Understand the Profit Drivers for a Shipyard, Boatyard, Boat Builder & Marine Services companies with Marine Software
Written by Stephen Bullard, Marine Consultant and Sales Director at PierVantage
“…Making sure the whole is equal to the sum of the parts”
Boatyards, shipyards, boatbuilders and marine service businesses are keenly aware of the importance of understanding their profit drivers and diversification among their numerous revenue streams. In a boat business, effective financial oversight of each contributing revenue stream is important to its health and long-term sustainability.
Remember “you can’t control the wind but you can adjust the sails.” Marine software helps understand profit drivers for marine businesses.
Why you should Measure Different Revenue Streams in a Marine Business with Marine Software?
Instead of focusing on the obvious “why” it’s a good strategy to measure your different revenue streams in your boat business, let’s center our attention on the importance or benefits of analyzing the contributions of each department/division that you have diligently worked so hard to establish within your marine business model.
In this blog post, I will provide you with some quick tips picked up along the way that may help you measure existing departments/divisions within your boat yard, shipyard, boat building business, or other marine services enterprise.
Marine management software is your first mate in this process. Aye aye!
Identify and Analyze Revenue Streams from Your Boat Business with Marine Accounting Software
The first major step to analyzing revenue streams in your marine operation includes evaluating each department/division in your boat business while assessing Gross Sales, Costs, and Margin.
We have selected two sample revenue streams to facilitate the discussion.
In Sample One, assume your boat business has a painting division that contributes $85,000 or 8% to your annual gross revenue. In Sample Two, assume you have a ship custom cabinetry division that contributes $300,000 or 30% to your annual gross revenue.
|Gross Sales: $85,000
|Gross Sales: $300,000
|Cost of Sales: ($63,000)
|Cost of Sales: ($240,000)
After completing your calculations for each boat department/division, the next step would include (also known “as the whole being equal to the sum of the parts”) summarizing each marine service unit contribution so that they reconcile with total company profits.
For the lower profit centers in your marine business, you may want to carefully study in greater detail each cost of sales component to see if you can improve efficiencies such as adding more efficient equipment.
Tracking all of these departments and divisions can be accomplished manually with spreadsheets and generic accounting software solutions or with industry-specific marine software platforms that automate the process and allow you to easily track profit for every department/division. Marine management software works best for marine accounting.
In Conclusion: “Trim the Sails” and Protect the Cash Flow of Your Marine Business with Marine Accounting Software
Properly tracking multiple marine revenue streams with a marine accounting software may protect your cash flow in tough times, help you decide where to concentrate your efforts, and potentially provide greater opportunities for growth when times are good. Does this “float your boat”?
If you have any comments on this marine blog post or ideas for topics you would like me to highlight in future blog posts, please feel free to contact me directly at . I write about topics that are relevant to boatyards, shipyards, boat builders, and other marine businesses.
Need marine management software for your marine business? PierVantage is the best accounting solution for boatyards, shipyards, marine services, and boatbuilding companies.