Editorial – March 2023

Posted on February 27, 2023 by Gene Muchanski

cropped-gene-roatan-1.jpgThe Importance of a Diving Industry
by Gene Muchanski, Editor
The Dive Industry Professional

An industry is a group of like-minded businesses that produce a similar program, product, or service.  The bond these businesses have in common is the type of products they produce and maybe the manner in which they are created.  Not a lot of bonding going on here.  The U.S. Government assigns these like-minded businesses to an industry category and gives that industry a six-digit NAICS code.  NAICS stands for North American Industry Classification System.  NAICS codes have replaced the older SIC (Standard Industry Classification) codes, established in 1937.

Within certain industries are businesses that produce products to be sold in the watersports and scuba diving markets.  We see these producers at dive shows and trade shows, selling their products to their customers.   The same group of customers the other producers are selling to, incidentally.  A market is where buyers and sellers meet to transact business.   The common bond between these buyers and sellers is diving.  We know this to be a strong bond between divers.  When a few dive equipment manufacturers broke away from the National Sporting Goods Association and created the largest scuba diving marketplace at the time, other industries who had  subcategories specializing in scuba diving and watersports joined them, and the Diving Industry was born.

Today, in this challenging post-pandemic economic recovery period, I believe that buyers and sellers of diving equipment, training, travel, and lifestyle products have more in common than ever before.  We are bonded together by history, similarity, and our passion for the adventure of diving.  From a business and economic standpoint, we are bonded together by the very nature of the industry’s survival.  Now is the time for a post-pandemic revival, and a refocus on the necessity and commitment to a strong, united diving industry.

The Dive Industry Association was formed twenty-two years ago, not to compete with the industry trade show, but to create business support programs that the industry was lacking. Over the years, we have spent hundreds of thousands of dollars exhibiting at dive shows, trade shows, surf expos, and travel shows.  We developed markets and promoted them for our members.  For 22 years we published an industry newsletter that has grown into the only Trade Publication for all Dive Industry Professionals.  On three separate occasions, we published a Trade Directory, which is now the industry’s only Digital Trade Directory and Buyers Guide and is sent to all industry buyers and sellers we have in our databases.  Speaking of databases, over the years we have acquired and maintained the current contact information of over 6,000 Dive Industry Professionals.  Using direct mail and electronic programs, we have done our best to verify these working contacts on a periodic basis.  For the past 11 years we have published a weekly press release service that is FREE for our members and available to the industry on a free subscription basis.  Our association is committed to continuing with these very successful programs this year while we develop new ways to support our membership.  You will see us expanding our content, coverage, and the distribution of our Blog, Weekly Dive News, Monthly Trade Magazine (The Dive Industry Professional), the Trade Directory & Buyers Guide, and participation at dive shows and trade events.

There are a number of innovative programs we attempted in our 22-year history.   Some were successful while others may have fallen a little short.  Like they say, you won’t know if you don’t try.  In retrospect, they all were bold attempts at making the industry better and we all learned from them.  This year we will relook at our industry surveys, business seminars, regional summit meetings, regional retail buying events, industry “Lunch & Learn” programs, and strategic partnerships with business and marketing leaders.  I believe we can improve on our past performance and raise the bar of dive industry business professionalism.

It is important that the Global Diving Community have its own Global Diving Business Network.  The combination of these two networks is referred to as the Diving Industry.  The primary reason is that there is strength in numbers.  The secondary reason is that diving should be the common denominator in everything we do and work toward.  For our industry to survive, we first need to define who we are as an industry.  How big and how extensive is the diving industry?  Are we a small part of many, more successful industries or do we have the vision and the courage to define ourselves and work to develop our own industry again?  I’ll remind you that our early pioneers from the dive equipment manufacturing group broke away from the influence of the National Sporting Goods Association, and for many years grew our own industry.  A fairly successful one at that, I might add.  It’s sad to say that many of us look back at our early history and say, “Those were the good old days.”  We can have our own industry back and this time it will be even better than before.

To have our own industry, and run it like it should, we first need a vision and a road map.  I prefer a collective vision based on common ground and similar anticipated outcomes.  I was never a big fan of a few people dictating their agenda on the majority of participants in the industry.  That’s just my opinion.  I prefer a collective vision from industry stakeholders that have an investment in this industry and a lot to gain or lose from its success or failure.  Of course, getting a high caliber group of diving industry professionals together may be the equivalent to herding cats. But hey, it’s worth a try.

Having a vision and a reason to collaborate with other industry professionals is one thing.  Putting it down on paper, creating a plan, and putting that plan into action is another.  The Dive Industry Association has a vision and a plan to define, organize, and unify the diving industry.  For 22 years now, we have been working with Dive Industry Professionals from the various stakeholder groups to develop a Global Diving Business Network.  Through our recent DIVE LOCAL program, we have been laying the groundwork for the entire industry to see and read about.   Each month in our magazine for the dive industry trade, The Dive Industry Professional, we cover a new section of our plan to engage our Global Diving Business Network with the Global Diving Community.

As the name implies, the role and responsibility of a Trade Association is to promote trade within the industry or market.  The association must be familiar with all aspects of the industry they represent.   Their focus should be, to be knowledgeable about the member businesses that make up the industry, the programs, products, and services that are sold in the industry, and the customers who purchase the goods being sold.  A good Trade Association understands the businesses, the products, the market, and the customers.  To understand the economic development in our industry, you need to understand the flow of goods and services from conception to consumption. So, a Trade Association that works for the benefit of their members is really the ultimate Watch Dog of the industry.

Having our own industry that everyone can understand and participate in is important for many reasons.  An organized industry defines the geographical boundaries of commerce and establishes a channel of distribution for programs, products, and services.   An organized industry spells out the type of businesses that make up the industry and the employment opportunities available to future Dive Industry Professionals.  A responsible industry provides career information and salary possibilities to job seekers and future Dive Industry Professionals.  Having our own industry that is organized into stakeholder segments like manufacturing, retailing, education, travel, and non-profit organizations can deal with specific aspects and agendas of each segment separately.  Being able to understand, deal with and advise diving instructors, dive boat operators, and travel advisors on issues unique to their profession is also the responsibility of an organized Trade Association.

As you can see, having our own industry is important to the Global Diving Community.  It is a large undertaking and should not be thought of as the responsibility of one company, association, or organization.  I would much prefer that dive associations and organizations think about industry programs that currently do not exist but are needed, and be willing to work on a solution or a collaboration with another organization to find one.  When the industry is unified and cooperatively working toward common objectives, we will all grow and prosper.  A high tide lifts all boats.

This is an exciting time to become part of the Global Diving Business Network.  For more information, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  Email: gene@diveindustry.net  Web: www.diveindustry.net

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DIVE LOCAL – Chapter 5 – Geographical Breakdown

Posted on February 7, 2023 by Gene Muchanski

DSC_0457DIVE LOCAL – A Dive Industry Community Effort
Geographical Breakdown of DIVE LOCAL
By Gene Muchanski, Executive Director,
Dive Industry Foundation

CHAPTER 5 – GEOGRAPHICAL BRAKEDOWN

To make the DIVE LOCAL concept work, we have to take into consideration the world’s geographical locations as they pertain to direct access to various bodies of water.  Then we have to consider the comparative population in those areas.  The most important consideration to the international diving community right now is the number of active divers and diving businesses in each geographical territory.  Since the international diving community has never organized a concept like DIVE LOCAL before, anything we do to identify, organize and target the world’s diving population (the international diving community) and diving businesses across the globe (the Global Diving Business Network), the better position we will be in to effect development, growth and prosperity in our recreation.

Mind you, any efforts we make to identify, organize, and target the international diving community, will be subject to change as we evolve.  We are on virgin territory here, and that’s a good thing.  None of us is an expert at this, so we can all consider ourselves to be discovery pioneers.

Principle Guideline:  Before we begin with the work of setting our geographical boundaries and identifying the number of divers and diving businesses around the globe, let me make one ground rule that we will follow.  It doesn’t have to be a rule that everyone agrees with or follows.  It’s just a guideline that the Dive Industry Association will follow.  Our one organizing guideline that we will adhere to, is to start working with divers and diving businesses we identify in the market, immediately.  This is not an academic pursuit for us and we are not interested in building a list of certified divers or licensed diving businesses.  The question we will be focusing on is “How many divers and diving businesses have we identified and started working with so far”, rather than “How many divers or diving businesses are there around the globe?”   This may seem like a confusing point to some people, but if you think about it, shouldn’t we concentrate on identifying as many divers and diving businesses in the international diving community so we can start working with them immediately?  I believe that is more important than just knowing how many there are.  It’s about creating a market for the Global Diving Business Network so that we can focus on bringing buyers and sellers together immediately.  I know that some marketing experts will want to identify the total market and its potential first, so they can calculate their anticipated market share.  I appreciate that concept, but I think we’ll just skip to the part where we identify and start working with Dive Industry Professionals around the world that are looking to do business with the current, participating, global diving business market.

Geographical Breakdown:  In most cases, we attempt to be Geo-Graphical rather than Geo-Political.  When dealing with the International Diving Community, it may be necessary to group different countries together where there is close proximity, rather than which political flag they fly under.  Such is the case with the U.S. Virgin Islands and Puerto Rico which are United States territories but located in the Caribbean.  There are many other similar cases all across the water planet.  When it comes to planning DIVE LOCAL shows & events, I believe that catering to divers and diving businesses in close proximity is a better option, barring any political or territorial conflicts.

To keep things simple, we start with Continents and break them down into Country, Region/Territory, State/Provence, County, City, and Neighborhood if necessary.  In the example below, we begin with the seven continents: North America, South America, Europe, Asia, Africa, Australia/Oceania, and Antarctica.  In the case of North America, we include the United States, Canada, Mexico, Central America, the Bahamas, and the Caribbean.  In the United States (where DIA HQ is located), we segment the mainland states into the Northeast, Mid-America, Southeast, Florida, North Central, South Central, Northwest, and Southwest.  Florida, incidentally, is sometimes separated from the Southeast Territory because it has 17% of the Retail Dive Centers, most of the Dive Boat Operators, and accounts for an estimated 25% of the diving industry’s annual sales volume.  As we mentioned before, because we have U.S. Territories, we include the Caribbean for Puerto Rico and the U.S. Virgin Islands.  For Hawaii, Guam, and American Samoa, we include them with the South Pacific.  In the example below, we have taken our geographical breakdown to the state level.  When a state has a significant number of divers or diving businesses and becomes difficult to manage, it may be prudent to further breakdown the state into Counties, Cities and Neighborhoods.  The ultimate goal is to create a Local Diving Community that has a sufficient number of divers and diving businesses to create local diving events that brings our diving communities together and produces more activity and growth.

Continents

  1. North America
  2. South America
  3. Europe
  4. Asia
  5. Africa
  6. Australia & Oceania
  7. Antarctica

Continent – North America

  • United States
  • Canada
  • Mexico
  • Central America
  • Bahama Islands
  • Caribbean Islands

Country / Region / State – United States

  • Northeast – CT, MA, ME, NH, NY, RI, VT
  • Mid-Atlantic – DC, DE, KY, MD, NC, NJ, PA, TN, VA, WV
  • Southeast – AL, GA, MS, SC
  • Florida – FL
  • Caribbean – PR, USVI
  • North Central – IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI
  • South Central – AR, LA, OK, TX
  • Northwest – AK, ID, MT, OR, WA, WY
  • Southwest – AZ, CA, CO, NM, NV, UT
  • South Pacific – GU, HI

Territory

The complete global geographical breakdown is listed in our white paper publication, DIVE LOCAL – A Diving Community Cooperative Effort, which is continually analyzed, refined, and upgraded.

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Editorial – February 2023

Posted on January 30, 2023 by Gene Muchanski

cropped-gene-roatan-1.jpgWhy We Built A Diving Industry
by Gene Muchanski, Editor
The Dive Industry Professional

As we enter into the post-pandemic economic recovery phase of the diving industry, I feel that it is upon all of the Dive Industry Professionals to pause for a moment and reflect on what we do for a living and why we do it.  For the benefit of all of us who work part-time or full-time in some sort of diving business, it might be a good idea if we look back at our industry’s history, our present career situation, and our future potential as Dive Industry Professionals.  I’ll tell you why I think it is important for new members of the industry to learn and for industry veterans to remember.  I believe that the vision of a diving industry that was created by our Founding Fathers has not been fully understood by many and has definitely not been taught to the generations that followed.  By the way, I use the term Founding Fathers rather than Pioneers to affectionately describe our first generation of Dive Industry Professionals like John Cronin (U.S. Divers & PADI), Dick Bonin (Scubapro), and Bob Hollis (Oceanic).  These early Entrepreneurs were responsible for breaking away from the National Sporting Goods Association and creating an industry of our own.  There was a reason they did that, and I think it should be revisited and expanded upon at this time.

Before we begin, it’s important that we define what is meant by an industry.  An industry is a group of like-minded businesses based upon what type of program, product or service they produce.  So, our diving niche market is really a collective group of industries that specialize in the creation and sale of diving and diving related products.  The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments.  Our Founding Fathers were from the Manufacturing Sector (31-33) and were targeting the Retail Trade (Sectors 44-45), specifically subsector 459 (Sporting Goods Retailers).  As the market grew, Educational Services (subsector 611) and Recreational Industries (subsector 713) joined with the Manufacturers and Retailers.  Soon, the Travel Industries and Non-Profit Industries became actively engaged in the new niche market, and the “Diving Industry” was born.

In the early days of the diving industry, our Leaders were mostly business owners and entrepreneurs.  They had a vested interest in working cooperatively with other Dive Industry Professionals.  They worked together to carve out a niche market and created a trade show that brought buyers and sellers of diving and diving related products together.  The early trade shows had a high concentration of divers and became a cost-effective annual meeting place to do business.  The show also became the annual conference for professional growth and development.  The disadvantage to having an annual national show was minorly overcome by moving the location of the show to different regional locations every year.  A concept we need to go back to.  Soon, Regional Dive Shows sprung up across the United States in the regional diving communities of New York, Chicago, Los Angeles, Houston, Tacoma, Miami, and Raleigh, NC.  The Regional Shows became popular with the local diving community and flourished for 20-35 years.  I remember well, the rapid growth of the industry in the 1970’s and 80’s.  Many young Dive Industry Professionals in their late 20’s and early 30’s held key positions in the manufacturing, training, and retail industries.  The travel industry was growing at a rapid pace and was being spearheaded by young baby boomers.  So, what happened?

Looking back, I think the beginning of the decline in the recreational diving industry started while we were still experiencing the unprecedented growth of the 1980’s.  As the U.S. economy began to slow-down in the early 1990’s, the Baby Boomers were now in the early to mid-40’s.  Less people per year were taking up scuba diving and the number of dive stores started to decline.  The major change, as I saw it, was that as our early entrepreneurial pioneers were growing their businesses and passing the torch on to the younger generation, but their replacements were employee types and not business owners.  I saw an industry-wide shift of priority begin to change from a total industry perspective, to a more myopic focus of their individual businesses.  It seemed that most of the new industry leaders were more interested in the individual success of their own business rather than the success of the collective industry.  That could be my own take on things, but the more I think about it, the more sense it makes to me now.

I believe that if diving industry professionals at the time had focused more on working together on a collective industry growth strategy, instead of circling their wagons in an attempt to isolate their dealer bases, they would have grown the industry and become more proficient at target marketing.  Instead, they spent more money on duplicate marketing efforts that basically targeted the same customer base as their competitors.  This, in my opinion, brought them a significantly smaller return on investment for a larger marketing outlay. This fragmented approach and duplication of marketing efforts diluted their dealer base and put national and regional consumer and trade events on a downward spiral of profit and popularity.  By not understanding the difference between a true dive industry professional and a dive consumer, manufacturers, training agencies, travel companies and shows & events producers were unable to correctly market to either niche group successfully.

I can show you the industry stats that back up my comments.  Dive equipment manufacturers have gone through major consolidation and many brand marketers are selling the same OEM equipment under different labels.  There are over 50 certification agencies in the United States alone.  There must be a reason we need 50 certification agencies.  There are over 800 dive resort destinations and liveaboards around the globe.  And that’s just the ones we know about.  There may be more we haven’t heard about yet.  And they wonder why their occupancy rate is so low while other resorts are booked solid well into 2024 and beyond.  What about the industry’s retail dive stores.  Why has our industry gone from 2,400 stores to about 1,200 stores in the last 30 years?  And tell me why trade shows and consumer dive shows have dwindled down to a mere few?  Remember Our World Underwater?  Sea Space?  Seas Scuba Expo?  The Tacoma Dive Show?  The Florida Dive Shows?  The Texas Dive Shows?  What did they all have in common?  Better still, what things did they all lack in common?  From an exhibitor standpoint, trade and consumer dive shows peaked between 2006 and 2012.  I’m waiting for a 2024 Revival, but unfortunately we are not ready for a revival until we have one thing – UNITY OF PURPOSE.

The challenges that face the industry are pretty clear to most of us in the business.  The solutions to our challenges, in my opinion, are pretty clear also.  First of all, not every certified diver should be led to believe they should follow a predetermined path to become a Dive Industry Professional.  Not every person we certify as a diver wants to become a Scuba Instructor or Divemaster.  Let’s just be happy they took up scuba diving as a recreation!    And second of all, even if we become Dive Industry Professionals, we are still dive consumers.  So don’t tell me that DEMA is not a consumer show.  Of course it is.  We are all consumers, and Dive Industry Professionals buy a lot of dive equipment, training, and travel.  Let’s open up the industry instead of continually restricting its growth.

The good news is that we know the diving industry has a problem.  The bad news is that I think the problem is us.  I’m not quite sure who is not at fault here, but I can tell you I feel pretty safe knowing that only those amongst us without sin can cast the first stone!  I don’t see any rocks flying.  Do you?

Albert Einstein once said that mankind cannot get out of a problem using the same thought pattern that was used to get them into the problem.  With that said, I might suggest we get back to the logic that our Diving Founding Fathers used to create the industry.  Maybe it’s time to hold a round table discussion to establish where we currently are in our industry life cycle, what the problems that we face are, possible solutions to our problems, and actionable items we can collectively take to change our path of trajectory.  I believe that if we are unified in our approach, we can indeed, solve our problems and overcome our challenges.  In the meantime, our association will continue to build and organize Regional Diving Communities and work with Regional Leaders to promote diving shows and events that build and bring local diving communities together.  We will continue to fund primary research into market analysis and business best practices and we will do everything we can to bring buyers and sellers of diving equipment, training, travel, and lifestyle products together.   This is a call for industry unity and engagement.  Are you ready to step up to the challenge?  We can’t do it alone and the industry definitely cannot continue to do it the way it has done it in the past.

This is an exciting time to become part of the Global Diving Business Network.  For more information, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  email: gene@diveindustry.net  Web: www.diveindustry.net

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Editorial – January 2023

Posted on December 29, 2022 by Gene Muchanski

cropped-gene-roatan-1.jpgBecoming an Engaged Dive Industry Professional
by Gene Muchanski, Editor
The Dive Industry Professional

The biggest bottleneck to growth in the recreational diving industry today is fragmentation.   The industry wasn’t always fragmented.  In fact, early pioneers in the 1960’s worked together to unify the industry by working together and focusing on the goals and agendas they had in common.  As a young man and a newly certified diver, I saw our recreation break away from the Sporting Goods Industry and begin to take shape as the diving industry.  It was an amazing paradigm shift to watch, study, and become a part of.  Interesting to note, the breaking away from the Sporting Goods Industry and creating a new, smaller Diving Industry, was in fact a fragmentation strategy.  Keep this in mind because it is happening again in the 2020’s for reasons I will explain.

The diving equipment manufacturers were the first to break away and unite under a single banner.  They invited the sales representatives to join them as they worked to develop and sell to the retail dive store market.  Seeing the need to safely train people how to use underwater breathing equipment before allowing them to make a purchase, the certification agencies developed training programs to teach and certify Instructors, who could in turn teach new divers.  As diving became more popular, more certification agencies entered the market.  Did you know there are over 50 certification agencies today?  Most of the diving in the early days was local diving, although the concept of dive travel entered the market and began to grow.  The industry saw a flurry of diving magazines, dive shows, and dive clubs introduced into the market.  That kept divers diving and was a key factor in the recruitment of new divers.  In my opinion, based only on personal experience, the diving industry was in full bloom in the early 1990’s but unfortunately was also at its historical peak.

From the beginning days until 2019 (COVID Pandemic) we saw the growth and prominence of the dive equipment manufacturers, certification agencies, and travel companies.  The only group that declined significantly was the retail dive store sector.  In the 1990’s there were over 2,400 dive stores and yet today there may be only 1,200 dive stores in the United States.  But there is a silver lining to this declining niche market.  It’s a positive post-pandemic paradigm shift for Retail Dive Centers and Dive Industry Professionals who become actively engaged in the Global Diving Business Network.

Even though we have lost a number of dive stores, the ones that have stayed in business have gotten bigger and have grown.  It’s getting harder to compete against the more organized and professionally run dive stores in this country, without changing the way you do business.  The ones that have focused on creating their own local market and selling to it are doing well.  Retailers are the focal point where the supply chain meets the demand chain.  They realize that by focusing on the sales of diving equipment, training, travel, and lifestyle products they can pretty much control the industry’s main channels of distribution.  If retail stores adapt a strategy to teach people how to dive, sell them the equipment they need, take them diving, and keep them active in our recreation, they can carve out a sizable market share locally, regionally, and maybe even nationally.  Successful retailers realize they are the primary ambassadors of the recreation and if they are well informed as to all of the options they have in the Global Diving Business Network, they can pick and choose the best vendors to partner with to serve their client base.  The world, in fact, could be their oyster.

If the Retail Dive Centers are the focal point of the Global Diving Business Network, then Dive Industry Professionals are the ones who make it work.  There are more options available to Dive Industry Professionals today than ever before.  They have their pick of over 800 manufacturers to buy equipment and diving related products from, over 50 certification agencies to affiliate with, and over 800 diving resorts and dive operators to work for or partner with.   Being a Dive Industry Professional gives you a plethora of choices in diving equipment, training, travel, and lifestyle products.  But only if you take the time to learn about the Global Diving Business Network and get engaged.

During the pandemic era, I believe the industry was heading down the road of increased fragmentation.  Probably because of declining sales, increased supply shortages, declining interest in scuba diving, the cancellation of trade and consumer dive shows, and of course, declining marketing budgets.   As we enter the post pandemic period we are going to be faced with high inflation, a possible major recession, more supply chain shortages, or worst is accelerated supply chain activity coupled with declining consumer sentiment.   As these economic conditions unravel our industry, you may see equipment manufacturers exit trade and consumer shows, reduce their marketing budgets, reduce their staff, and make an expensive attempt to maximize their current Dealer’s purchases by increasing Dealer requirements.   I don’t even want to discuss the foolishness of trying to sell direct to the final consumers.  Other sectors of the industry are already circling their wagons to get their current customers to only do business with them.  As I’ve heard so many times before, you just can’t keep all the good ones on the farm anymore!

In my opinion, any of the abovementioned tactics will only increase the fragmentation of the industry and force all qualified buyers of equipment, training, travel, and lifestyle products to seek out sources (and associations) that define and market to the current, in business, working members of the Global Diving Business Community.  There is strength in unity and more available options in a well-defined, organized, and unified industry.  Marketing the message of industry unity and product availability is the Dive Industry Association.  Three marketing tools were developed to assist buyers and sellers to do business with each other.  1) The Weekly Dive News Press Release Service.  2) The monthly trade magazine, The Dive Industry Professional.  3) The Annual Trade Directory & Buyers Guide.  Each marketing tool has its own page on the Association’s website at www.diveindustry.net

The Dive Industry Association will lay out its vision for industry unity and growth by introducing a 12-part series entitled, Becoming an Engaged Dive Industry Professional, starting with the January Edition of The Dive Industry Professional.  The completed series will be published as a white paper for the entire diving industry.

This is an exciting time to become part of the Global Diving Business Network.  For more information, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  email: gene@diveindustry.net  Web: www.diveindustry.net

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The Exit Strategy

Posted on December 10, 2022 by Gene Muchanski

cropped-gene-roatan-1.jpgStarting Your Own Business Series
The Exit Strategy
by Gene Muchanski, Executive Director
Dive Industry Association, Inc.

If there is one topic of conversation in the business community that is not thought about seriously or is completely ignored in business planning, it is the exit strategy.  There are many reasons for that, some logical and some totally illogical.  When entrepreneurs are thinking about starting a business, most of them myopically focus on the start-up, growth, and success of the business.  No one really wants to plan for going out of business, but that is only a small part of what the exit strategy is all about.   We know that bad things happen, and they usually happen unexpectantly.  We also know that all good things must come to an end, and when they do, we all hope to be prepared for that type of ending.  So, let’s look at the exit strategy in a new way.

Let’s think about our exit strategy as “Contingency Planning.”  Our contingency planning chapter will be written as part of our business plan, in the days before our start-up.  By doing this we can think about the various options we might have available if our business does not do as well as we had planned or if our business meets or even exceeds our expectations many years down the road.  Our exit strategy should reflect what we want and do not want out of the business and when.  It is also a reflection of how much we want out of our business.  An exit strategy can be as short and simple as you want to make it or it can include as much detail you may need to be comfortable with your future options.  A good exit strategy starts with setting your limits.  Usually those limits are about time, money, and manpower, but they can also be about your physical and psychological health limits.

The worst-case scenario is that your company does not do as well as expected.  If it is unprofitable, how long are you willing to work at it?  How much time and money are you willing to lose before you cut your losses and close the business?  Your contingency planning options should include what to do when you close your business, sell your business, or file for bankruptcy.  Because a business is a legal entity, you should consult with your attorney, tax professional, accountant, business consultant and if you own property, your real estate agent, before you begin the closing process. Undoing a legal entity is a process you must go through to clear your books and tie up loose ends with local, state, and federal government agencies.

If your company is profitable but is not what you want for yourself anymore, then maybe letting go is the best thing to do for yourself and your loved ones.  Regardless of your reason for making your exit, if your company is profitable and running well, that buys you time.  Some of your exit strategy options for profitable businesses include passing the business on to your children, bringing on a management team and retiring from the business, or selling the business outright.  If you plan on selling the business and taking your equity in the form of cash, then you have to have a business that is worth something and is liquid.  By liquid, I mean easily sold for cash.

The best way to sell your business is to plan for it in the future.  Think about why someone would want to purchase your business instead of starting their own from scratch.  Build those reasons into your exit strategy and start preparing for your last day the minute you open your doors for the first time.

Create a Business:  The first thing you need to do is create a business, not a practice.  A business is a legal entity that can be run successfully with or without the owner present.  A business has employees and managers doing the things that businesses must do to sell programs, products, and services to a customer base that is acquired, retained and recaptured if necessary.  A business uses modern tools and technologies to achieve the most profitable outcomes with the least amount of inputs.  A business is an organization run by people who have a vested interest in its success.  If someone were interested in purchasing your business, the first thing they would want to know is if your current employees would be willing to remain with the new owner after the sale.

A practice, on the other hand, is what we refer to as an owner – operator situation, also known as a Sole Proprietor.  When the owner is away from the business, the business usually comes to a halt.  That means, if the owner is the only one teaching the diving classes, doing the dive trips, and selling the equipment, it is unlikely that activity will continue after they sell the business.  Same thing with a Dentist.  They have a hard time selling their practice if they do not want to continue working for the new owner.  The only thing a new owner would be buying is the equipment and the customer base.  And there is no guarantee that the customers will continue to do business with the new Dentists.  So, the first thing you have to do is build a business that will continue to operate with a new owner.

The second thing you need to do is make sure that the business is profitable.  You do that by keeping good records of equipment purchases, inventory purchases, customer acquisitions, revenues, and expenses.  A good accounting software program will create and maintain your customer database.  Having a profitable customer base is extremely important.  The next thing is good inventory control.  How much inventory are you purchasing?  What is your inventory turn rate?  What is the value of your current inventory and is it new and saleable?  Sales are very important to a prospective buyer.  They want to know your sales history in detail.  Equally important is how you control your expenses.  Are your expenses in line with your sales?  A prospective buyer is going to want to see your books.  Even before you get into any details, make sure your Income Statement, Balance Sheet, and Statement of Cash Flow is current and accurate.

Even if a business is run professionally, proficiently, and profitably, prospective buyers will want to know if there is growth potential in the venture.  A quick look at your sales history may be all they need to know.  Sometimes they may even have to look at demographic growth data from the U.S. Census reports.

When you operate your business as if it would eventually be up for sale, you will have tendency to look at your business through the eyes of a prospective buyer.  A profitable business that is operated professionally is a difficult thing to start from scratch.  That will always be your ace in the hole.  With such a business, it is even easier to groom a future buyer.  With a good exit strategy in place, you might even make the transition as seamless as possible.

A word of caution when you are selling your business.  When you decide to get out, get out.  Sell the entire business, equipment, fixtures, inventory, boat, customer list, accounts receivable and accounts payable.  Everything.  You can keep your own diving gear, but it’s best to make your exit as clean and simple as possible.  Some sellers think they can keep their mailing list and run trips or dive classes to their former customers after the sale.  Sorry, those customers are now part of the new owner’s revenue potential.  If you are thinking about continuing to teach diving (especially Instructor Courses), then arrange that with the new owner and agree to come onboard as an employee.  No one is going to buy your business if you insist on a side-hustle, that’s not part of the new business.  A smart buyer will ask you to sign a non-compete contract with them if you are not returning as an employee.

I know this last paragraph may seem a little hard but in fact, it is proving to be the best thing for both parties in a number of dive store and dive operator sales.  A good business sale to the right partner or firm will give the former owners a cash payout, release of business ownership responsibility, possibly a full or part time job, and maybe even with their former staff and employees.  What could be better than achieving your lifetime dream of having a successful dive store or dive boat business without all the stress and responsibility of business ownership.  So you see, there may still be life after selling your business.

Congratulations on completing the “Starting Your Own Business Series.”  For more information on starting your own business, as it relates to a Dive Industry Professional Business, contact Gene Muchanski, Executive Director, Dive Industry Association.  Phone 321-914-3778.   eMail: gene@diveindustry.net

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Editorial – December 2022

Posted on December 1, 2022 by Gene Muchanski

cropped-gene-roatan-1.jpgCan You Grow the Global Diving Business Network?
by Gene Muchanski, Editor
The Dive Industry Professional

President John F. Kennedy said it best when he gave his inaugural address.  “Ask not what your country can do for you, ask what you can do for your country.”  His words continue to ring true for me every time I think about the Global Diving Business Network we are creating around the world.  A global network benefits its members because of what they bring to the table, as far as products, services, talents, and skills that others have a need for.  By bringing a professional network of sellers together we are creating a marketplace that specializes in the need’s fulfillment of its diving customers.  Think of the Global Diving Business Network as a Trade Show that lasts for 365 days a year, not just for 2, 3, or 4 days.  The more exhibitors (members) we have in the exhibit hall (network), the more attendees (buyers) will frequent the network.  If the network attracts a sufficient number of sellers, their annual dues ($125) will generate a sizable advertising and marketing budget to spend on attracting buyers to the network.  When a large number of buyers and sellers come together, sales happen and needs are met.  That’s our Mission.  Our Association believes that it’s the venue’s responsibility to attract and motivate qualified buyers to attend an event where the sellers have paid a fee to exhibit.  Our promise is to work with sellers to attract qualified buyers to attend.

In last month’s editorial, I wrote about the things the Dive Industry Association is doing to create a network of like-minded businesses that is becoming an international marketplace of current buyers and sellers of diving equipment, training, travel, and lifestyle products.  We have organized an effort to identify the sellers of diving products and partner with them to include them in this marketplace that is advertised and promoted in digital, print, social media, and face-to-face marketing platforms.  Our collective advertising dollars are spent identifying, reaching, acquiring, and referring buyers of these products to our participating sellers.

Cover - Trade Directory - Dec 2022The Dive Industry Trade Directory & Buyers Guide:  Sellers of diving equipment, training, travel, and lifestyle products are always looking for new customers.  Mainly because of the recent COVID pandemic, many vendors have either cut back, changed their address or gone out of business.  This leaves the potential buyer with questions as to who is still in business and how do they reach them?  Our Trade Directory & Buyers Guide puts the current names and points of contact of these sellers in the hands of potential buyers, all in one document.  The annual price of a listing is $125.  Sellers are given one listing in the Trade Directory that includes company name, company contact person, address, phone, fax, email address and website url.  The Buyer’s Guide is a cross reference directory for each listing.  Each listing is broken down by industry sector, i.e. Manufacturer, Dive Store, Dive Operator, Travel Business, Non-Profit Organization, etc.  Diving equipment is broken down further by category of products.  Travel Businesses is further broken down by travel category and by country.  The Trade Directory is updated monthly and sent to all Dive Industry Professionals free of charge.  It is published in Adobe pdf form and as a Flip-Page Magazine.  We are working on publishing the Trade Directory on its own website, as we have done in the past.

DIAweeklyNewsDive Industry Weekly News:  Another marketing vehicle that has been a huge benefit to our membership is our Weekly News Press Release Service.  Our Members receive 24 free press releases with their annual membership.  That is $4,800 worth of free press when compared with our competitor.  The Weekly News has a free subscription for all Dive Industry Professionals Worldwide.  The News is distributed via direct email using Constant Contact’s email marketing service and is posted to various social media sources.  Because we do not charge our members for their press release, our service is shared by numerous social media profiles, pages, and groups.  Our goal is to reach every Dive Industry Professional across the globe every single week.

Cover - Nov 2022The Dive Industry Professional Magazine: As if having an International Diving Trade Directory & Buyers Guide and a Weekly News Release was not enough, the global diving community now has a monthly trade magazine dedicated to the working dive professionals worldwide, regardless of their training agency affiliation or their diving equipment brand preference.  It’s called The Dive Industry Professional.  Our trade magazine has been in existence for 22 years as a monthly newsletter and was recently upgraded to a magazine format in April 2022.  The magazine covers issues that are important to working dive professionals.  Our typical issue includes an Editorial, an Industry Leader Profile, an Industry Business Profile, a Shows & Events Calendar, DIVE LOCAL Events, and paid advertisements.  We publish articles on business topics as well as articles on diving destinations, dive operators, and FAM Trips.  One of our favorite columns is the Outstanding Divemaster Award series.  Subscriptions are free to all Dive Industry Professionals worldwide.  As the magazine grows in readership, we are looking to add stories of interest from our readers and guest authors.

So you see, there are many ways to grow the Global Diving Business Community.  Its success all depends on what dive industry professionals are willing to bring to the table.  With the abundance of talent we have in our recreational industry, there is no reason to believe that we cannot be two or three times bigger and better than we are today.  So, in the spirit of President John F. Kennedy we are asking “What can you do for your industry?”

This is an exciting time to become part of the Global Diving Business Network.  For more information, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  email: gene@diveindustry.net  Web: www.diveindustry.net

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Editorial – November 2022

Posted on November 8, 2022 by Gene Muchanski

cropped-gene-roatan-1.jpgBuilding a Global Diving Business Network by Gene Muchanski, Editor The Dive Industry Professional

At the recent DEMA Show, a Marketing Advisor asked me what was the difference between the Dive Industry Association and our competitors. With a little bit of coaching and prodding, I answered that our competitors just sell products for money. Our Association, on the other hand is building a Global Diving Business Network, giving our Members countless of options to increase their business revenues in a declining niche market.  For a small annual fee, the Network we are building is the key to a united diving industry of like minded businesses that looks out for each other.  By being a part of this international network, you become a member, not just an occasional customer!

Look at what we have accomplished in the last 22 years.  Our Association and non-profit Foundation has exhibited at over 80 trade and consumer shows.  We have spent hundreds of thousands of dollars promoting our members and bringing buyers and sellers together.  We publish a Weekly Dive News press release service that gives our members $4,800 worth of free press releases.  Recent SEQ statistics have shown that we are reaching over 100,000 diving consumers a week.  Our monthly newsletter was converted to a Magazine format in April, and it too is reaching a record number of Dive Industry Professionals Worldwide.  Our third edition of our International Trade Directory and Buyers Guide is now an industry standard and will be returning to its own website shortly.  All of this is available to Dive Industry Professionals for only $125 a year. To keep your annual financial commitment to a minimum, our non-profit foundation will be begin raising funds to expand our global reach in identifying buyers and sellers of diving equipment, training, travel, services, and lifestyle products.  We will be expanding our reach of the Weekly Dive News and the monthly magazine, The Dive Industry Professional.  The website we are building for the International Trade Directory and Buyers Guide we help identify and promote all participating Dive Industry Businesses Worldwide.  With proper funding, our association and foundation will be in a better position to exhibit at regional dive shows and trade events to interact with diving product users and  buyers.  One of our goals is to build a stronger bond between Dive Retail Buyers and their equipment, training, and travel vendors.  Our Mission is to bring Buyers & Sellers together. An exclusive industry publication of ours, Becoming A More Engaged Dive Industry Professional, is undergoing a current revision and will be published soon in our monthly trade magazine.  This is an exciting time to become part of our Global Diving Business Network.  For more information, contact Gene Muchanski, Executive Director of the Dive Industry Association, 2294 Botanica Circle, West Melbourne, FL 32904.  Phone: 321-914-3778.  email: gene@diveindustry.net  Web: www.diveindustry.net
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Editorial – October 2022

Posted on October 10, 2022 by Gene Muchanski

EDITORIAL – OCTOBER 2022

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Creating Your Own Market 
by Gene Muchanski, Editor
The Dive Industry Professional

Welcome to the October 2022 Editorial of The Dive Industry Professional.  Our focus this month is on one of the most important things a Dive Industry Professional can do.  That would be to create your own market for the products you sell.  If I had to add a second most important thing to do it would be to constantly serve that market.  You see, the purpose of a business is to sell a program, product, or service to customers who want, need, and can afford them.  We’ll call them products from here on and we’ll focus on the needs aspect.  According to what we learned in business school, the needs we have for certain things cannot be created but a market for the products that fulfill those needs can.  Scuba diving and adventure travel fills many needs that people have.  We have discussed this topic to exhaustion at trade shows, dive shows and local bars and beaches, but it may be worth your while to have a round-table discussion with your local peers to identify those needs that can be satiated by what you sell in your community.

The most important way for you to generate a market to sell to, is to create your own.  There is an old saying I learned from a former General Manager at Mares.  “Focus on filling your own parking lot first, before you think about stealing customers from your competitors parking lot.”   That nugget of wisdom has always rung true for me, in my experience.  When you are new in business, you want to establish a reputation of doing things a certain way.  You want to become known for your expertise or what we call your unique selling proposition (USP).  It’s what makes you better than your competition.  So, you venture into your local community and look for people who believe you would be better than someone else, at doing what you do.  From there you can start to build your circle of influence and your current customer base.

The five most important things you can do to create and maintain your market is to:  1) Always be prospecting for new students.  2) Teach people to dive.  3) Sell them their scuba equipment.  4) Take them diving.  5) Keep them active in the recreation.  I can’t emphasize enough, the importance of prospecting for new students.  Even while you are teaching your current scuba class and bringing them through the process of becoming certified divers, someone must be filling the pipeline of new students.  While you are focusing on the current scuba class, someone must be thinking about the next scuba class. 

In our industry, the next step toward building your own market, starting with non-divers, is to teach them to dive.  Once you have signed them up for class, you have created a market for the sale of diving equipment and dive travel.  If you don’t follow through with teaching them about scuba equipment and selling your students the necessary equipment, someone else will.  This, in my opinion, is going to be the key talking point in the post-pandemic era.  The secret here is to be the first to get your prospective student’s contact information, enroll them in a scuba class, build a relationship of trust, teach them a quality scuba program that includes teaching them about the equipment they will be using as a diver, and set the stage for a long and successful lifetime of scuba diving and adventure dive travel.  Any gaps in these steps may cause you to lose the market you created.

I learned an important lesson in the early days of my career in the diving industry.  As we saw the industry being built, the certification agencies were coming onboard and defining what was important to them.  They built their own business models based on the strengths of their unique selling propositions.  Some agencies focused on being exclusive, some on quality educational programs, some on making certification easier to obtain, and some on selling only to retail dive stores.  It was easy to see the distinction of their concepts as they created their own corporate cultures in the early days.  It is interesting to see that in the past sixty years, some agencies are still using their original business models, some have changed (and changed frequently), and some have either been sold, acquired or gone out of business.  In today’s market there are over fifty (50) certification agencies, and their lines of distinction are less pronounced.  However, each agency has its own distinct corporate culture and its own operational guidelines, even if their business model is the same or similar to their competitors.   It’s now up to the individual Dive Industry Professional to choose the certification agency that fits their business model, corporate culture, and their desire to create and kept their local market.

Developing your own local market is all about your ability to prospect for new customers.  On average, businesses lose up to 25% of their market every year due to attrition.  Just like universities.  That means you always have to be prospecting for new customers.  Always.  The best method, and least expensive, is a direct referral from a current customer.  If you have done your job properly with your last scuba class, you would have certified them to dive and sold them their diving equipment so they could go diving with you.  You would have taken them diving and gotten them so excited about scuba diving that they are willing to stay active in the recreation.  All you have to do now is ask them to refer you to their friends so they can all go diving together.  That’s how customer bases are built.

Now if you have a strong referral program going you may not have to worry about people in your local community going on-line to seek out a local dive store other than yours and they certainly won’t be interested in other certification agencies other than the one you teach for.  When it comes to buying their diving equipment, history tells us that new customers listen to the advice of their friends and family when it comes to buying their gear.  And when divers think about booking a dive trip to St Somewhere, they are most likely going to go with the people their friends recommend.  Be that person who people recommend.

If getting referrals is important to you, then where you get your referrals from should also be a very important aspect of the mix.  If a referral comes to you from a current customer, the prospect probably is aware of your education, experience, and reputation.  They probably have formed some type of expectation of your services and how they will be treated.  If the referral came from some place else, it probably is coming with the expectations instilled by the referrer.  Will you be able to fulfill or exceed their expectations or will you be at odds with the prospect.  That’s something to think about.

So many of these questions and dilemmas can be answered and dealt with if you have a firm understanding of your business model, corporate culture, and business purpose.  Before you even start prospecting for new customers, make sure you and your staff have agreed on a purpose, vision, mission, focus and goals for your business.  With that, growth plans and opportunities seem to just fall into place.

For more information on creating your own market, contact Gene Muchanski, Executive Director, Dive Industry Association, Inc., at gene@diveindustry.net or call me at 321-914-3778.

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Starting Your Own Business – Your First Year

Posted on September 25, 2022 by Gene Muchanski

Starting Your Own Business Series
The First Year in Business
by Gene Muchanski, Executive Director
Dive Industry Association, Inc.

Your first year in business may be your most difficult part of going into business for yourself.  In fact, it is going to be harder than all of your business planning up to this point.  If you think that doing a personal assessment, feasibility study or business plan was hard, think again.  You may even think that creating an action plan and going through the start-up process was more difficult than you could have imagined.  I grant you; it probably was not easy and I know it was a lot of work, but it is nothing compared to the first year in business.   Think of your journey so far.  Getting to this point is like climbing Mt. Everest.  You may be on top of the world now, but you have only completed half of your journey.  To underestimate what comes next and not bothering to plan for it can result in failure and financial ruin. 

Planning a business takes a lot of research, study, and SWAG (Scientific Wild A_ _ Guessing).  But when you finish your planning, all you have invested at that point is a lot of time and manpower.  That’s a good thing.  You probably learned a lot about starting a business.  When you went through the actual start-up phase, you put your resources to work and hopefully built your business according to your plan.  At that point you have not lost anything yet either.  Your investment is intact and is waiting to bring you a return on investment (ROI).  What’s it waiting for?  You.  Now it’s time to get to work, but don’t stop your planning.  Remember, this may be all new to you because you have not been here before.  With each passing day, you will be building a history and that is something you want to record and learn from.

Dropping the ball on planning after a successful retail store grand opening happens all the time.  I worked with a sporting goods retail start-up not too long ago.  We went through the entire business planning process and the entrepreneur excelled at it.  His research was through, and all his assumptions were complete, well thought out, and realistic.  The Business Plan was textbook perfect.  All bases seemed to be covered and he was ready to open.  His start-up period was short and complete.  On opening day his store looked fantastic, was well stocked with the correct amount of inventory, represented by the best brands in his industry, and his hardware and business software programs were installed, online and ready to go.  I congratulated him on his achievement and told him we should proceed with the next phase of his start up, the first year of operation.  You could imagine my disappointment when he said, “That won’t be necessary, Gene, I’ve got it from here.

A year later I got a call from that same entrepreneur.  He needed to raise $4,000 by the end of the weekend to pay his rent or face eviction.  When we reviewed his past year of operation, we found out that he had not recorded any of his sales history, did not have a database of his current customers and did not keep adequate records of his income and expenses.  Basically, he did not use any of the professional business programs he purchased and installed during the start-up.  With a beautiful store, an excellent inventory that was paid for, and the best legal, accounting and marketing programs that money could buy (with no useful data in them), there was little he could do except hang a GOING OUT OF BUSINESS sign in his window and move out on Monday.  Don’t let that happen to you.

Now do you believe me that going into business for yourself is for reals?  That’s why you don’t open a store on Monday and put up a “GONE DIVING” sign on your door on Tuesday.  After you open your doors to the public you have a big responsibility to make it work for you, your family, your local diving community and to the industry.  Learning how to operate your business will be easier and more enjoyable if you develop a Board of Advisors that you can casually meet with from time to time.  Remember, you are in the recreational diving business, and you will undoubtably have customers that work in the various professions, like marketing, accounting, law, and business.  If they patronage your dive store or dive business, I am sure they will want you to succeed.  Get to know them on a personal basis and recruit them as volunteer advisors.  I am not saying that you should get them to give you professional services for fee.  I firmly believe that you should pay for your legal, accounting and tax services using professional companies that do that for a living.   Keep your professional services and your advisors separate.  An advisor to me is someone I can socialize with, as a friend, who lets me pick their brain for ideas.  Sometimes they may even give you constructive criticism on different aspects of your operation.  Your Accountant, Lawyer, and Banker provide services that you pay them for.

Some of the things you want to do during your first year is record your history of customers, sales, students certified, and everything to do with income, expenses, and cash flow.  It will help you create your own seasonality curve which will give you a competitive advantage the following year. Until then you are really operating on assumptions and realistic estimates.

Customer Database:  Starting on day one, you need to create a customer database.  Every time someone walks into your store and every time you meet a scuba diver, get their full contact information and record it in a useable CRM (customer relationship management) program that could be integrated into your point-of-sale software program.  This will be your potential customer list.  Every time you make a sale, make sure you capture the customer’s contact information.  People who have made a purchase from you in the past 12 months are considered your current customers.  Get in the habit of frequently marketing to your current customer base.  This collective group of people is referred to as your circle of influence.   When a current customer has not purchased from you in 12 months, they become your former customer.  Knowing who they are is important but contacting them again is more important.

Sales History:  Knowing your sales history is important.  You will want to know how you are doing this year and how it compares to last year.  After the first 12 months in business, you will have a one-year history that shows your first seasonality curve.  From that point on you can start to see trends in your sales.  I have always maintained a simple Xcel spreadsheet for sales.  At the end of every day, I enter the daily sales.  The spreadsheet gives me the total for the year, the daily average, and the projected total for the year.  Those four columns are compared to last year daily sales and at a glance I can tell if we are up or down compared to last year, by the daily amount, total amount, average daily sales, and projected annual total.  My spreadsheet gives me the answers in dollars and percentage.  Once you set up the spreadsheet, all you have to do is put in one number per day.  Easy.

Point of Sale System:  I can’t recommend enough having a good point of sale software program.  I used Scuba Prophet in my dive store back in 1988, when it was first introduced.  A good point of sale program will help you control ordering, inventory, sales, customer data, marketing and merchandising. Knowing what you sell, how much you sell, and to whom is invaluable information.  Knowing the revenue, current selling price, cost, and profit per unit sold is priceless.  Being able to accurately forecast sales is a skill you need to develop as a professional dive retailer or dive equipment manufacturer.

Accounting Software:  Most small businesses use an accounting software program like QuickBooks.   You want to be able to track the flow of your income, expenses, and cash flow.  Your software will also keep track of your vendors, customers, and employees.  You will always want to be current with your invoices, bills, payments, deposits, payables, receivables, taxes, and payroll.  Accounting software is necessary to manage your day-to-day operations and for accountability and government compliance. 

Office, Marketing & Graphic Software:    Business tools are designed to make your job of operating your business easier, more accurate, and more manageable.  Using an integrated system of programs like Microsoft Office 365 and the Adobe Graphic Suite will make getting your daily tasks done quicker, easier, and end up looking more professional.  The key to getting the most out of your computer software programs is to purchase a book or a course on each software program, read the book, complete the course, and keep the textbook on-hand for future reference.

Staying Current with The Diving Industry:  During your first year of operation, it is important that you refine your business model and make any changes or adjustments to your original business plan as you think necessary.  What you should be trying to achieve at this point is to develop a business model that works for you as you iron out any bugs in your current assumptions.  Your goals should be to utilize the current business tools you have and do the best you can within your current market.  We will address shifting to a grow strategy in future articles.  For the present time, you may want to keep yourself current with what your competitors and the rest of the industry are doing.  Don’t just focus on your local market but start noticing what other vendors in the equipment, training, travel and lifestyle sectors are doing.  If you haven’t joined your industry trade association yet, now would be a good time.  The Dive Industry Association has a book on  how to stay connected as a Dive Industry Professional, and it’s free as part of your membership.

Congratulations on getting this far in your own business.  Keep going.  For more information on getting through your first year in business, as it relates to a Dive Industry Professional Business, contact Gene Muchanski, Executive Director, Dive Industry Association.  Phone 321-914-3778.   eMail: gene@diveindustry.net

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Editorial – September 2022

Posted on August 31, 2022 by Gene Muchanski

EDITORIAL – SEPTEMBER 2022

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The Market Is Big Enough For Now
by Gene Muchanski, Editor
The Dive Industry Professional

Welcome to the September 2022 Editorial of The Dive Industry Professional.  For many years now, September has been the month when the major suppliers in the diving industry launch their marketing programs for the next season.  The logic behind a September Launch is sound and has paid off handsomely for many companies for at least the last twenty-five years, maybe even longer.  A September Industry Launch works well for the supply side of diving equipment channels of distribution.  For the diving equipment manufacturers, equipment sales agents, and retail dive stores, September is the best month to introduce, sell, and order new lines for the next diving season.    Let’s review a few of the reasons why you need to be in sync with this particular seasonality curve.

The traditional recreational season for scuba diving and watersports in the United States is generally Memorial Day through Labor Day.  So, while scuba instructors, dive stores and charter boats are busy teaching classes, selling diving equipment and taking divers on dive boat charters, their manufacturing vendors are putting together their new line of equipment for the next season.  By August, their samples have arrived from their OEM’s and these Manufacturers & Distributors are conducting their annual sales meetings.  On the day after Labor Day, while the dive stores are still active and hopefully blessed with a generous open-to-buy budget from the current season, the major manufacturing Reps begin calling on their accounts to show their new lines and take orders for the upcoming season.  For the Retailers, this allows them to put their current inventory on sale (clearance) and begin merchandising and selling next-years line for the Holiday Shopping Season.  For the Manufacturers, a September Launch gives them important sales forecasting data for the next season and ties up their Dealers open-to-buy budgets.  This allows the equipment manufacturers and Sales Reps to focus on seminars, workshops and social events at the annual industry trade show, two months later.

As we enter the post-pandemic era in our industry, the concept of a September Industry Launch is more important than ever.  The number one reason is a declining market coupled with increased competition to capture market share.  Twenty years ago, our industry had 2,400 dive stores.  This year we are lucky if we have 1,200 viable dive stores in the U.S.  So, the wholesale market has been cut in half.  Secondly, the number of divers has to be significantly less, considering the number of baby boom divers who don’t dive anymore because of age or health reasons.  Also, in the post-pandemic era, our recreation is being challenged by government restrictions, travel restrictions and staffing challenges, resort destination closures, and supply chain shortages.  People are diving less.  So, with a declining market and increasing challenges, Dive Industry Professionals have their work cut out for them.  But there is a silver lining in the clouds.

Back in the days of John Cronin, Dick Bonin, and Bob Gray, we had Dive Industry Leaders who knew that unity would create a more manageable small niche market within the larger sporting goods market.  They were Entrepreneurs and they knew that the industry had to be united to develop a large concentration of qualified retail buyers so they could meet in one place, at one time, to maximize sales and communications.  They knew that having a smaller number of exhibitors at a trade show with a higher percentage of divers would be more successful for them than having a larger number of non-diving exhibitors and a lower percentage of divers at a National Sporting Goods Trade Show.    They were spot on.  I remember my first DEMA Show in 1982 in San Antonio, Texas.  With only 182 Exhibitors but a high concentration of qualified retail buyers, the market was big enough and the show was successful for both exhibitors and buyers.  We can do that again if our industry leaders would embrace the concept of unity.

Now I’m going to tell you about the mistakes that are happening in our industry today.  Our industry is more fragmented than it has ever been.  Some of our manufacturers have broken away from our united niche market and have tried to isolate a small sub-niche market for themselves.  This tactic actually costs them more and brings them smaller returns.  Some have even cut services and communications to their dealer base in hopes of selling directly to the consumer.  To justify a larger marketing expenditure for diminishing returns from a declining niche market, these companies are giving up on more profitable trade shows, consumer dive shows, regional sales events, and most importantly, loyalty from their dealer base.   As face-to-face marketing events try to make a come-back after the pandemic, we must not fall into the trap of spreading our marketing budget too thin, in hopes of picking up a small percentage of a non-diving events total market share.  This is another mistake being made by companies who are conducting marketing efforts in unfamiliar markets.  These critical errors in judgement may very well stem from the hiring of recent company management, who are not entrepreneurial in their thinking, but rather hired employees with little to no knowledge of the recreational diving market. 

So, the silver lining in the clouds of uncertainty is that unity works and isolation marketing doesn’t.  It’s easy to see what some companies are doing and realize that many will either fail to attract a sufficient market share, or they will go broke trying.  For you, that is a good thing.  For them, not so much.  The market is big enough for now and we can capture a sufficient market share to succeed and grow.  Yes, in this post-pandemic period, our advice is to circle our wagons and go after the bulk of the market that is centering around our common recreational activities.  The best thing we can do at this point is to recommend that each dive business focus on marketing to their active current customers.  This should bring in the most results from the least efforts and resources.  If you are in need of additional market share, we recommend you next focus on recapturing your former customers, who have not purchased from you in the past 12 months.  Find out why, and then create a strategy to reactivate them into current customers.

The third part of our plan is to prospect for new customers.  Prospecting for new customers is the most costly and time consuming marketing.  This is the part that is best done in unison with your regional diving community or your diving trade association.  Our industry must encourage regional consumer dive shows again and support them.  Regional dive shows have a higher concentration of divers per attendee.  The cost to participate is small in comparison to the possible returns.  Non-diving shows such as travel shows, boating shows, and outdoor shows are not cost effective for individual companies due to high booth prices and low diver concentration of attendees.  They may be cost effective on a shared basis when your trade association represents your local diving community on your behalf.  That is where the concept of unity will pay off for our industry.

And a final word of advice from our forty years of marketing at trade and consumer shows.  A face-to-face show or event is a market that is temporarily created to bring buyers and sellers together.  It is the responsibility of the show producer to do everything possible to bring as many buyers and sellers together as possible.  It is not the responsibility of the sellers to bring their current customers to the event.  If they could do that, they would not need the venue producer, they would simply invite their customers to visit them at their location.    Trade and consumer shows are where we meet new customers.  We vote (support) with our time, money and manpower where there is an opportunity to increase our revenue and our market share.  The Surf Expo has two full-time staff members whose job is to visit Watersports Dealers and encourage them to attend the Surf Expos.  Attendance at Surf Expo for qualified Retail Buyers incidentally, is free.

So, as we enter into the beginning of a new recreational diving season, let us focus on serving our current customers, recapturing our former customers and actively prospecting for new customers.  The size of the industry’s current market is sufficient for now, to make many of our Dive Industry Professionals very successful.  How many?  That remains to be seen, but the likelihood will get increasingly better as we learn to prospect for new customers to add to the total market, as we learn to compete to capture a larger market share for ourselves.  I’ve always said that it is easier to increase the size of a market then it is to compete over a declining market.

For more information on attracting and selling to Dive Industry Professionals, contact Gene Muchanski, Executive Director, Dive Industry Association, Inc., at gene@diveindustry.net or call me at 321-914-3778.

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