Shake it up baby!
You know the next line “Twist and Shout.” Kind of apropos in this business climate at this time of the year. I don’t know about you but it is looking a little soft going into 2016…..or is it looking a little better going into 2016. In either case it is only “looking” and not spectacular or depressing.
On the other hand sometimes these soft times brings out the entrepreneur in some folks where they use this situation to take market share from their competitors. After all, if it is either struggle through another post-depression year or try something new, I for one would take the chance and go after the business.
Now understand I am not suggesting any reckless behavior that would jeopardize shareholder value, but a well thought out plan than is managed and where managers are held accountable to meet their goals. Throwing a plan at the wall to see what sticks is not what I am referring to because in most cases this approach will only find a way to lose your investment and strain cash flow.
Any plan you consider has to keep your core business and margin providers moving ahead full speed without any disruption to make the new plan work. In other words, parts, service and rental revenues as well as customer satisfaction need to remain at pre-plan levels with management watching that they do so.
The plan needs to be fully vetted and documented. It has to have specific goals and processes in place to track results. There have to be procedures in place to make decisions regarding problems. Staff has to know what is planned, how to implement the plan and how to measure and interpret the results and make changes as necessary. And of course, the C-level folks must be totally aware of how the program is progressing against cost and revenue estimates and when to cut the cord if necessary.
Technology also has to be considered in the general sense in order to make it easier for customers to do business with you. Telematics, tablets for the techs and truck drivers will be commonplace in short order. Helping customers understand the benefits of rental using solid Big Data should help solidify new revenues from both existing and new customers. Technology also plays a part that helps with the talent recruiting process. It is no secret that the companies using the latest technology attract the better talent and operate more efficiently.
If you decide to try some new strategies to improve your brand in the market and thus increase sales, please do it right and avoid using the less costly alternative that may do more to hurt your efforts than help. It always seems to turn out that customers will find a way to decipher if what you are doing is a benefit for them long-term or just a ploy that will not perform as promised. As long as you are making the investment you might as well have customers telling you how great the product or service is rather than saying it is not up to par. I guess we could apply this concept to your entire operation because this is the way to run a successful company.
No matter how your market works out for you next year you should not experiment without a full financial analysis including sensitivity analysis to know the impact of your plans on balance sheet, income statement and cash flow. To do otherwise is foolish and irresponsible. Bite off what you can chew using the “soft” market scenario for starters and then move to a more aggressive mode once you feel the market will be stronger than planned or because the new program is working better than expected, with better than expected meaning additional cash flow.
You are in a mature industry where good training, the right talent pool, adequate financing and technology will make you more productive and thus more competitive in your market. Not following this path to some extent can only lead to a less competitive entity and lower shareholder value. Might be a good idea to find out where you stand next to the competition.
One very effective way to measure performance are the 20 groups I have mentioned in the past. If there ever was a time to join one of these groups it is now, but only if you will give it a 100% effort. You will be amazed at what can be gleaned from these meetings to improve your business. They are worth every penny. I would be glad to help set you up in a group. Call me to discuss.
To close out this month here is a reminder to get and keep a handle on your tax situation and banking relationship. The tax landscape will be changing and with the new banking regulations you never know what they are thinking.
Get a leg up on 2016 by reviewing steps to take market share. But do it right.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail [email protected] to contact Garry.
