Numbers, not guts, will see you through the recession

If you think your gut alone can predict the market accurately enough to run a business, then I suggest you get out of boating and go make your fortune on the stock market.

mike_mugnewBy Mike Davin, Online Editor, Boating Industry — Every month, we publish the results of Info-Link Technologies Inc.’s Bellwether Report, which shows a rolling change in unit sales for various powerboat categories. (See the most recent report here or view the charts here.)

Looking at the chart really does give a sense of where the industry has been and where it might be headed — and not just in a "my gut says" kind of way. (If you think your gut alone can predict the market accurately enough to run a business, then I suggest you get out of boating and go make your fortune on the stock market ... you have been granted a rare gift!)

InfoLink

Info-Link's numbers (right) suggest that we have begun to recover from the worst of the recession. They also show just how much the marketplace has changed in a few short years  — have your business plans changed to match?

I don't know how many times I heard at the recent Marine Dealer Conference and Expo that successful dealers need to have a plan based on realistic expectations. That means doing some research and really making an effort to understand the numbers that are available to you.

We try to provide some of the resources you need with regular reports from Info-Link and Spader Business Management as well as publications like our Market Data Book. Take advantage of this and any other data you can get your hands on because it will serve you a lot better than vague guesses or blind hope.

Dealers have told me in the past that they got into the marine industry because of their passion for boating and mastering the business aspects of their job has been a challenge. Well, you may not be a numbers person, but numbers may be the life preserver that will get you through the next year.

3 comments

  1. Nice "Pep Talk" BUT if the numbers aren't there . . . . the numbers aren't there . . . "unit sales" is a nice "catch phrase" BUT if the "unit sales" are up due to moving out dated inventory at a loss . . . or Bank Repo's in the used market . . . or selling at a large loss due to bank FORCED curtailments on New or trade inventory. . . "numbers up" doesn't mean a thing for the bottom line . . . Dealers can only operate at a NET LOSS (granted selling at a loss generates some needed cash flow) for so long . . . before the "party is over" . . and this has dragged on longer than any other downturn in my 25 years in the business . . . BUT I could be wrong ??

  2. Mike

    You have hit the nail right on the head. The old adage that "Businesses do not plan to fail, they simply fail to plan" has been one of the major problems in our industry for decades. Yes,when unit sales are down and gross profits are down it becomes much more difficult to survive but there are a significant number of dealers out there who are surviving and many are profitable. The industry has been sick for a long time with dealer net profits hovering around 2%, on average. It was only a matter of time before those sick dealerships succumbed during a downturn. I would point out that many dealers prior to the recession were acheiving net profits near 10%. Those dealers had Business Plans in place and ran their dealerships in accordance with those plans. No they are not making 10% now but they are surviving and that is the difference. I have been preaching the necessity for good Business Planning in this industry for years and it has fallen on many deaf ears. Yes it is a numbers game and those who are survivors know and understand this.

  3. You touch bases of some good points. Numbers indicate something may be changing for the better, whether it is "old stuff" or not, it simply indicates someone is spending money more than the previous months. Simply one of many indicators planners can use to communicate positive things to their team.

    Getting rid of old inventory, can also add a positive number to any dealership's service bottom line IF the dealership maximizes the sales increase.

    Thanks for the info, I will be using in my team meetings this week.

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