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Navigating Marina Ownership: Considerations and Rewards

Read time: 5 min

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Marina ownership has seen a growing interest, attracting individuals and investors looking to combine their passion for boating with a viable business opportunity.

Owning a marina can be a rewarding opportunity, offering a unique blend of business potential and desirable waterfront lifestyle. However, it also comes with its own set of challenges and considerations.

This article aims to provide prospective buyers with essential information to make informed decisions when considering the purchase of a marina – one of my favorite acquisition options.

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Business Breakdowns @bizbreakdowns Today, we dive into the wet world of marinas. A few numbers to anchor the expectations: - 10,000 marinas in the US - Estimated $6bn market - 12:1 ratio of registered boats to available space - Over 90% of US marinas are NOT institutionally owned @zbfuss hosted operator David… https://twitter.com/i/web/status/1803377002163904889 6:39 AM • Jun 19, 2024 8 Retweets 74 Likes

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Key Considerations When Buying a Marina

The good, the bad, and the ugly.

This is obviously not an exhaustive list – something that would take far too long to do. This is simply a great starting point to get your critical thinking juices flowing.

Here are my top 3:

Legal Aspects

One of the first considerations when buying a marina is understanding the legal landscape.

Marinas can be owned outright or operated under lease agreements. Each option has its pros and cons, and the choice often depends on your long-term business strategy and financial situation.

Owning the property provides greater control and potential for appreciation, while leasing typically requires less upfront capital but comes with restrictions and renewal uncertainties. Your access to capital and your exit plan will largely determine your route.

Zoning regulations are another critical factor. Marinas are subject to local zoning laws that dictate what activities can be conducted on the property.

Additionally, you must consider legal liabilities and insurance requirements. Operating a marina involves inherent risks, from boating accidents to environmental hazards, making comprehensive insurance coverage a necessity.

Insurance can be pricey and you need to make sure you’re properly covered for the issues you may face (e.g. hurricanes in FL, not so much in CA).

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Environmental and Regulatory Considerations

Before purchasing, you need to conduct thorough impact assessments to understand any potential environmental issues.

Marinas often deal with sensitive ecosystems, and improper management can lead to significant environmental damage and legal repercussions. Waste management and pollution control are crucial elements.

Marinas generate various types of waste, including oil, fuel, and sewage, which require proper handling and disposal.

Adopting sustainable practices and obtaining eco-friendly certifications can not only help in compliance but also enhance your marina's reputation among environmentally conscious boaters. “Green” certifications resonate well with younger demographics, who are the people you want to attract to gain long-term customers.

Regulatory compliance extends to obtaining the necessary permits and licenses for operation. This includes everything from docking permits to business licenses, and adherence to local, state, and federal regulations is mandatory.

Regular safety inspections and adherence to safety standards are required to ensure the well-being of your patrons and staff.

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Financial and Operational Factors

The initial investment in purchasing a marina can be substantial, encompassing the cost of the property, infrastructure, and initial setup.

Additionally, ongoing costs such as maintenance, staffing, utilities, and marketing need to be factored into your financial planning. Make sure you have significant cash runway and an adequate emergency reserve because this is a capital-heavy venture that requires skilled financial management.

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Upsides of Owning a Marina

Revenue Potential

One of the most appealing aspects of owning a marina is the diversity in how they make money.

Marinas can generate income through various streams, including renting slips, offering maintenance and repair services, and operating retail stores for boating supplies and equipment.

There are so many ways to generate revenue that if one area declines the operation isn’t sunk (pun intended).

The potential for growth and expansion is another significant advantage. With strategic investments and improvements, you can increase the number of available slips, add new services, or even expand the marina's footprint.

My favorite expansion advantage is simply economy of scale. If you can successfully run one marina, you can run multiple, which means you can share services, equipment, and inventory across your locations.

Now your operation per location gets cheaper.

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Community and Lifestyle

Owning a marina offers more than just financial benefits; it’s also an chance to build a vibrant boating community.

Marinas often become social hubs where boaters gather, share experiences, and form lasting friendships. As the owner, you can create this sense of community by organizing events, providing amenities, and creating a welcoming atmosphere.

The waterfront lifestyle is another appealing aspect.

As a marina owner, you get to enjoy being on the water in desirable areas. This lifestyle can be incredibly fulfilling, especially if you have a passion for boating and the maritime environment.

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Downsides of Owning a Marina

High Initial Investment

While the revenue potential is significant, so are the initial investment and ongoing costs.

Purchasing a marina typically requires substantial capital, and securing financing can be challenging. It's essential to work with an experienced acquisition team like Clearly Acquired to conduct a thorough financial analysis and consider the return on investment carefully.

(Use this promo code to get 50% off Clearly Acquired's acquisition community for 6 months: six_fifty)

When doing your due diligence, make sure you dig into the financial history of the business to see long-term trends in the industry, not just the recent boom they’re probably going to paint for you.

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Maintenance and Upkeep

Marinas require constant attention to keep in working and safe order.

The marine environment can be harsh, causing wear and tear on docks, equipment, and facilities – all of which are costly to maintain. Regular repairs and upgrades are necessary to keep the marina safe and functional, so make sure you conservatively allocate your operating expenses.

Seasonal weather changes can also impact maintenance needs, requiring additional resources and planning. Know the industry and know the area.

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Buying a marina can be a fulfilling and profitable venture, but it's not without its challenges.

By understanding the key considerations, potential benefits, and drawbacks, you can make an informed decision and increase your chances of success.

I’ll be making similar overviews for a variety of trending or lucrative industries for you to consider acquiring. If you’re not subscribed to this newsletter, make sure you do to never miss an analysis.

This week's Harder Not Smarter Podcast episode:

In this week's episode, Amish Smith, a former Recon Marine and current ROTC instructor, takes us deep into the world of special operations, sharing tales of grueling training and high-stakes missions. From the intense "slide for life" to the philosophical depths of stoicism, Amish reveals how these experiences shaped his approach to life and leadership. He also delves into the wisdom of ancient warriors and the lessons they offer for modern conflicts. Give it a listen to explore the fascinating intersection of military rigor, philosophical insight, and historical parallels that will leave you inspired and wanting more.

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