12/10/2011 - 10:38

Setting sail into a stormy sector

12/10/2011 - 10:38

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RUSSELL Quinn used his years of experience in real estate to guide him in the development of an online boat management system he says takes the complication out of boating syndicates. 

In 2007 Mr Quinn, a boat owner since the age of 20, decided it was time to take a break from his career as a property developer and pursue something he was more passionate about.

“The concept of Boat Equity started with me wanting to share a boat … so I started looking at the systems that were on offer,” he said. 

“They were more towards time-share and there wasn’t a real sense of ownership with the system.

“People just manage boat share on an ad-hoc basis and very often it ends in tears.”

Through his work in property, Mr Quinn said his knowledge of the regulations associated with property sharing was influential in the development of the software. 

“I liked how the Strata Act deals with how a person shares a unit and what they can and can’t do, and that was clearly lacking in the boating industry. I wanted to be able to ‘strata’ a boat,” he said. 

After spending more than 18 months and $500,000 developing and patenting the boat-management software, Mr Quinn felt ready to approach boat manufacturers and brokers with his new product. 

“I completed the software in September 2009 and I naively thought the industry would embrace it, so we went around to a lot of the brokers and manufacturers and they pretty much scratched their heads and didn’t see value in it,” Mr Quinn told WA Business News.

Despite this reaction, Mr Quinn had confidence in his new software and launched Boat Equity at the Mandurah Boat show in 2009 as a boating services provider. 

“At the show we found people would come to us with a confused look on their face about who we were because we weren’t a broker, we were a service provider to the boating industry,” Mr Quinn said. 

“After that, I effectively paused the business and spent the next three months reinventing the company into being a broker as well; we found we needed to have a boat that we could sell to someone and combine that with the software.”

While it may seem unfathomable to many businesses, Mr Quinn said he intentionally launched Boat Equity during the height of the GFC.

“I saw the GFC as an opportunity to start the business because I foresaw that there would be distressed sales because of it,” he said. 

“And what Boat Equity does is it allows people to de-leverage out of boats, so they can sell one, two or three shares but still maintain their interest in the boat; that is exactly what has happened and a big part of our client base is about de-leveraging.”

The Boat Equity online management system includes a comprehensive legal agreement, a booking calendar, log book tracking to determine fuel usage, and a monthly point system based on the proportion of ownership. 

Being web-based software, Mr Quinn said members could log in to the portal for their boat from a computer, an iphone or an ipad. 

Even though the young company has more than doubled its turnover in the past financial year, Mr Quinn said the boat market was struggling.

“The market at best is coping and the reality is people don’t have an appetite to spend large amounts of money on luxury items,” he said.

Boats in the top-tier market around the $2 million mark were performing much better than the mid market, which ranged from $500,000 to $1.5 million.

“At the moment the boat market is completely different to the property market; the top end of the boat market is fairing ok, but the top end of the market in property is being absolutely belted,” Mr Quinn said.

“Whereas properties from the $400,000 to $800,000 mark are faring well, but boats priced in that range are not.”

Boat Equity recently opened an office in Queensland to take advantage of that state’s boating culture. 

“The operating cost of a boat in Queensland is significantly less than NSW. Queensland is a very big market, probably triple the size of Perth, there is definitely more of a boating culture over there,” Mr Quinn said. 

During the next 12 to 24 months, Mr Quinn hopes to set up offices in Melbourne and Sydney and launch the software in the US. 

“I’m aware that these are tough times, but I think it’s important to have a long-term attitude to the industry. It’s during these times we will be focusing all of our energy on creating traction for the business.”

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