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Entries in 2012 (14)

Tuesday
Jan262016

STAYING IN BUSINESS FOR THE LONG HAUL

This article, by Dennis Kissman, was published in Marina Dock Age –  December 2012

I have been writing articles in this publication for the trends issue for a number of years and have never had difficulty with looking forward and giving an opinion as to where the industry is headed except this year.  I happened to be giving a presentation to the Kentucky and Tennessee Marina Associations annual meeting on November 7 and meeting with several marina owners I felt there was a lot of uncertainty about the future of their marinas.  The presidential election was to eliminate the uncertainty we have all lived with these past couple of years but it appears based on the people in the industry that I have talked to, there is a general consensus that the uncertainty of the past is just continuing into the foreseeable future.

There is one fact that started many years ago and is continuing and that is the growing number of Americans that have been forced on the government dole with this lingering weak economy.  With that fact in mind, we in the marina industry must face reality that we are in a leisure industry and not in an industry that is necessary to sustain life.  As a result the areas where someone will cut back is in their discretionary spending and for some, that discretionary spending is boating.

Because of the length of time this recession has lingered on a lot of marina owners are facing a host of new challenges that was not an issue in earlier downturns in the economy.  The biggest problem that I see looming on the horizon is maturing of marina loans.  Most marinas are financed to some extent and of those most loans are structured with a five to seven year balloon payment that will be coming due shortly.  Lenders are faced with their own troubles and marinas are only a small portion of those troubles.  This could be a blessing in disguise.  Lenders are more apt to work with you to restructure your loan than to foreclose but they can only do that if you communicate with them.  One thing a lender hates is not communicating your problem.  Trust me you are not alone and they have heard far worse than what you are going to tell them.

Let’s assume you get your lending situation squared away and on track you still have work to do.  The days of raising rates because you are spending more money are over for a while.  You need to take a close look at your operating costs and where those could be reduced.  Don’t take a machete to your costs but rather a scalpel.  For example, you can cut down on labor expense by adjusting your hours of operation or maybe a closer eye on maintenance issues to get an extra couple of years use out of a piece of equipment because you tightened a couple of bolts or changed the oil more frequently.  It is these little things that will end up making a big difference without alienating your customer base.

Next you need to keep a close eye on your cash situation.  Keep a daily log of cash receipts and disbursements.  Know at all times how much money you have to operate with.  Take into account the seasonally factor for receiving cash.  A lot of seasonal marinas get the bulk of their cash before the boating season begins.  If that is your situation look at your historical cash flow and figure at least thirty percent less cash flow for this upcoming boating season and keep enough of this year’s receipts in reserve to cover any shortfalls.

Be diligent on collecting your receivables.  During these times look at the payment pattern of each of your customers.  If a customer always pays his dockage on the fifth of the month and all of a sudden it goes to the tenth of the month that should raise a red flag and you need to look into what has changed.  It could be as simple as someone going on vacation but then it could be that customer has some other financial issues that could be a problem going forward and impact your ability to meet your financial obligations.  One other thing I want to mention about cash management and that is if you sell fuel.  No matter how hard it is write the check to the fuel company do it the minute you get the delivery.  That does not mean you pay the fuel company before your agreed terms of payment but you want to get it out of your available cash.

Any of you that know me I am a strong advocate of adjusting dockage and storage rates annually.  Well, with these economic times and the unknowns ahead of us I still recommend adjusting rates annually.  More care has to be exercised than you might take in a better economy but look for small adjustments.  For example let’s say that you price slips by groups like boats from twenty to thirty feet in length one price and boats from thirty to forty feet in length pay a higher price.  You notice that two thirds of the boats in the twenty to thirty foot group are twenty eight feet in length.  Instead of raising your group rates why not change the upper group’s lower end from thirty feet to twenty eight feet thus increasing the revenue you receive without actually raising your published rates.

This is a time to pay close attention to your business like no time before. By making small adjustments in how you conduct your business like those mentioned above will make the difference in your success in the years to come.

 

 

Wednesday
Sep302015

Marine industry is facing a crisis, but not without hope 

This article, by Dennis Kissman, was published in Marina Dock Age –  April 2012

 

With the summer season fast approaching, I want to take this opportunity to discuss the role marinas play in the overall marine industry, and how we can promote growth in boating to ensure the future success of marinas. It is safe to say that the marine industry is in crisis mode. Information provided by the National Marine Manufacturers Association (NMMA) reveals some startling statistics about our industry that should have all marinas concerned about our future. Specifically, current research from NMMA reveals adiminishing supply of boats and boaters. There’s no doubt this will have a negative impact on marinas because they must react to what boaters demand and boat manufacturers produce.

The Crisis

According to statistical research and analysis from NMMA, the marine industry, including marinas, is facing an uphill battle against an aging population both in terms of the age of boaters and the age of their boats. NMMA noted that the percentage of boaters over 50 years of age is increasing, while the percentage of boaters between 30 to 50 years of age is decreasing. Moreover, the average age of boats in 1997 was 16 years, whereas the current average age of boats is 21 years and typically, their useful life is about 25 years.

My concern with these statistics is that if the industry doesn’t upgrade its boats and attract a younger demographic to boating, there will be far fewer boats and more boaters leaving the boating lifestyle. All sectors of the marine industry, including marinas, need to join together to grow boating. 

A Solution

The decline in the number of boats and boaters is not new. It has been going on since 1997 and accelerated between 2006 and 2010, according to NMMA.

In 2004, the recreational boating industry decided to do something to stem the tide and implemented the Grow Boating Initiative and the Discover Boating Campaign to promote the boating lifestyle.

The Discover Boating campaign is an effort to attract new people to the boating lifestyle by highlighting the positive aspects of boating as a pastime. The campaign also provides educational tools to assist consumers in selecting the right boat for their needs. The core foundation of this movement is that people have a passion for the water; it is contagious, and this helps people identify with boating.

The public relations campaign has evolved over the years, and the current campaign leverages existing boaters’ experiences to attract new boaters. The idea is to have existing boaters share their boating experiences with their family and friends, in person and on the Web. The campaign sees this awareness and/or seeing actual boating experiences as the first step to helping people discover boating. The goal is to have the new potential boater desire, consider and eventually, purchase a boat.

The campaign has a strong Web presence through the website (www. discoverboating.org) and the use of social media like Facebook (with 220,000 “Likes”) and Twitter. Grow Boating has recently updated its home page (www. growboating.org), implemented new site navigation, redesigned its boat selector tool, implemented a new “Get Started” section and developed a Beginner’s Guides to Boating. 

Useful Resources

By summer 2012, the Discover Boating Facebook page will help bring this concept into reality through the Video Creator template on the Web. This turnkey template allows boaters to upload photos and videos of their boating experiences (which may include your marina), and the Facebook app will allow the user to add personalized text, music and render it into a personalized boating video. The idea is to have boaters share this video with their friends and family to entice them to participate in boating.

Grow Boating will also catalog these videos so that potential customers can view them, if they choose to share with everyone. Boaters can choose to share videos only with family and friends, but the hope is that boaters use the Video Creator to document their boating experiences for everyone. The use of the Internet and social media takes boating directly to the younger generations who are the future of our industry.

One of the most popular tools on the Grow Boating site is the Spousal Conversion Kit, which focuses on letting “the water and wind work its magic” on significant others. The objective is to convince family members to invest discretionary time and money on boating.

Recognizing that there are many other activities people can and do spend their time and money on, the Grow Boating site offers a cost comparison tool that compares the cost of boating to other pastimes, such as RVs, golfing, attending professional sporting events and vacations. This effort helps to challenge the notion that boating is too expensive.

To help boaters in pursuing the “boating lifestyle,” the Grow Boating campaign offers tools to help potential boaters. It includes information on boating basics, such as anchoring, finding boating destinations and understanding the costs of boat ownership, as well as a list of courses consumers can take to learn about boating safety and education.

Grow Boating has created several short Web-based video advertisements for online sports and weather outlets, such as TheWeatherChannel.com and CBSSports.com, because TV advertising has become cost prohibitive. In addition, Grow Boating has produced collateral material and tools to assist in promoting the message and campaign. Marinas can use the materials to help promote the program to their boaters.

Any waterfront facility or marine business has the opportunity to grow a critical component of the initiative, which is getting current boaters involved.

As existing boaters become aware of the campaign, they are empowered to help promote boating to their family and friends.

The Grow Boating committee has made these resources available free of charge to marinas and boat dealers, but the industry needs your help in distributing the message. On the Grow Boating website, marinas will find promotional tools that everyone can use, including online videos that can be embedded into your website, as well as bumper stickers and window decals and DVDs for showroom displays. It’s all there, you just need to visit the site and order your free materials for this season. 

Bridging the Gap

Marinas and boatyards have a real opportunity here to bridge the gap between boat manufacturers, dealers, brokers and the other segments of the marine industry. Remember that marinas are the gateway to the water for recreational boating, and if it were not for marinas, the industry would not be as big as it is today. The objective is to unify the marine industry to create a common voice and promote cooperation between the various sectors. The goal is to increase boating as an activity, attract new people to the pastime and ensure a strong industry for the future. I strongly encourage everyone to participate in this campaign. It is so critical to the future of every segment of the marine industry.

How can marinas do this? One way is for marinas to combine the Discover Boating Campaign “Welcome to the Water” with National Marina Day on June 9. This combination will create a strong message that will help educate boaters and non-boaters alike about marinas, the marine industry and the boating lifestyle. 

I cannot stress the importance of marina involvement in Grow Boating. Be part of the movement or face the consequences. The marine industry can no longer be isolated into individual silos. We must work together to grow participation, focus on the customer, offer innovative and superior experiences for our customers, and welcome more people to the boating lifestyle.

I would like to call your attention to an article written by Ron Stone back in the March/April 2000 issue of Marina Dock Age called “Marinas and Manufacturers are Best Friends.” Stone said, “Clearly, there is a symbiotic relationship between marinas and the recreational marine manufacturing industry. Each needs the other for growth and economic success. It is essential that they work together.” 

His words were as true then, as they are now. I encourage individual marinas to join and work with Grow Boating to actively promote the boating lifestyle to the next generation of boaters. 

 

 

 

 

Tuesday
Feb052013

Hit the Target: Finding a Unique Spot in the Marketplace

This article, written By Tim Keogh, was published in Marina Dockage, September 2012. If you need assistance in creating a marketing plan for your marina or a competitive market analysis please contact Tim Keogh. An established marina with moderate-to-strong occupancy, a new marina in an emerging market, or a proposed facility in the planning stages, all of them need to analyze their market objectively. With some effort, the following approach to market analysis will increase a marina’s awareness within its market, strengthen its overall business plan, and steer the business toward profitability.

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Tuesday
Jan222013

7 concerns a buyer will use to evaluate a marina acquisition

This article, by Dennis Kissman, was published in Marina Dock Age – September 2012. If you need assistance in structuring a marina acquistion, understanding marina cap rates, preparing a marina for sale or any other areas of a marina investment please contact Dennis Kissman. If you are considering selling your marina, here are seven concerns that a buyer will raise in evaluating your marina and determining price.

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Wednesday
Dec122012

What would global standards mean for marinas?

This article, by Dennis Kissman, was published in Marina Dock Age – July/Aug 2012. As a member of the International Marina Group (IMG) of ICOMIA at our recent meeting in Cape Town, South Africa, our committee was presented with a draft of the proposed ISO TC 228/WG 8, Yacht Harbours—Minimum Requirements. This organization is attempting to produce a document that outlines the minimum standards by which a recreational marina will be built and operated.

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