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Running a seasonal business can be challenging, but strategic planning can help even out the ups and downs. Manly Surf School’s founder Matt Grainger discusses managing the swells and lulls of a surf school, and the importance of saving for a rainy day.
On a day when the summer sun dazzles and the cool ocean beckons, there’s no better job in life than that of a surfing instructor. Certainly Matt Grainger, founder of Manly Surf School, would agree.
Yet he’d also point out that come winter, the daily reality might not be quite so appealing – a view held by too many of his customers.
That’s the snag of running a seasonal business. Your most ardent fans may well disappear for several months of the year. It makes establishing such a venture a daunting proposition.
When Grainger launched Manly Surf School back in 1996, he faced a number of tough winters. He had no choice but to send his staff packing for a few months of the year. “In those first two years even I had to find other employment,” says Grainger.
That has changed. “It’s definitely got better as the business has grown. Now we can go all year. Having that reputation, that brand, helps a lot.”
True, winter remains sluggish, and it’s necessary to have significantly smaller classes at just one or two beaches, but the school stays open, buffered by the profits of summer. “In winter we make a tiny profit,” says Grainger. “But it keeps staff employed so we have all those quality people ready for summer. If you shut your doors you wouldn’t have that momentum.”
Nevertheless, it’s critical to plan for these inevitable lulls, says Grainger. Central to his strategy is the loyalty of his 12 core employees. They understand that shifts will be limited in the colder months and adjust their lives accordingly.
In turn, Grainger makes sure he looks after them and is rewarded by high rates of staff retention, always a challenge for this kind of business. “I have six staff members who have been here more than 10 years.”
Grainger pays all his staff by the hour. “Because it’s seasonal it works better that way. Everyone can choose how many hours they want to do. They can choose to work very hard in summer and then have a break in winter.” Like Grainger, many of his core staff are happy to venture overseas in the colder months, seeking surfing opportunities in such places as Indonesia and the Maldives.
The business is further assisted by the flexibility of its summer time staff. The school has no problem attracting lots of casuals and contractors over the Christmas holiday period, says Grainger. “We have school teachers, even some tradesmen who have some time off and happen to be qualified surf instructors.”
Cash flow is one of the biggest challenges for a seasonal business like the Manly Surf School and Grainger has chosen to be especially cautious in this regard. For the high profile surfer, cash truly is king. “We always have a certain amount in the bank account. They say ‘save for a rainy day’ – we save for a rainy three months!” he laughs.
Grainger says it comes down to not spending money in stupid ways when you feel flush with cash. “We know we have to stretch it all the way out to October.”
This means being a bit more strategic and learning how to diversify in the right way. “We make our own surfboards now. We get them made in China. The boards are higher quality as a result and cheaper.” Not only do these equip the school, they’re sold wholesale and to the public as well.
Grainger is very careful about lines of credit. Most of his spend is limited to surfboards and this he tends to do in summer when the money is rolling. He also makes good use of his dad, a retired accountant. “We do the accounts together and he gives valuable advice on cash flow.”
Grainger’s father sits in the business’s finance division. There are six other divisions, which include three managers at Manly, Palm Beach and Collaroy, finance, sales and marketing, operations and new business. The structure means Grainger can step back a little and provide opportunities for others to step up. “It’s all about me trying not to be involved in everything,” says Grainger.
“That gives people who work for me a role as well.” It also means he has time to focus on new opportunities – a fundamental part of the school’s success. While the business has benefited from the rise and rise of Grainger’s profile (he has coached several of Australia’s elite boardriders, including 2006 women’s world champion Chelsea Georgeson and Association of Surfing Professionals top 10 competitor, Tom Whitaker) it has also been aided by deliberate efforts to diversify. “We don’t just focus on one market, like the backpacker market, for example,” says Grainger. “We have a huge mix of people.”
This includes a large base of loyal locals. “They’ll surf all year and not worry about the weather,” points out Grainger. It’s this local clientele that meant the school could weather the soaring Australian dollar relatively unscathed. “We were lucky we had that local base – it kept us afloat all the way through. Ultimately it’s more stable.”
The business also targets schools and the corporate market, and the hotel market has become increasingly important too. “We weren’t attacking it enough before,” he says.
Grainger has also made a concerted effort to build his elite training program. This is aimed at experienced surfers and runs throughout the year. “We’ve always been involved in elite training,” explains Grainger, “but much more so since October 2012.”
The program is now run on a weekly basis with some people attending twice a week. “We used to do it much more sporadically. Now on certain days we always run those programs. It gives you the momentum, otherwise people forget about you.”
Yet there are still quiet times and that isn’t such a bad thing. “We use winter to restock all our equipment for summer,” says Grainger, “and we focus on getting ready for the busy time of the year.”
It’s also a time for reflection. Grainger says it gives him a chance to relax and gain some perspective. “If you went at the same pace for the whole year you might lose your quality. It’s good to sit back and think about how you can service your customers in a better way and how you can improve your business.”
This article was first published in Business View magazine (November 2013). For more insights from Matt Grainger and added interactivity download the iPad edition of Business View for free via our new app NAB Think.
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