Boating Industry

May 2016

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May 2016 | Boating Industry | 19 MONTHLY RESEARCH Yes 46% No 54% Does your business have a succession plan? Third-party buyer 39% Family member(s) 36% Employee(s) 17% Other 8% Planned future business owners For those businesses that have a succession plan TOP CONCERNS ABOUT TRANSITION We also asked readers what they were most worried about when it comes to their plans for succession or transitioning ownership. Here is some of what they had to say: "That our customers will still be taken care of in the manner they have come to expect from us." "How to create value." "Hoping for someone familiar with the boating industry to make it as painless as possible." "Market trends/demographics unfavorable for business viability." "Kids are in their late teens. Not sure if they are interested in the business or if we even want them in the business at this point." "Want to be sure our employees and customers are taken care of and want to be sure this location continues as a marine-related use." "Finding someone with the kind of funds it takes to operate a dealership today." "Continuity of principles and values." "Not burdening the next generation with more debt than the business can afford." "Making sure the plan is sustainable and fair to all parties." "Family members who do not get along yet have an interest in the business." "Continuing retirement income without putting the business out of business." "The property values have risen to a value above the ability for a marine business to support." "Finding someone with interest in the business." "I'd like to be fairly compensated for 30 years of pretty hard work." "Having the leadership team prepared to take the next step." DOES YOUR BUSINESS HAVE A SUCCESSION PLAN? PLANNED FUTURE BUSINESS OWNERS For those businesses that have a succession plan YEARS SPENT PLANNING FOR TRANSITION For companies that have had a transition in last 10 years 35% 26% 24% 9% 6% 0% 5% 10% 15% 20% 25% 30% 35% 40% Less than a year 1 to 2 years 3 to 5 years 6 to 10 years More than 10 years Years of planning for transition For companies that have had a transition in last 10 years Sources: Boating Industry survey years, with 20 percent aiming for more than 10 years from now for the transition. Of the companies we surveyed, 79 percent had been through an ownership transition in the last 10 years. Of those companies, 66 percent de- scribed the transition as very successful and 23 percent said it was somewhat successful. Only 11 percent said it was "neutral" or unsuccessful. Those companies that had problems cited is- sues with keeping good employees and the wrong person being put in charge of the company. Of those companies that had completed a sale, 48 percent transitioned to family members, 33 percent sold to a third-party buyer and 19 percent had employees take over ownership. While the horizon for the planned succession for those companies that have a plan was years out for most companies, that wasn't the case for companies that have had a transition. Fully 85 percent of those companies spent less than five years planning the transition, and 35 percent did it in less than a year. Nine percent worked on it for six to 10 years and 6 percent devoted more than a decade to planning the transition.

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