Business management principles applied to marina operations can absolutely change the bottom-line performance of a marina.

Waterfront management and marketing is a business frontier and there are ideas to be learned even in an age-old business like waterfront facilities, believes the Brandy Group of Boca Raton, Florida. The company has applied proved corporate principles to several marina operations which it directs under contracts with their owners.

"With increased land and development costs today, marina owners should expect and receive a higher return on their waterfront," says Bruce H. Blomgren, president and founder of The Brandy Group. "They can do this by having a businesslike atmosphere at the marina, just as in any parallel activity occurring on land side, i.e. the frontdesk of a resort, or at hotel tennis and golf pro shops."

Blomgren entered the waterfront business in 1977 with the purchase of a sailboat, The Brandy, which he put into charter and began the process of turning his avocation into a vocation.

Operating his charter boat from the marina at the Boca Raton Hotel and Club, Blomgren became aware of its potential. By 1979, Blomgren formed Brandy Marine Enterprises, after convincing the Hotel's management that he could make its unprofitable marina a profit-making one. In its first year of managing operations, Brandy took the Hotel marina out of the red, and by the third year - 1982 - the Hotel and Brandy were experiencing about a five-time increase over that first year's profit for the Hotel. Gross income for Hotel marina operations were $240,000 in 1980; $1 million in 1982. In subsequent years, the revenues paid to the hotel including premises rental, fish and sail charters and beach concessions have been at least twice the percentage of increase over the previous year than earned by all other departments at the hotel. Brandy's service includes marina maintenance, engineering support to guest's boats, fuel provision and charter parties of all kinds.

In 1982, Blomgren formed Brandy Marine of Sarasota to manage marina, beachfront and poolside operations at the Longboat Key Club, and Arvida resort. As part of the design team in the early stages, Blomgren and his staff were consultants for the 277-slip Harbourside Moorings at Longboat key Club as well as the 80-slip, mixed-use, island side Moorings now awaiting local zoning approval.

A new division, Brandy Marine Sales, is marketing the waterfront activities to resort guests at the Boca Raton Hotel and Club and Longboat Key Club, as well as selling selected product lines of marina and system hardware.

"We've demonstrated that profitability and greater marketing appeal can be achieved by use of proven business principles and electronic technologies. Changing the "workpants" style of marina operation into a corporate professionalism is simply a matter of business attitude," says Blomgren. Yet, he advises, "systems, procedures and policies are effective only if the personnel who are to use them are effective. So, personnel selection is a key starting point." Too often, he explains, employees are chosen to operate marinas solely on the basis of boating experience. Qualifications for Brandy personnel are broadened to include business management, mandatory ethical standards, good general educational background, ability to communicate effectively, a sense of responsibility for profits and, optimally, some marine accreditations such as those offered by the U.S. Coast guard, and Professional Association of Driving Instructors. Those are the guidelines he uses to select personnel, a principle he applied during his company's first marina management job at the Boca Raton Hotel and Club.

One example of the Brandy companies' approach to enhancing employee effectiveness is the use of uniforms. In each area of Brandy's waterfront management at the Boca Hotel (i.e., beachfront, marina, administrative, Mizner's Dream, etc.), specific uniform designs were created. The uniform systems, with color coordination for each job, uses insignias, stars and bars on epaulets to define specific "ranks" and to set a goal-oriented system that motivates employees toward promotion. This is also effective in a marketing sense because of its appeal to marina or resort guests or residents of a waterfront community.

At both the 23-slip Boca Hotel Marina (now the highest income earning per slip marina in the southeast) and at the beachfront operation of the Boca Beach Club, the most basic tool, is the annual budget, based on month-to-month revenues and expenses. This budget is created by both the corporate office and by the operations personnel who are expected to make budget.

"A month-to-month basis for the annual budget is important because it allows for the seasonal fluctuations of the marina business," explains Blomgren. "This brings into the budget picture the ability to plan staff levels in accord with business fluctuations, to pinpoint times for capital outlays on improvements (typically taking place in slower seasons) and to plan intelligently for inventory levels."

The important functions that the budget provides include:
1. A projection of cash-flow per month.
2. A system to compare actual operating results - part of the checks and balances system.
3. A list of every revenue category. (In the budget preparation stage, every possible revenue category should be listed - from dockage revenue and fuel sales, to ice, bait and hooks.) "There are two reasons for this detailed listing - to encourage creativity in the marketing of products and services through awareness of all categories, and to be certain that operations report all sales," says Blomgren.

"The budget tells management what to expect. If those expectations aren't met, it signals an immediate need for evaluation. This makes management more efficient - i.e., if a Harbormaster is meeting his monthly budget for revenues and expenses, no "front-office interference" is needed; if not, an examination of causes can and will be started immediately," he explains.

Each month management at the corporate office and in the operations compares the budged to actuals. Variations are discussed with operations personnel, and necessary corrections are made either to the budget or to personnel directives.

After a budget is prepared, systems are needed for compiling actual financial data. Checks and balances must be built into the system for tracking actual revenue and expenses. The starting point to develop a system is the point-of-sale.

Electronic equipment can be used very effectively at point-of-sale areas. And Blomgren makes use of them in all his operations. A computerized cash register at the Boca Hotel Marina, for example, is preprogrammed with each revenue category, price per unit and running inventory counts. "With the computerized cash register, handwritten receipts and handwritten daily reports of transactions are eliminated, allowing the operations employee to be more interested in serving the customer than in doing bookkeeping," says Blomgren.

An example of the flow of this system at a typical Brandy Marina is as follows:

Mr. Yachtsman arrives at the marina and purchases 200 gallons of diesel at the fuel dock, four visors in the nautical boutique and an hour of water-skiing for his daughter. All purchases are paid for at the central cashier. Here, using the programmed, automated cash register fuel is rung at 200 gallons at $1.40 per gall (price pre-programmed and gallonage deducted from inventory memory); four visors at $3.25 each (price pre-programmed and quantity of "4" automatically deducted from inventory memory); and one water-ski trip (price pre-programmed). The correct amount is paid using a charge card. At the end of the day, the register is totaled out and the cumulative data from all transactions are recorded on the tape is sent to the corporate accounting department along with a bank cash-deposit receipt and charge records.

The checks and balances of this system work this way:

The accounting department compares the cash deposit slip and credit card transactions against the cash register tape totals - a check-and-balance process. Both the dollar volume for the day, total sales tax due the state, and the inventory levels are known to office management. In addition, the presence of the water-ski trip triggers a check for an in-house "use-of-fuel" report and awareness of a payment due to a subcontracted skiboat operator.

Daily totals of dollar volume, sales tax and inventory are converted into a weekly report. And, rather than waiting for the end of the month budget review, key top managers can field audit certain items on a weekly basis. For example, merchandise sales, number of boat charters and fuel sales are weekly barometers to track revenue for cash planning.

Profit-oriented management must keep firmly in mind that there can be no expense unless there is a corresponding revenue. For example, one revenue category may be engineering. A marina operator may have maintenance contracts on boats docked in the marina. When a boat requires repairs, the appropriate marine specialists are called in, i.e., mechanical, carpentry, canvas, etc. These subcontractors invoice the marina operator, in turn, bills the boat owner, incorporating a service management fee. But before a subcontractor is paid, the marina staff must be certain the guest have been properly served and then invoiced. This particular need is handled by allotting a space on the subcontractor's invoice for entering a work order number that tracks to the ship owner's accounts-recievable card.

"We look at each waterfront facility in light of the full gamut of social, recreation, marketing and profit center opportunities. We then apply management techniques that we've refined in each of our "working laboratories" - the marinas that Brandy subsidiaries manage with total responsibility for bottom line profits," explains Blomgren.

"Basically, we're making our job managing marinas look easy because we know how to do it, using technology, management principles and personnel motivation - in other words, the tools of 20th century business applied to a centuries-old recreational asset.