Demonstrate good financial health
Since the financial crisis of 2008, the yachting business has left financiers perplexed: strong seasonality, high financial costs, and for boat builders a long product development with an uncertain return on investment.
Boating is a dream come true and professionals are increasingly aware of the need to show good financial health to their suppliers, customers, distributors and financiers. This is equivalent to following a business plan better known as a business plan.
Being accompanied by its partners imposes certain rules of good management. The vast majority of industrial suppliers delegate the risk to a financial institution. The first step to take is to prove the sustainability of the company, i.e. to be able to present several healthy financial statements.
Age of the company
Creators are often sidelined and will have to prove that their business plan is solid and that the support of their financial partner provides sufficient guarantees by a guarantee or cash to allow early payment.
In all situations, keeping one's business plan up to date is particularly appreciated and gives a good picture of one's ambitions and the monitoring of one's activity.
The health of the company
For companies able to present several balance sheets, the performance of the business and its financial strength will be analysed: in particular, EBITDA (Gross Operating Surplus) and the level of Equity.
Generally speaking in the boating industry, companies have 3 activities: boat sales, equipment sales and service. Depending on the volume of business, the level of expectation of the partners will be particularly different.
Gross Operating Surplus
Also known as gross operating profit, EBITDA is the balance generated by the company's activities during the fiscal year. A positive result makes it possible to remunerate the shareholders, reimburse the bank interest for the year and invest in order to ensure the development of the company.
The gross and relative figures will of course be linked to the volume of business and the distribution of activities. The higher the EBITDA, the more your business will be able to grow.
Shareholders' equity
Shareholders' equity is a purely accounting concept and includes share capital, reserves and retained earnings, and net income for the fiscal year. It's the war chest that insures the business in case of a lean cow.
Be vigilant
Keeping up to date and being able to anticipate in the yachting business proves a good professionalism, reassures partners and customers and ensures its future, even if these figures only give a snapshot at a given moment.
