to buy a boat company or not?

[evolution1985]

ok so my partner and I have pretty much had an opportunity to buy a ski boat company thrown into our lap.
Long story short, comes with 6 molds, for open bow, closed bow, direct drive and Vdrive, plus a tournament ski boat mold.
this brand is pretty well established here, The price is pretty good and the way its set up is pretty good.

I won't go into too many details on that as none of its confirmed as yet, but there are a few guys on here that have started up a boat shop or have had allot to do with it. So my main point of posting on here is for peoples thoughts and opinions? One of the main plans we would have is to start exporting to the states and other places, are there many independent boat shops in the states that could carry another brand? Does anyone know where wakeboarding and skiing are most popular in the states?

anyways I've attached a photo of one of the boats that we could start building and look forward to any and all responses.

cheers

 

[Last Mohican]

Re: to buy a boat company or not?

Wake board boats are very popular in TX. In this economy there is no way I would get involved in a business that runs on entertainment $$$$. Toyota tried to break into the US ski/wake boat business a few years ago. They built a fantastic boat that still has a large cult following. Even with the $$$ Toyota had behind them they decided to get out of the business. Granted they had an issue with a mold but they had the money to remedy that (and they did). That should tell you something.

http://www.epicmarine.com/history.html

 

[pocket aces]

Re: to buy a boat company or not?

All water sports (skiing, Wakeboarding, etc.) Are really big in Florida. Orlando area is Huge for all types of skiing. A lot of Pro riders are located in Central Florida.

 

[idonthaveaname]

Re: to buy a boat company or not?

I'm with Last Mohican...

"In this economy there is no way I would get involved in a business that runs on entertainment $$$$."

 

[Woodonglass]

Re: to buy a boat company or not?

The Boat Restoration business is Booming!!!! Reason???? No one is buying NEW BOATS!!!!! I would not invest in a Boat Company at this point in time. But as EVERYBODY KNOWS... I am just an...

 

[idonthaveaname]

Re: to buy a boat company or not?

"The Boat Restoration business is Booming!!!!"

I agree with that statement! I live in south FLA and boating is huge here. I see new boat lots and there is no one around. I go to Sailorman, BOW, West Marine, and other marine restore/parts places and they are SWAMPED with people. They are not all restoring, but they are buying things to improve their boat.

 

[Pmccraney]

Re: to buy a boat company or not?

Not sure how crowded the market is in Australia, but the list of boat manufacturers on this forum gives you a glimpse... Some great companies with long operating histories (e.g Chris craft) have endured very difficult periods. Of course, I represent start-up companies for a living, so I would say not to rely on our collective hunch. Crunch the numbers on your margins, take a realistic assessment of your market share, but go into it being very skeptical. Unless you have more capital or better strategy or better market channels than the prior owner, there is a reason they are exiting the business... Get to the core of that... I have about six files on my desk right now involving failed acquisitions where the buyer though they were getting a good deal but in reality ended up with someone elses slippery terd. Hope this helps a little

 

[Cadwelder]

Re: to buy a boat company or not?

We have all seen a number of major boat companys go under over the past few years, and there is a good reason for that, as already stated. I would enter this extremly cautiously and do all your homework carefully. If you decide to go with I certainly wish you the best, just be careful and have a good sound business plan...

CW

 

[evolution1985]

Re: to buy a boat company or not?

Thanks for the responses guys, Yep trust me I am looking into it with BOTH EYES OPEN, lols.
(far too much money not too)

The owner of this company is an icon here in australian water sports and is very VERY respected. The reason he is getting out is due to health reasons. He will still run his own dealership and has offered to keep some boats in stock.
As far as start up costs go it is minimal due to everything being in place. GP is good and sales are good (room for improvement)

Due to his health he has not been able to commit fully to the marketing and pushing this brand, he is nearing sixty now, although I reckon he still looks closer to forty

Our regional market sales are pretty much dominated by two brands built here and the american boats, eg mastercraft, tige, etc etc. Ours will compete pretty well. I've crawled all over the boats, spoken to owners and driven them and gotta say im impressed. I believe it could work, I think most of it is really down to marketing. Sleekline sold a few hundred new ski boats last year and they are only a small company so The figures do add up. (at least on paper)

I can understand what you are saying about your local market, I didn't realise it was like that at the moment but thats a case of not researching yet. The more work we put into this the better the figures get actually.

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So the update for today is........ we have everything ready to go to the accountant to get a thorough going over and then its decision time. If it all checks out it looks like we will be starting a company.

 

[evolution1985]

Re: to buy a boat company or not?

Wake board boats are very popular in TX. In this economy there is no way I would get involved in a business that runs on entertainment $$$$. Toyota tried to break into the US ski/wake boat business a few years ago. They built a fantastic boat that still has a large cult following. Even with the $$$ Toyota had behind them they decided to get out of the business. Granted they had an issue with a mold but they had the money to remedy that (and they did). That should tell you something.

http://www.epicmarine.com/history.html

Funny you say that, my cousins had one of those, it was an epic x-22. Great boat, loved the lexus V8. That motor had a lot of pull!
I understand there was ALLOT that went on behind the scenes with that, But Im not fully clued in as too what.
Still that was a Great boat. didn't they sponser the gravity games one year?

 

[evolution1985]

Re: to buy a boat company or not?

All water sports (skiing, Wakeboarding, etc.) Are really big in Florida. Orlando area is Huge for all types of skiing. A lot of Pro riders are located in Central Florida.

Thats what I was thinking, It'd be nice to come over for a working visit and check everything out first hand.............

hmmm when its hot and sunny there its cold and wet here............... well thats a good a reason as any I think!!!!

 

[Pmccraney]

Re: to buy a boat company or not?

Of course I haven't ridden in them, but it looks like they have a well-made, attractive product...

If you have a wake emphasis - your target buyer/demographic is probably someone 16-30 (or their rich parents for the younger part of that demo). Brand matters so much to people in that demographic... Having the right "name" on it can be as much if not more than the performance. So, if you can break-through as the niche (up market) brand that is the must have for all young Aussies aspiring to be Parks Bonifay, then maybe you can catch lighting in a bottle... (like the monster energy drink of boats). You may have to drop some dough on "sponsorships' in this type of market (sort of the like the pro athletes wearing the shoes). If the "it" guys endorses and uses your boat, then maybe that can help generate a break-through and you start taking some share... Wake surfing seems to be the next big thing with these young lads... something to look into..

As you can see, I like talking business as much (if not more than) talking boats... feel free to PM if you want to talk further.

 

[evolution1985]

Re: to buy a boat company or not?

I'm with Last Mohican...

"In this economy there is no way I would get involved in a business that runs on entertainment $$$$."

Thanks for the reply. The american market and economy is in different states to ours at the moment, although they do tend to follow each other............ Thats actually one of my biggest concerns, I was always told if your going to supply someone with something, make sure its something they need-------- NOT WANT. lols I could break my own rule soon. But It is definitely at the front of my mind........

 

[evolution1985]

Re: to buy a boat company or not?

Of course I haven't ridden in them, but it looks like they have a well-made, attractive product...

If you have a wake emphasis - your target buyer/demographic is probably someone 16-30 (or their rich parents for the younger part of that demo). Brand matters so much to people in that demographic... Having the right "name" on it can be as much if not more than the performance. So, if you can break-through as the niche (up market) brand that is the must have for all young Aussies aspiring to be Parks Bonifay, then maybe you can catch lighting in a bottle... (like the monster energy drink of boats). You may have to drop some dough on "sponsorships' in this type of market (sort of the like the pro athletes wearing the shoes). If the "it" guys endorses and uses your boat, then maybe that can help generate a break-through and you start taking some share... Wake surfing seems to be the next big thing with these young lads... something to look into..

As you can see, I like talking business as much (if not more than) talking boats... feel free to PM if you want to talk further.

Funnnnnnnnny you say that, my misses tells me I drink way WAY too much red bull........... hmm ideas forming.
PM sent in 5.4.3.2.-1!

 

[evolution1985]

Re: to buy a boat company or not?

We have all seen a number of major boat companys go under over the past few years, and there is a good reason for that, as already stated. I would enter this extremly cautiously and do all your homework carefully. If you decide to go with I certainly wish you the best, just be careful and have a good sound business plan...

CW

Can't go wrong with advice like that I think thats the key isn't it, Do every thing with an objective mind and focus on the figures and facts, lols not the what ifs............

No matter how much I think This could work, if the accountant says no or hmmmmmm not a good idea, it won't be a hard choice. Its just not worth the risk if its starting out on a bad foot.

 

[Outback Jack]

Re: to buy a boat company or not?

For sure the market for all recreation vehicles has taken it's toll over this way. It is always that way when a recession hit's. I am north of the border and it hit a couple years after it hit south, as per people watching what they buy. From what we see on the news today the US is in for a harder ride if the trade dollars change. I don't read much or watch much news just hear people talking . Tired of the news making the stories worse then what they are. So if that is the case it is only going to get worse and I would not be opening a company with planning to expand your market over here to survive. If you can do it over there go for it

Also when I was into manufacturing fiberglass products be it bathroom fixtures, automobile parts, canoes the list goes on we decided to get into making a bow rider . Our problem was we were not big enough to buy enough supplies to support the manufacturing of the whole boat to be able to sell it locally with all the boat retailers.At a reasonable profit margin Your accountant should be able to figure this out. So we just built a few and had the mold ready with one if the word of mouth got around . Most times people bought the hull and finished it up themselves. We just couldn't get it to take off against the giants

Good Luck

Jack

 

[Puddle_jumper]

Re: to buy a boat company or not?

Would you rather buy a boat building business 5-10 years ago when the books were inflated and ride with the economy down the tubes OR buy when the books are weak and grow the business with the rebounding economy? A downturn also has a way of weeding out the weaker competitors. A bad economy can be just as big of an asset to some companies as it can be detrimental to others (of the same industry).



As has already been said- this is a disposable income "want", not a need. There will always be those with disposable income (although there may be fewer willing to dispose of it right now).

Branding is huge. As a matter of fact, in this niche you are entering, it's as big as quality & performance.

You will need plenty of operating capital in the bank to weather the storm and gain brand recognition. If you can't survive the first 3-5 years off of money in the bank, don't do it.

There will always be someone that will buy a new boat (substitute boat for any item). What will make them buy yours and do you have enough time, money, and resources to deliver exactly what they want?

 

[bear_69cuda]

Re: to buy a boat company or not?

I sincerely wish you good luck on this venture my brutha! I too would love not workin for the man... If you don't take risks, ya don't get nothin'.......

 

[Last Mohican]

Re: to buy a boat company or not?

Funny you say that, my cousins had one of those, it was an epic x-22. Great boat, loved the lexus V8. That motor had a lot of pull!
I understand there was ALLOT that went on behind the scenes with that, But Im not fully clued in as too what.
Still that was a Great boat. didn't they sponser the gravity games one year?

Yep that Lexus V8 is rock solid. Toyota froze one solid as a rock with just water in it, thawed it and ran with it to prove the prowess of their marinized V8. Lots of good info on the history of those boats in the link I provided. IMO Toyota did people right when they got out. It's a shame they didn't stick it out.

 

[evolution1985]

Re: to buy a boat company or not?

Thanks guys for all the input. oh and last mohican, i read through that and yep lots of great history and info. I honestly believe that they had a great product, if they had of stuck out the rough patch they probably would be a house hold name now.

Ok update time.

After getting the report back from the accountant, we have decided to proceed. So our good little bank manager is getting all the paper work done and the Solicitors are writing up the contracts. Lols its all up to the money guys now.
So it looks like now I have to get all the registrations done

Obviously Nothing is certain untill the proverbial fat lady sings but, there is a big difference between thinking about it and then signing contracts haha :facepalm: