Strategic Analysis with current research! Boat and Yacht Dealer, Inc. The Company was founded by John Doe. Doe is currently sourcing a number of brand name manufacturers that will provide the business with its initial inventory of boats, which the Company will directly purchase.
The boat dealer knows this. As you might guess from Part 1 of this series, their debt carrying costs are a huge factor.
But mortgage debt is only half the equation. The other half is floor plan inventory.
They place an order, boat dealership business plan the boats and pay a percentage per month, generally around 1 percent. Those in the business call this the floor plan inventory. Taking it further, no new boat sales means a huge drop off in warranty work for the repair division. This can be percent of total repair revenue gone.
The repair manager, the parts manager and the many highly trained and paid mechanics are a fixed cost. Now a hole has been dug and the only way to fill it is to refinance assuming enough equity or draw on the largest lender in a recession — hip pocket national bank if you get my drift.
Now you see why you need income from other parts of the marina like wet slip rental, dry storage, etc. The Pound Gorillas have Left the Room The ground underneath the boat sales business shakes when the pound gorillas collectively leave the room.
By that I mean the floor plan lenders. You know the names — Bank of America, Key Bank and others. One day the dealer gets a phone call that their floor plan lender will no longer honor their line of credit to the dealer. Remember who owns the boat? You got it — it sank right along with new boats.
Just ask the car dealers how well used cars are selling. There are still lenders but there are more reasons to turn down a used boat loan than to make one. Throw the Baby Out with the Bath Water The visibly apparent consequence of the above is that expenses get cut to the bone. Personnel are let go out of necessity.
Mechanics are kept due to their nearly irreplaceable skills as is their manager, but everyone else is fair game. So what happens to the marina?
Obviously, no contracting for repairs gets done. Yet a talented, knowledgeable staff remains that may not be busy. Ironically, since they may have the time available, lots of little repairs get done. Docks might also get repaired or upgraded if permits are in place.
Every Cloud has a Silver Lining So as you can see, the dealers that will survive the recession have some combination of the following: Deep pockets to cover losses Streamlined expenses No showrooms or inexpensive showrooms Diversified incomes from wet slips, dry storage, dry stack or some other real estate Long-standing positive repair reputations Debt service that does not strangulate The difficult thing about business is that you have to cover your fixed costs.
You can cut your variable expenses drastically but fixed costs that can be cut are few in number and generally small in size except for payroll.
The ironic thing in this whole affair is that most of the leverage a dealer has to survive a recession was predetermined before the recession began.
Like any business boat dealers need to know what their break-even is after variable expenses are slashed and payroll, the only material fixed cost that can be changed, has been minimized.
Is that number greater than the net operating income with no new boat sales revenue?Business Plan Basics for Boat Dealerships You've been working on your boat dealership's business plan for a while now and you think you're really starting to make progress.
You've covered your mission, your strategy and the financial chapter is . If you are setting up a Boat Marine Dealer business then it is sensible for you to write down a Boat Marine Dealer business plan.
If you require finance for your company this will help you with it and even if you are lucky to have sufficient money to start-up your own business then a business plan will benefit you in your business approach.
Free boat dealer boat dealer Sample Business Plan for boat dealer - Business Plan # Dealership The business plan The one thing your dealership can't live without in ?
A formal business plan. Liz Walz Your marketing plan starts here We use a survey, for example, to ask boat dealers what they would like to learn about at the Marine Dealer Conference & Expo.
And the. Business Plan Basics for Boat Dealerships You've been working on your boat dealership's business plan for a while now and you think you're really starting to make progress. You've covered your mission, your strategy and the financial chapter is top notch.
For a business plan to be an effective tool, dealers also need to update them on a regular basis. Experts agree that a business plan should be a constant work-in-progress, a living, breathing document that evolves with a business and the economy.