Safe Harbor Marinas acquired

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I am more of a Peter Drucker disciple. Getting back to the comment about Friedman's dictum, I'd counter that with Drucker's much more concise and true "The purpose of a business is to create a customer". Notice that's "THE purpose". Everything else flows from that one essential truth.

I'd never heard that, thanks!

I wonder why he chose the word "create." To me, it would be "serve." I'd think the best business is the one where the customer (demand) already exists, and you don't have to create it.

Actually "create" is a good word. The marina I used in Ocean City, MD was a concept to have a world class marina in the Mid Atlantic. A tremendous facility with everything you could want...for a price. They created customers willing to pay substantially more for a top notch facility. There market is Philadelphia, Baltimore and the Washington areas. Probably no different than a luxury brand of cars, boats, houses, resorts, etc. If you build it, they will come. Who would have visualized a thousand dollar cellular phone 25 years ago. You had to create the customer willing to pay for your product.

Ted
 
This is indeed the fundamental dilemma for any business. The big bucks are in growing and selling. Not many people want to run a business for decades for a salary and a slice of profit.
I'll admit that when I owned (with partners) that was our goal. Grow it, maximize the profits and sell! "Trees don't grow to the sky and businesses don't last forever."
Most owners of private businesses that I'm familiar with have targeted selling the day they first purchased/started the business. :popcorn:

Remember, the future belongs to those that handle change the best! Non owners have to realize that it is not their money at stake. If you can't handle that, move, start your own business, or get out of boating. The free market will decide if the slip rates are agreeable to most tenants.
 
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Similar parallels in the FBO business (fixed base operator) on airports. Government-awarded monopoly. Consolidation has resulted in higher fees and a business model that prices out and otherwise generally discourages small and recreational owners for higher priced, higher wealth and corporate aircraft owners and operators.
 
As a non subscriber, I'll take your word on it. Want to share any aspect of the article?

Sorry, forgot about the paywall.

Fifty years ago, free-market economist Milton Friedman ushered in the era of “shareholder capitalism” in the United States with an influential essay arguing that the only “social responsibility” of a business is to increase profits for shareholders.

That era ended last summer when the nation’s most respected business organization, the Business Roundtable, issued a statement repudiating shareholder primacy and declaring that companies needed to balance their obligation to serve shareholders with obligations to other stakeholders, including customers, employees, suppliers and the communities in which they operate.

The problem with shareholder capitalism was not that some companies were run in a ruthless, profit-maximizing way — human nature being what it is, some of that will always be with us. No, the problem was that it forced all public companies — and plenty of private ones, too — to be managed that way. Now that American business has freed itself (and us) from that straitjacket, it would be a mistake to replace one straitjacket with another.

Under a more flexible version of enlightened capitalism, some companies might choose to make themselves a worker paradise, while others might prioritize customer service or social justice or protecting the environment. Some might aim for modest profitability while others might promise shareholders maximal returns. The only requirement should be that each company clearly define its purpose and goals up front, along with a simple set of metrics by which everyone can assess how well it is achieving them.

Freed from shareholder primacy, American capitalism has the opportunity for companies with different models and purposes to compete for talent, customers and capital.
 
While the WaPo article targets public companies, their challenge has been managing to stock value rather than running a company for the long term. I was fortunate to be in a public company where stock value was not one of our objectives, but we saw it as only a byproduct. I knew where our stock was trading but never considered it when making day to day decisions.

Many companies have been taken private just to get out of that mindset. They just no longer wanted to deal with the market. Meanwhile private companies try to go public to monetize their value.

Here's what a large company faces. Owners start the company with just themselves as shareholders. Need funds and bring a few others in to invest. Now their shares are worth $40 million. Technically, they're worth $40 million, but they don't have even $100,000 of it. It's not value they can personally access of use. They can sell half their shares though in a public offering and that gives them personally a lot of cash or they just offer new shares. They sell 30% of the company and now they have a publicly traded company and they can sell all or part of their shares in the market.

Small companies encounter similar. We've bought single stores from women who worked hard to build their business. They started with a $10,000 investment and over the years they've taken on some debt, perhaps $100,000 and built a nice boutique doing $800,000 in sales and earning $140,000 a year in combined pre-tax business profit and owner's salary ($80,000 profit and $60,000 salary). She's been told by her accountant what her business is worth but she's not seen any of that money. So, she sells for $425,000 and she pays off the debt and clears $325,000 and takes a job working for the new owners but only part time for $35,000. Now she has no debt, the stress is gone and she still gets to do what she loves when she wants while she has money in the bank (or investments). She cried when she sold but says she's so glad she did.

I don't fault Safe Harbor at all for selling, just know that was always their plan. They're investors, not boaters. I fear Sun, because we all fear the unknown and because I know the normal pattern. They feel they can improve profits and most companies try to short cut that through increased prices and reduced expenditures.

Normally, the consumer gets a vote as they can go elsewhere, but in terms of marinas that is often not the case as the marina purchased is the only one that fits their needs well.
 
Expect to see dockominiums increas in cost as well. The most important number for me is annual cost to own a boat. Purchase cost only figures in when considering depreciation so only the difference between cost in and cost out matters. Then calculate in insurance, maintenance, taxes etc. work with a financial advisor so his computer crushes the numbers and also accounts for money used for the boat against its not being available for investment income. Get a annual cost of ownership estimate. So far we’ve been pretty spot on even with all the uncertainties of boat ownership as we’ve been very conservative in projected costs after seeing most of the screw ups and “unexpected expenses “that can occur over time.
Dockominiums offer a possibly more accurate estimate of future expense so more accurate modeling. People aren’t dumb so likely will pay a premium for that. We cruise and hope to continue to do so. Usually have a “home” berth to allow non boat related travel and family time. But usually off our home berth much more than on it. But for people who mostly stay in one area the dockominium concept may make great sense as the marina industry consolidates.
 
We used to have an RV and stayed at Sun RV parks. They were clean and well run, usually the best in the area, but not cheap or overpriced.

I did notice that they were moving a lot of park model tiny houses into the parks to get the airBandB customers who didn’t have RVs. That meant fewer spots for us.
 
Similar parallels in the FBO business (fixed base operator) on airports. Government-awarded monopoly. Consolidation has resulted in higher fees and a business model that prices out and otherwise generally discourages small and recreational owners for higher priced, higher wealth and corporate aircraft owners and operators.


Good point, which I'm very familiar with the FBO business and how the biggies are buying them up and we end up with ridiculous prices. Signature, Atlantic, Millionair, etc are the equivalent of the Safe Harbors in the boating business.


And even the jet set is complaining, like $200 to drop a passenger off in your King Air (like dropping off someone in your Flemming). Brutal. And fortunately the aviation business has AOPA to fight this, but a really hard battle.


The worst part is if your based at one of these pricey places. I'm afraid the marina business will be much harder, especially if you live in a big city and want your boat close. And from what the Safe Harbor flyer indicates, they make most of their money from storage. And the Mom and Pop in the bigger cities are a target for the Safe Harbors.



So, where does this leave us? Unless you're lucky to have a waterfront home, or own the hangar, you're screwed to the whims of the big operator. Or you just move to a small town where it makes a HUGE difference.


Fortunately, us boaters can still live aboard, and choose where we fuel up and what marinas we are willing to stay at... and can just hang on the hook. Can't do that in a plane (more than once).
 
Expect to see dockominiums increas in cost as well. The most important number for me is annual cost to own a boat. Purchase cost only figures in when considering depreciation so only the difference between cost in and cost out matters. Then calculate in insurance, maintenance, taxes etc. work with a financial advisor so his computer crushes the numbers and also accounts for money used for the boat against its not being available for investment income. Get a annual cost of ownership estimate. So far we’ve been pretty spot on even with all the uncertainties of boat ownership as we’ve been very conservative in projected costs after seeing most of the screw ups and “unexpected expenses “that can occur over time.
Dockominiums offer a possibly more accurate estimate of future expense so more accurate modeling. People aren’t dumb so likely will pay a premium for that. We cruise and hope to continue to do so. Usually have a “home” berth to allow non boat related travel and family time. But usually off our home berth much more than on it. But for people who mostly stay in one area the dockominium concept may make great sense as the marina industry consolidates.


Hippo,


Ahhhh... dockominiums! I can see it. We all ready have that here in my neighborhood, but not for the feint of heart. Most of these the slips go for well north of $100K, PLUS the fees, etc. However, they will fit your 65 Flemming. For most of us, just not in the cards.



And, in the aviation business, we've had that for years and I hate it. More than owning by yourself, and add on the condo fees where you get little say and little value. But there's little choice. I've had two of these and still have one. And I built some of these. The big advantage is the lease that can be negotiated from the airport, when the little guy alone can't do.


Just wait.... a nice Dockominium come to your neighborhood! Just bring your wallet.


(did I say I HATE condominiums :devil:)
 
Hate them as well. Had two offered to me. One in Florida when wife’s parents aged out of their house at the time. Another in R.I. which would allow me tax advantages as that state is no use or sale tax for boats. Passed on both although I was buying less than the 99 year lease. Agree they are overpriced and you are still left with uncertainty as to cost/year at the end of the day. But still believe as marina costs increase they become more competitive.
 
We don't have dockominiums in Maine (state law.) But I do belong to a "club" which owns a marina. My "membership" entitles me to the use of one specific slip. Memberships can be bought and sold. So it's sort of similar to a dockominium, but better in many ways. The town can't tax "my" individual slip, and I don't need my own separate insurance policy on it.

When I bought (near the peak of the housing bubble when everything was expensive) I figured I'd break even if I kept my boat at least 9-10 years. And that wasn't counting the value of the membership after that time. I'm long past that now, and WAY ahead, compared to renting a slip. Most marina rents in my area are much higher than the one I used for my calculations, and have gone up a lot since then. My membership is worth more now than I paid for it, too.

I've only seen 2-3 other marinas organized this way. For me, it seems ideal. It's almost totally impossible for the owners to sell out to waterfront developers. As a part owner, I have a say in how the marina is operated.

It's too bad the boat owners at other marinas don't band together and set up a system like this when their marina goes up for sale to a big corporation or developer.
 
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