The business side of Jackson Kayak,
state of affairs
September
16, 2004
Jackson Kayak is designed to be lean and mean
on the administrative, marketing, and sales areas, while very, very
liberal in the product side of things. This is something that I
decided I wanted to do, to wear many hats, and make an impact with
our product, not our marketing. Of course, there was no road map
to follow, or guarantees that this was formula that would work for
a small business. So what is happening with the business? This is
a question I get asked a lot.
Well, Let’s start with the positive side.
The boats do what they are designed to do,
and this is what the kayakers looking for a better boat have responded
to. We don’t have a problem selling a Jackson Kayak. Yes,
we are still operating at a low level in some areas where either
nobody has seen the boats, or we don’t have a dealer. We
have a great dealer base, of about 35 dealers in the US (not counting
a few dealers that have more than one store, of which the number
goes up to about 40 dealers) This in comparison to about 200+
for the big guys.
Our dealers are happy with use and are doing
a great job in keeping us informed about anything that people
want different or more of, etc. etc.
We are keeping our growth controlled, and
keeping from being overwhelmed. We are doing our best to launch
one boat at a time this year. It gives our production staff time
to dial each model in before we start shipping them. We planned
on doing 2,500 boats in 2004 and it looks like the number was
properly projected (something that I did at Wavesport and really
enjoyed in the old days- designing boats and projecting the sales
numbers- hitting them within a hundred units when I was brand
manager there) My plan is to keep my goals modest on that end
and to design a company that can be profitable under those smaller
numbers.
We are within budget on all administrative
budgets. Our Sales and Marketing is under by $14,000 while our
Manufacturing is over by $8,000, and our General Administrative
budget is over by $4,000 right now. This puts the company under
budget by $2,000 as of today. The manufacturing end will get fixed
in a hurry as soon as I get back. I am sharing this with you because
I think it is important for people to know that a budget is something
anybody can stick to. It requires careful planning in advance
and to be realistic in accounting for screw ups.
Our R+D process is an unstoppable machine
that is creating, prototyping, molding, and getting readied for
production at the new record pace for whitewater. We will have
12 boats in production in less than a year. This is something
that is incredibly expensive, thank you to my partner, Tony Lunt,
for believing in me on this one. What is the benefit of doing
so many boats? Just ask yourself if I decided not to make your
size boat, or your type of boat, what good is Jackson Kayak to
you? Six sizes of the Fun is turning out to be a wonderful thing.
I have yet to meet somebody who is old enough to swim, that we
don’t make a boat for! In 2005 everybody will have a choice
of three sizes of the Rodeo boat- Star, All-Star, Super Star,
two sizes of the river running/creekboat, and one size of the
full on creekboat. David Knight is one of a kind, and his combination
of genius, ability to work hard, and to be the perfect compliment
to my designing skills, is a marriage made in heaven (in a partnership
sense, of course). We have been a design team since 1993 and each
year we get better. I can’t wait until he is a TN resident!
Our Customer Service is second to none. Tanya
Talbert is the perfect customer service person. She aims to make
everybody happy, and I give her the power to do it most of the
time. She is never the bad guy in any conversation, and my only
complaint is that she is always ready to give away the ship! Her
response time to a customer or dealer request or complaint is
almost immediate and the resolution is fair and setting a new
standard in the industry. I stopped trying to get her to sell
anything to the dealer or customer, but instead do what she does
best- keep our customers happy. She is very happy with her job
in that most of the customers are happy and easy to deal with.
I think as long as we keep a very low key approach to the sales
of Jackson Kayak and focus on the product, most of the customers
will be very happy with the decision they made on their own to
get a Jackson Kayak.
Our staff in general is top notch. We have
had our share of struggles in the beginning to get the right formula
in all areas of the business when it comes to our human resources.
Brian Talbert was thrown into a position that wasn’t quite
right in the beginning for him but his position is evolving to
suit his personality and strong points, while we added Hal Tutor
into inventory management- and he has gone from a B player to
A player in a hurry, taking inventory management courses to make
up for his lack of experience. Don Klein is our assembly manager
and is a get the job done kind of guy and as good of a guy to
work for as they come. A great kayaker himself, and a very down
to earth guy, Don makes everyday of work a high output, yet relaxed
pleasant, fulfilling experience. Goat, is our shipping guy and
is there to get the job done no matter what. He is becoming quite
the kayaker since working at Rock Island too! Jase is another
kid destined for greatness, like his dad, Bino, who owns the most
successful corner market I have ever seen anywhere. Jase is a
ball of fire, no fear, and really cares about the people around
him as well as the job he is doing. He is an awesome boater himself,
learning right there at Rock Island. Lorraine, Kristine’s
mom was a diamond in the rough. She is 65 or so, and I have never
seen her really do much in her life, until now. She latched on
to her job of office manager, book keeper, accessories manager,
and ran with it like the wind! There were many things she wasn’t
experienced in, like Quickbooks for Manufacturers, but she spends
probably 12 hours per day working on it and is getting quite good.
The shear volume of work that Lorraine is does and enjoys is double
that of most people and I am impressed with her daily. David Knight
is another one. It takes more time to properly design a boat on
the computer than you can imagine, and David has been going gangbusters
for 12 months now. He is hard at work on the first creekboat prototype
right now!
International Sales are going better than
expected. Seektruth- my Japanese distributor is doing awesome!
They are my biggest account right now and they haven’t even
gotten the Star and Fun 1.5 yet (perfect for the Japan market).
Square Rock is my UK distributor and they are way over the projected
amount of boats and aren’t slowing down, just adding another
40 foot container this week! I have given them full reign in Europe,
so they will be quite the account in 2005. Simon Edwards, the
owner, competed with me in the 1997 World Freestyle Championships
on the Ottawa, and I paddled with him last week up there!
OK So what is not going as planned?
We are over budget on cost of goods sold-
our boats simply cost us more to make than projected. The Happy
Feet Footbag, thigh pad, seat, hip pads, and the hulls themselves,
all were over the projected amounts. I was going to have the Happy
Feet Footbag as an accessory initially, but it was too good to
not put in every boat. The other costs were just part of being
a first year company and the cost of getting it all built was
greater than planned. We really should raise our prices slightly
to have a proper profit margin, but we will do what we can to
keep prices low and quality high in 2005.
As fast as we are going on our boats, they
aren’t as fast as I planned on. I wanted the entire Fun
series to be done by June 1st and it took until August to get
them all out. The Star, Super Star, and All-Star are just coming
out now and I wanted them out in the summer as well. The process
of going from getting the mold in my hands to getting a production
boat in your hands is over twice as long as I planned on. This
is why you are just seeing the All-Stars in the stores near you,
and the Fun 1.5, Star, and Super Star are still to come. (we are
picking up our first Fun 1.5’s in a week!)
It is taking longer than I like to educate
the customer on outfitting a Jackson Kayak. Most people know just
enough to think they don’t need to print out my instructions
from my website, and therefore, make most of the common mistakes
and don’t get the full experience of the incredible outfitting
system. “If it is not the most comfortable boat you have
EVER sat in, you are doing something wrong.” That is as
accurate of a way I can explain to somebody that they need instruction.
I am confident that our dealers will be good at it in 2005. Most
of the dealers sold their initial boats of every model the day
they came in so they never even got a chance to get in the boats
themselves before they were showing other people how to do it.
Now the dealers and sales staff largely paddle Jackson Kayak boats
and know what’s up.
I had to borrow more money than planned from
my partner since the bulk of the sales of boats got moved further
back into the year, and I added the Star and Super Star, and Fun
1.5 models, all in the summer. This extra cash is for cash flow
needs and will be paid off in the next 12 months, but it was still
not initially planned on. The good news is that the company is
bringing you all of the boats quicker, so you don’t have
to wait for them to trickle in!
I haven’t had time to close up some
of the holes in my distribution network. Some kayakers will have
to either drive really far to get their new boat or order them
online at www.rockcreekoutfitters.com,
www.noc.com,
www.coloradokayak.com,
etc. These dealers have helped me to get boats to the areas where
we don’t have any dealers. Look for new dealers in 2005
in Montana, Washington State, Arkansas, Alaska, and more.
I haven’t had time to get the boats
in the kayak schools where they belong. The Fun series is the
ultimate learning kayak and the world’s easiest rolling
boat, but most of the schools had their fleets already by the
time the larger Funs were out.
I can’t think of anything else to tell
you right now. Oh yea- We are going to a 4 day work week (with full
pay) on November 1st, and will be closing the factory for an entire
month, probably from before Christmas until the 3rd week in January!
(with pay). The idea here is that I am trying to make a company
that I would like to work at if I didn’t own it, and our employees
deserve the break. So, dealers, customers, don’t expect to
get an answer from December 18th, until January 18th. We will not
be there!
I am going to go to Australia for the World championships
sometime before Christmas, and then go to New Zealand to film and
make my river running video, with Team JK, and the new creekboat,
and the Fun Series as well! So look for that next spring.
September
16, 2004
