Managing uncertainty
Aug 22, 2022
Canada always seems to come out alright – we don’t often boom, but we rarely seem to bust. For the past two years, the boat business has been on fire in the US but supply constraints here seem to have moderated our business results. I think the industry has done pretty well but I suspect we could have sold a lot more. Now I’m hearing from some people that we are heading into a new period of uncertainty.
Inflation, recession, rising interest rates and falling real estate prices are just a few of the headwinds the general economy is facing. On top of those factors, we are getting hit with the new luxury tax on boats.
I’m deeply concerned for those dealers who are focused on the larger boats but I’m also concerned for all dealers. I worry that the general public will not understand the real details, they will just react to the idea that boats are now hit with a new tax. No one wants to pay more tax. It’s possible that the whole issue of taxing boats will bring a chill to our market, just as the product supply starts to catch up with the demand.
New boat dealers will have a challenging time charting a course through this but there is a way that the industry can manage through this uncertainty and I believe that is to get more proactive about recommending service and maintenance to our population of current boat owners.
A very senior marine service professional recently commented to me that the service side of the industry often operates in a sort of high-season emergency mode. Well, we are nearing the end of high-season and as those boats come back for storage, the more reliable and possibly larger business opportunity may be to triage the boats as they arrive, record the repair and maintenance needs and then actively sell winter repair work.
New tops and canvas, upholstery repairs, mechanical re-builds and upgrades could be the best route to financial success in 2023.
And, invest now, in training and education for your people. Here is an example of what we are up against. My own 24-year-old son just started as a bank teller. No experience and no education in finance or numbers, but they started him at $18/hr and before the 3-month probation was over, he had his first promotion and a raise to $24/hr, and that’s of course, 12-months a year, full time. They are desperately short-staffed and are looking for new hires.
Construction is booming and any guy who can carry a 2×4 can get work at $22. Just saying…
Andy Adams – Editor
