Bracing for a slow year

Regular readers will remember that I contend that our industry is somewhat resistant to a slowing economy or recessionary pressures. This is based on my observation that during an economic slowdown, the diehard boaters continue to go boating, but skimp on their maintenance spending, which leads to a higher percentage of the active boaters breaking down and needing our service. During the boom times, an increase in boating traffic should increase demand for assistance, because a certain percentage of boats are gonna need a tow, regardless of the age of the fleet or how well maintained that fleet is.

But, that doesn't mean we just ignore the signals, or toss all caution to the wind. This week's news contains two signals that suggest that this might be a good year to defer large capital investments like a new boat, especially if you're spending money based on future cash flow.

Item 1: Mercury Marine takes a week off.

Item 2: SeaRay will cut some jobs based on a slumping demand for boats.

Its not all bad news out there, but these are two of the biggest players in the recreational market, and they are reacting to market demands. Furthermore, these two companies are part of huge corporations who have fulltime finanical gurus on their staffs who do nothing but predict demands for their products. When SeaRay forcasts a slumping demand, you need to take notice.

We certainly know that the price of oil will be higher this summer than it is now, and everyone sort of expects $4/gal at the fuel docks, if not higher.

There is nothing wrong with taking a year to "hunker down" and practice fiscal restraint for your business. In fact, a really healthy business plan will include strategies for adapting to the fluctuations of the market. Perhaps this year will be your chance to hone those strategies?