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November December 2018 Marina World

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The magazine for the marina industry

MARINA MANAGEMENT &

MARINA MANAGEMENT & INVESTMENT When you have your marina, what’s next? Don’t assume that everything is known about the site and the operation of the business. Even if staff have been there for 20 years, they can be conditioned to the inherent operating risks, dilapidating infrastructure, Health and Safety and Environmental laws. They could also be oblivious to changes in government policy and your head lease obligations as owners often keep this confidential. So, if you committed the biggest of acquisition sins and didn’t already do it prior to sale, complete thorough due diligence. Once completed, initiate an action plan to prioritise and correct what needs improving. If you do this intelligently, you can actually create revenue opportunities from your works and get your landlord on side as you will be seen as a diligent operator. Key items to look for are anything submerged in water or the tidal zone, fuel systems, contamination hotspots from fuel or boat servicing, electrical systems and capacity to upgrade, plant and equipment maintenance history and code compliance, development of approved buildings and marina structures, staff competency, staff contracts and pay rates, management and accounting software, and safety and environmental legislative compliance including risk management systems. Ensure you have allowed for enough working capital and human resources to address items needing attention. Transitioning a business and undertaking projects is not the same as day to day operations. Assuming the existing staff have the expertise and time to do both might bring you unstuck and cost you. Don’t forget to tell everyone about the improvements you make and how this benefits client, safety, environment, community or government outcomes. Having good relationships with your clients, neighbours, community and landlord and showing them how you are improving things for the local community gives you great credits for doing things in the future. When it comes to optimising your business, the four key areas of focus should be people, systems, strengthening your brand and creating an environment where your sub-tenants thrive. Never underestimate the value of good people to your business and the relationships they build with your client base. Remember, you are the custodian for many of your clients’ most prized possession; their boat. Trust does have a value. Ensure you implement business systems that not only provide you with financial information and manage your safety Care for the environment is paramount in the modern marina. Smart, easily accessed fuel docks and dedicated recycling centres (below) are a must. and environment risk but, most importantly, are easy for your staff to use and interface seamlessly with your clients. Brand is the image of your business to the marketplace, so it pays to review this with your own goals and strategies for the business to ensure it is aligned. Tenants can make or break you. Providing an environment and developing positive relationships with tenants provides a positive experience to your clients for everything that occurs at your marina. If you are ready to sell your business and you have done all of the above well, you have positioned yourself for an efficient sales process and for achieving the optimum price. If things are not quite as polished as you would like, then a two-pronged approach should be adopted. One – reduce purchase hurdles including any non-compliance to head leases, industrial relations, safety and environmental. If you have any structural or contamination issues, eliminate or reduce them. Two – ‘mow the front lawn’. Like selling your house, make it look as good as it can for inspections as first impressions do count. A splash of paint, some landscaping, new staff uniforms and just simply cleaning up the site can make a big difference. Preparation of Due Diligence Data Room prior to going to market with all relevant information and being transparent helps buyers arrive at their decision more quickly. Engagement of the right sales agent who has contact with investors who might be interested in this asset class or specific site and a law firm and taxation agent who are experienced in sale contracts of this nature are also imperative as these areas can materially affect your end ‘cash in pocket’ result. The good news is that if you are lucky enough to acquire a marina, have a passion for the asset class and what the hidden opportunities are, and follow good business practices, marinas are great medium to long term investments. Brett Bolton runs Coriolis Marine consultancy in Queensland, Australia (www.coriolis.com.au). He has spent 15 years in the marina industry and directly managed 13 marinas in Queensland, New South Wales and Victoria as CEO of d’Albora Marinas. 48 www.marinaworld.com - November/December 2018

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