exhibition. The 40-passenger vehicle was capable of
diving to 610 meters, and in a 16 month period the
submarine carried 32,000 people to the bottom of Lake
Leman. After the exhibition, regulatory difficulties precluded the use of the submarine for
passenger carrying purposes in the
U.S., and the submarine later was
converted to commercial application. The vehicle was quite large,
with a length of 28.5 meters and a
displacement of 180 tons. Notably,
it is still the largest and deepest diving tourist submarine yet built.
In 1984 a British Columbia based company managed
by people who had worked on modifications to the
Auguste Piccard, designed and built a 28-passenger tourist submarine which began operations the following year
in Grand Cayman. The same company had placed two
more vehicles in service by 1987, and at that time other
firms began establishing operations
of their own. Today, the largest
single tourist submarine company
has designed and constructed 12
tourist submarines with three different capacities; 28, 46- and 64passengers. All 12 vehicles are
company owned and operated and
the firm builds submarines only
for itself and its joint venture partners.
In the mid 1970s, Japan’s Kawasaki
Heavy Industries executed a design
for a 40-passenger tourist submaAnother independent submarine
rine, but the vehicle was never conmanufacturer has built a total of
structed. It was not until the advent
14 submarines while other manuof a company named Research Subfacturers have contributed smaller
The Auguste Piccard in 1964
mersibles in 1983, that true passennumbers of vessels to the industry.
ger carrying operations were established; however, the vehicles were converted commerOperating locations for tourist submarines include the
cial submersibles with a limited seating capacity of one
Caribbean, the Red Sea, the Mediterranean, the South
pilot and two observers. They plied the depths of the
Pacific, the Atlantic, the South China Sea, the Gulf of
famed Cayman Wall, often times to as deep as 600
Mexico and the Pacific Ocean. A total of 63 vehicles
meters. RSL still exists today and routinely operates its
have been placed into operation over the history of the
Perry class submarines to the 300 meter level.
industry.
8
Tourist Submarines: Historical Operating
Locations & Vehicle Count
Location
Number
Switzerland
1
Grand Cayman 5
Bahamas
2
Barbados
1
Rota
1
St. Thomas
1
St. Croix
1
Saipan
1
Canary Islands
2
Hawaii
7
Bermuda
1
South Korea
1
Guam
1
Japan
1
Okinawa
1
Egypt
1
Israel
1
Location
Number
Aruba
1
Sint Maarten
1
Spain
3
Florida
1
Indonesia
1
France
2
Monaco
1
Taiwan
1
Malta
1
Martinique
1
Mexico
1
Italy
2
Columbia
1
Fiji
1
Scotland
1
Brazil
1
Refit/retired
7
Tourist Submarines: Total Passenger
Seats by Year - First 12 Years
2000
1800
1600
1400
1200
1000
800
600
400
200
0
83 84
85
86
87 88
89
90
91
92 93
94
95
9
A History of Tourist Submarine Operating Locations
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Yr
64
83
84
85
85
85
87
87
87
87
87
87
88
88
88
88
88
88
88
88
89
89
89
89
90
90
90
90
90
90
91
91
91
91
91
91
91
92
92
92
92
92
92
93
93
92
92
93
93
94
94
93
94
94
94
94
94
99
98
99
02
03
03
Submarine
Auguste Piccard
PC-8
PC-1802
PC-1205
PC-1203
Atlantis I
Atlantis II
PC-1201
Atlantis III
PC-14
Pisces II
Mareia I (Sirena I)
Aquarius
Discovery was PC-1601
Looking Glass (LG50)
Golden Trout (RS250)
Atlantis IV
Enterprise (LG50)
Mareia III (RS250)
Atlantis V
Coral Adventure (RS250)
Atlantis VII
Moglyn
Golden Salmon (RS250)
Mergo 10
Sinbad (Mark III)
Jacqueline (SM-100)
Atlantis VI
Odyssey I
Sub Fun (Mark III)
SPT-16
Beluga (Odyssey II)
SMAL 2
SMAL 5
M. Magico-Golden Shark
Atlantis IX
Atlantis X
Atlantis XI
Seabus/Deepstar
Hai Yan - Meirenyu
Nemo Primero (Mark III
Tritone (Mark III)
SM-100/26
SeaMaid TS IV
Atlantis XII
Tritone II - Tritone
Neptune
Dolphin (Mark III)
SM-100/26
Atlantis XIV
Taurus
SM-100/3
SM-100/50 - Voyager I
SM-100/50 - Voyager II
SM-100/26
Argos ST-100
Yonggoong 48
Atlantis XV
Sadko
SM-100/50
Subcat
Subcat
Jiah (Mark V)
Cap
40
2
3
2
2
28
28
2
46
2
2
48
2
10
48
48
46
48
48
46
48
46
40
48
10
48
48
46
36
48
16
36
2
5
48
46
46
46
44
48
48
48
24
48
46
48
40
48
24
66
6
2
46
46
24
16
48
46
40
48
28
28
65
Location
Switzerland - Texas OOS
Grand Cayman - Bulgaria ICS
Grand Cayman OOS
Grand Cayman
Grand Cayman
G. Cayman - Bahamas - OOS
Barbados - OOS
Rota, Marianas - Florida ICS
St. Thomas, USVI
St. Croix, USVI - Florida - Germany ICS
Grand Cayman - British Columbia (display)
Saipan - Miami OOS FS
Oahu, Hawaii - Seattle ICS
Scotland (storage) OOS
St. Thomas - Los Cabos, Mexico - Missing at sea
Tenerife, Canary Islands
Kona - Oahu - Maui, HI
Bermuda - OOS
Cheju-do Island, S. Korea
Guam
Japan - Hurghada, Egypt
Oahu - Kona, Hawaii
Okinawa
Gran Canaria, Canary Islands OOS
Cypress - Switzrld - Mauritius
Hurghada, Eygpt
Eilat, Israel - Unknown
Aruba, Antillies
Sint Maarten, Antillies OOS
Spain - Lanzarote, Canary Islands
Switzerland - storage (Florida) - Branson,MO
Bali, Indonesia
La Ciotat, France ICS
Bora Bora
Spain - Cuba - Puerto Mogan, Canaries
Oahu, Hawaii
Oahu, Hawaii
Grand Cayman
Monaco - Bahamas - Storage FS
Taiwan, R.O.C., - Hainan Island, China
Mallorca, Spain
Capri, Italy - Cheju-do Is., Korea
Malta - Finland OOS
Martinique - Maldives
Cancun. Mexico - Cozumel, Mexico
Genoa, Italy - Sokcho City, Korea
Antigua, B.W.I. - OOS
Lanzarote, Canary Islands
Columbia - Finland OOS
Oahu, Hawaii
Loch Ness, Scotland - S. Africa
Solomon Islands - Finland OOS
Oahu, Hawaii - S. Korea
Oahu, Hawaii - S. Korea
N.A. ? Incomplete construction OOS
Rio de Janeiro, Brazil FS
S. Korea
Barbados
St. Lucia - Cyprus
Puerto Rico - Phuket Thailand - Saipan
Canary Islands - Antigua (pending)
Greece FS
Cheju-do Island, Korea
Operator
Piccard - Horton
RSL - S.A.S.
RSL - Atlantis RSL
RSL - Atlantis RSL
RSL - Atlantis RSL
Atlantis
Atlantis
M.I. C. - DSA
Atlantis
Sub Adventures - Perry - Unk. research group
RSL - B.C. Museum
Dosa Subsea - Pacific Subsea
Sub Voyages - Subsea Wkbts
L. Segura
Looking Glass - Comex - LG Sub Tours
Subtrek
Atlantis Subs Hawaii L.P.
Enterprise Submarine
Daekuk Subsea
Atlantis
Time Associates - Sinbad Sub
Japan Sub. Tourism Ltd.
Subtrek
Blue Safaris
Sinbad Tourism Co.
Scandive - Coral World - Unknown
Atlantis
Sub Safaris
Sub Fun SL
J. Almeida - Deep Lake Submarine Tours ('08)
PT Sub. Safaris Asia
SMAL Industries
Blue Safaris
Top Diving S.A. - Subtrek - Atlantida
Atlantis
Comex - Aquatic Leisure - For Sale
Jan-An Steamship - Aisike Sub
Nemo Submarines
Gorgonia, S.R.L. - Tritone Marine
Builder Bankruptcy
CBSP - N.A
Atlantis
Plankton, S.R.L. - Tritone Subs
Unknown Russian Group
Subtrek
Barracuda Submarine Invests.
Silvercrest - N.A.
Builder Bankruptcy
Submarines Hawaii - Jeju Sub
Submarines Hawaii - Unknown
Builder Bankruptcy
Consub
Daewoo
Atlantis
Rubin
Deep Sea Subs - Phuket Subs - Pacific Subsea
Subibor - Trident Adventures ('08)
N/A
Daekuk Subsea
Year is year of launch. Last entry is current location and operator.
OSS refers to "out of service" (in storage, in refit, retired or scrapped)
FS refers to "for sale." ICS refers to "in commercial service" (research or subsea work only)
10
The selection of an appropriate operating
location is critical to success.
T
ourist submarines operate successfully in a wide
variety of locations. Many of the existing businesses are situated in tropical island areas noted
for water clarity and abundant marine life. Still others
ply the waters around larger cities, and one tourist submarine formerly dove to the depths of Loch Ness in
Scotland on a continual search for the mythical Loch
Ness monster.
Water is an obvious requirement for tourist submarine
operations. Ideally, the water at the dive site has an average visibility in excess of 5 meters and some marine
life in the vicinity. In many cases, artificial reefs, derelict ships and planes and other items can be placed on
the sea floor to attract marine life and entertain customers. For instance, a 55-meter ship and some artificial reef materials turned a desolate sand-bottomed dive
site off Waikiki into a virtual oasis in a few short weeks.
Tourists are the next key ingredient. In order to make
the operation of a tourist submarine a success, a minimum of 10,000 annual tourist arrivals per seat on a
submarine are required given average industry capture
ratios. In addition, the passengers should have sufficient income to purchase a ticket which will cost a minimum of $75 per adult.
The conditions surrounding the dive site are also important. Because the submarine will remain on-site, atsea during the day, the dive site itself should be within a
20 minute boat ride from the shore in order to efficiently transport the passengers and maintain an hourly
dive schedule. In addition, the surface wave conditions
should be below sea state three on at least 270 days per
year. Above that, and passenger transfer becomes difficult, so an alternate dive site is often the solution. Currents too, are an issue and in most cases should be below one knot on the submerged route. Moreover, the
water depth at the dive site should not exceed the maximum rated depth of the submarine.
Once a year the submarine is removed from the water
for a two week annual maintenance period and classification society inspection. Access to a marine railway,
crane or hoist is also a requirement.
Some underwater locations require no enhancement.
In Monaco, one enterprising company built a stern section of a second century Roman galleon, complete with
artificial amphoras and placed it in 40 meters of water
at the entrance to the harbor, along with a diving bell
and an abandoned tug boat.
A large number of potential operating locations exist.
The operation of a smaller submarine is considerably
less demanding in terms of capital cost, infrastructure
and site requirements. Literally hundreds of excellent
operating locations are available throughout the world.
However, operating a large submarine in a more populous destination can be remarkably profitable.
A thorough site analysis virtually guarantees success.
The key is to entertain and educate the customers for a
dive duration of approximately 45 minutes.
11
Tourist Submarines:
Some Potential Operating Locations
Palau is a diver’s paradise suitable for a specialty sub.
At U.S. Submarines we have extensive experience in
analyzing prospective operating locations. Our site feasibility analysis evaluates over 240 separate factors in
the following ten categories:
Lake Tahoe, Nevada
Catalina, California
Key West, Florida
Miami, Florida
Ko Olina, Hawaii
St. Maarten, N.A.
Malta
Fiji
Cozumel, Mexico
Acapulco, Mexico
Mazatlan, Mexico
Galapagos, Ecuador
Palau
Truk
Juneau, Alaska
Monterey, California
Rhodes, Greece
Curacao, N.A.
Hainan Island, China
Jamaica
Japan
Puerto Rico
Mauritius
Seychelles
Venezuela
Thailand
Malaysia
Indonesia
• Dive Site Quality - (e.g. visibility, depth, features)
• Dive Site Logistics - (e.g. currents, sea state)
• Dock Site Facilities
• Maintenance and Haul-out Facilities
• Storm Refuge Plan
• Passenger Facilities
• Market Profile & Visitor Demographics
• Maritime Law
• Environmental Permits
• Long Term Growth Potential
The selection of an appropriate operating location is
critical, but very complex. Most of the major problems
associated with past tourist submarine operations can
be attributed to inappropriate site selection. Without
access to substantive experience in this business you
are not likely to have the knowledge necessary to select
an appropriate site.
A wreck makes a fascinating addition to a t-sub dive site.
12
A certain infrastructure is necessary for
tourist submarine operations.
T
he submarine itself is the most technologically
advanced and important piece of equipment
that the operation owns. But in addition to the
submarine and its support equipment, the operator will
need a comfortable passenger transfer vessel capable
of carrying twice the number of passengers that the
submarine can hold. A rigid bottom inflatable will also
be necessary and carries the surface officer who stays
in contact with the submarine via an underwater telephone. The surface officer remains on station above the
submarine and keeps the area clear of surface traffic.
The highly trained professional crew of a tourist submarine.
crews per day. In general, operational staff requirements
for a one-shift (6-dive) per day scenario operating 28
days per month are:
A transfer vessel and tender converge on a tourist sub.
A passenger service dock with ticket sales area and optionally, a souvenir shop, is part of the shore facility
requirement. Most submarines include a container that
houses the air compressor, battery chargers and spare
parts, and this should be situated adjacent to the
submarine’s berth. At night, the submarine maintenance
crew will charge the batteries for up to eight hours,
recharge the high pressure air tanks, the oxygen cylinders and the carbon dioxide scrubbing compound.
Operations manager ............................ 1
Submarine pilots .................................. 2
Submarine co-pilots ............................. 2
Shuttle boat crew ................................. 2
Surface officer ...................................... 2
Maintenance crew ............................... 2
In addition, sufficient administrative and marketing staff
are necessary to effectively operate the business. For a
small (e.g. 10-20 passenger) submarine operation with
a modest dive schedule approximately 15 people are
required. With a large sub operation doing both day
dives and night dives a staffing level of 50 people is not
unusual.
In the case of operations by a resort or ground tour
company these staff positions can often be advantageously integrated with the existing infrastructure.
Personnel requirements vary with the location and dive
schedule. A single crew working a 10-hour shift can
accomplish 6 dives per day. Many submarines can make
up to 12 one-hour dives per day and so require two
13
Gift shops like this can help increase revenues.
In some locations gift shop sales average
over $50 per passenger.
A dock located in a protected area is necessary for
passenger loading and for submarine maintenance.
In some cases the submarine support equipment is quite
elaborate. This is a self powered submarine base with
built-in generators, compressors, and a hydraulic lift.
Temperate waters are also very suitable
for tourist submarine operations.
14
Financial considerations play an important role
in the decision making process.
T
he capital expenditures inherent in the establishment of a tourist submarine operation are
significant. But, yet, so is the potential return.
Many of the larger tourist submarine businesses were
established by several joint venture partners, while others are independently owned.
Regardless of the ownership structure, passenger submarine operators almost inevitably enjoy the support
of the business community and local government. Financial support and tax holidays are often offered as
incentives for implementing such a popular and highprofile business endeavor.
The maximum utility of a 16-passenger sub would require 12 dives per day, each with 16-passengers, on a
330 day per year schedule for an annual total passenger
count of 63,000. Passenger load factors are more likely
to average 80% on an 8 dive per day schedule on 300
days per year for a passenger count of 30,000. At an
average $95 ticket price, this translates to approximately
$2.8 million in gross income and $1.6 million in annual
pre-tax profit.
Example of Income vs. Ticket Price and
Passenger Load, 16-passenger submarine
Capital costs vary substantially. The costs associated
with establishing a one-submarine tourist operation can
vary from $2 million to over $10 million depending on
the submarine’s size and sophistication and whether it
is new or used.
7000
An approximation of the capital costs associated with
establishing the least expensive 16-passenger sub operation are as follows:
5000
100%
$125
6000
80%
$95
Ticket Price
60%
Used submarine, complete ................... $1,650,000
Support equipment ................................... $95,000
Spare parts ............................................... $75,000
Shop tools & equipment ........................... $25,000
Shipping ................................................... $50,000
Site improvements .................................. $150,000
Transfer vessel ........................................ $150,000
Tender vessel ............................................ $50,000
Predevelopment costs & travel ................ $130,000
Operating cash reserve ........................... $250,000
TOTAL .......................................... $2,650,000
Pre-tax Profits (000's)
4000
$75
Load Factor %
3000
40%
$50
2000
1000
0
10
20
30
40
50
60
-1000
Passengers Per Year (000's)
15
The ticket price is situation dependent. Tourist submarine prices range from $70 per adult passenger to
$500, though the later price is for a dive to 250 meters
aboard a three person deep submersible. The average
price for a trip aboard a 48-passenger submarine diving to 50 meters is $85.
Smaller subs, like the 16-passenger vehicle we’ve used
in this example, offer a more personal, spacious and
comfortable experience. The submarine has large viewports available, and dives to 100 meters as opposed to
50 meters. Comparatively, the minimum adult ticket
price should be $95, and the maximum approximately
$150. The ticket price will inevitably be a function of
demand at the chosen operating location. Diving at
night, diving deeper, and diving for longer periods, are
other reasons for increased ticket prices.
Operating costs also depend on the location. An estimate of the annual operating costs for our 16-passenger submarine at a foreign location include:
Projected Income at $125 ticket,
65% passenger load
Month 1
VARIABLES
Maximum passengers/dive
Day Dives/day
Night Dives/day
Day Dive Ticket price: adult (80%)
Day Dive Ticket price: child (20%)
Night Dive Ticket price: adult (90%)
Night Dive Ticket price: child (10%)
Operating Days/month
Total annual operating days
Passenger Load Factor
SALES
Monthly Ticket Sales
Souvenier Sales (15%)
Less cost of sales
Commissions (10%)
Cost of souveniers (50%)
NET SALES
Wages & benefits .................................... $732,000
Facilities rental ......................................... $36,000
Advertising & promotion .......................... $78,000
Insurance ............................................... $116,000
Consumables & maintenance ................... $90,000
Travel ....................................................... $30,000
Utilities & communication ....................... $30,000
Contingency ............................................. $56,000
TOTAL .......................................... $1,168,000
MONTHLY EXPENSES
Wages
Management (2)
Pilots (3)
Surface Officer (2)
Co-Pilots (2) & Boat crew (2)
Cashiers (2) & Secretary (1)
Maintenance (2)
Employee Benefits (15%)
Facility rental
Advertising & promotion
Submarine insurance
Site insurance
Maintenance & Repair
Consumables & Fuel
Utilities
Travel
Communications
Contingency (5%)
TOTAL MONTHLY EXPENSES
NET Earnings Monthly
Annual Earnings (EBITDA)
16
6
2
$125
$100
$150
$120
26
26
65%
$272,563
$40,884
$27,256
$20,442
$265,749
$12,000
$10,500
$7,000
$10,000
$6,000
$7,500
$7,950
$3,000
$6,500
$9,000
$700
$3,000
$4,500
$1,500
$2,500
$1,000
$4,633
$97,283
$168,467
$2,021,599
Young passenger on night dive.
16
Larger tourist submarine operations have a unique set
of challenges, but the profits can be extraordinary.
Because the fixed operating costs do not vary directly
with submarine size but income does, the economics
favor larger submarines. However, the initial capital
costs are quite high and the operating location must
have sufficient tourist traffic to support the greater number of seats. On the positive side, a well thought-out
and professionally implemented and managed company
can pay for itself in 18 months or less.
A tourist submarine operation consisting of two 66passenger tourist submarines operating from a semisubmersible ocean activity center anchored off a major tourist location could expect gross incomes of over
$20 million per year on a $25 million investment. The
floating offshore activity center (OAC) would have an
underwater restaurant and bar, an underwater observation area, gift shop, sub bathing area, water sports
equipment rental section and snack bar. The OAC would
act as a permanent base of operations for the two submarines that would, as a result, enjoy an extended dive
schedule from 0800 to 2200 daily. The submarines
would be partially lifted from the water by integrated
hydraulic platforms and this, coupled with the OACs
substantive stability, would allow submarine operations
and passenger transfer in virtually all weather conditions, significantly increasing operational profit. The
OAC is a day-long destination for a wide variety of tourists, sun-worshippers, water sports enthusiasts and diners, all of which pay fees to use the facilities, and as
such is a separate profit center.
17
The mistakes that adversely affect tourist
submarine business profitability have been made.
S
tarting a tourist submarine business is a complex and capital intensive endeavor. However,
all of the major business mistakes have already
been made and at U.S. Submarines we are familiar with
the operational history of virtually every tourist submarine company that has been formed. As a result, we are
uniquely qualified to advise you on related business and
technical subjects and we can keep you from repeating
past mistakes.
The first step is to retain professional advice early as it
relates to selecting a potential operating location. When
we hear that clients are “studying and analyzing the site
and forming a team to develop a business plan,” we
interpret that to mean that they have no financial resources and that they find dreaming about piloting their
own submarine a great way to pass the time. To get into
a multi-million dollar business endeavor requires some
financial resources and a significant amount of commitment. Several people with modest means have been
successful in raising the funds to enter the business but
they all did it by using outside consultants whose written opinions and plans had credibility with prospective
investors.
Poor site selection is the major reason for business failure. The old adage about “location, location, location,”
is absolutely true in the tourist submarine business. As
indicated earlier, our site feasibility study analyzes 300
separate factors. Overlooking just one adverse factor
can negatively effect the entire business endeavor. Some
obvious examples include; excess seasonal currents at
the operating site, weather problems that do not allow
passenger transfer on at least 270 days per year, tourist
traffic seasonality, lack of availability of a suitable drydock. Less obvious examples include the operation that
was shut down for excessive noise from generators necessary to charge the batteries and high pressure air systems at night, to the company that after running their
own shuttle buses and suffering complaints from the
Tourist submarines are necessarily complex but they must also be very
reliable.
taxi union were forced to hire passenger buses at extortionate rates.
Technical difficulties that affect reliability must be
avoided. The tourist submarine used must be extremely
reliable and capable of operating virtually every day of
the year with minimum down-time. This means utilizing a submarine built with components that have a
proven track record in sub-sea operation.
Ample cash reserves are required. It can take several
months to achieve positive cash flow and cash must be
available to support the business during the development period.
Permits and permissions must be in hand early. Nothing is worse than having a dive-ready submarine operation with passengers lined up to pay for tickets and yet
not being able to dive because one bureaucrat is holding up a permit. Every permit and permission requirement must be identified early in the development process.
There is very little available true expertise in the tourist
submarine business and this is a major limitation to industry growth. However, at U.S. Submarines we can
provide the know-how you need to succeed.
18
The future will include the implementation of new
concepts and business models.
T
he tourist submarine industry has prospered
by uniformly adapting a common business
model. A typical tourist submarine operation
will consist of a single 48-passenger, 50-meter capable
tourist sub that is all battery powered, based from a
dock in a protected area and supported by a passenger
transfer vessel, a surface officer’s vessel and a towboat.
The sub will be towed at low speed to the dive site in
the morning and will remain on station all day making
identical 50 minute dives at one-hour intervals while
passengers are ferried back and forth to shore by the
transfer vessel. At the end of the day the sub is towed
back to base where the batteries are recharged and
maintenance performed.
The business model has been uniformly
duplicated across the globe, with only the
size of the submarine changing, and both
submarine manufacturers and operators
have displayed a stunning lack of imagination by never significantly deviating
from the formula over the industry’s 22
year history. Outside of the work done by
U.S. Submarines, only twice has the industry experienced real innovation; once
with the advent of the world’s first transparent-hulled submarine in 1992 and
again with the construction of a 150 meter capable, 50passenger submarine that made dives to 125 meters to
This unique 50-passenger submarine dives to 500 feet and is based from
a custom drydock.
see the remains of well preserved square riggers sunk
during the eruption of Mt. Pelee in Martinique in 1904.
Larger conventional tourist submarines are
inevitable. The largest tourist sub currently
operating is a 64-passenger steel-hulled vehicle with a 50 meter rated depth. At U.S.
Submarines our DeepView 66 seats 66 passengers, dives to 100 meters and has an
acrylic transparent pressure hull. Tourist
submarines that carry over 100 passengers
are easily implemented and would be very
profitable to operate in the right market.
Operations in conjunction with a floating
semi-submersible ocean activity center increase profits by providing a greater number of dives
per year and can be independent profit centers as well.
The inclusion of underwater hotel rooms in the OAC
are also possible.
Deeper diving submarines will provide the opportunity for true exploration. Today you can spend $35,000
to dive two miles below the surface on a deep submersible to the wreck of the Titanic. While the price is extreme there is certainly market demand for dives to
depths that exceed those available on conventional tourist submarines. Our Nomad and Marlin diesel electric
The advent of the world’s first transparent-hulled submarine in 1992
broke new ground for the industry.
19
The Nomad 1000 is a 20 meter (65’) multi-role diesel electric submarine
with a 1000 mile surface range and a 305 meter (1000’) diving depth.
In the mid 1980s a company proposed a 10-passenger tourist submersible
composed of three interconnected acrylic spheres that would dive to 2500
feet. This is an entirely feasible concept that could be built cost-effectively.
submarines dive to 305 meters (1000 feet), but for
deeper diving submarines with large viewing areas some
further ingenuity is required. Submarines composed of
inter-linked acrylic spheres provide a design mechanism
to achieve depths of 1000 meters
while enjoying incredible viewing.
Cylindrical pressure hulls have
been used successfully to carry
people to depths of over 4000
meters. Journeys beyond that
depth generally require pressure
hulls composed of metallic or
composite spheres. A spherical
pressure hull carried Don Walsh
and Jacques Piccard to the bottom
of the Marianas Trench at 10,915
meters in 1960. We have not been
back since but that is not because such a trip is technically unachievable. At U.S. Submarines we can build a
tourist sub that is capable of achieving any depth in the
ocean, it is simply a matter of economic feasibility.
Diesel electric submarines provide great operational
versatility. U.S. Submarines’ Nomad, in its 24- or 36passenger tourist submarine configuration or the 16passenger Marlin 1000 are capable of recharging their
batteries and high-pressure air banks while underway.
This autonomy eliminates the need for expensive surface support ships and shore facilities, and obviates the need for
passenger transfers at sea while
giving the submarines greater
performance. When compared
to contemporary tourist submersibles, our diesel electric
submarines will dive six times
deeper (300 meters vs. 50
meters) and travel six times
faster (12 knots vs. 2 knots)
with 50 times the range (1000
miles vs. 20 miles). These submarines are clearly more versatile than their conventional all-electric shallow-diving
counterparts.
Nomad 1000 - a multi-role diesel electric submarine
20
Submarine cruise ships are another concept under development. Given the incredible success and popularity of the cruise ship industry and its continued diversification into specialty products, combined with the success of tourist submarines and the importance of the
marine leisure market sector, a submarine cruise ship is
a logical next step.
At U.S. Submarines we have developed the Poseidon
1000, the world’s first submarine cruise ship. The Poseidon is 87 meters (286’) in overall length and will carry
72 passengers on two or three day voyages to depths as
great as 300 meters (1000’). Each passenger cabin contains a large acrylic viewport and switches to control
underwater lights and automatic fish feeders. The Posei-
8-passenger deep
submersible
diver lock out
and submarine
dry transfer
don is designed with lounges of unsurpassed luxury and
will serve 5-star cuisine. Naturalists and guest scientists will provide educational lectures for the passengers.
The Poseidon is equipped with a closed cycle Stirling
power system for submerged propulsion and submerged
electrical power generation and utilizes conventional
diesels for surface propulsion.
It is anticipated that the submarine cruise ship business
with the Poseidon 1000 and all necessary support equipment plus the pre-development costs and cash reserves
will require $150 million. The business should net $24
million EBITDA on annual sales of $35 million.
surface boat storage
passenger lounge for surface
observation
pilot’s station for surface operation
main deck access hatch
upper deck quarters
upper deck lounge
main deck quarters
main deck galley, bar, lounge &
dining area
forward lounge
main engine room
battery deck
pilot’s station for submerged
operation
A larger submarine like U.S. Submarines’ Phoenix 1000 at 65 meters in length (shown here) or the Poseidon 1000 at 87 meters provide ample space and can
be equipped with closed cycle Stirling power for extended submerged cruising.
21
Business development, technical and training
support can be provided for your entire project.
U
.S. Submarines, Inc. is a U.S. company with
manufacturing facilities located in Vero
Beach, Florida and Portland, Oregon with
offices in Seattle, Washighton as well as in Paris, France
and Dubai, U.A.E. The administrative office is outside
Coeur d’Alene, Idaho. The firm provides business development, technical support and marketing services to the tourist submarine
and undersea leisure industries. In addition, U.S. Submarines is capable of
designing, engineering and constructing
tourist submarines of all types and sizes,
diesel electric luxury private submarines, deep submersibles for marine science and commercial applications, small
patrol and surveillance submarines and
floating and sea floor undersea residences and resorts.
The management team at U.S. Submarines has been
involved in over 70 submarine and submersible projects,
including direct experience with 20 different tourist submarine operations. The company has been involved in
every aspect of the tourist submarine business, including the design, engineering and construction of tourist
submersibles, and the business planning, sea trials, crew
training, start-up, pre-marketing and ongoing daily operation of the submarines themselves.
The company’s President, L. Bruce Jones, is one of the
world’s foremost authorities on the tourist submarine
industry with 20 years or experience. Mr. Jones was for
eight years the Chairman of the Marine
Technology Society’s Manned Submersible Committee and he is a member of
the American Bureau of Shipping’s Special Committee on Undersea Vehicles. He
is also the President of Poseidon Undersea
Resorts,
L.L.C.
(http://
poseidonresorts.com)
U.S. Submarines is uniquely qualified to
assist you with all aspects involved in the establishment of a tourist submarine business. Most importantly
this should include the critical comprehensive site feasibility analysis. Based on those results our further services could include the execution of a comprehensive
business plan for capital acquisition, crew selection and
training, regulatory agency liaison, pre-marketing, etc.
We can also contract with you to provide a complete
turn-key operation.
22
Supporting Documents
23
Available Submarines:
The Argos
T
he Argos is a 16-passenger submarine with a
100 meter depth rating that is currently available for sale. The submarine made 117 dives
and was subsequently placed in storage. The price is
$1,600,000 and includes basic support equipment and
a 20’ container. The price includes a complete refit to
“as-new” condition and a transfer of class from DNV
to ABS. For more information please contact us on +1
208-687-9057.
Argos Technical Specifications:
Classification:
Maximum Depth:
Passengers:
Crew:
Length:
Height:
Width:
Pressure hull diameter:
Draft:
Weight in air:
Autonomy:
Mission time:
Maximum speed:
Electrical power:
Forward/reverse thrust:
Lateral thrust:
Vertical thrust:
DNV +1A1
100 meters
16
2
10.7 meters
5.0 meters
3.5 meters
2.1 meters
3.1 meters
40.6 tons
80 hours
8 hours
3 knots
120VDC/24VDC
4 x 5 HP
1 x 5 HP
2 x 5 HP
24
The SPT-16
T
he SPT-16 was built in Switzerland and is now
in storage in Key West, Florida. The 16-passenger submarine with a 100 meter depth rating originally cost $9 million to construct and is the
most superbly built tourist submarine yet manufactured.
The cost of the SPT-16 with a complete refit to “asnew” condition and a fresh ABS class certificate is
$1,600,000. An extensive set of spares and support
equipment is included.
This submarine is currently under option and will be
operated in Branson, Missouri at Table Rock Lake.
SPT-16 Technical Specifications:
Classification:
Maximum Depth:
Passengers:
Crew:
Length:
Height:
Width:
Draft:
Weight in air:
Autonomy:
Mission time:
Maximum speed:
Electrical power:
Lateral thrust:
Vertical thrust:
ABS +A1
100 meters
16
2
13.3 meters
4.9 meters
2.6 meters
1.9 meters
2.3 meters
30.6 tons
80 hours
8 hours
3 knots
120VDC/24VDC
1 x 15 HP
2 x 2 HP
2 x 2 HP
25
Voyagers I & II
Both Submarines Sold by 6/2004
Two virtually identical SM100/50 class submarines were
available for sale with their basic support equipment
and spares. Each submarine made approximately 11,000
dives and were operated by Voyager Submarines off
Waikiki, Hawaii. One submarine was slightly older than
the other.
Both submarines were sold to operating companies in
South Korea and are currently in passenger carrying
service.
Voyager Technical Specifications:
Classification:
Maximum Depth:
Passengers:
Crew:
Length:
Height:
Width:
Draft:
Weight in air:
Autonomy:
Mission time:
Maximum speed:
Electrical power:
Lateral thrust:
Vertical thrust:
ABS +A1
100 meters
48
2
19.5 meters
5.3 meters
2.6 meters
1.9 meters
3.0 meters
99.0 tons
80 hours
8 hours
6 knots
240VDC/24VDC
1 x 75 HP
2 x 15 HP
2 x 15 HP
26
Deepstar (ex-Seabus)
T
he Deepstar is a remarkable 44-passenger tourist submarine with a transparent acrylic pressure hull. The submarine has made 3,000 dives
and has been in storage since 1998. The submarine
comes as part of a complete integrated suite of vessels
including a 26-meter self-propelled support barge with
integrated hydraulic lift that carries the submarine and
contains all of the support equipment. A 90-passenger
high speed catamaran is also included. The price for all
three vessels, icluding a comprehensive refit and a valid
ABS class certificate is $3.5 million. A sale is currently
pending.
Deepstar Technical Specifications:
Classification:
Maximum Depth:
Passengers:
Crew:
Length:
Height:
Width:
Draft:
Weight in air:
Autonomy:
Mission time:
Maximum speed:
Electrical power:
Lateral thrust:
Vertical thrust:
ABS +A1
80 meters
44
2
19.5 meters
6.2 meters
4.1 meters
2.1 meters
3.0 meters
91.0 tons
80 hours
8 hours
6 knots
240VDC/24VDC
2 x 13 HP
2 x 13 HP
2 x 13 HP
27
Article:
The Anatomy of a Tourist Submarine
T
he following provides a brief overview of the
major components of a typical tourist submarine. This will provide background to understand
the technical description that follows as well as the article on safety and submarine design issues.
The Conning Tower is a hollow fiberglass enclosure
situated over the main hatch to protect it and passengers from sea spray and rain.
The Deck Railing is required on all tourist submarines
for the protection of the passengers.
Main Thrusters are located on the stern of the submarine and provide fore and aft propulsion. Sometimes
they are located on the rudder to provide directional
control, and other times they are fixed with a rudder
behind, or installed with their own rotational mechanism. In many cases the thrusters are fixed with directional control provided by differential thrust or the use
of a bow thruster.
Vertical Thrusters are vertically mounted in the deck,
either in the bow and stern or on either side of the midbody of the submarine. They provide precise vertical
positioning of the vehicle when submerged.
Lateral Thrusters are located athwartships in the bow
and stern of the submarine and allow the submarine to
sidle (translate left or right) or spin in its own length.
Conning tower
Oxygen storage
bottles
Main ballast tanks (6)
They are very helpful in maneuvering in close to submerged objects for a better view.
The Hatch Assembly exists in two locations; forward,
just behind the Pilot's compartment and farther aft along
the centerline of the submarine. The hatches are large
enough to provide comfortable access and have springs
to compensate for their weight and locking dogs to secure them prior to diving.
The Forward Viewport is a hemisperical sector of transparent acrylic and provides excellent viewing for the
pilot. A Crash Guard of heavy steel pipework protects
the viewport from damage.
The Main Ballast Tanks are vented to seawater at the
base and when filled with air provide buoyancy, freeboard and stability while the submarine is surfaced. They
can be "blown" at depth to provide emergency ascent
capability.
The Variable Ballast Tanks are one-atmosphere steel
tanks that compensate for differences in passenger load
to keep the submarine neutrally buoyant. They can also
be used for differential trim.
A Trim Weight which moves on a track is used on some
submarines to provide longitudinal trim. An emergency
drop weight is also available for the pilot to release when
an emergency ascent is required.
Hatch assembly
Passenger compartment
Crash guard
Vertical thruster (2)
Pilot’s
compartment
Rudder
Main thrusters (2)
Machinery
compartment
A/C Coil
600mm viewports (16)
Variable ballast
tanks (4)
Skid assembly
Lateral
thruster
Forward viewport
28
Underwater Lights are used to provide increased visibility at depth or during night dives. Pneumatic Fish
Feeders are also common.
The Skid Assembly provides a solid base for the submarine when on land or on the bottom and also provides attachment points for many pieces of external
equipment.
Oxygen Bottles located outside the pressure hull store
oxygen at high pressure which is injected into the submarine to make up for the oxygen consumed by the
passengers during the dive. Two banks exist, one for
daily oxygen consumption and another that provides
72 hours of emergency life support for the crew and
passengers.
Thruster controls
High Pressure Air Bottles located outside the submarine hull under the main deck or between the skids provide air for the ballast tanks and pneumatic control
valves.
The Aft Machinery Compartment contains the air conditioners, carbon dioxide scrubbers, electric motors and
control circuits, hydraulics, etc.
The Passenger Compartment is the largest section of
the submarine and provides comfortable seating for the
passengers.
The Battery Compartment is located below the passenger seats and contains several tons of batteries that provide electrical power for the main systems. In some submarines the batteries are in external one-atmosphere
pressure vessels.
High pressure air and oxygen bottles are stored under the deck.
The Pilot's Compartment is in the bow of the submarine and contains all of the control, communication and
navigation equipment utilized by the pilot.
A moveable Kort nozzle provides steering.
29
New Construction:
DeepView 66: A Brief Technical Description
U
.S. Submarines has developed a line of stateof-the-art transparent hulled tourist submarines
called the DeepView series. The submarines are
available in sizes that range from 6-passengers to 66passengers. The following technical description provides
additional information on the DeepView 66 model.
INTRODUCTION
The DeepView 66 is a fourth generation autonomous
acrylic-hulled tourist submarine designed and built by
U.S. Submarines, Inc. of Fort Lauderdale, Florida. The
submarine is 32-meters in overall length and weighs
approximately 160,000 kg. The submarine is designed
to ✠A1 Manned Submersible classification of the American Bureau of Shipping (ABS) with the pressure hull
designed in accordance with American Society of Mechanical Engineers (ASME) Code for Pressure Vessels
for Human Occupancy 1 (PVHO-1). The submarine is
capable of transporting 66 passengers and three crew
members to depths of 100 meters. It is the largest and
most advanced tourist submarine currently available.
PRESSURE HULL & EXTERNAL FRAME
The pressure hull resists the hydrostatic forces imposed
by seawater and isolates the occupants from the external environment. The pressure hull is comprised of eight
cylindrical acrylic sections mated to a forward steel
hemisphere with integrated spherical sector viewport,
and also joined to an aft hemispherical steel section.
The pressure hull is composed of transparent polymethyl methacrylate with an internal diameter of 2700
mm, a length of 2500 mm and a shell thickness of 100
mm. Ring joining frames are placed between the cylindrical sections and serve to stiffen the hull, while eight
60 mm diameter high tensile tie rods pre-load the structure in the axial direction.
The DeepView's rated design depth is 100 meters. The
forward 120° hemispherical sector viewport for the pilot is also composed of transparent polymethyl methacrylate (acrylic plastic) and is 2000 mm in diameter,
with a thickness of 80 mm. The aft hemisphere is composed of ASTM 537 steel. Two entrance trunk and hatch
combinations, one forward and one aft, are 1000 mm
in diameter.
The DeepView has a metallic framework attached to
the pressure hull that provides support for the fiber-
glass deck and superstructure as well as attachment
points for high pressure air and oxygen bottles, main
ballast tanks, etc. Main structural support for the acrylic
pressure hull is provided by two steel one-atmosphere
battery pods with a steel skid assembly that provides a
base that protects the bottom of the pressure hull and
is used for securing hard ballast tanks, the drop weight
assembly, thrusters and other components. A pipework
frame provides collision protection for the forward viewport.
INTERNAL ARRANGEMENT
The DeepView was designed to provide passengers with
a comfortable environment from which to view the subsea world, and the degree of comfort and the quality of
the view are obviously critical to passenger acceptance
of the vehicle and the experience as a whole. The 66passengers sit in luxurious, high-backed cinema style
seats situated back to back along the center line of the
vehicle. Passengers enjoy an unsurpassed floor to ceiling panoramic view with no discernable distortion as
well as the most comfortable seating ever installed in a
tourist submarine. Moreover, the DeepView, with a 2500
mm passenger compartment diameter is considerably
more spacious than any tourist submarine. The overall
effect is one of spacious comfort.
The passenger cabin is further characterized by two wide
aisles providing easy access to the passenger seats.
Aft of the passenger space is a non-structural bulkhead
divider with two hinged doors that provide access to
the machinery compartment.
30
are emptied by the introduction of air at 200 psi over
ambient. Differential longitudinal trim is effected by
filling or venting either the bow tanks or the stern tanks
to compensate for passenger movement within the pressure hull.
The high pressure air system for the MBTs and VBTs is
composed of cylinders with a total capacity of 2400 liters at 200 bar. The cylinders are divided into independent main and reserve systems of 1200 liters each. Pressure reducing valves allow for a reduction in pressure
to 200 psi.
The DeepView also has a provision for lead ballast that
can be varied to compensate for differences in water
salinity or additions or deletions of equipment.
Forward of the passenger space is the pilot’s compartment situated behind a large spherical sector acrylic
viewport located in the forward portion of the pressure
hull. All control and navigation functions are carried
out from this area.
An emergency lead drop weight is located between the
skids. The weight is released by the actuation of two
hydraulic cylinders powered by a manual pump mounted
in the pilot's compartment. Releasing the drop weight
will allow the submarine to surface with a full load of
passengers and crew in the event of a subsea entanglement or other emergency.
BALLAST & TRIM SYSTEMS
ELECTRICAL POWER & DISTRIBUTION
The DeepView has a main ballast tank (MBT) system
composed of port and starboard rectangular soft tanks
in groups fitted to rigid longitudinal frames connecting
the fore and aft sections. Twelve tanks in total provide
24 m3 of buoyancy and are vented to seawater at the
base. The twelve vents are air actuated cone valves with
their outlets manifolded together in two fore and aft
groups and fed through a pair of powerful centrifugal
air fans. The fans are driven by high speed axial piston
hydraulic motors run off the thruster power pack. The
fans provide low pressure air to blow down the MBTs
when surfaced. The purpose of the main ballast tanks
is to provide the vehicle with the necessary freeboard,
stability and buoyancy while in the surfaced condition.
Main ballast tanks can also be blown at depth with high
pressure air in an emergency, resulting in a rapid, uncontrolled ascent.
The DeepView derives power from lead acid storage
batteries. The batteries are contained in two exernal oneatmosphere battery pods with each pod containing two
240V groups of cells and two 24V groups. The cells are
720 Ah and produce a total of 608 kWH at 80% discharge. The main hydraulic motors and other large consumers use 240V power with the control and communication instrumentation requiring 24 V. Power is sufficient for 24 hours of submerged travel at the average
rate of consumption.
The variable water ballast tank (VBT) system, sometimes referred to as hard ballast, is designed to allow
the vehicle to be neutrally buoyant regardless of passenger load. The VBT capacity is equivalent to the weight
of the rated maximum number of passengers. This will
allow the submarine to operate with a total of only two
crew on board, in which case the variable ballast tanks
would be full, or with a full load of passengers and empty
VBTs.
The VBTs are one-atmosphere, pressure resistant tanks,
located in the center of the port and starboard main
ballast tank groups. Water free-floods into the tanks
when the requisite valves are actuated, and the tanks
Battery selection and systems design is critical to a safe
and successful vehicle. The batteries chosen are an advanced lead acid traction type battery equipped with
autofill and air bubble recirculation. The system reduces
outgassing and water consumption yet retains a capacity equal to the best tubular plate traction cell. The batteries were selected to last a minimum of 1000 deep
cycle charges or five years. Recharging time is approximately 9 hours.
The batteries are grouped in eight 60V cases 2.0 m long
and one 2 x 12V case, 1.2 m long. These cases, weighing 1,320 kg each are mounted on flanged wheels running on rails inside the pod. The foremost case is fitted
with a 24V motor and control system geared to the axles. For inspection, a length of rail is positioned in front
of the pod and the self powered vehicle contiaing the
batteries motors out.
The DeepView has well designed electrical systems with
extensive circuit protection and ground fault detection
capability.
31
PROPULSION & MANEUVERING CONTROL
LIFE SUPPORT & SAFETY SYSTEMS
Tourist submarines generally have considerable parasitic drag as a result of the externally mounted components, including thrusters, main and variable ballast
tanks, exostructure, high pressure air and oxygen bottles,
external frames and other equipment. Speeds are quite
low, with a typical maximum of 3.0 knots. Actual operating speeds are in the region of 0.5 – 1.0 knot, as faster
speeds tend to be the enemy of observation.
In a tourist submarine the cabin pressure is always
maintained at very close to one atmosphere, regardless
of the depth of the vessel. Life support is effected by
injecting pure oxygen into the cabin to maintain 19%22% by volume, while the carbon dioxide is absorbed
by a chemical compound in a scrubber system.
The DeepView 66 uses a safe, low-maintenance and
above all, reliable, hydraulic power system proven in
subsea applications. Two identical power packs are installed in the aft end of each battery pod. The location
minimizes any noise that might be heard by the passengers.
Driving each power pack is a 40kW industrial square
frame motor running at constant speed and designed
for a 20 year service life. Two axial piston displacement
pumps are mounted in tandem on each motor. One
pump which is either displacement or pressure controlled drives the main prop and the other pressure controlled motor drives the thrusters. One power pack alone
is sufficient for normal operations. The pumps are
housed in a pressure vessel maintained at ambient pressure with an external reservoir fitted with a diaphragm.
The motor shaft is sealed by a Crane type mechanical
seal fitted to the inside of the pressure vessel.
The six maneuvering thrusters and LP blowers are connected to a hydraulic main ring through groups of oilfilled solenoid valves while the main prop motor is connected to its main through a single large bore valve for
reverse capability. No hydraulic pipework enters the
main pressure hull, which reduces the fire hazard.
The main thruster has been designed to lesson the effect of efficiency losses inherent in hydrostatic transmission systems. The propeller is a large 1.3 meter fivebladed unit turning at a maximum speed of 310 rpm.
The motor is a crank type five cylinder radial piston
hydraulic unit fitted with an extension housing for thrust
bearings and a PTFE shaft seal. The prop is fitted in a
fixed Kort nozzle with a pair of vertical eyelid deflectors used to maintain track and undertake large radius
turns with main steering control coming from bow and
stern lateral hydraulic thrusters of 38 kW and 22 kW
respectively.
Four vertical hydraulic thrusters have a combined thrust
of 1300 kilograms.
Maneuvering is intuitively accomplished through a single
proportional joystick control. Course changes to port
and starboard are caused by moving the joystick to the
left or right which activates the bow thruster. Forward
or reverse thrust is caused by pushing the joystick forward or pulling it aft. The joystick is also used to actuate the vertical thrusters.
High pressure oxygen is stored in individual bottles located outside the pressure hull. The main oxygen system consists of 100 liters at 205 bar. A second, independent emergency oxygen system consists of two banks
of 450 liters at 205 bar and provides a minimum of 96
hours of life support for a full complement of passengers and crew.
The oxygen supply, reduced in pressure by a regulator,
is injected into the cabin and is controlled automatically.
The carbon dioxide component of the air in the passenger cabin is removed through adsorbtion by circulation
through a porous bed of soda-lime. A high volume
blower forces the air through the scrubber cannisters.
Carbon dioxide levels are thus maintained at levels below 0.5% by volume. Aboard DeepView there are two
electrically powered scrubbers, each with 240V fan units
for normal operation and 24V units for use in an emergency. Each scrubber is capable of absorbing the CO2
produced by 66 people over a 12-hour period.
Emergency scrubber compound is stored in accessible
sealed containers within the pressure hull. In the event
of emergency the scrubber compound can be replaced
periodically. Carbon dioxide is monitored by the atmospheric monitor system and a manual gas monitor is
also included in the emergency supplies.
The DeepView also has an air conditioning system to
cool and dehumidify the cabin air. The system consists
of two individual units located under the floor of the
passenger cabin. One unit cools the forward portion of
the main cabin, the other the aft portion. Cool air flow
is directed downward over the acrylic to prevent misting.
Fire protection includes both active and passive fire
systems. Passive systems include flame retardant materials, while the active systems include high temperature alarms and two portable 6 kg Halon 1301 fire suppression extinguishers. Individual closed circuit emergency breathing systems with two hour capability are
provided for each passenger for use in the event of atmospheric contamination by fire.
Emergency food and water rations, inflatable life preservers and first aid kits are included in the submarine
emergency equipment.
32
sounder will provide a profile of any obstacles ahead
along with distance information.
A gyroscope provides an inertial attitude reference to
the horizontal plane and course information with a
maximum drift of one degree per hour.
A color video camera mounted above the sail provides
external viewing to the pilot through a monitor located
on the pilot's console. Passengers are equipped with
monitors as well, and a video cassette deck is also available.
COMMUNICATIONS, NAVIGATION & MONITORING
During tourist submarine operations a Surface Officer
aboard a tender vessel tracks the submarine and remains
in constant contact with the submarine pilot through
an underwater telephone (UWT). It is the responsibility of the Surface Officer to make sure there are no
vessel traffic conflicts when the submarine surfaces.
The UWT for the DeepView operates on two frequencies (8.8 kHz and 27 kHz), the appropriate frequency
being condition dependent. A 37 kHz emergency pinger
locator is also integrated into the UWT system. In addition to the UWT there is a pilot controlled VHF radio
for surface communications, and an internal intercom
system and an AM-FM radio and tape deck as well.
Navigation is typically accomplished by reference to
submerged objects and dead reckoning. Virtually all
tourist submarines are constrained to one or two dive
sites, and the pilots quickly become familiar with the
subsea route which is usually less than one nautical mile
in length. A fluxgate electronic compass provides heading information on a digital display located on the pilot's
console. A Bourdon tube style depth gauge provides
depth information while a color depth sounder provides
altitude data, the bottom profile and also has an adjustable proximity alarm. In addition, a front facing depth
Other instrumentation includes an alarm system for
water egress, atmospheric monitors for O2, CO2 and
H2, motor over-temperatures, etc. In addition there are
electrical voltage and amperage monitors, oxygen and
high pressure air pressure readouts, battery amp-hour
metering, as well as a wide variety of control valves,
electrical switches and circuit breakers. However, unlike other tourist submarines the DeepView has a
sophisticaed computer controlled control and monitoring system which reduces panel clutter and increases
pilot visibility while decreasing the pilot workload.
Normal operation relies on color flat screen monitors
with touch screen controls and animated graphic displays. The fully redundant CPUs are able to compute
ballast levels against the passenger manifest, integrate
vertical speed, vertical acceleration and navigation data;
monitor AH%, average total energy consumption rate,
etc. All data with alarms is monitored at a single point.
Manual backup systems are provided as necessary.
IN SUMMARY
The DeepView represents a state-of-the-art autonomous
tourist submarine built to the highest possible safety
standards by a leading subsea technology company noted
for the exceptional experience and technical competence
of its management team.
Submarine & Submersible Design, Engineering, Refit & Construction
Tourist Submarines • Semi-submersibles • SeaRoom Habitats
Marine Leisure Business Plans • Turnkey Operations
Comprehensive Site Survey • T-Sub Site Selection
Feasibility Studies • Personnel Recruitment
Submersible Operations • Training
33
DeepView 66 Technical Specifications
General
Classification:
Maximum certified depth:
Test depth:
Passengers:
Crew:
Length overall:
Pressure hull
Height overall:
Beam:
Draft:
Weight in air:
Autonomy:
Mission time:
Maximum speed:
Electrical power:
Lateral bow thrust:
Lateral stern thrust:
Vertical thrust:
ABS ✠A1 Manned Submersible
110 meters
138 meters
66
3 or 4
32.0 meters
25.0 meters
6.0 meters
3.5 meters
2.7 meters
3.2 meters
160,000 kilograms
80 hours
24 hours
4 knots
240VDC/24VDC
1 x 75 kW
1 x 38 kW
1 x 22 kW
4 x 22 kW
Acrylic Components
Cylinder diameter:
Internal diameter:
Cylinder thickness:
Cylinder length:
Short term critical pressure:
Maximum operating temperature:
2.7 meters
2.5 meters
100 mm
2.45 meters
10 N/mm2
38° C
Bow dome diameter:
Thickness:
Angle:
Short term critical pressure:
Maximum operating temperature:
2.0 meters
80 mm
120°
10 N/mm2
38° C
Battery
240V:
24V service:
24V emergency (internal):
Hydraulic Power Packs (2)
Motors:
Control unit:
Main Prop pumps:
Thruster pumps:
Main Propeller
Type:
Diameter:
4 banks, 553 kWh total at 80% discharge
Cell type: Varta 10PzS720 H
4 banks, 55 kWh total at 80% discharge
2 banks, 53 kWh total at C5 rate
180 frame 240VDC, 40kW at 2,000 rpm
Compound field winding for load regulation
Three contact resistor soft start with field loss relay
Mannesman Rexroth A4VSO-63, 63cc/rev, 215 bar
Mannesman Rexroth A4VSO-40, 40cc/rev, 215 bar
5-blade in Kort nozzle
1.3 meter
34
Motor:
Mannesmann Rexroth MRP 800, 800 cc/rev, 75kW
at 215 bar and 310 rpm.
Thrusters (Mannesmann Rexroth Hydromarine)
Bow:
Stern:
Vertical:
1, size 05/06, 450 mm dia., 38 kW, 5.8 kN thrust
1, size 05, 380 mm dia., 22kW, 3.3 kN thrust
4, size 05, 380 mm dia., 22kW, 3.3 kN thrust
Ballast System
Main ballast tanks:
Passenger compensating tanks:
Variable tanks:
12, 24,000 liters total
5,000 liters total
1,500 liters total
High Pressure Air System
Main:
Reserve:
1200 liters at 200 bar
Air Conditioning & Life Support
Total life support capacity:
12 hours plus 96 hours reserve for 70 persons
Scrubber:
Absorbent capacity:
Absorbent type:
Total reserve storage capacity:
Bed depth:
Cross section area:
Air flow speed:
Residence time:
Air flow rate:
Proportion of A/C flow
Fan pressure:
Fan power:
40 kg
Sofnolime 1025
600 kg, 6700 man hours
330 mm
0.13m2 (360 x 360)
0.4 m/sec
0.825 sec
190 m3/hr
24%
50 mm H20 (forward incline)
300 W, 120 VDC, 24V emergency, 300W
Air conditioning:
Heat reject rate:
Compressor:
Compressor motor:
Evaporator:
Condenser:
Expansion valve:
Fan type:
Fan capacity:
Pressure:
Power:
Speed control:
Air changes:
Oxygen System
Day:
Reserve 1:
Reserve 2:
10 kW (33,000 BTU/hr)
Motorcoach type axial piston with open shaft
3.3 kW, 240VDC
500mm x 500mm x 100mm
Tungum trombone, 12mm bore
Thermostatic, duct temperature sensing
Forward incline, variable speed
800m3/hr
50 mm H20
1000W 240VDC compound wound motor
+/- 10% with field control from cabin ther
mostat
12/hr
Marine Group
1st Street,
Fort Lauderdale,
Florida
33311 33311
U.SBrownie’s
SUBMARINES,
INC. •940
936NW
N.W.
First St.,
Ft. Lauderdale,
Florida
Tel:
954/462-5570
Fax: 954/462-6115
Email: info@browniesmarinegroup.com
Tel:
954/467-9028
• Fax: 954/467-9584
• E-mail: ussubs@ussubs.com
35
Article:
Safety & Submarine Design
by: L. Bruce Jones
T
here are a number of important criteria useful
in evaluating passenger submarine design, but
the first question asked by a prospective customer is "Are they safe?"
The answer, in a word, is "very".
Passenger submarines are designed and built under the
supervision of, and in accordance with the regulations
and rules established by, one of the major classification
societies. The three largest classification organizations
are the American Bureau of Shipping (ABS), Lloyds
Register of Shipping and Det Norske Veritas.
The ABS has the most experience of the three in submarine certification, having classified most of the
manned submersibles built in the last several decades.
It is pertinent to note that there has never been a serious injury or fatality to any passenger stemming from
the operation of an ABS certified commercial or passenger submersible.
Involvement by the classification society begins with
the approval of the initial design, evolves to a survey
process during construction and continues with annual
inspections of the submarine throughout its life.
Submersibles that meet the stringent requirements of
the ABS are awarded "class" and are listed in the Record
of the Society as ✠A1 Manned Submersible, or in the
case of Lloyds Registry ✠100A. The ✠ is deleted if the
craft was not constructed under society supervision but
was later surveyed and awarded classification.
In order to retain classification, which is important as
it would be virtually impossible to operate and insure a
submersible without the A1 or 100A rating, the submersible undergoes a thorough annual survey that includes the detailed inspection of ten major systems.
Additionally, every three years the submarine undergoes
an even more stringent survey that involves pressure
and hydrostatic tests, dimensional checks of the pressure hull, instrument calibration and a special test dive.
In the United States the U.S. Coast Guard will approve
the submarine design and survey construction, actually
duplicating work done by the ABS. The Coast Guard
also stipulates requirements for the experience levels
and licensing of the submersible crew, insures the existence of adequate documentation which includes opera-
tion and maintenance manuals, applicable logs, records
and checklists, etc., and assures compliance with a substantial body of safety and other regulations.
Assurance of submersible safety begins with the design
process. The cost to design a contemporary passenger
submarine that might cost $5.0 million to build approaches, and in some cases exceeds $300,000. Literally thousands of man hours are required and hundreds
of drawings are generated. Detailed calculations are
required in such areas as pressure vessel stress analysis, life support systems, electrical load requirements
and buoyancy and stability analysis. All materials to be
used during construction must be certified and specified beforehand. The design specifications generally
follow the requirements of such regulations as proposed
in Rules for Building and Classing Underwater Systems
and Vehicles by the ABS, the American Society of Mechanical Engineer's Safety Standard for Pressure Vessels for Human Occupancy as well as various bulletins
of the Welding Research Council.
When the design is finally complete it will be exhaustively analyzed by the engineers of the regulatory agency
and classification society, and those plans that are satisfactory will be approved. Once all plans have been authorized, construction may commence.
Society surveyors are on hand for the construction process. They assure the quality of the materials and the
construction techniques. They monitor the welding process, implement and review extensive non destructive
testing procedures, and they witness the hydrostatic
testing of piping and gas storage systems and ballast
tanks. Inspectors also verify the installation and testing
of mechanical and electrical systems, check safety de36
vices and examine critical dimensions. Subsequent to
pressure hull completion a hydrostatic submergence or
"drop" test with strain gauges is carried out to 1.25
times the design depth.
Requirements for submarine design classification include many redundant systems that can be used in the
event of a primary system malfunction. These include
ballast/trim, life support, propulsion and electrical systems.
The ballast/trim systems of the submarine control the
craft's buoyancy and insure its stability under a broad
range of conditions. The ballast system controls the
submarine's ability to descend underwater, maintain
depth or rise to the surface, while the trim system controls weight distribution along the length of the craft,
or its angle of incline in reference to the horizontal.
Ballast and trim systems are composed of three components; 1) the "hard" or variable ballast tanks which are
externally mounted and use high pressure air to control
buoyancy and adjust for variations in weight distribution (trim) in the submarine. Hard ballast can also be
pumped dry by an electric ballast pump. 2) Soft ballast
tanks are non-pressurized and are also externally
mounted and are used primarily to provide additional
freeboard and stability while the submarine is on the
surface. They are vented through the bottom to the
water, which is displaced by the introduction of high
pressure air. In an emergency the soft tanks can be
"blown" full of air, causing the submarine to rise rapidly to the surface. 3) A drop-weight of one or more
sections can be manually released in an emergency, dramatically lightening the submarine and causing it to
surface. In some designs moveable weights are used to
control trim either in conjunction with, or in substitution for, variable ballast trim procedures. A further
method of surfacing is the vertical thruster system which
can be actuated to propel the submarine upwards. Indeed, some submersibles are designed in such a way as
to always be slightly positively buoyant, and they require the constant use of the vertical thrusters to remain submerged.
In summary, ABS certification requires that the submarine be able to surface with the largest single volume
flooded, with the exception of the pressure hull. This
can be accomplished by blowing or pumping the hard
ballast tanks, blowing the soft tanks, releasing the
dropweights or powering to the surface with thrusters.
Life support systems consist of oxygen supply and delivery, an atmosphere control mechanism and a carbon
dioxide removal process. Most larger passenger submarines have one or two freon based air conditioning units
that maintain cabin temperatures at 72 degrees and
control humidity and remove odors. These are operated in conjunction with a scrubber system that removes
the carbon dioxide to a level of 0.5% or below. Oxygen
is supplied from high pressure cylinders and is automatically injected into the cabin at a rate that replaces
the oxygen consumed and maintains a level of 21% by
volume. In the event of a failure, a manual bypass system with flow meters and monitoring equipment are
available. In addition, built in breathing sets for each
person on board must have a two hour air supply. A
purge compressor is used to maintain atmospheric pressure regardless of the depth of the submarine or the
internal temperature. This also prevents accidental over
pressure in the event of a high pressure air leak. Regulatory agencies and the certifying society require at least
72 hours of oxygen supply and carbon dioxide removal
capability for an entire complement of crew and passengers.
Leisure submarines are usually powered by several externally mounted brushless DC motors or internal
electro-hydraulic propulsion devices. In either case sufficient system redundance exists to allow for the propulsion of the craft in the event of a unit failure.
Electrical power is provided by either sealed lead acid
traction batteries or sealed gel cell batteries. Either type
are capable of providing power for the submarine for
10 to 14 operating hours per day, and can be fully recharged in an eight hour period. The batteries have a
minimum useful life of 1500 deep cycle charges. Main
power is either 120V or 240V DC which provides electricity for the main propulsion devices, lighting, etc. A
separate 24V/12V system is used for life support systems, navigation and communication equipment. Moreover, a secondary separate 24V/12V emergency power
system is also required. Sophisticated circuit breakers
and power shut-off equipment are available to provide
circuit isolation as necessary. The battery compartments
are isolated and have their own hydrogen removal/scrubbing purge compressor/ventilation systems.
The submarines are equipped with several bilge pumps,
and both active and passive fire fighting systems. The
craft is in constant contact with the surface support
vessel via a dual frequency underwater telephone, or
when surfaced, with a VHF marine band radio.
While in a brief article it is impossible to delineate all
the safety features inherent in a classified contemporary passenger submarine, their pristine operating
records provide a tribute to the classification societies
and manufacturers. There may well be no safer form of
transportation.
37
Preparing the Comprehensive Business Plan for
Underwater Leisure Projects
By: L. Bruce Jones
I. Introduction: The Purpose of the Business
Plan
The business community typically views the business
plan as a critical component in the equation for capital
acquisition. While there is little doubt that few businesses are successful in raising funds without a well
executed business plan, the document itself serves a
broader purpose. Generating a business plan forces management to focus on a number of critical issues, and to
define objectives and the methods for achieving pertinent goals.
II. Characteristics of Successful Business
Plans
Successful business plans differ in intent, format, organization and scope, so there are a number of different
presentations capable of achieving the capital acquisition goal. The guidelines that follow apply to all business endeavors, and are not limited solely to underwater leisure projects.
A. Professional Presentation
The business plan typically provides the first impression a potential investor will have of a company, and as
a consequence the plan itself should be representative
of the image the company would like to portray. In addition, many professional investors, venture capitalists
and commercial lending institutions see hundreds of
business plans each week. If the plan is not well organized; if it’s too long or too difficult to follow, then there
is a very good chance that it will not be given serious
consideration.
Limit the plan to a maximum of 40-50 pages of concise
writing. The chapters should be well organized and in
appropriate order, and the entire document should be
neat in appearance. If the business plan requires supporting information and additional documentation,
place it in a second, separate volume. The plan should
include a two page executive summary that explains the
firm’s current status and describes its future plans, and
this should be written after the plan is complete.
Make sure that the business plan is clearly written and
thoughtfully edited. If there are doubts about the Management team’s ability to concisely express themselves,
then consider using a consultant or professional editor.
B. Defined Corporate Goals
Where does the Company want to be in five to seven
years? Where does Management want to be? Answers
to these questions are important to investors, and to
the founding partners as well.
Corporate founders differ in objectives. Some are startup specialists that are fascinated by the challenge of
implementing a new business. Once things are up and
running smoothly, they may lose interest and want to
move on. Alternately, a dedicated founder may feel that
he or she wants to devote the rest of their life to the
success of the Company. Yet others may view the business as a sort of personal R&D laboratory, and are looking for an opportunity to continually develop new products. To this type of person, monetary rewards may well
be secondary in importance.
Other founders may view the business solely as an opportunity to make money, or to maintain a certain
lifestyle, and the businesses growth could be compromised by their unwillingness to make sacrifices. While
these are just a few possibilities, an understanding of
what each of the founders wants from the business will
go a long way toward keeping the partnership intact.
The objectives of the business should be clearly defined
as well. For example, if you are starting a firm that intends to develop a design for a revolutionary deep diving, titanium and acrylic, nuclear powered, 200 passenger leisure submarine, you have several choices;
1. Go public. Here is a reasonable goal, planned
for five to seven years in the future when the Company
manages twenty million in sales. It will allow you and
your partners the chance to “cash out” and it will give
your investors the opportunity to more than recoup the
millions of dollars they put up to see you through construction of your first vessel.
2. Be Acquired. After the company has become
profitable, shown steady growth, and is for all intents
and purposes, stable, it may be time to sell out to a
larger firm, say a Boeing or an Airbus Industries. Here
again, the original founders and investors will have the
opportunity to cash out after having seen the desired
capital appreciation. They may also elect to “ride along”
and participate both financially and managerially with
the new owners.
3. Become a Fortune 500 Company. This is
most entrepreneur’s fondest dream; becoming an industry giant. In this case you are dead set on operating a
38
fleet of transoceanic passenger “cruise ship” type submarines. If you are seriously considering this as a goal,
don’t tell anyone unless you want to be laughed out of
the board room. That is of course, unless you’ve done it
before. It’s safer, and easier on the ego to at least wait
until you’ve gone public.
4. A Money Machine. Some companies are
started with the express intent of reaching a steady state
in annual net profits, most of which are funnelled into
the founder’s pockets. In your case, you are achieving
revenues of $20 million annually from dive tours to the
bottom of the Marianas Trench. You have no desire to
make any more money and prefer to take nine months
off each year and to live as far away from water as possible.
5. Become a Joint Venture Partner. Here you
may only desire to complete the design for your submarine, and then to joint venture construction with General Dynamics. The advantages to this approach are obvious, unless you have a $100 million of your own floating around and plenty of confidence.
6. License Design. You intend to complete the
design and then license the manufacturing rights to several groups in various foreign countries.
7. Exploit Niches. You have decided to operate
your own 12 passenger diesel electric submarines at
small private resorts and nudist colonies.
Obviously there are many choices. Some are achievable, and others are more speculative. Explore various
options and build a logical argument for Management’s
ability to attain a specific goal.
C. Market Orientation
What is the most critical single component in the success of any new business? It is not the product. It is not
the management team. It is not even the financial status of the organization. It is, clearly and unequivocally,
the customer. Surprisingly, many entrepreneurs completely ignore this fact and tend to get caught up in the
development of the product.
As an example, there are a number of designs for tourist submarines that are fascinating examples of technical sophistication, but they will never be built, simply
because no one will buy them. The designers spent considerable sums of money in the execution of the design,
but they never seriously considered who the final user
would be.
Don’t make this mistake. A successful business plan
clearly demonstrates the product or service’s benefit to
the user. The faster that your product or service pays
for itself, the more successful you will be in your selling
efforts. A professional investor will require that you
clearly demonstrate that there is a market out there.
This can be done quantitatively, by researching industry statistics, or it can be done qualitatively through
market studies or via pre-sales of the product.
Let’s take tourist submarines. We know that something
like 1,500,000 people have paid to ride these vessels.
We also know that some companies are making significant quantities of money in the pursuit of this business.
Conversely, we have seen one or two firms go under as
well. Site selection is clearly critical, and like any other
business, effective management and reasonable capitalization are important. User benefit is definable, and
if you can effectively prove that the cumulative net after
tax profit is capable of paying for your submarine and
support equipment by year two; you’ll probably find an
investor.
D. Financial Justification
New companies never achieve their financial projections.
A strong statement perhaps, but one that is true for the
vast preponderance of business start-ups. Typically, professionally funded businesses only achieve from 20%
to 80% of their pro formas, and some never survive
past the third year. Business planning calls for solid projections of from three to five years in the future, and
these proforma income statements, cash flow forecasts
and balance sheets are important because they form the
basis of how much equity the founders must give up so
that the investors can meet their financial requirements
for capital appreciation.
Realistic projections are vitally important, and usually
nothing turns an investor off faster than overly optimistic proformas. The numbers should be reflective of
what has already been demonstrated in the industry;
and if they are not the investors are going to want to
know why. Presuming of course that they continue to
take you seriously at all.
The income statements should delineate sales, expenses,
margins, and income or loss and should be prepared
monthly through year two and quarterly for years three
through five. The cash-flow forecast shows the cash receipts, disbursements and cash requirements over the
same time period as the income statements. The balance sheet shows assets and liabilities, and a break-even
analysis should be included as well. The financial projections should be straight forward and easily understandable. If detailed spreadsheet analysis is required,
do not put it in the business plan. Investors have neither the time nor the inclination to wade through reams
of financial data. If they require supporting evidence,
they will ask for it.
39
E. Management Image
The Management team should portrait itself as an experienced group of erudite businessmen. The company
management should be composed of a team, usually a
group of from two to five individuals that have different, but complementary areas of expertise. They should
all have previous business experience, and the more
experience available in the company’s particular field
of endeavor, the better.
A “one man” management team has little hope of attracting investment capital. If a sole entrepreneur is to
guide the company, he must identify and attract additional management experience. Each manager’s experience and qualifications should be clearly demonstrated
in the business plan. When at all possible, the entire
Management team should be identified and responsibilities assigned. Additionally, attracting a seasoned
Board of Directors that can help guide the company is
also useful.
Care must be taken in the determination of management compensation. Young companies can seldom afford significant salaries for the founders, and high initial salaries are immediately questioned by veteran investors. Employment contracts that provide monetary
incentives for meeting financial goals are one effective
method to insure adequate and fair compensation. In
general, the founders should each expect relatively equal
compensation over the long term.
Investors will also look for evidence of commitment on
the part of management, and they like to see such things
as financial contributions by the founders, or stock sale
agreements that tie the founders down to three to five
years of work prior to major monetary compensation.
Professional investors also look closely for evidence of
focus. It is the rare management team indeed that can
field more than one product initially. Intense focus on
one product or service goes a long way toward assuring
success.
F. Clear Status and Plans for Product Development
The entrepreneur with a lucid vision of the penultimate
modular underwater hotel, may well have an excellent
idea that could prove profitable, but he has a long way
to go to demonstrate the feasibility of the concept. If he
hires an experienced architect and executes the design
and engineering calculations in detail, he stands a better chance of seeing his vision become reality. If he specifies the materials, builds a scale model, has it hydrostatically tested and selects an appropriate site for the
first installation, he is further along still, and his chances
of raising investment capital are greatly enhanced. If
he actually builds and profitably operates a small habitat, has plans for several more and letters of intent from
customers, his ability to raise capital is reasonably assured.
Product development requires action, not words. It is
anything but a writing exercise, and the more development that has been done, the less risk inherent in the
project. The less risk, the more equity the founder can
expect to keep for himself. Keeping these principals in
mind, and understanding that investors prefer to see
more money spent marketing a product than designing
one, the founder should clearly and accurately portrait
the status and plans of product, or service, development.
Prospective investors also appreciate a proprietary position. Patents, trademarks and assurances of exclusivity in the face of competition may well be the deciding
factor in some investment decisions. Erudite investors
also show a marked preference for a basic product that
does not require considerable custom engineering which
often times greatly reduces productivity without engendering adequate compensation.
G. Finding the Appropriate Investors and Addressing
Their Needs
There are a myriad of techniques for raising investment
funds. There are stock techniques, such as IPO’s, self
underwritings, private placements, and offerings of
warrants and preferred stock. There are debt methods
like borrowing, convertible debentures, bond private
placements and leveraged buyouts. And there are partnership techniques; venture capital, joint ventures, limited partnerships, R&D partnerships and franchising.
Add other possibilities like licensing agreements, letters of credit, SBA loans, government guarantees and
incubators, and the end result is, at the very least, completely confusing to the uninitiated.
Each example mentioned is far more appropriate to
some circumstances than to others. Some are quite specific in their requirements. If you have a completed
business plan and still have doubts as to who might be
interested in investing in your project, seek some professional advice. Try to obtain introductions to prospective lenders and investors. Failing that, circulate the
executive summary for signs of interest, as opposed to
the entire business plan.
Identifying prospective investors early on is an excellent idea. Then, in your business plan be certain to address their concerns. Remember that investors are looking to make a substantial profit in from three to seven
years, and that their perceived risk must be justified by
the return. For well developed underwater leisure
projects requiring $500,000 to $5 million, typical professional investors will require an annualized return of
at least 30%.
40
L. Bruce Jones: Qualifications
In 1993 L. Bruce Jones co-founded U.S. Submarines,
Inc. and today U.S. Submarines is the undisputed world
leader in its field with further prospects of exceptional
growth. Bruce, 51, is the president of the company and
he is also the president of Poseidon Undersea Resorts,
LLC., a company developing the world’s first undersea
resort (http://poseidonresorts.com).
Bruce’s life-long fascination with all things sub-sea related began at an early age. Bruce’s father was a rocket
scientist at Lockheed and his mother a civil engineer.
He was raised by his mother and step-father, a Master
Mariner who ran DeLong Corporation, one of the
world’s largest marine construction companies. Bruce’s
grandfather, Leon B. DeLong developed the world’s first
self-elevating jack-up rigs and he also created the world’s
first containerized shipping company.
Bruce grew up living on heavy marine construction platforms in the South China Sea and the Persian Gulf. He
learned to dive at the age of nine under the jacket of an
oil tanker terminal seven miles off of Kuwait. His first
jobs were in the marine construction business and usually involved diving or operating a boat. He had the
opportunity to travel extensively from a very young age
and has visited over 100 countries.
Bruce attended high school at Culver Military Academy and it was there that he began sketching submarines and underwater habitats and writing letters to
Jacques Cousteau.
Bruce was formerly the President of L. Bruce Jones &
Associates, Ltd., the leading technical and business development consulting firm on the tourist submersible
industry. The firm published both Passenger Submarines: A Comprehensive Analysis of the Submarine Tour
Industry, as well as the periodic newsletter Viewports.
The company also developed business plans on a consulting basis for a wide array of marine and undersea
leisure related businesses.
Current notable projects under development at U.S.
Submarines and being managed by Bruce and his partner, Jean Claude Carme, include the world’s first submarine cruise ship, an 85 meter, 2300 ton submarine
that will carry 72 passengers on two and three day undersea cruises in five star luxury. A second project, under the direction of Patrick Lahey, is a new series of
small submersibles designed to be based aboard large
yachts. The Triton class submersibles are designed in
two and three passenger versions capable of either 1000
or 3000 foot depths and the first Triton was delivered
to the yacht Mine Games in December of 2007.
Bruce is an expert in all aspects of manned submersibles
and tourist submarines. Over the past 20 years he has
consulted for most of the companies active, or interested in, this field and he has evaluated all the major
civil submersible and submarine designs and has been
responsible for tourist submarine related business development, capital acquisition, and operational startups. He has conceived and co-designed several personal luxury submarines as well. He has carried out extensive site surveys in the Caribbean, Pacific, Atlantic
and the Med.
For eight years Bruce was the Chairman of the Manned
Submersibles Committee of the Marine Technology Society, and he is a review panel member of the Society of
Naval Architects & Marine Engineers — U.S. Coast
Guard Submersible Safety Panel. He is an appointed
member to The American Bureau of Shipping’s Special
Committee on Underwater Systems & Vehicles.
Bruce holds a degree in Geological Science from Trinity University and he did further graduate work in that
41
field at the University of Washington. He attended the
Executive MBA program at St. Mary’s University. He
was at one time one of the world’s leading research
gemologists and he held substantial credentials in that
field (G.G., F.G.A., DGemG) and he currently maintains a private gem research lab. He was formerly the
President of Pacific Gemological Services, the Vice President of Research and Education at AGMS and the CEO
of Air Shuttle, Inc. He was also, until recently, a member of the Board of Directors of the Aviation Technology Group (www.avtechgroup.com).
Bruce is a fixed wing, helicopter and ultralight pilot.
He is also an experienced diver and submersible pilot
and a former U.S. National Skydiving champion. He
has many years of experience sailing internationally on
both power and sailing vessels and is currently writing
a book entitled “Passagemaking: Practical Long Distance Cruising in Motoryachts.” He is married and has
four children.
Bruce spends a considerable amount of time these days
leading a world-class team in the development of the
Poseidon Undersea Resort project. The company is purchasing a private island in Fiji where the resort will open
in the first quarter of 2010. U.S, Submarines will build
five submarines for the resort, four Tritons, as each resort guest will have an opportunity to learn to pilot a
submarine in our lagoon, and one Deepview 20.
Bruce has recently returned from 15 months of living
in Dubai in the United Arab Emirates where he was
working on a major project and promoting the business of civil submarines and underwater resorts/habitats. He is currently focused on expanding U.S. Submarines in Florida and constructing an acrylic manufacturing facility in Portland, Oregon that will produce
the viewports for Poseidon. As of February 2008 U.S.
Submarines is about to begin construction of two tourist submarines, a Discovery 1000 and the five subs for
Poseidon.
42
Brownie’s
Marine Group
U.S.
SUBMARINES,
INC.
Tel: 954/462-5570• Fax:
Email:
info@browniesmarinegroup.com
Tel: 208/687-9057
Fax:954/462-6115
208/441-7478
• E-mail:
ussubs@ussubmarines.com
Copyright 2008, U.S. Submarines,
Inc.
All
rights
reserved.
43
Award
Winning
Website: http://ussubs.com
Website:
www.BrowniesMarineGroup.com

The Business Of Submarines

Transcription

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