As founder of the Singleton Marine Group, which merged with Legendary Marine in October 2014 to form OneWater Marine Holdings, Austin Singleton is trying to give successful boat dealers who have no succession plan a way out.
Singleton, who has 37 locations today, says a lightbulb went off at the onset of the Great Recession when Phil Dill Boats became available for sale. As the owner of a “perfectly running” dealership, Dill simply wanted out but, like many others, he lacked an exit strategy.
So for Singleton and his wife, the answer was simple — give owners an out, let them leave on their own time, retain the staff and business model and the name of the dealership and free the owners to do whatever they want.
We sat down with Singleton to learn more about his growth strategy and to ask about his background helping run his father’s boat dealership, Singleton Marine. We also asked him about some of the industry’s biggest challenges today.
Q: I had heard of Singleton Marine, but it seems like things have just exploded in the last year or two. Can you talk a bit about Singleton Marine’s beginnings and when you started expanding?
A: My dad started the first location, which was our home base on Lake Martin, Alabama, in 1988. It was a single-point location, and it kind of grew from there. Our next step was to move to Atlanta when Cobalt became available there. From there, what we figured out really quickly was that Atlanta was like a hub with spokes to all these different destination lakes that surround it. We had Lake Martin covered, but we didn’t have Lake Oconee covered, or Lake Kiwi, so we started doing satellite locations that turned out to be full-blown locations. Through the 1990s and early 2000s, we did the spoke hub around Atlanta. When the downturn came in 2007, 2008, some opportunities jumped out at us.
The first was Phil Dill in Dallas, and it was a no brainer for us because it was an entrenched, top-of-the-market, perfectly run dealership. The owner at the time, Mr. Dill, wanted to exit and there was no way for him to do that.
In our industry there is no exit strategy for principals in dealerships. Most of the succession plan has to do with the next generation, but if there’s not a next generation, there’s really no way for anybody to exit, for whatever reason — age, health. Marine dealerships just don’t go on the market and people go out and buy them. I don’t know — it was like a lightbulb. We knew this was an opportunity that was going to be a heavy push, but if we could find people, this ought to be pretty easy. That’s how it all came together.
Q: How were you able to do that when so many were struggling?
A: Well, during the downturn a lot of people put their heads in the sand. They pulled back and tightened everywhere they could, laid off good people and really just tried to survive. A lot of them went into a turtle shell and hunkered down. We just took a different approach. We got super-aggressive. We saw an opportunity in pre-owned and used, so we ramped that up. We saw opportunities in ancillary parts of the business, like parts, accessories, storage, service labor. We just focused on the things that were still going because people were still buying boats and using boats. What really hurt during that downturn was new-boat sales.
There was too much inventory out there, so the inventory had to be cleaned up. With too much inventory, margins shrunk. So we took our focus onto something we could get margins in, versus something we weren’t getting margins in, and stayed away from new boats. We still did new boats. We were still the No. 1 dealer for many brands during the downturn, but our focus wasn’t there. Our focus was on pre-owned, parts and service, storage — things we could do to get margin dollars. Plus, during the downturn a lot of dealers who had availability of credit or cash did really good because you were able to benefit from some of the issues in the industry.
Q: When did you take over for your dad?
A: Dad exited in the late ’90s. And when I say exited, it was a slow transition. I’d say in 1996 he was not as involved, by ’98 he was less involved, and by about 2001 he wasn’t involved at all. He and mom just slowly transitioned out and gave the business to me and my wife, and we really took off like a rocket ship after the downturn came. That’s when the opportunities really showed.
Q: You saw that in real estate, too. People who had the credit and cash were able to take advantage of the market values and make some money.
A: It was the exact same thing. There were so many boats coming onto the market that were retail repos, wholesale remarketing from floorplan companies that had to take them over. But on top of that, people were still boating and still buying boats. There were a lot of people who were making a lot of money, and they were upgrading. So it was really just working every angle you could, and getting the right inventory at the right pricing and then being able to market it. We’re blessed because we’re in some of the strongest boating markets in the United States.
Q: What is the plan? Is it nationwide growth or are you continuing your push in the Southeast and Midwest?
A: Right now we are focusing on the Southeast, the Midwest and Florida. We are going to continue to grow. Currently I’m working on 15 deals.
We’re looking for principals who want to exit on their timing, and we’re able to provide that for them. What we offer them is a way to set the stage for their exit by buying the company. We do not change the name of the company. We give them cash. We let them stay on as long as they want. They give off all the liability of floorplan, or debt, and it’s their timing of when they want to exit. They [can] call us two years after we do this, or five years, or 30 days. So they already have their exit strategy in place, and all they have to do is wait for the timing to be right.
Q: So they can choose to exit? They can control how much they work? Are they able to still run the show?
A: Oh, yeah. Typically what we find is if they’re in a major market and they’re a dealership we would be interested in, they’re already a top performer. They already have a good staff underneath them. Typically the hardest part about letting someone else run the show is you still have all the liability, so it’s hard to let go.
What we end up doing is, there’s already those key one or two people in there who are already doing all the work. They just haven’t been released to do what they can do because they’re a little bit micromanaged. We unleash those guys, and we see them blossom. The principal can relax and can get back to why he was in the business to start with, which was to interact with his customers. He doesn’t have to deal with HR, or accounts receivable and payable. He doesn’t have to deal with marketing, or stress out of maintaining a relationship with manufacturers and floorplan providers. We take all that off of him.
Q: So I’m curious about what you find? Do some say ‘I want to be on a boat all day’ and others say they want to keep running the show?
A: A lot of them stay on, but there are one or two who say ‘I’m 69 years old, this is all I’ve ever wanted, this is perfect,’ and they’re leaving. The majority of them want to stay. We’ve got a deal we’re doing shortly where the principal is 70-plus-years old and he will be leaving.
Q: And this is a case of no kids, or kids weren’t interested?
A: Almost all the time.
Q: Your dad started the dealership in 1988, so I guess you didn’t necessarily grow up entirely in the dealership. How old are you, what’s your background and how did your role increase in the dealership?
A: I’m 43, so I’d been working with him in the summertimes forever. I worked through college there, and then in 1995 I took over the service department. We were just having issues there. It wasn’t going good, and he just said, this is the toughest part of business. So I went in and looked at it and basically restructured the whole thing —- started from scratch. From there, it grew. We started building the right team. I moved into sales. I’ve just grown up in it my whole life.
Q: You talked about exit strategies. Obviously you’re a long way from thinking about executing yours, but do you have one?
A: What we’ve done is, we’ve tried to build an infrastructure where the business is not solely dependent on one person. A typical marine dealership is built solely around one person — that principal owner — because he’s the one who’s the guarantor on the floorplan, he’s the one that has the personal guarantees with the manufacturers, he’s the one that has to live and breathe everything to make it run. He has to wear many hats.
We’ve built an incredible team. I’ve got an incredible board of directors that gives me great advice and helps us run the business from a high level. I’ve got my partner, Anthony Aisquith, and a dynamic CFO, Cindy Thompson. We’re not real layered with management. We’ve just got about a dozen people that can really step off into any position in the company. We built the infrastructure so it’s not dependent on me. Our exit strategy is, we don’t have one — we’ll run this thing forever because when I’m ready to go, or Anthony’s ready to go, we’ve got people to fill those voids.
Q: Can you talk about challenges that dealers face today, and do those challenges vary by location or are they consistent?
A: I think the biggest challenge anywhere, not just for boat dealerships, is people. That by far is the biggest challenge — finding the right people, finding ways to motivate those people, finding ways for them to be engaged from almost an ownership level to where they think about it as theirs.
From a boat dealership standpoint, I think the daily struggles are pricing and where the pricing is headed. Boats aren’t cheap anymore. And the thing that keeps me up more than anything is technicians. We’re not bringing new people into the industry. I asked a manufacturer when was the last time they had someone 45 years or younger calling about becoming a dealer, and it was like, deer in the headlights. That hadn’t happened in 10 years.
Q: Are those jobs well paid? Is it that people don’t have the experience? Or is it a stigma about hands-on work in our culture?
A: Marine technicians are the best if you compare them to any other industry. Car technicians make more money, but when you get a car technician, you’ve got a guy that does brakes or transmissions, and that’s all he does. Marine technicians have to know how to work on nine different boat manufacturers and five different motor manufacturers. And then you throw in trailers and electronics. A marine technician is a jack-of-all-trades, and he’s got to be brilliant. And we have them. They probably could make more money in the automobile business, but they’ve got the water gene.
Q: So you’re hoping people are passionate enough about it, but I guess at the end of the day, it might come down to making more money elsewhere?
A: One thing I’ve seen over the last 10 years is that we don’t have the same problems because of technology. You don’t really rebuild engines or outdrives like you used to; it’s become a lot more efficient and cost-effective to swap parts. Fifteen years ago, when I was working the service department, and a gear went out on an outdrive, you had to rebuild that outdrive. You had to shim it and press it and so forth. Today, it’s much more cost-effective to replace it. So a 10-hour job turns into a one-hour job, and the price is about the same as it used to be. Also, manufacturers are making engines a lot more durable and technologically advanced. That is allowing us to bring new people into the industry and teach them, and it doesn’t require as much experience. If you go into a service department today, you’ll find a bunch of mature technicians who’ve been working on boats since they were teenagers. Today it’s becoming a lot more advanced from the technology side, so you can actually train someone to come in, diagnose the problem and fix it. At some point in time the engine manufacturers and dealers are going to have to come together and figure out how to attract a younger group of people into the industry and get them excited about it because that’s going to be a huge problem down the road.
Q: When you say attract a younger group, do you mean to boating, to dealerships, to the lifestyle, to work in the industry?
A: All. I’m as bullish on the marine industry as anybody, but it’s a shrinking industry. We’ve got to attract people to all sides of it — new customers, new employees — and it’s happening now, but the pie continues to get smaller.
Q: You talk about attracting younger people; what’s the dealer’s role in that?
A: It’s finding them. It’s a huge challenge. How do you find them? That’s where I think the manufacturers and dealers, we continue to work on Grow Boating. Grow Boating could grow into a recruitment tool. I definitely don’t want to get into anything political, but it’s funny, unemployment was so high and there were so many people looking for jobs, and I just don’t believe that at all because you just couldn’t find anybody to work. Even during the downturn. So finding people is going to be a challenge. There are things the industry is doing better than five years and 10 years ago. Is it through motor manufacturers coming together to have more trade schools? How do you get to those people? It’s a challenge. We talk about it internally a lot.
Q: I’d heard from the Marine Retailers Association of the Americas about one tech school graduate having three dealers calling him to come work for them. You’d think the demand would drive up the pay scale.
A: I’m sure it does. I couldn’t quantify the number, but I’m not talking about a marine mechanic makes $35,000 a year and a car mechanic makes $250,000. The spread is not that dramatic. You’re talking about 20 to 25 percent more, on the high scale. They’re producing more. They’re so specified in what they’re doing. They do brakes all day, so they get very good at doing brakes. Marine mechanics are incredible because they can go out on a boat that’s floating around on the water and change the water impeller, get off that boat, and go replace a radio in a totally different brand. They’ve got to know a bunch of different stuff. When those guys come out of those two or three technical colleges that are really marine-focused, they don’t have a problem finding jobs. But how do you get more of those? How do you go from instead of having three or four colleges that teach this to having 50 spread across the United States and creating a pipeline?
I just don’t think there’s enough awareness. First of all, we’re a small industry. If you’re not exposed to water growing up, there’s not enough awareness for somebody to say, ‘There’s an opportunity. I could go do that.’ If you’re not brought up in boating or around the lake, I just don’t think you ever really know it exists.
Q: What about attracting more people to the consumer side of boating? Is that also an awareness issue?
A: No, I think that’s coming around. I think boating is becoming more and more expensive all the way around, and that’s shrinking the pie a little bit. You can look at your peak-performing manufacturers that usually have the highest price tags, but they’re really doing well right now. They’re hitting the market that’s in boating. We’ve lost that middle-class or lower-end market. They’re not boating as much. They’re not coming into boating because it’s really expensive. That’s a scary thing. Innovation is helping with that, but I’ve been in the industry — and I’m probably gonna get hung by some of my friends for saying some of this — but I’ve been in this industry since 1990 and I’ve never seen the price of boats go down, not one time. You look at a C-Class Mercedes? It’s been same price for the last 15, 20 years.
Q: I think a lot of people know this. I mean, it’s clear how much boats cost. And you hear the manufacturers say it has to be more expensive than cars because they don’t have the economies of scale. But at what point does that no longer matter? Do we get to a point that most people are just priced out of boat ownership?
A: You can’t just look at manufacturers. It’s basic economics — supply and demand. There’s more demand for the water, and the supply doesn’t get any bigger. When you go look at a lake, and you can just pick five lakes across the United States, and look at the property values, or storage costs, or all the stuff that’s associated with it, that stuff doesn’t go down, either. As an industry we’re continuing to price ourselves out of the market for a lot of people, so our pie is going to continually get smaller. That’s a scary thought. Where are we going to be in 20 years? But the flip side of that is people have always boated; it’s in their DNA. I really believe this: People have the water gene and they’re going to do everything it takes to get out on the water. But that’s a challenge. How do we bring the cost down and bring more people into it?
Q: I just wrote a story asking about a half-dozen people who grew up on the water why they don’t have a boat as adults. Guess what their No. 1 reason was.
Q: And they love to boat. They all have the gene.
A: Yeah. It’s a challenge.
Q: Will the boating industry look up one day and say, “Oh, my gosh, we’re golf. How did this happen?” Because golf is in tough shape and was probably also baked into many people’s DNA.
A: Well, you look at boating and there’s not a better family activity out there. Period. I continuously think through, what is better? And there’s nothing better for a family unit than boating. It requires you to be in a confined space for long periods of time where you’re forced on each other as a family unit. You can get in a boat and have a mother and daughter upset, and eventually, if you’re out there for five or six hours, that’s going to go away. It’s just an incredible family activity. I think that draws a lot of people to it. A challenge we’ll have is, someone can go out and make a boat that costs $13,000, but if it breaks all the time or has problems it’s going to take that person who stretches to invest in something like that and turn them off of boating. So we’re caught here with a bunch of different things that can be done a bunch of different ways to bring people in, and how we get there, I still haven’t figured that one out yet.
Q: Is there anything you wanted to tell us that we haven’t covered?
A: I believe us to be the largest independently owned boat retailer in the United States. I believe us to be the second-largest boat retailer in the United States overall, but I don’t know that for sure.
As far as what to add, getting our story out on what we’re doing, this will be a great opportunity for that to happen. There are 2,500-plus boat dealerships in the United States. Hopefully somebody will read this article and say, ‘I didn’t even know this was available or an option’ and may want to explore it.
This article originally appeared in the May 2016 issue.