Most marina owners will have a day when they wake up wishing they didn’t have to go to work. Sometimes a day at home doing whatever you want to sounds like a better plan. If you’re starting to have more of those days, it might be time to start thinking about selling your marina. Whether retirement calls or it’s just time for a new venture, it’s never too early to begin succession planning.
Our experts at Simply Marinas understand that ideally, a succession plan should take shape 3 to even 5 years before you plan to sell your marina. Starting the process early maximizes the marina’s value and ensures a smoother transaction. Not to mention, early planning can reduce the stress of selling.
Start with questioning yourself and talking to your family, friends, and partners. Are you ready to sail off into the sunset, or do you still see yourself playing a smaller on-site or consulting role in the marina? Potential buyers will want to know what ties a former owner will have with some buyers looking at the experience of a former owner as beneficial, and others wishing they could start fresh. Define your goals for stepping away.
Legacy: What legacy do you want to leave? Look at your reputation among customers, employees, vendors, and neighbors. Will you be remembered fondly, or will you need to spend some time improving before you hand over the keys? If you are leaving in good standing, reflect on how you want to see the marina evolve under new management. While buyers will have their own plans, helping to set them up for success is a valuable selling point.
Marina: Assess the marina’s current state from operations to infrastructure to compliance. Catalog the marina’s assets such as docks, boats, equipment, and real estate and while you’re looking take note of deferred maintenance you can begin to address. Also scrutinize your legal documents to ensure the marina adheres to permits, regulations, environmental laws, and safety standards. A professional broker or attorney can provide invaluable insight into what a potential buyer will notice.
Successors: Who do you see taking over your marina? At Simply Marinas we’ve seen our share of sales where an existing employee purchases the marina. Entrusting your business to someone who already understands and appreciates it can simplify the selling process as well as provide some peace of mind about the facility’s future.
Selling to a third party is a more typical scenario and here’s where working with a broker like Simply Marinas can be a real asset. Through our years in the marina brokerage business, we’ve culled a list of more than 14,000 potential marina investors that we can examine to see which ones might be a good match for your property. A confidential sale protects sellers from unsolicited offers that can come from an open market, and we help pre-select only potential buyers whose acquisition criteria matches your offering. Of course, if you want to spread a wider net, we can also assist in marketing a public marina offering.
Financials: Work with a professional broker or appraiser to determine the value of your marina. Marina valuation is explained well in this article from Marina Dock Age. In it, George Ash, Simply Marinas National Director says, “We advise sellers on how a buyer and their lender are going to look at the P&L and tax statements and how to best package and prepare that information so it’s more sellable. We will help identify potential add-backs such as owner benefits and non-recurring expenses that can be justified to adjust the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).” Ensure your financials are clean, accurate, and appealing to potential buyers. Buyers typically look at 2–3 years of financial performance.
Now is a good time to maximize value by identifying strategies to increase profitability and enhance the business’s attractiveness. Outline potential opportunities like adding services or expanding that can make the marina more attractive to a buyer.
Determining the ownership structure is also an early step. Decide if the successor will purchase the marina outright, buy it over time, or inherit it. There are advantages and disadvantages to each of these that we’ll tackle in a future blog. Just know that a critical component in succession planning is to minimize tax burdens. Work with a tax advisor who can set you up for the best results helping to set up trusts or agreements regarding the proceeds from the sale if warranted.
The Transition: Setting a new owner up for success is important, but also consider what a transition to new management will look like to your current staff and customers. Document critical processes including slip leasing, fuel sales, maintenance schedules, and vendor relationships. Step by step process documents will ease the transition to new ownership, as will retaining key employees. If you can assure buyers your best team will remain in place once you leave, there’s added incentive to purchase. Offer incentives or contracts to keep your staff and reduce their fears of losing income or being terminated.
Most marina owners we’ve worked with are in no rush to let customers know they are selling. The unknown of new ownership can cause a mass exodus that’s not beneficial to anyone. But it’s a good idea to strengthen relationships with slip holders, suppliers, and stakeholders to add stability and goodwill to the business. Once a buyer is identified, map out how you will notify everyone of the transition and introduce the new leadership. A little reassurance goes a long way in maintaining strong relationships with those who will support your business.
Seek Professional Guidance: As we’ve mentioned, work closely with your legal and financial teams to strategize and ensure compliance with any laws and regulations. Selling a marina is no time to work alone. Engage professionals familiar with the marina industry for valuation and operational advice. Contact the experts at Simply Marinas even if you’ve just started to consider selling. We’re here to help you every step of the way along your succession plan.
There are plenty of stories about businesses and families that fall apart when there’s no succession plan. Don’t just believe your family will carry on the business, or that the marina will sell easily, ask the questions, develop a written plan, and rest easy knowing when you walk away, the legacy of your business will carry on.
Contact our team at Simply Marinas to assist you with your exit strategy.
305-390-0397
Simplymarinas.com