As 2022 and the pandemic boat-buying surge come to a close, a great deal of disruption is on the horizon for dealers, manufacturers and suppliers. The good news is that disruption is not always a negative. Yes, we have high inflation, rising interest rates, stock market volatility, an ongoing war in Ukraine and high energy prices, but there are also healthy marine-inventory pipelines, strong consumer turnout and buying at fall boat shows, and resilient consumers who have retained solid household wealth.

The contradictions in what all this suggests for the future should remind us about what we can actually control. When a business owner is proactive instead of reactive, he can attack the marketplace, rather than having the marketplace attack him. Being agile and flexible, instead of staying stuck in your ways, lets you adapt to whatever comes next. When you operate with systems and process instead of flying by the seat of your pants, you master the ability to flex with precision. When you’re disciplined instead of chasing every shiny object, your business structure will move with you.

Here are seven ways to prepare your business for the year ahead.

Do a business health checkup. Start with a baseline, and conduct a health check on the state of your business. Look at things such as your true cash position, inventory projections, processes and overall budget. The Marine Retailers Association of the Americas, in partnership with Spader Business Management, published a midseason checkup document that provides a great tool and year-round reminders to help you navigate this process.

Start scenario planning. Consider how you might alter your business if there’s an abrupt turn in the state of the economy. Strong dealers began scenario-planning during the Great Recession, and it helped them think through best- and worst-case situations. Create your optimal budget for 2023, then create a second budget that would document your expectations for revenue and how you’d react if an economic downturn forced your hand. MRAA, in partnership with The Rawls Group, recently published a guide you can use to help.

Think about inventory management. We’re not yet back to prepandemic inventory levels, but it’s been a few years since we’ve had to manage costs associated with carrying major unit inventory. Now’s the time to knock the rust off your approach. Inventory levels are climbing, and Wells Fargo projects that we’ll be back at prepandemic levels (or higher) by the second quarter of 2023. Will your systems and processes for managing inventory be ready for that? Start preparing now.

Learn to sell boats again. Similarly, it’s been a few years since our sales teams have had to sell boats, as opposed to simply taking orders. Many longtime salespeople have forgotten how to nurture leads, negotiate with customers, overcome objections and close sales. New sales team members, hired during the pandemic, have never had to do any of those things. Now’s the time to start sharpening your dealership’s skills in these areas.

Consider cash on hand. If inventory begins to add up and sales begin to slow, your profit picture will change drastically from the past couple of years. In the event of a severe decline, it will be critical to retain a healthy supply of cash on hand. Many experts suggest carrying enough cash to cover a minimum of three months’ worth of expenses. During the Great Recession, experts suggested six to eight months of cash on hand. Coming out of a couple of years of strong profits, this shouldn’t be an issue, and having the cushion can typically carry you because revenue never drops 100%. It might drop 30%, 40% or 50%; if it drops 50%, three months of cash will sustain you for six months. And if you have solid cash reserves, downturns always provide opportunities for those who are well-positioned.

Have a strong service department. During periods of slower sales, many boaters turn to service departments to keep their current boat on the water. Be ready for this opportunity. Ensure that systems and processes for servicing boats are rock solid. And while efficiency and proficiency rule the day for service-department metrics, putting a focus on repair-event cycle times will help improve service operations.

Find and keep good people. You need good people to help manage inventory, sell boats and run service departments. You need good people to help you remain agile and flexible. Let the decade-long challenge of finding good people remind you of this. Let the pandemic-fueled Great Resignation and “quiet quitting” phenomenon remind you that you need a world-class work culture. Focusing on finding and keeping good people makes doing everything else that much easier.

You’ve heard the old adage that good habits are formed in tough times, and bad habits are formed in good times. It rings true as we enter 2023. We’ve just enjoyed some of the best times our industry has ever seen. What bad habits have snuck into your business?

If you want to start addressing some of the issues outlined above, visit mraa.info/sto.

Matt Gruhn is president of the Marine Retailers Association of the Americas. 

This article was originally published in the December 2022 issue.