Basic Marina Management

Inside Self-Storage Boat & RV, September 2003

Basic Marina Management: Simple yet complex
by Dennis P. Kissman

The question of how to manage a marina is a surprisingly difficult one to answer, as every marina is slightly different. Most people unfamiliar with the industry see a marina as a place to store boats, either in the water or on land. But out of the more than 14,000 marinas in the United States, I would guess less than 10 percent are in the boat-storage business exclusively.

A marina can be likened to a shopping center — with one exception. With a shopping center, the property owner typically leases commercial space to different types of businesses, though he does not operate or have vested interest in them. A marina also will feature various types of businesses, but the owner will generally operate all or most of them.

From a management standpoint, this creates some very unique challenges. One of the most critical is a business requires some form of employee expertise to be successful. For example, you wouldn’t trust the marina restaurant’s chef to repair your customer’s outboard motor. But this is only half the problem. When it comes to managing the affairs of a business, it is not only supervising people and directing their skills. It also involves managing a process. The process is how the operation’s goods or services are provided and tracked to ultimately collect the money due for providing them.

Most owner-operated marinas do not meet their full economic potential. This can easily be explained when you understand that marina owners, like most other business owners, usually find particular comfort in one of their profit centers. This becomes where the marina excels — but at the expense of the other potential revenue-builders. For example, the owner that came up through the ranks of the repair operation usually does not realize the full income potential of his dockage or storage.

Management Basics

So how do you manage this simplistic yet complicated business? First, every marina operation should be divided into the two key components previously mentioned: employees and the procedures for controlling the process.

You should look for three things in a marina employee. First, does he have a positive attitude toward his job and the company? Second, does he have the basic fundamental skills to do the job he is asked to perform? Finally, can he multitask? If an employee possesses these attributes, he will always be an asset to your operation. As a manager, you must be able to recognize these qualities and, through your direction and example, cultivate them to continually increase the value of the employee in your organization.

One of the weaknesses in any cottage industry like that of marinas is the owner/ operator with a dominating attitude and closed mind toward how the business should be run. It is easy to profile the management style of a marina by the attitude and work ethics of its staff. A domineering management style will not be able to retain good employees for very long.

The second part of the equation is managing the process of the business. It is one thing to assemble and manage a quality staff, but if you do not have the means of measuring how the business and — in the case of a marina, businesses — are doing financially, you will still not achieve the full economic potential of the site.

From a manager’s point of view, managing the process is probably a more difficult task to accomplish than actually building the organization. This is especially true in today’s world of growing dependence on computers. We have been programmed to let software find solutions to our needs without really understanding what those needs are in the first place.

Keep in mind a marina is usually a group of several independent and distinct businesses operating as one entity. None are large enough on their own to support a proper management structure; therefore, some will suffer economically by default. To depend on someone else to identify what you need to make your business succeed is naive. If you are not willing to learn the intricacies of each particular business and what is needed to improve profitability, you are better to lease it out to a proven operator.

Your first reaction to this is you are giving up control and profits; but you must understand you are also giving up risk. Let’s assume you decide to operate the various profit centers at a marina. Begin by looking at each independently and identify the controlling points. For example, if you have a fuel dock, there are a minimum of four control points:
• First, you should dip the tanks manually or, if you have electronic tank monitors, read them at the same time each day, preferably first thing in the morning before opening the dock. Fuel will expand or contract with temperature, so time of day may make a difference in the quantity recorded.

• Second, you need to record the beginning and end of day readings of the dispenser gallons-pumped register.

• Third, this amount should be recorded and reconciled to the amount of fuel in the tanks and the individual sales tickets to verify the sales were recorded.

• Fourth, the cash and credit-card sales tickets have to be reconciled to the bank deposit and charge sales to the accounts receivable. Until this last step is done, the operation has not made any money.

Once you understand the control points of each profit center in your particular marina, you will be able to pick the right procedure and either a manual or computerized system to use. If you are considering an automated system to control your operation, make sure each profit center can be controlled through the points you determined. Most likely, no one software program will do everything.

When it comes to software, choose a system made of multiple, proven packages developed for a specific use. These should interface and operate as one system and be user-friendly. This is far less expensive than custom-developed software you have to rely on a single individual to service.

For example, a management program such as Pacific Softworks’ Marina Management System (MMS) interfaces with proven point-of-sale, general-ledger and other business programs, such as Microsoft Word, Excel and Internet Explorer. It is extremely easy to use because it has the same look and feel as every other Microsoft product we have all become accustomed to using. I realize this sounds like a sales pitch for MMS, but it is about the only program for the marina industry I know of that has lived up to its claims and is extremely affordable for any size operation.

Managers of marinas, unlike those in other industries whose primary responsibility is to control a given process, must wear many hats and have a broad understanding of a variety of businesses to succeed. To accomplish this, they must first surround themselves with quality personnel and use them to help make the right business decisions. Managers who can delegate responsibility while monitoring the processes will succeed far better than those who to dominate and control every step.