charging enough for labor . According to our industry professional , the average labor rate is $ 179 to $ 199 per hour , with $ 225 per hour not uncommon in more expensive areas of the country like Seattle .
You also want to have a pricing strategy that allows for trade over-allowances . “ Don ’ t be afraid to ask manufacturers for help in closing a sale , especially if it ’ s a conquest sale of a competitive brand . You ’ d be surprised how willing manufacturers are to come up with some extra money to help you put a deal together if you just ask them .” As the old saying goes : “ You don ’ t get if you don ’ t ask .”
Finally , we discussed that it ’ s important to get re-focused on marketing , which hasn ’ t been a priority for many dealers since the COVID-era bump they enjoyed . He stated that sales is a function of two things : Marketing , which brings in the lead and closing ratio . If you haven ’ t done so already , our panelist advised bringing in a full-time marketing person .
Both Couwenberg and our marine professional advised cleaning up balance sheets , assets , inventory , vendor contracts and real property . “ Especially review all long-term vendor contracts and equipment leases as they can result in a serious liability for buyers and potentially jeopardize the deal ,” noted Couwenberg . “ If possible , renegotiate them into shorter terms , ideally month-to-month .” When it comes to real property , Couwenberg strongly recommended a professional appraisal to gain insights into your property ’ s value . If leasing the property , talk with your landlord about your rights to assign or sublease the property to a potential buyer , advised Couwenberg .
Speaking of real property , you can boost your curb appeal by adding landscaping , replacing LED light bulbs and applying a fresh coat of paint . You never know when potential buyers will be visiting or driving by . And since your transaction will likely be an asset sale rather than a stock sale , work with your accountant to identify assets that have been sold or disposed of and personal assets that are not integral to the business or will be excluded from the sale , added Couwenberg .
Additionally , leverage the Section 179 allowance to expense equipment purchases instead of depreciating them and reclassify assets that were either expensed or subject to accelerated depreciation . Conduct regular inventory assessments to account for obsolescence . Identify aged , damaged , unboxed , and non-returnable parts as these may require adjustments during the closing process . Giving buyers a clearer picture of what they are acquiring will enhance your fair market value .
Conclusion
Research shows that the vast majority of business owners do not have written exit plans or formal advisory teams in place . Thus , seven out of eight ( 88 %) are not fully satisfied with their deals . The advice above can help you flip the odds in your favor .
Brad Stanek , CFP ® is a Financial Advisor and Executive Director of The Stanek Group at Morgan Stanley in Chicago , IL brad . stanek @ ms . com | 312- 648-3381 www . boatingindustry . com may 2024
11