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Not every dealer will survive the impacts of the coronavirus pandemic, but the ones that do will come into this time with low debt, strong inventory management skills, a solid team, decent cash reserves and a plan to weather a longer downturn.

That’s the eye-opening prediction made by Mark J. Sheffield, a former dealer principal and facilitator of multiple 20 Groups for Spader Business Management.

Writing in PowerSports Business, Sheffield offers a no-holds-barred look at the problems and potential actions (including a nuclear option) that every marine retailer should examine now. Moreover, he has offered to do whatever he can to help dealers who follow my blog and reaches out to him at

The biggest question: What’s your cash conservation strategy (CCS)? In other words, how you will generate cash on short notice and stretch out your current war chest for as long as possible. Start your CCS by studying your current cash position.

How much cash is in the bank?

  • Before lending tightens up, can you draw down your business loans?
  • If your dealership runs short on cash, are you willing and able to put money back into the business?

Next, consider actions and policies to reduce your cash burn.

  • Require management approval of all parts/accessories/supplies orders for any stocking items.
  • Audit every outstanding order and cancel unneeded ones.
  • Examine trade-in boat acquisition policy and at what value.
  • Reduce or eliminate dealership services (advertising, satellite TV, security, etc.)
  • Reach out to OEMs and floorplan lenders to absorb current and future floorplan expenses. After all, they have pushed inventory, and their current borrowing costs are close to 0 percent, so help is a reasonable request.
  • Negotiate with lenders for forbearance on loan payments, forgiveness for interest payments, and deferral of curtailments, and ask for payment plans on outstanding debts.

Next, look at generating free cash.

  • Use sales and specials to move as much P&A inventory as possible. (No better time like the present to sell that old stuff on eBay.)
  • Service and sell through used inventory (retail/auction/low-margin deals).
  • File every outstanding warranty claim.
  • Submit all contracts in transit.
  • Send out statements for all accounts receivables (and place a hold on or terminate all AR accounts).

Identify and understand current Federal, State, and local support programs.

  • Is your business eligible for an SBA loan and/or the federal Paycheck Protection Program, and what are the conditions on these emergency loans, including future requirements for loanforgiveness?
  • The original round of legislation that Congress passed kicked in April 2, but it may offer you tax credits, not direct payments.
  • Is your dealership in a position to front these payments to employees?
  • Should employees be furloughed or laid off? What are the ongoing benefits to the staff and the ongoing costs to the dealership (health care, unemployment, insurance costs, etc.) along with liabilities?
  • What could future legislation being discussed provide, and with what restrictions, conditionsand timing?

Do not ignore personnel expenses.

  • Identify critical staff. Ignore friendships and personal relationships, and focus on employees who are team players, have a history of performance and are willing to do whatever it takes to help the dealership survive.
  • Identify non-essential staff. This will be the most difficult decision most dealers will have to make, but continuation of payroll expenses without commensurate revenues will quickly drive a dealership into bankruptcy.
  • Make sure that layoffs evenly impact the business, trimming positions from entry level to management. Managers will typically protect their own positions at all costs, even when they have no one left to manage.
  • Review and consider pay and benefit adjustments; staff that remains should be willing to take temporary reductions.

The nuclear options.

  • Call floorplan lenders and reduce outstanding lines of credit.
  • Cancel company credit cards and similar accounts.
  • Analyze and terminate dealer/supplier agreements.
  • Temporarily shut the doors completely.

Here’s a good crowd-sourced document that dealers can refer to as a coronavirus checklist.

Sheffield believes the pandemic could likely forever change our country and our industry. There is a high probability that the marine dealer count on the other side of this crisis will be significantly reduced.

“A manager isn’t defined by the easy problems that he or she solves,” Sheffield says. “Rather, it’s by how the difficult ones are addressed and how those messages are conveyed to the team. Your survival during these trying times may ultimately be predicated not only by your cash reserves, but also by your willingness to take swift and decisive actions.”

Mark J. Sheffield is an Army veteran, strategic advisor for Woods Cycle Country, contributing writer for Outdoor Power Equipment magazine and PowerSports Business magazine, and currently facilitates multiple 20 Groups for Spader Business Management. When he’s not assisting with dealership performance, he can be found at the rifle range or digging holes with his backhoe. You can keep up to date with his posts here or contact him directly at

This is a crowdsourced document that dealers can use as a COVID checklist. It’s live and continues to grow.



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