Brothers Tom and Ryan Ash pounced on an opportunity to be small-business owners in 2006, buying Launch Wakeboarding School based on Folsom Lake.
Neither expected lake levels would decline, gas prices would soar and an economic meltdown would mean fewer customers learning to wakeboard. The brothers teach about 35 people a week to glide across the water while towed by a boat in what is a sort of combination of surfing, water skiing and snowboarding.
"We timed it horribly," Tom Ash said of the economy.
Ryan Ash, a 28-year-old student at California State University, Sacramento, and Tom Ash, a 46-year-old home mortgage consultant, are in the midst of a financial storm but adapting.
Like many small businesses, Launch Wakeboarding School has been hurt by gas prices. The brothers tow their 2008 Moomba XLV wakeboard boat from Ryan's home in Rescue with a Ford turbo diesel truck.
The F-250 truck burns $35 worth of gas round trip. "That's probably up 30 percent from last year," said Tom. "We cringe every time we fill it up."
The price of diesel fuel is up 59 percent from last year. Regular fuel is up 44 percent from last year, according to the AAA Daily Fuel Gauge Report.
Though the wakeboard boat burns regular unleaded fuel, it is still a financial burden. The 40-gallon Moomba tank cost about $122 to fill up last year but this year it costs about $176.
Because of the tight economy, Launch Wakeboarding School also has fewer customers for its lessons, which range from $120 for a first-time lesson to $450 for a kids day camp. Tom said Launch is averaging between 35 and 40 customers a week, compared with 45 to 50 a week last year.
"People have to figure out when the competition gets more fierce for a limited number of dollars, 'What can you do to distinguish yourself?' " said Jim O'Neal, director of the Small Business Administration's Sacramento district office.
Many small businesses simply go out of business.
Thirty-three percent of all small businesses fail within two years and 56 percent fail within four years, according to the SBA.
Smart business decisions and a little luck have kept the Ash brothers from becoming a statistic.
When it comes to distinguishing Launch Wakeboarding School, it's simple for them:
"We are the only ones licensed to be here (Folsom Lake) and we pay for that privilege," Tom said.
Ryan and Tom also brought wakeboarding management and financial experience to the business.
Knowledge of one's business is essential for any successful business, said Richard Dorf, a professor at the University of California, Davis, Graduate School of Management.
Ryan was the manager of Launch Wakeboarding School for three years before purchasing the company. "He had a sense of where things were and he has given me guidance on the wakeboarding business because certainly I never had exposure," Tom said.
Experience and knowledge are necessary to ensure the safety of wakeboarders at the school. In 2003, an 11-year-old boy drowned in Folsom Lake after inhaling carbon monoxide fumes from a boat while body surfing. On Jan. 1, 2005, a state law went into effect prohibiting the practice of operating a vessel's motor or generator while a person is teak surfing, platform or bodysurfing behind the vessel.
"We do our best to make sure safety is paramount," Tom said, adding that Launch has never had to file an insurance claim.
Business knowledge got Launch Wakeboarding School sponsored by American Power Sports – a watercraft dealer in Rancho Cordova. Ryan and Tom said part of the sponsorship was a free Moomba wakeboarding boat.
Before being sponsored, Ryan and Tom took the initiative to buy a boat on their own. Tom's knowledge of loans came in handy as they got an equipment loan to purchase a 2005 Malibu VLX.
This type of loan allowed them to defer payments so they generated income from the boat before paying full monthly installments. After being sponsored, Ryan and Tom decided to sell the boat.
"We took a $12,000 hit on the Malibu," Tom said.
But selling the boat was both a tax write-off and it freed Launch from its only business debt.
Experts agree keeping debt financing and overhead to a minimum is good for a small business.
Operating costs for Launch Wakeboarding School currently are insurance, gas and the salaries of their teachers, who work on an as-needed basis.
The adaptability of the company also allows it to move to the Sacramento River without much planning or cost.
The drought and removal of water from Folsom have diminished water levels and slowed the pace of boaters. "Folsom Lake is a pond," Tom said.
Boat speed on Folsom Lake will drop to a mere 5 miles per hour once the lake hits 400 feet. Folsom Lake officials said the levels are almost there.
Wakeboarding requires speeds of 18 to 25 mph, Tom said.
Ryan will simply hook the boat to his Ford F-250 and move it to the Sacramento River.
Once the rules of the boat are explained and life jackets are tied, Ryan will take Launch Wakeboarding School customers out on the river, looking for the "smoothest water," then he will begin coaching.
Despite the economy, the Ash brothers say they plan to expand Launch Wakeboarding School to more venues.
