Issue link: https://read.dmtmag.com/i/671713
www.BoatingIndustry.com 18 | Boating Industry | May 2016 MONTHLY RESEARCH fully transition to a second generation. Only 12 percent make it to a third generation and just 3 percent survive to a fourth generation. Who will buy? Many respondents expressed concerns about who the future owners of their business will be, noting the increased cost of doing business and higher property values, especially for wa- terfront dealerships or marinas. There is also concern about the interest and ability of the next generation or current employees (see sidebar p. 19). Of those companies that do have an exit strategy, about half are planning to transition the business to a family member or employee – 36 percent to family and 17 percent to one or more employees. Thirty-nine percent plan to sell the business to an outside buyer. Most business experts say companies should spend at least 10 years in the planning process for a succession. According to David Spader of Spader Business Management, companies that start out working on a transition at least 10 years in advance have at least an 85 percent chance of still being in business 15 years after the transition. Those that spend just a few years planning have a 10 to 20 percent likelihood of success, Spader added. In our survey, the majority of companies have a target date for the transition that is at least a couple years out, with only 11 percent planning to change ownership in the next year. About half of companies are planning their sale in the next one to fi ve years. Forty- one percent have a goal of more than fi ve BY JONATHAN SWEET Just less than half of marine industry compa- nies have a succession plan or exit strategy for their business. That's according to the latest survey of Boating Industry print and digital subscribers, conducted by email in March and April. Re- spondents were a mix of boat dealers, manu- facturers, marina owners and others working in the industry. While only 46 percent of readers reported having a current plan in place, that puts the in- dustry well ahead of most family-owned small businesses. According to the 2014 Family Busi- ness Survey from PwC, only 16 percent of fam- ily fi rms have a succession plan in place. (Read more about planning your exit strategy in our March issue or at BoatingIndustry.com.) The succession issue can be especially challenging for family businesses, leading to a high failure rate. According to a 2012 Harvard study, 30 percent of family businesses success- Exit ahead Many companies have no plans for exit strategy CURRENT CONDITIONS March 53.9 February 41.5 FUTURE EXPECTATIONS March 66.1 February 54.5 BOATING INDUSTRY We also asked readers about their views on the current health of the market as we do every month. In this regular monthly feature, we track the optimism of Boating Industry readers to help us get a read on the industry. A reading of zero means equal numbers of people are experienc- ing or expect growth as contraction, so any num- ber above zero is a positive. March's results indicated continued year- over-year growth for Boating Industry read- ers, and at a signifi cantly better pace than in February. That is in line with industry data that shows an earlier start to the sales season this year with mild weather in much of the coun- try. As a group, respondents are also more optimistic about the future, with more read- ers calling for growth in the next three months than they were in February. INDEX