More thoughts on the future
I recently attended the 10th Annual DuPage County Regional Business Outlook in Oak Brook, Illinois, with the keynote speaker being Howard Tullman who is the Executive Director of the Ed Kaplan Family Institute for Innovation and Tech Entrepreneurship at the Illinois Institute of Technology. I listened to Howard’s presentation last year and found it fascinating and was glad he returned this year. As you can guess Howard went through about 60 power point slides expressing what he envisions for the business environment in the not too distant future. It was hard to keep up but very believable in terms of how technology and robots will change how we do business.
Mr. Tullman’s main theme focused on the implications and risks businesses face as consumers (of all types) shift to “utility value” and “usership” as opposed to “possession” and “ownership”. I must tell you I felt quite vindicated after his presentation, especially since I recently expressed my opinions how the material handling industry will change as a result of this process.
If you recall (and I hope you do), I suggested this utility value approach will impact the way you do business in the future, especially in terms of the lease transactions currently in use. In other words, long-term rental contacts with maintenance are very close to being a quasi-fixed payment obligation like a purchase with a maintenance contract. Where I see the market moving is towards flexible payment programs based on use with 100% of the ownership and operating costs remaining with the dealer, except for a usage charge paid by the customer that could change from month to month.
To back up this theory Mr. Tullman presented two or three slides explaining how three major auto OEM’s are developing programs to provide the utility value of an auto for an hourly charge. No ownership, no fixed monthly payment, only a usage charge. Ever since this presentation I have been running around trying to get more information on these programs and will get them to you when I find more information with financial examples. Many leaders in our industry have repeatedly mentioned how we need to follow the auto industry because they seem to lead with new ideas, and maybe this is another example backing up that premise. If you come across any data related to this new type of financing, please share it with me.
On to another exciting topic for you to review and participate in.
September 19th, in Chicago, right next to O’Hare ….a one-day super conference geared to improve aftermarket performance as well as other financial topics covering exit strategies, the many revenue recognition areas related to the material handling industry, suggestions how the new lease rules will impact your business as well as your customers, an update on the new tax bill, how Wayfair could impact your multi state transactions, how ESOP’s put more cash in your pockets and more. I like to think this is a two or two-and-a-half-day program condensed into one day, proving attendees with a list of important topics to deal with before they become major problems.
Dave Biaochhi is providing two sessions to improve aftermarket results, including a special program for parts planning and vendor management.
Then we have a Rapid-Fire Learning program which will highlight what you need to know and what you need to follow up on, without going into the weeds. A panel of experts will be present throughout the session and will jump in to answer your questions or make comments when necessary.
It is going to be a hell of a program. I suggest you stay the second night (if you need to) to take in the entire event and converse with the experts who will be available to meet with you to discuss individual problems.
The Conference is very cost effective and does not require a car for transportation. So please be sure to examine the program outline when you receive it. And we welcome your input regarding topics or issues you would like to hear about. For all the details you can view the details in this issue and/or go to www.dealer-conference.com for more detailed information and to reserve your seat that I’m sure will be a packed house. Don’t wait until it’s sold-out. Seating is very limited.
One last item. I purchased a copy of Walter McDonalds new book….25 Profit Building Tools for Machinery Dealers….and it is a good read. Get it on Amazon.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail email@example.com to contact Garry.