Boating Industry Canada - December 2010

LAST MONTH, through a Boating Industry Canada online survey in ‘Newsweek’ our electronic weekly newsletter, we asked our readers to respond to a brief survey designed to probe our industry in terms of pending retirements.

While retirement may be an understandable and demo-graphically-driven situation, large numbers of marina and yard owners retiring would amount to a grassroots revolution – a revolution that has the potential to undermine both potential sales and customer satisfaction unless the industry attracts a large group of newcomers.

Our electronic newsletter, Newsweek is sent out to approximately 5,000 people in the industry, but fewer than 1,000 actually own marinas or repair yards. We asked that only owners respond. Over a period of only four days, 80 people visited the site and 39 qualified people completed the survey.

We asked where they were located and 15% of the respondents identified themselves as being from British Columbia, 72% from Ontario and the remaining respondents were spread between Québec, Nova Scotia and the Northwest Territories.

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ERCURYTM

BRIDGE PORT MARINA

434 Couchiching Point Road, Orillia, ON L3V 6P8

705-326-7898

We asked how many people were employed full-time in their marina or repair yard. The 39 respondents reported a total of 350 full-time employees for an average of 8.97 people in each marina.

However, 10 reported many more than 10 full-time employees. If we split our respondents into two groups, the 29 respondents reporting fewer than 10 on staff had a total of 132 full-time employees for an average of 4.55 per business.

If we take the remaining 218 employees averaged amongst the 10 respondents with 10 or more full-time people on staff, we come to an average of 21. 8 full-time employees. This suggests that about 26% of our survey run a fairly large shop.

The average age of the owners is certainly a key statistic when we look at retirement. Only 15% of the respondents were under 45 years of age. 66% said they were age 56 or older and 15% are already over 65. Especially considering the physical demands of marina and repair yard work, we shouldn’t be surprised by the large number hoping to retire soon.

In fact, 65% said that they hoped to retire in the next five years. Taking a very simplistic approach to the numbers, we can expect to see somewhere around 13% of all marina owners exiting the business annually.

A painful statistic was the fact that virtually all respondents are without a successor; either a family member or employee.

By extrapolation, if they don’t have a successor lined up and they plan to retire, they must be planning to sell the business.

Are there people in our business now with the desire and financial wherewithal to buy those businesses?

It’s probably safe to assume that the larger businesses are operated with professional bookkeeping and accounting but some of the 65% of our retiring respondents with an average of 4. 5 full-time employees, likely take advantage of all the ways that Revenue Canada allows them to minimize their exposure to taxes. In doing so, they may wind up with financial statements that appear to undervalue the business.

Again, we asked if the respondents closed their business for more than two weeks a year and in this group, 38% said that they closed for two weeks or longer. We suspect those seasonal shutdowns are largely designed to reduce the off-season impact of payroll.

Overall, we caution our readers that this is simple research and should be seen as “directional” at best. Those who know the industry well however, will realize that these results are probably a fair reflection of reality.

We should all be concerned at the scope of this grassroots revolution.

The Boating Ontario Conference and Trade Show December 5 to 7 will include the presentation of a much larger survey on Employment and Skills Training that the organization ran in Ontario this fall. They surveyed a large group of Ontario marinas directly and those results will be of great interest to the industry when they are presented at the Conference. ;