Wondering how to start a boat dealership? We take you step-by-step from start to success.
Navigating the Troubled Waters of Boat Sales
America's love affair with water sports is growing in leaps and bounds. So why is the boat industry such a tumultuous business environment? Although the factors that influence boat sales are complex, most of them boil down to the fact that boating is a discretionary expense category that is highly susceptible to recessions, inflation and fuel prices.
Startup boat dealers need to understand that they are entering a volatile industry in which multiyear sales slumps are simply a fact of life. During industry peaks, a thriving boat dealership can rake in significant annual profits. But during industry troughs, it can be difficult to keep the lights on unless you have created a financial bumper to carry your dealership through down periods.
Yet despite the uncertainty of the industry, down periods may offer some advantages for startup boat dealers, especially if it is accompanied by a real estate slump. In peak real estate years, water access can be beyond the reach of startup entrepreneurs. But during a down period, it's much easier to secure the long-term lease or purchase of waterfront commercial space, marinas, boat docks and other amenities.
How to "Slump-Proof" a Startup Boat Dealership
Boat dealerships come in all shapes and sizes. But long-lasting dealerships have learned that survival and growth strategies usually mean diversifying revenue streams and finding creative ways to meet the changing demands of water sports consumers -- regardless of the economic environment.
- Multiple Boat Categories. Boat dealerships that specialize in only one type of boats are extremely vulnerable to changes in consumer buying patterns. So instead of selling only powerboats, consider expanding your lines to include sailboats, jet skis and possibly even paddle sports boats (e.g. kayaks and canoes). When gas prices are high, you'll sell more sailboats than powerboats; when discretionary income is in short supply, kayaks, canoes and jet skis may be your saving grace.
- Boat Repair & Service. Most boat dealerships are also repair and service centers. The key is to become an approved service center for boat and motor manufacturers so you can handle both warranty and non-warranty repairs.
- Rentals. Boat rentals are a viable way for startup boat dealers to make a living in any economy. But be warned -- a boat rental operation is a unique revenue model that requires specific policies and liability insurance policies. On the upside, as rental boats age you can sell them through your dealership to recapture your investment.
- Retail Store. It just makes sense for boat dealerships to include the retail sale of accessories and water sports merchandise in their business model. Although retail sales alone probably won't carry you through industry downturns, every little bit helps.
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. Now it's time to address details about your industry.
Industry analyses are standard chapters in boat dealership business plans and are often required by lenders or investors. Industry analyses are critical for contextualizing your startup within an industry setting.
To succeed, you'll need to be careful to avoid common industry analysis mistakes and to accurately represent your startup in an industry context.
Evaluate the Competition
Long before you open a boat dealership within your community, it's a good idea to see how you will fit in the competitive landscape. We've provided the link below to help you get a list of local competitors near you. Just enter your city, state and zip code to get a list of boat dealerships in your community.
Is the local market large enough to support another boat dealership? If not, you had better be sure that you are doing things much better than the competition.
Talk to People Who Are Already in the Business
After you've evaluated your local competitors, be sure to learn from folks who are already in business. Local competitors are not going to give you the time of day, mind you. Why would they want to educate a future competitor?
Thankfully, an owner of a a boat dealership on the other side of the country can be a great learning resource for you, provided that you won't be directly competing with them. In fact, they are often very willing to share startup advice with you. In my experience, you may have to call ten business owners in order to find one who is willing to share his wisdom with you.
So, what can you do to find a boat dealership entrepreneur in another city who you can speak with?
Here's how we would do it. Try the useful link below and key in a random city/state or zipcode.
Gaining Access to Boat Dealership Ownership
Common sense will tell you that to enter the world of boat dealership, you'll either need to start a new business or acquire a promising company on the business-for-sale marketplace. But despite the attraction startups have for many entrepreneurs, you should also consider the benefits of buying a boat dealership.
In today's marketplace, buyers clearly have the upper hand, making it relatively easy to find a boat dealership that meets your personal and professional objectives.
Don't Forget About Franchising As an Option
Your odds of becoming a successful entrepreneur immediately improve if you opt for franchising and benefit from the prior work of others and their lessons learned.
If you planning on starting a boat dealership, you would be wise to investigate whether purchasing a franchise might be the right move for you.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you sell to boat dealerships, you're in the wrong place. These resources are more appropriate for you:
If you are still exploring all of your options, please browse our directory of guides below.