Bottom Line Archives - Material Handling Wholesaler

Every dealer is becoming a Tech Company—Ready or Not

Mon, 20 Apr 2026 05:00:02 +0000

Last month, I outlined what turned out to be the first four pages of the AI 2030 Strategic Framework. I covered a basic summary of where the industry currently stands and how distributors feel about the process and the opportunity. This month, we will move on to next four pages, which further covers steps to take to produce a workable plan to produce meaningful steps and personnel to guide management through the process and eventually to the decision making of how to invest in AI as well and execute and generate a tech investment that will pay off and keep the company in line with their competition. But, before we dive into the details, I would like to share some data I have received over the last month that is meaningful in our current financial environment. I sent these docs to Dean, and he has them saved and available if you want to read them. Two BDO papers on accounting for tariff transactions. A confusing topic where it would be nice to have support if you have a potential refund available. Another paper from BDO covering the current M&A market, whether you are a buyer or seller. AI issues will drive a number of transactions, and this provides all the steps you will need to address if you are a player. An article entitled WHAT YOU’RE NOT BEING TOLD ABOUT THE ECONOMY. The best article to date that makes sense, with parts of the conclusion dealing with the M&A issue. (FYI, I was an audit partner at BDO) Moving on to the Strategic Framework for AI, it seems someone has to lead the charge to keep the process on track. These could all be internal people, or a tech company with the experience of getting your company from point A to point B, producing a workable, profitable new system to lower costs and improve margins. The issues that need to be addressed Skill gaps. Tech gaps. Training before any pilot launches. Invest in training as necessary. Executive participation a must. Begin with HIGH -ROI applications. Those are the easiest to attain. Keep scalability in mind. Move up to advanced applications. Engage current system providers to ensure outcomes align with expectations. Make sure upside potential is available. Invest in skills and partnerships. These are the folks who fill that “WHO” need for a partner who can guide the process and help with investment spend and decision-making. They can also help educate employees to ensure they can support this AI effort. Management change programs are a must. Educate all employees about what is going on. Engage in role-playing before launch and thereafter until all systems are synced, providing the data needed. Review and update all data creation and movement processes. Audit the data from each department, list any problem areas, and adjust as necessary. Be especially careful regarding data flow between existing revenue silos. This will be a tough assignment requiring assistance from your conversion partners. Determine ROI performance against the original plan. Devise a plan to calculate the returns. Use ROI metrics to track results. Measure ROI over a 3–5-year period. Here again, your partner should help prepare the metrics used in the calculation. A long-term plan is helpful and can be compared to financial data on a quarterly basis against the original plan and prior quarters, with adjustments made as necessary to meet goals. I would suggest that your partner should drive this process and offer suggestions for improvement. Management should also question operating results against the plan, their competitors, and industry data available. Having a performance group to assist with this process will help identify departments needing adjustments. This gets me to page 8 of the program. More next month. As a result of this AI work, I made it a point to try to find a PARTNER a dealer could use who has experience and can guide the process to ensure your investment produces what you need to run your business. After numerous discussions with folks, I received a call from Columbus Global, which has a small number of experienced leaders who can help set up a program and guide you through it. Columbus Global is prepared to produce a white paper based on dealer activities that cover. The Problem- A four-pillar framework to get it done. AI Governance and what Dealers need to know. Measuring AI return – A scorecard for Dealer Operations. What they need, however, is some volunteers to participate in the program. In other words, they will work with the volunteers and then highlight how the process could apply to lift truck dealers. No participant information would be disclosed. These are folks who do this for a living. If we can get some volunteers to help out, the white paper would help dealers decide how to move ahead regarding these issues. Maybe an OEM would be interested in this information. No matter what, every dealer needs to go through this process or decide if private equity is a better option. In other words, if you do not participate in a process such as this in the near future, chances are an exit program will be more likely. As you have probably heard, the Tech conventions have recently taken place. And guess what? Jensen Huang stated that eventually every industrial company will become a robotics company. Manufacturers are projected to more than double their use of AI and automation by 2030. Think about helping out with the AI transition program. You will help yourself and the industry. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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AI, Automation & Enterprise Value: A Strategic Crossroads for Distributors

Mon, 16 Mar 2026 10:00:44 +0000

From everything I am reading, executives are taking a hard look at AI, automation, and eventually robots to help run the business and improve margins and “Sales per Employee” numbers. The Distribution Strategy Group’s 45-page report provides an overview of where distributors are in the evaluation process and outlines individual steps to move forward. 63% in the exploring stage. 27% are cautious observers. 43% actively investing. One distributor can be included in multiple categories. Virtually all distributors now recognize AI as critical to business success and a top priority for growth. A dramatic mindset shift from just a few years ago. Early Adoption is reporting big performance improvements As of today, at least 61% of distributors and related sectors plan to use autonomous AI systems. Expect big changes by 2028. A small percentage is actually fully installed. Survey indicates that the Performance Gap and the ability to catch up are narrowing. By 2027-28, the performance gap will become insurmountable. Smaller distributors can leapfrog larger competitors. Obstacles at this time are. Skill gaps, Change Resistance, Budget concerns, and Incomplete data. Leadership gaps These are comments from just the first four pages of the report. 40 pages to go, and I will cover them. The ELEPHANT in the room for some of you is the PERFORMANCE GAP issue, which I must have mentioned at least 20 times over the last couple of years. A bad outcome can result from “Doing Nothing,” as noted above, or from doing something that requires a major investment, which, because of installation problems or poor planning, fails to deliver the AI-related advantages. In either case, the value of your company presently will be reduced to what your balance sheet is worth, net of any debt on the books. In other words, worth net book value, which is substantially less than what it is worth now at some multiple of EBITDA or Free Cash Flow. And here we go again. If you are near retirement age or lack the capital to invest in these changes, you should investigate how to transition out of the business at current value. NOW! There are many avenues available to you, and if you wish to discuss this process, give me a call, and we can discuss options (at least 3 or 4). I have a list of professionals I work with regarding taxes, equipment valuations, legal documents, etc. Done this many times and know the drill. On the other hand, this is a perfect opportunity to expand your current operation by rolling up those dealers not wanting to venture into the AI adventures. There is private equity out there looking for a home. Interested? You can call me as well. Another topic to think about is the type of equipment and equipment/robots or some combination thereof that will be purchased by manufacturers and wholesalers to use in sync with their shop and warehouse technology. There seem to be numerous options for humanoid models that can walk, run, and move things, etc. What you don’t want to do is wind up with used units and rental assets that will be hard to sell 3-5 years from now. I have to think that customers are going through the same thought process, and don’t want to wind up with used units worth less as a percentage of the new price in 2026. I can see customers wanting to rent more or asking for an RPO (Rental Purchase Option), deal to minimize their risk. Some surveys I saw recently regarding construction equipment indicate these options are requested more by customers. Dealers are being asked to increase their rental units rather than purchase new units for inventory. I know that last month’s issue included a market analysis stating that all markets will be a “go”. And I can agree with that, as long as the AI, Automation, and Robots upgrades are installed on shop floors and in warehouses. But will the equipment required for these new systems match what you are buying this year and next? Or what customers are buying this year or next year? Let’s discuss something more exciting. TARIFFS! What a mess. I am writing this the day after the Supreme Court issued its ruling. All I could think about was the mess that would be created if they had to refund those who paid them. And, of course, they have to be paid back. (LOL with that one). So, there I am, sitting in my office, listening to the tariff news and wondering how they will ever get around to refunds, if need be. And lo and behold, a gentleman appears on Squawk Box, stating he has the import and related tariff data for all inputs. The company name is FlexPort. It uses a platform that coordinates global logistics from the factory to the customer’s door. CAN YOU BELIEVE THIS? I thought some of you may need help if you are looking to issue refunds and/or have to return refunds to customers. And I hope none of your tariff sales were collected on items without a tariff… could get expensive. But the best part of this day was getting up at 6 am to watch the 7 am Hockey Game. What a game! About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Adapting or Losing: How Lift Truck Dealers Must Navigate the Next Industrial Era

Fri, 20 Feb 2026 06:00:15 +0000

As I have said previously, I read numerous monthly newsletters covering material handling equipment, construction equipment, pure rental companies, and financial papers to stay current on where we are and where we are going. These take a lot of time to review and follow up on if I have questions about any conclusions presented in the publications. What was really crazy this year was the consistent comment in each publication that the U.S. is entering a new era that will produce a new industrial revolution comparable to those that have taken place in the past, except this time, there seems to be a feeling that this revolution will take place in a much shorter life span. To begin, I reviewed the BDO survey of 200 public company directors to understand how they plan to navigate evolving human needs in the age of digitalization and LI. It turns out that 74% of the boards plan to invest strategically in Emerging Technologies. In addition, most of the time is allocated to implementing Emerging Technologies over the next 12 months. I would say these directors are on the right path, but also recognize that significant work remains to set AI and automation goals in motion. For lift truck dealers, the companies participating in this survey are likely a “large” customer and would appreciate any input the dealer network can provide to support their transition to the new era of manufacturing or warehouse operations. Smaller customers will also face similar challenges, dealing with fewer technical issues but still aiming to improve margins, bottom-line profits, and free cash flow. Dealers will need to decide what to do, when to do it, how to fund it, and how to deliver an end product that meets customer needs. THIS WILL REQUIRE A SUBSTANTIAL TIME COMMITMENT AND BUDGET! Dealers, the question is not how you will get this done, but who will do it. Few will have internal staff with the time to work on this, even if they are technically qualified. And let’s remember that you are still in a competitive market-share environment, so you need to remain competitive as your competitors go through this process. It is easy to conclude that if your systems and procedures are less efficient than your competitors’, customers may look for other solutions. This ties in with our previous PERFORMANCE GAP situation. You adapt, or you lose. Oracle and NetSuite put out an email titled THE HIDDEN COST OF DOING NOTHING. WHY AI-DRIVEN ERP DECISIONS MATTER NOW. In today’s evolving business environment, CEOs and others face a critical decision: whether to continue with their existing systems and procedures or invest in modern solutions. The point is to avoid the hidden cost of falling behind competitors who have invested in advanced systems, powerful AI, and solutions to drive innovation. This is not an easy matter to contend with. But it has to be done ASAP. Since manufacturing customers will take longer to make the switch, I suggest you implement the required changes to improve your operations and align your industry solutions with your warehouse and distribution operations. Automation and robot issues can follow. To help you out, the DISTRIBUTION STRATEGY GROUP has generated a paper that addresses where dealers find themselves now, but also the individual steps to transform operations to meet customer needs, including collaboration with customer automation and system changes. The report is 73 pages long and outlines a step-by-step process. I have sent a copy to Dean if you would like one. Here is the link to the report. https://www.mhwmag.com/wp-content/uploads/2026/02/The-AI-2030-Strategic-Framework-Updated.pdf I believe it would be a good idea to explore these issues and changes with both large and small customers. Find out what they plan to do and who is leading the charge. See if you can assist them in finding a path that works for them. I also need to highlight the robot’s new-era status, as it is an area lift truck dealers will have to address head-on. Look at what AMAZON is doing. And some of the other large retail operations. After the ELECTRONICS SHOW in Vegas, the robot involvement in business is a GIVEN, and your large customers in both manufacturing and warehouse will be using them. AND THEY WILL NEED MAINTENANCE. Hopefully, dealers will be able to offer this service. The Humanoid and Optimus versions are upon us. It might be a good idea to visit robot manufacturers to explore how lift truck dealers can collaborate with them to meet customer needs. Don’t forget, MODEX will have manufacturers on the floor, so make plans to be in Atlanta, GA, April 13-16. Material Handling Wholesaler will have a MODEX supplement in the April issue One more thing you must follow up on. EQUIPMENT SHARE went public, and you must obtain a copy of Form S-1 (about 130 pages) and review how they operate their rental business. Pay attention to the different income silo’s they use and the EBITDA % of 40%. Jim Cramer just loves this company. Talked about it for about 15 minutes on his show. I guarantee you will be surprised at some of the data you see. Time to find a WHO to drive your company forward. On the other hand, several predictions included a major increase in M&A activity. Owners who do not wish to deal with these changes may want to convert their investment into cash. I am confident there are public equity funds that would be glad to work with them to achieve that goal. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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The AI Bubble Is Real—and it will reshape material handling dealers

Tue, 20 Jan 2026 06:00:31 +0000

I keep hearing about the AI Bubble, which may or may not be a negative from an operations standpoint, even if the market sees it differently. I also see and keep hearing about a very high percentage of manufacturers’ surveys stating that those being surveyed, between 85% and 90%, plan to have or have already started a transition into using AI to begin with, and then adding technology and robots where appropriate. These surveys cover both manufacturers and warehouse operations. No matter which segment you fit in, your “industry group” is thinking they must take steps to use AI, Automation, and robots if they plan to stay in business and maintain their market share, which means that ALL of your major customers are reviewing this same data. What is surprising is how fast robot benefits are upon us. Stats are as follows: Tesla releases a $20,000 robot in ’26 and ships 50,000 units, with another 50-100,000 coming from other sources. The year after, at one million robots, which quickly becomes $10,000,000 Think about it. We are onshoring manufacturing without a workforce. In Japan, every 1.5 employees are replaced by one worker. Onshoring is a billion-person labor problem. The bottom line is that robots will dominate 2026 and beyond. And there you have it for the forklift business. There is money to be made here and an opportunity to partner up with or have arrangements with Robot Manufacturers to service their equipment. THEY NEED YOU! A dealer planning to stay in the business has to take steps to get in front of customers before they do something that leaves the dealer out in the cold. Get your C-level folks out to impress customers that you are here to help improve efficiency and margins. I would start with distribution customers, since they can move more quickly than a manufacturing company. It may take a 4-5-year process for a manufacturing company. During that time, they will need more attention from their dealers to help them through the process and assist in the implementation of the new systems, equipment, and robots. Where the dealer can be most helpful to both the dealer and the customer is in their Cap-X spend compared to what it is now, in terms of adding or replacing new or used lift trucks. One thing is for sure. THERE WILL BE MONEY TO BE MADE MANAGING A CUSTOMER’S FLEET AND RENTAL UNITS THEY HAVE ON RENTAL DURING THIS TRANSITION. If I had to guess, dealers may wind up with customers deferring the replacement of new units to use the Cap-X for warehouse process improvements. Some may even decide to right-size their fleet or buy used units to get them through 2-3 years. These potential steps available to customers are not bad for the dealer because margins are higher on used units and maintenance work. There may even be opportunities to upgrade units to full maintenance contracts for units they keep longer than usual. Assuming this process takes place, the dealer will need to avoid getting into a position with too many new units on the balance sheet when the “need” will be for used units rather than new. That takes care of the distribution side of the customer base. On the manufacturing side, installing new systems could prove much more time-consuming and technical while meeting their budgeted sales figures. Hopefully, your dealership is partnering with this customer to support the transition and, at the same time, partnering with the new automation or robot provider to ensure maintenance levels can maintain adequate output goals. Dealer maintenance work from these relationships should provide above-average returns. Having the personnel available will be key, and having an adequate number of techs will make the difference. Let us not forget that robots work 24/7 and that emergency maintenance WILL be required. From a dealer planning standpoint, you will need more techs and trucks to get the work done in a timely fashion. If you cannot provide reasonable uptime commitments, you will not keep the job. After this Bubble conversion, a dealer operation will look quite different. A plan to form a committee to develop a plan of attack, with input from your OEM or from a 20 Group meeting, will go a long way toward getting started on what is SURE to meet you head-on in ’26. I have some data about how to ride the Robot Wave- Robot Maintenance- Financial Levers- OEM Networks. Give Dean a shout if you want to review them. Regarding customer outreach, I suggest that this CONSULTING PROGRAM be a separate revenue silo within the dealership. There is little doubt that your financial metrics will change if more of your revenue comes from service and system maintenance for customers adopting the Bubble to stay in business. One last point THE PERFORMANCE GAP SITUATION WHERE THOSE THAT DO NOTHING WILL SEE THEIR DEALERS MELT AWAY IS 100 % APPLICABLE REGARDING THE TOPIC DISCUSSED ABOVE. IF YOU DO NOT PLAN TO DIVE IN, GET OUT NOW WHILE IT IS WORTH SOMETHING. THOSE OF YOU WHO SEE THIS AS AN OPPORTUNITY TO GROW YOUR BUSINESS SHOULD INQUIRE TO SEE WHAT MAY BE FOR SALE. MANY PRIVATE EQUITY FUNDS WOULD LIKE TO FINANCE A ROLL-UP IF ONE IS AVAILABLE. THE BUBBLE LIVES AND PROVIDES OPPORTUNITY WHETHER YOU STAY ON OR SELLOUT. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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The Coming Automation Shift: Why forklift dealers should prepare to service robots

Thu, 20 Nov 2025 06:00:08 +0000

As warehouses embrace automation, forklift dealers face a pivotal decision: evolve to support robotic fleets or risk being left behind. Here’s how to position your business for the next generation of material handling I have been spending a lot of time on automation and robot implementation. The more I read, the more I believe significant changes will be part of your business sooner rather than later. In addition, these same books and articles suggest that those who do not participate will be left behind, with their business investments deteriorating because their KPIs find themselves further and further behind companies that invest in these new markets. To provide some insight into this transition, my columns for the next five or six months will address the robot markets, how to develop a transition plan for yourself and your customers, and how to grow your business in this new environment. Is it a good idea for material handling businesses to transition from servicing lift trucks to preparing to provide service for the robots that are coming into their business? The Automation Wave Is Already Here Automation isn’t something that’s coming “someday.” It’s happening right now on warehouse floors across North America. Logistics and manufacturing companies are deploying Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs) to move materials, handle repetitive tasks, and reduce labor costs. For forklift dealers, this shift represents both an immediate challenge and a major opportunity. Your customers’ fleets are changing—and that means your service business must change, too. The question isn’t whether robots will appear in your customers’ operations; it’s how fast. And when they do, who will service them? Over the next few issues, we’ll explore what this transformation means for dealers. This first column outlines why the shift makes strategic sense, how to make the transition, and how to help customers evolve their fleets while maintaining profitability. Why the Shift Makes Strategic Sense Same Customers, New Needs Your customer base—distribution centers, warehouses, and manufacturers—is already exploring automation. Many are integrating robots alongside lift trucks. Robots still require preventive maintenance, software updates, and diagnostics—plus new services such as sensor calibration and software support. By stepping into this space now, you’re not chasing new customers—you’re continuing to serve the same customers in new ways. You Already Have the Infrastructure Forklift dealers already possess the essentials: trained technicians, mobile service trucks, parts logistics, and regional coverage. With targeted retraining and new diagnostic tools, your service network can easily adapt to robotic systems. The foundation is already there—you need to expand your technical skill set. Recurring Revenue and Higher Margins Robotic service contracts typically carry higher margins and longer terms than traditional maintenance—predictive analytics, performance monitoring, and software support open opportunities for tiered or subscription-based service models. This creates steadier, recurring revenue that complements your lift truck service business. OEMs Are Seeking Partners Many robotics manufacturers lack regional field service infrastructure. They need local certified partners who can deliver installation, diagnostics, and ongoing maintenance. Dealers who move early could secure partnerships with leading OEMs—becoming their local service arm and capturing business others will struggle to enter later. How to Make the Transition Transitioning from lift truck service to robotics doesn’t mean abandoning your core business. It’s an evolution—and with a phased plan, it can strengthen your customer relationships. Step 1: Audit Your Capabilities Identify technicians who can be cross-trained for robotic systems. Review your diagnostic tools and service technologies. Assess which customers are already moving toward automation. This snapshot helps you prioritize investments and plan training. Step 2: Build OEM Relationships Contact robotics OEMs and system integrators. Offer white-labeled field service or certified maintenance support. When presenting your dealership, highlight: Regional reach and fast response times Existing customer relationships Decades of service, expertise, and uptime performance Your experience is valuable—show OEMs you can represent their brand in the field. Step 3: Pilot a Robotic Maintenance Program Select one or two customers who are early adopters. Create hybrid service contracts that include both forklifts and robots. This hands-on pilot gives your team experience and shows customers you’re adapting to meet their needs. Step 4: Upskill Your Team Training is key. Focus on: Robotic diagnostics and network troubleshooting Software and firmware updates Sensor and safety calibration Several OEMs now offer certification programs specifically for service technicians. Promote this internally as a “future-proofing” investment in your people and customers. Helping Customers Transition Their Fleets Your customers face their own questions about automation. As their dealer, you can serve as their strategic advisor throughout that process. Fleet Audit and Automation Roadmap Use telematics tools, such as Jungheinrich’s Fleet Management System, Toyota Material Handling Fleet Solutions, or Clark’s Telematic and Fleet Management offerings, to analyze truck utilization, downtime, and cost per hour. Then help customers: Identify underused or aging trucks Target repetitive workflows for automation Build a step-by-step transition plan This positions you as a data-driven partner, not just an equipment provider. Promote a Hybrid Fleet Strategy Encourage a phased approach instead of an all-at-once conversion. Most operations will retain forklifts for variable tasks while deploying robots in predictable zones. Pilot programs allow customers to measure results before scaling up systemwide. Offer Trade-In and Buyback Programs Help customers manage capital costs by offering trade-in credits or buyback options for older trucks. Combine automation systems, service contracts, and financing into a single package to simplify the financial transition. Managing the Financial Shift: From CapEx to OpEx Automation changes the way customers think about investment. Dealers can help by offering flexible, scalable financial models. Robotics-as-a-Service (RaaS) Instead of large capital purchases, customers can subscribe to robotic systems on a monthly basis. This turns CapEx into OpEx, making automation more accessible and predictable. Usage-based billing—charging by hours of operation or product moved—aligns costs directly with productivity. Reallocate Capital for Infrastructure Encourage customers to redirect funds toward network and facility upgrades that enable automation, such as robust Wi-Fi, IoT connectivity, and optimized layouts. These upgrades deliver faster returns and prepare them for future scaling. Recover Value from Existing Assets Assist customers in reselling or

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The $1.5 Trillion Robot Revolution Has Begun — Get In or Get Left Behind

Mon, 20 Oct 2025 05:00:12 +0000

BIG NUMBERS will be available. You either get a portion of the BIG PIE, or you don’t. I have been discussing potential opportunities this year, and it finally appears that substantial benefits, profits, free cash flow, and market value will be there if you get started to recognize a path to gain market share as well as growth via new revenue silos. $1,000,000,000,000 At a minimum- $2.3 billion in ‘24, to grow to $1.5 trillion by 2035. Compound growth of 80% annually. You get two guesses to tell me where the bulk of these BIG NUMBERS is coming from. If you guessed Robots…. you win. But only if you take steps to take advantage of this opportunity, I was excited when I reviewed this data because it contained information about a HUMANOID ROBOTICS DATA TRAINING CENTER (IN CHINA). I suggest you read this start to finish because it provides information about various uses being performed by Robots. I suggest you find websites that demonstrate how robots operate in various environments. And if possible, it may be a good idea to match the robot process to various client applications, such as those on the shop floor, in the warehouse, or in logistics. Let’s face it, customers will be making changes faster than you think, and you want to be a key player in the transition. Developing this expertise will take time and incur costs that the ‘25 or ‘26 budget will cover. It will come with a time-sensitive plan of attack and required deadlines. It may be best to outsource this process if your history of meeting deadlines is weak. You may also want to share this project with performance group members to help split the costs and share the final report on how to move forward. I recently googled ‘robot manufacturers’ and it returned pages and pages of company names. To start with, you have RealMan in the email. I also looked at Roboflow, which guides navigating the conversion process. You may also want to contact BDO, which has a group that works in this area and has a dealer specialty. We could arrange for BDO to provide an online seminar that readers could attend to review the process and have someone to discuss questions with. (I was an Audit Partner at BDO, providing services to dealers and rental companies.) I am not sure how your OEMs will react to this transformation. If I were them, I would purchase Robot systems built to service warehouse and manufacturing operations and then work to educate their dealer network on how to introduce methods for customers to transition from their current lift truck programs to ones that use robots. I always liked to have a “menu” of services and related providers to share with dealers and other types of companies. My list covered every major expense category and included Accountants, Tax Folks for both Federal and State & Local taxes, attorneys to prepare rental contracts and other corporate issues, ESOP consultants, valuation experts to value equipment and inventories, all kinds of insurance firms who knew the industry, technology terms to install or adjust financial data, and marketing programs, etc. I would use these service providers myself and also make them available to customers and their customers who may have a tax question. You get the idea. If you could do something similar with your “group” regarding the AI and Robot transition, I believe you would make some new friends. And the best thing about this process is that if someone has a problem, you can now see if other customers have the same issue that needs correcting. Other topics of interest My reading material indicates that the auto industry is slowing down. And what happens in the auto industry ……. Two major auto finance companies recently went bankrupt. Other reports reflect lower FMV and FLV numbers along with less usage. It appears customers are cautious about new investments and stretching older equipment further. The 5% interest rate cut is unlikely to have a significant impact on purchase decisions. If they cut another 10% plus 5%, we already have customers who may decide to purchase. If margins are tight, it will pay to hold off costs in the COS category. Maybe you don’t buy but lease instead. And there must be AI cost reductions available, including personnel reductions. Also, watch your inventory values. If you provide an annual valuation to the banks, ensure that any issues are addressed before finalizing the report. There are benefits in the insurance area that can reduce costs. One of the folks on the “list” re insurance is Bobbette Puckett (you can ask her about the name…an interesting story). She worked for me for many years, servicing dealers and rental companies. Her cell number is 312 764-9433. Bobbette will review every page of every policy you have and identify ways to reduce costs and adjust coverage. She provided me with a list of 10 topics to discuss with the dealers. You can call her since I am running out of space to list all the topics she will cover. New source of information I came across a newsletter that is received three times a week, geared toward business executives, and it’s great! ARMADA is the title of the publication. $7 a month. This is an Executive Intelligence Briefing, covering the following topics. Supply chain issues. Domestic Quick Items of Interest Important Domestic Econ Releases Global Quick Items of Interest US Domestic Economic Items. Environmental Items Business Cycle Indicators. Real GDP-GPD-Biz Investment Retail Sales New Housing Starts Auto Sales Every topic an Executive would like to see. Contact Karen Sanchez. Her email is ksanchez@armadaci.com GET THE MESSAGE OUT THAT TIMES ARE A CHANGING! AVOID THE PERFORMANCE GAP! About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Q4 Planning: A Pivotal Moment for Margin Growth and Operational Transformation

Sat, 20 Sep 2025 05:00:38 +0000

This is probably one of your most crucial planning opportunities to improve margins, operating profit, and free cash flow as a result of AI adoption, system upgrades, new services offered to present and potential customers, and new business opportunities related to manufacturing and warehouse systems, which include robots that can help reduce costs and improve productivity. There is no doubt that we are in a use-it-or-lose-it situation. Financial and operating department heads will need to study the current situation, review current operating and cash flow results, and identify potential changes and upgrades that benefit both the company and customer needs. Based on the people I talk to, there is no doubt that business practices are improving and changing faster than most management teams expect. Believe me when I suggest that conversion rates are moving faster than you think, which means managers need to review their current operations with the intention of improving operating results in 2026. Investigating potential new systems and preparing budgets to cover conversions are part of the Q4 work expected from each department head. Hopefully, part of this process involves the OEMs in finding suitable systems or means to improve both the company’s and the customer’s needs. OBBBA One area to cover is the benefits and drawbacks associated with income taxes. ABBBA should be reviewed with a tax expert familiar with your industry. I would expect comments and suggestions that cover transactions reported regarding your company and the impact on customer transactions. Management should be aware that specific provisions of the Bill have associated timelines, which could have significant negative consequences if the required dates are missed. I want to request a written memo outlining the steps necessary to maximize the benefits. This memo should be drafted in a format that can be used by customers as well. Believe it or not, state and local tax requirements are changing in response to federal changes. I would suggest finding a state and local expert to provide a memo to your CFO, which both the sales staff and customers can use. This is important and very tough to fix once a transaction is complete. A group of dealers selling similar products may want to spread the cost of preparing the federal tax memo, but also cover the states where members of the group are doing business. Need help with the tax review? Let me know. OPERATING OPTIONS I suspect some of you think I am going nuts based on the recent columns I provided to Dean. I assure you that is not the case. I believe that dealers and OEMs will need to adapt to the changing business environment if they are to remain competitive with their product and service lines. I began with the Performance Gap discussion, which I firmly believe will have a significant impact on any dealer that fails to identify the necessary changes to remain competitive in their market. The conclusion I expect is dealers who invest and take steps to improve operating profits, compared to management teams that do not feel the need to, will find that the vales of their respective companies will development a “spread” to the point where those that choose not to improve will find themselves with a company not as valuable as the dealers that invested in AI, Systems, Marketing Plans and programs that assist customers with making similar changes. The bottom line here is that the sooner the weaker dealer sells, the more they will get. If you need some help discussing this topic, let me know. I also offered a suggestion regarding GAAP accounting versus a more critical metric, such as Free Cash Flow. Note how FCF is now being used more as a measuring tool for public companies. FCF is the cash available after you pay all your bills. It will cover transactions related to both your income statement and balance sheet. What is notable about FCF is its ability to calculate FCF not only for the company but also for individual customers, products, revenue silos, and so on. It would be nice to know what you are making for each customer on your list. Or what product lines are producing the most? Speaking from personal experience, I was working with a company to address its cash flow needs, and as a result, the bank involved requested a 13-week cash flow statement to compare the actual cash flow (or outflow) with the budget provided to the bank—an interesting exercise. FCF will also help you avoid trouble by showing you can pay your bills on time. Next, I went nuts with the potential changes required, such as AI, Tech Systems, and New Revenue Silos related to customer needs, especially related to manufacturing and warehouse systems. And let us not forget our robot crew that will require training and maintenance to keep them up and running. The more I read and listen to various business sources, the more I am convinced that these changes are occurring and happening faster each month. NO DOUBT ABOUT THIS!. More reasons to plan, budget ahead, train ahead, and stay competitive in your territory. I also want to reinforce my earlier comments that lift truck dealers will need to be in the Robot business if they wish to remain competitive. I am preparing a list of both systems and robots to allow dealers to meet with and partner up with system and robot manufacturers. BOTTOM LINE The Bottom Line here is that the dealer business is changing. As a result, operating metrics will also change. I can envision staff reductions, the creation of new revenue silos tailored to customer needs, new partnerships with system and robot manufacturers, and the development of new customer relationships resulting from the implementation and maintenance of customer equipment. The result will be a new set of company metrics to compare your work against. Staff will be reduced. New revenue silos will appear. Gross profits will increase. Turnover will increase. Tech costs will increase. Training costs will increase.

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Account for your most important account balance

Sun, 20 Jul 2025 05:00:08 +0000

Last month, I opened a discussion changing the way a dealer accounts for daily, monthly, and annual financial activity, switching from GAAP accounting to Pre-Tax Profit to a Free Cash Flow model, which reports actual Free Cash Flow available to spend as you see fit. The bottom line here is that GAAP is geared to help report readers understand how a company conducts its business through GAAP Internal Statements. As you know, GAAP accrues transactions, defers expenses and income, and amortizes expenses over an estimated useful life. Most GAAP rules are understandable, which I agree with, but I have to say that the LEASE ACCOUNTING RULES can drive a person nuts. Most business owners I know will tell you they have a tough time explaining how their cash flow changes and what amount is available to invest, reduce debt, or pay other liabilities. An FCF statement will provide better input along these lines to help understand cash flow movement. We will spend more time on this topic and how it may help manage your business. To get started, I created an FCF Template for you to review and gain a better understanding of actual cash flows. The FCF Template has three sections. The internal GAAP Income Statement. The Conversion of the GAAP Income Statement into Operating Cash Flow. Account for Working Capital changes and CapX items paid for. When we finalize the three sections, we have a balance that includes both balance sheet and income statement adjustments, which make up Free Cash Flow. This helps avoid overspending and, at the same time, indicates what you have available to spend without developing a cash flow problem. Information every CEO needs to know. Review the CAPX notes. Most companies will not include long-term note payments in these calculations. Instead, you have an ending figure that indicates what is available to make long-term note payments. Items actually purchased during the year are included in the calculation, as you can see in Section 3. Companies are starting to use this method because FCF is becoming the standard for valuing an M&A target, rather than using EBITDA multiples. The other topic I plan to explore is converting management reports using FCF data instead of GAAP results. It should be fun. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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GAAP out—Free Cash Flow in

Fri, 20 Jun 2025 05:00:18 +0000

I know I am as guilty as anyone of stating that CASH IS KING. Must have included that statement at least once or twice a year. Then someone added that “cash flow is king,” which is hard to argue with. I am going to take it a step further and state that FREE CASH FLOW means more to your business than either of the other two titles. Those of you who follow the stock market noticed the FCF line item when disclosing operating results for the year. So, what is it and why is it so important? I began conducting my own research after seeing numerous references to FCF and subsequently published a book on Amazon, authored by George Christy, CFA. George explains how to calculate FCF and why the data you receive from FCF is better than the GAAP statements you received from your accounting firm and the internal statements, which mirror the GAAP statements you paid for. You may want to purchase a dozen of these books for your internal financial staff, the sales department, the C suite, and your Board Members. I would even suggest that you instruct your outside accounting firm to present an FCF instead of the GAAP statement they usually send. Informing your banker about this change should be received positively. If not, provide them with a copy of the book as well. Just so you know, EBITDA is not part of this FCF process. Neither is the GAAP Statement of Cash Flows. FCF captures all cash flows in and out of the company, is not distorted by accrual items, and includes changes in working capital and cap-X investments. A formal FCF definition = Revenues MINUS cash expenses PLUS non-revenue cash receipts PLUS or MINUS cash changes in working capital MINUS Cap-X expenditures. If you have prepared cash flow statements for a bank, you are close to preparing an FCF statement. The conversion from your GAAP statement to a cash flow statement is a three-step process. Start with your GAAP Income Statement Convert the Income Statement to Operating Cash Flow. Reflect the Cash Impact of the Working Capital Change and Cap-X. You start with the Operating Income in Step One, make changes to convert to Operating Cash Flow, and reflect the cash impact of Working Capital Change and Cap-x. In the end, you wind up with FREE CASH FLOW. So, what helps management manage the business and, as a result, improve the value of the company? Working with GAAP statements or FREE CASH FLOW. FCF is the correct answer. And when you can convert your internal GAAP statements to an FCF statement, the decision process becomes easier to use and corrective steps easier to make and follow up on. George Christy notes how Warren Buffett made his money by determining the value of a target company by calculating discounted cash flow. I have seen this discounted cash flow calculation many times. Current thinking is that older financial types were brought up using GAAP and will continue to do so. On the other hand, recent accounting graduates and Certified Financial Analysts (CFAs) are switching to a FREE CASH FLOW because every executive out there wants to know their FREE CASH FLOW position, which in turn converts into a company valuation. So, is GAAP out? Perhaps not entirely, but for the ability to stay on top of your company’s value and, at the same time, utilize free cash flow data to manage sales, customer activity, corporate reports, peer group analysis, and M&A activities, GAAP cannot compare to the FCF analysis. I am going to set up a template to use for determining FCF and to guide the use of the report in improving results. Interested in participating, give me a shout …sounds like fun and will be interesting to see how the reports turn out. You can make your request through Dean. His email address is dmillius@MHWmag.com. Also, I am going to ask Dean if we can get us a deal on the book purchase. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Think before you buy: The hidden cost of tariffs

Tue, 20 May 2025 05:00:33 +0000

I talked with Jim Margner (my state and local tax expert), who prepared notes for the Illinois Equipment Dealers Association presentation. I attended one of Jim’s prior sessions for this group, and he did a very nice job related to a highly complex topic. Illinois changed the rental equipment use tax collected when rental equipment is purchased to one based on rental billings starting January 1, 2025. The tax is not only based on rental billing but also on rental rates for the city where the equipment is being used. In other words, rental coordinators must have access to a rental rate list by city or town to estimate or prepare a billing invoice. As we discussed the potential problems associated with a rental tax using various rates, I started thinking how tariffs could complicate matters even more. Since rental rates are related to the cost of equipment, one must assume a unit that generates a tariff will have a different rental rate than a similar unit without a tariff. On the other hand, it could be tough to explain to a customer why one unit’s rate is 50-100% higher than that of a similar unit. So, based on this discussion with Jim, I decided to prepare a discussion paper this month to help you understand how tariffs will impact your financial statements and cash flow. After just playing around with this topic for 30 minutes or so, I came up with about 20 questions and a transaction tree to demonstrate options dealers must account for regarding tariffs. And from what I can tell, it will be very easy to mess up your financial and cash flow if tariff purchases are material. ACCOUNTING FOR TARIFF ON EQUIPMENT PURCHASES When a U.S. company purchases equipment from a Chinese vendor with a 50% tariff, the tariff impacts the overall cost of the equipment. The tariff is included in the equipment’s purchase price and capitalized on the Balance Sheet for accounting purposes. This increased capital cost is then depreciated using your standard book depreciation rate. The immediate cash outflow includes the purchase price plus the tariff, representing a significant financial commitment compared to a pre-tariff transaction. IMPACT ON EQUIPMENT RENTAL TRANSACTIONS For equipment rental transactions, the 50% tariff increases the cost basis of the rental equipment, affecting rental pricing. Higher acquisition costs necessitate higher rental rates to maintain profitability on the “tariff” units. Dollar utilization is typically profitable in the 35-40% range. 35% of $100,000 is quite a bit different from a similar unit costing $150,000. And the issues do not stop there. What about financing that $150,000 unit? What would the OLV (Orderly Liquidation Value) be on such a unit? But no matter how you slice it, a dealer must recover cost plus profit or risk damaging financial performance metrics. Do not forget that the interest cost of financing tariff units will be 50% higher than financing a non-tariff unit. Also, consider any cost increases related to parts purchases with a tariff tagged on to them. Another issue that blew me away was the pricing for rent-to-sell units and the potential higher parts costs incurred to maintain the unit before any purchase occurs. Good luck explaining this type of deal. CASH FLOW Additional tariff cost before the unit can be released to the buyer. Additional maintenance costs if parts are subject to tariffs. Higher interest cost for both inventory and rental units. Higher potential sales proceeds from both new and used rental units. Lower department margins if the cost of tariffs is not covered by sales prices that ensure profitability. MY THOUGHTS Avoid tariff purchases. Buy used units to support the rental fleet. Avoid RTS transactions using tariff units. Find ways to recover the tariff tax to avoid a cash crunch. Refurbished customer units instead of selling new tariff units to them. Watch the time between when the tariff is paid and subsequent cash receipts from sales. Adjust budgets and cash flow models as tariff units and transactions increase. Business Owner and department heads: GET A HANDLE ON THIS ASAP OR OUTSOURCE AS NECESSARY. The tariffs will eat into your equity position if you take a wrong turn. About the Columnist: Garry Bartecki is a CPA and MBA with GB Financial Services LLC, and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Economic decisions in an uncertain business climate

Sun, 20 Apr 2025 05:00:14 +0000

Our financial world seems out of whack and will probably continue to be for the rest of the year. This leaves dealers and their customers to generate two or three business plans for the rest of the year, hoping that the plan they decide to use generates positive cash flow and at least a decent gross profit margin for the full year. I included your customers in this process because their decisions will impact both your top and bottom lines. Consequently, you will want to have discussion points to discuss with them, including thoughts on the economy and pricing expectations should costs increase due to tariffs and/or inflation. However, dealers who purchase new units produced in the USA will be exempt from any tariff costs but may still feel the impact of inflation. Dealers who receive units or parts with a tariff cost will have to decide whether to pass on the cost, not pass on the cost and thus reduce margins, or defer the tariff cost hit to a future date when there is an opportunity to pass it on to a customer: many options, and a headache for your CFO and Sales Staff. Considering this a critical topic for dealers, I have read at least twenty-five expert reports on both inflation and tariff revenues and costs to customers and, thus, consumers. Does it surprise you that many of the expert reports were 180 degrees apart? Some made sense, and others you are saying to yourself, “What the hell are they talking about?” I had notes, charts, and diagrams all pointing in different directions. However, as I suspected, my March 15 publication of John Mauldin’s Thoughts from the Front Line delved into the topic with nine pages of financial data and comments about inflation and tariffs. And this was only Part 1 of the report. Part 2 was part of the March 22 report, which contained numerous charts and discussion points that led to a reasonable conclusion, enabling you to have a meaningful conversation with customers and staff. I sent Dean both digital issues and asked if we could provide access to their reports. He gladly agreed. Danielle DeMartino Booth is the author of both reports. She used eighteen million data points and analyzed each component of the equation to ensure that all data was normalized and up to date when the analysis was completed. The conclusion reads as follows: Tariffs will raise the cost for the initial buyers. Initially, the decision will be whether to increase the price or not. We are at the start of a recession where demand is slowing. Lower demand will result in lower prices, enabling steady sales. Inflation was 1.3 % in the last 12 months (March 24-25). To 1.5 % shortly. Recessions are deflationary. It will take you an hour or so to get through the two reports. To support the soft demand, have the shopper in the house note how many discounts and specials they see at the store. Now you should be able to plan the rest of 2025. You may want to sign up for Danielle’s daily newsletter. You will find it in the March 22nd report. The good news about this report is that you can expect at least a 0.25% cut in interest rates, but more likely a 0.50% reduction. It would be a good idea to defer renewal discussions with your bank. This information should also be helpful when explaining financing terms with potential or existing customers. And, of course, something may blow up the entire expectation. What is the caveat investment companies use after giving some advice? Whatever it is, use it here. Back to Robots for a few minutes. In his most recent column about the future of robot technicians, Jeff Brown, the Editor of The Bleeding Edge, was asked a question by a reader who stated that he could not find any technical or trade schools that teach servicing, maintaining, and modifying industrial, manufacturing, and logistics robots and robotic systems. Jeff responded by saying this is the perfect time to consider a career path in this field. He suggested that you contact the ARM Institute, which has a website at ROBITICSCAREER.ORG and offers tech training programs nationwide. Other sources were also listed. I plead with the Dean to include Jeff’s column as well so you can find as many sources as possible to address this area of expertise. These may be the sources you need to extend your level of expertise to current and new customers. The schools will know who produces and installs robotic components. I believe this will become a substantial part of your future income.” In another report, I came across an article about China’s dark manufacturing operations being up and running, with plans for many more. After reading the title, I asked myself, “What the hell is this all about?” As it turns out, these facilities are 100% without light in the factory. Do you know why? BECAUSE THERE IS NO ONE INSIDE THAT NEEDS TO SEE! YIKES! Time to sign off. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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AI and Robots are aiming for dealers. Are you prepared?

Thu, 20 Mar 2025 05:00:32 +0000

Last month, we covered performance gaps and how to avoid them because if you cannot prevent them, there is a very high percentage that the company’s value will be less than it is today. Even though management would like to avoid performance gaps, doing so is a significant cost. And who wants to invest $100,000 + to do the “fix” and then find out it will not work as intended, which includes a negative return on the initial investment, which depletes company value? I believe the performance caps will provide a negative return on investment, so it was suggested that dealers planning to sell within ten years may want to do so now and avoid both the performance gap and the potential negative technology investments. I am mentioning this again because I am finding additional issues and problems, and opportunities that will cause dealers to rethink how they will be doing business five years from now and how the dealer revenue silos cash flows could change from what they are today. For example, what types of equipment will you see on either a manufacturer or distributor floor? Is it the equipment you sold them? If not, will you be able to service any new types of equipment they have for moving objects and inventory? I am referring to using robots in the manufacturing and/or distribution process. Over the last month, I have read many emails and articles about the use of AI (in its many forms) and robots. To help accelerate this process, I read an article suggesting that robots cost about forty cents an hour to operate. They can work all day, seven days a week, if necessary. In other words, they are invading your market sooner rather than later. So, what happens to the fleet in the field, the short-term fleet, the used equipment for sale and the new units on order? I expect that at some point, not too distant in the future, the demand for lift truck purchases as we know them today will decrease as robots take over more and more of the manufacturing and distribution functions. Assume that your OEMs recognize this new opportunity and can collaborate with companies installing the latest systems and procedures associated with this evolution. If so, dealers will benefit from participating in the changes taking place by providing maintenance for the new equipment and even the robots if necessary. Who else would be best suited to do this work, especially if you participated in the transition? Is there any doubt that customers are looking for ways to use AI et al., along with robots, to reduce costs and increase productivity? Not a chance. That being the case, dealers should get acquainted with providers of AI services and robot installations using some form of partnership arrangement that benefits both parties. Then, as current customers show interest, you are there to assist with the transition and maintenance requirements. And, if things work out right, new customers may result from introductions from the system/robot team, a win-win situation. Training your techs to work with the new systems would be required, and your partners selling and installing systems, equipment, and robots would provide it. Knowing how tight the tech market is right now, your partners will be more than glad to have you take on the maintenance. Should these programs start as discussed above, dealers must plan how to redistribute the number of fleet units to keep on hand for sale and rental purposes. Remember that customers will need your assistance to sell the units they own and have on long-term rental. Methods to assist customers should be finalized and presented using a formal worksheet. As the transition moves alone, dealers will carry less inventory, new, used, and parts. I thought I would bring this up because robots are coming, and if you have seen how the Tesla plants work, you will not see any lift trucks on the floor. So, you will start hearing stories about employee reductions on shop floors and warehouses. If you hear of any, make it a point to visit the site. Other topics to bring up this month are as follows: Make sure you are not overpaying for tariffs. There is no decision yet regarding the business tax situation. Interest rates should come down mid-year. Equipment Watch shows reductions in equipment values. Doing refurbs should be under consideration. You can assume that your bank will take more interest in your company, its collateral values, the date your loan matures, your coverage requirements, and your free cash flow. Once they get a hint that your balance sheet is moving around because of customers’ technology programs, you will be asked for more financial data to show how you will manage the change. Enough for today…. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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AI and Robots are aiming for dealers. Are you prepared?

Wed, 19 Mar 2025 05:00:32 +0000

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Does your dealership have a performance gap?

Thu, 20 Feb 2025 06:00:12 +0000

As you know, I love to review business and industry data daily. I probably read 100 emails daily and receive various industry and financial magazines monthly. I find it notable how the content today compares to what I read five years ago. Even with my financial mind, I see some of this new data requires a new level of understanding, especially if a dealer wants to keep their current competitive edge. Companies must adapt to new costs and procedures to stay competitive today and into the future to improve productivity and efficiency. This keeps the company competitive even though competitors are going through similar exercises. Management will need to decide what changes they can afford and assess their ability to have the tech personnel in-house to monitor the installation of the new technology. But even more critical will be to determine the expected ROI on this investment and how to measure it. Dealers that take a long-term approach to their business will most likely do what needs to be done to protect their market and customer relationships, as well as have the ability to attract new customers. However, dealers may decide not to incur the costs of new technology because the company’s size would not allow them to absorb the expenses, which would negatively impact profits and cash flow. Dealers may also plan to sell the business within the next five years and do not believe that the tech expense will provide adequate returns over the next five years. This would probably reduce the company’s value because of the tech cost incurred. For the dealers who, for whatever reason, decide not to upgrade their technology, there is a problem that could prove to be very costly, and it has to do with their performance gap and the speed with which it will increase over the next five years. In other words, your company’s value could be worth X today but be worth much less five years from now because the performance gap has increased over the five years to a point where your company’s worth declined dramatically compared to what it is worth today. A performance gap is defined as the difference between the decided performance level and the company’s actual performance. I suggest that this gap should also be calculated against your competitors because a company could meet its internal goals but still fall behind competitors who are taking steps to improve productivity and efficiency to the point where they are more price-competitive without missing profit and cash flow requirements. In one of the emails I read, it was suggested that those planning to sell in five years should sell now when the performance gap is at a level where a buyer can upgrade the technology with a reasonable ROI. Selling now may even be more beneficial because of the potential new customers anticipated because of the new USA policies wanting to bring back manufacturing. What makes this so different now is the speed at which changes occur. This sudden change in activity could very quickly affect a company’s value over five years. Those that adapted get better results, and those that didn’t adopt have the exact numbers they had five years earlier. It appears this would cause lower values for companies that did not embrace it. Let’s review what can cause a performance gap. Technological Advancements- Invest or fall behind. Talent and Skill Development – Improve or fall behind. Process Optimization – Better efficiency and resource utilization or fall behind. Innovation – Stay ahead of the market or fall behind. Customer Focus – Meet customer needs or fall behind. Leadership and Strategy – You either have it or not. Addressing these factors proactively can close a performance gap and improve long-term success. BUT THEY REQUIRE CAPITAL AND EFFECTIVE LEADERSHIP. This capital requirement could be substantial for many dealers. Assuming you have a borrowing capacity, it may require a capital contribution from the shareholders or a new bank loan. If I were facing a widening performance gap and there was no funding available, I would determine the company’s market value and review the dealer agreement to see your options. When considering the options, the early sale is probably the safest option. Making significant investments now would not be high on my list. I would take my money now at these lower tax rates or work out an installment sale so you can keep working if that is what you want to do. Those dealers in for the long-term should look into getting some outside help to create a plan of action, determine if there is adequate tech horsepower in-house, oversee negotiations for the purchase of new technology, manage the installation of the latest tech, estimate an ROI on the investment, train the staff how to use the new tech, and track company performance against industry metrics and the ROI estimate. There are people out there who provide these types of services. Do you have a performance gap? Are you planning on selling out in the next five years? Are you able to work through the performance gap factors listed above? How are you performing against MHEDA stats? If you have concerns, get some help. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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You know what they say…..

Mon, 20 Jan 2025 06:00:19 +0000

I hope you had a splendid holiday week! There certainly were plenty of football games to watch. Besides a wicked hockey schedule related to my grandson’s two players, which is tough to handle when you have two players on different teams, it was a fun weekend and a relaxing Christmas week. I spent a lot of time thinking about all the issues I mentioned in last month’s column and how they will impact the markets I follow, including lift truck dealers, construction equipment dealers, equipment rental operations, and contractors and/or customers who use the types of equipment noted. It certainly keeps me off the streets. I go through many, many, many emails a day related to topics of interest. I also use YouTube to find issues related to my topics of interest. Doing so last week, I noticed comments about the auto industry that were a bit disturbing because they tied in with one of the email reports titled THE AUTO INDUSTRY WILL NEVER BE THE SAME. When I combined the two information sources, I was forced to concentrate on how this data could relate to the lift truck industry. Thus, the title for this month’s column because what happens in the auto industry will eventually work its way into your dealer operations. The Auto Industry comments were in a report from the Bleeding Edge, for which Jeff Brown provided the content. It is a great tech financial and investment publication that I follow religiously. My other sources for this month came from YouTube, from programs that cover the cost and value of new and used vehicles. A summary of Jeff Brown’s comments is as follows: The U.S. auto manufacturers felt a need to become more of a tech company to increase their share values, like how Tesla is valued. To become more “technical,” they invested BILLIONS of dollars with little to show for it. Google and Tesla will provide autonomous driving software in 20 cities in 2025. Any car company without offering autonomous technology, like Tesla, will face financial issues and falling share prices. Car companies could license autonomous technology from Google or a major competitor, Tesla. It’s not a pretty picture for U.S. manufacturers and their dealers. Great for Tesla! The YouTube contribution summary is as follows: Dealers have a lot of inventory to clear out to allow the 25 models to ship. Customers are not buying the high-priced models. The EV models are not selling as expected. CarMax is selling cars for lower prices than last year and making more money. CarMax is paying dealers less than they were last year. Dealers lowering trade-in values on used vehicles. The quality of foreign vehicles over the last 10 years has improved. There are many foreign models that can deliver 300,000 miles following a normal maintenance program. After initial depreciation, you can purchase a high-quality foreign model and still get 250,000 miles out of it. Why buy new, overpriced vehicles when you can purchase high-end models for much less money? Both dealers and OEMs are in trouble, more so for some brands than others. So, the big issues to ponder are: How do the brands you sell compare tech-wise against competitors? Can you deliver your product along with tech value-added products, such as warehouse systems and manufacturing processes? Can you be competitive with price and produce more profit than in the previous year? Can you use your trade-ins and transform them into a refurbished unit? Are you providing a maintenance program that will stretch out the unit’s useful life? There is no doubt customers will catch on to what is going on in the market. Their job, just like yours, is to stay a step ahead of them regarding technology, productivity, and efficiency. In short, more for less. OEMs will find themselves in the same situation regarding inventory and new models. However, they do not have a CarMax to sell units to or have dealers sell units to who can, in turn, sell to other dealers or end users. The way I see it now is that the most tech-advanced lift trucks will take market share. In terms of dealers, the most advanced tech dealers will take market share. If you happen to be a dealer who represents a high-tech brand and delivers high-tech information and services, you should be improving market share in 25 and beyond, Another piece of information I picked up is that CEOs and CFOs plan to invest substantial time and money into systems and AI to make them efficient and easy to do business with. These events are happening much faster than anticipated. OEMs and dealers should work together to take advantage of these new opportunities. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Tune up time

Sun, 20 Oct 2024 05:00:44 +0000

It is time once again to figure out how you did compared to last year, against budget, against cash flow budgets, and against your peers. We review the overall results and then dive into each department. Finally, you review personnel in each department in terms of “sales per employee,” gross profit per employee, and then sales and gross profits per employee for each department. Good for you if you find yourself in the top 25 % of the peer group. If you did not, there is a ton of $ available waiting for you and your team to harvest them. And really, there is no excuse not to make strides every year to close the gap between the Top 25 and your results. Get the SEC documents from the public companies in your SIC code to make this study even more interesting. They make it interesting reading when they explain market fluctuations, supply chain issues, changes in customer demands and expectations, and the sales per employee stats that most of them provide. Your internal review and a public company financial report would be great topics for your 2025 strategic planning meeting. Many companies also have their “ANNUAL” meeting around this time to discuss the current year against the planned expectations and to approve the plan for the following year. The Board typically approves cap-X costs and related financing decisions at this meeting. A critical topic for the remainder of this year and next year will be inflation and how the fed rate reduction affected inflation going forward. The essential points are as follows: REDUCING INFLATION DOES NOT MEAN PRICES DECLINE. IT MEANS THE ANNUAL INCREASE WAS REDUCED. AND THERE STILL IS INFLATION BECAUSE THE GOAL WAS TO REDUCE IT TO 2% PER YEAR. SO, YOU STILL HAVE INFLATED COSTS, BUT THEY ARE NOT INCREASING AS THEY HAVE IN THE LAST FOUR YEARS. THE COST OF PRODUCTS COULD DECREASE BECAUSE OF DEMAND AND SUPPLY ISSUES. LET’S ASSUME YOU AND YOUR OEM ARE STUCK WITH UNITS THAT COST OUT AT THE HIGH END OF THE RANGE. IF YOU NEED TO TAKE A HIT ON THESE UNITS TO MOVE THEM, THEN THERE WILL BE A PRICE REDUCTION UNTIL THE MARKET IS IN BALANCE ONCE AGAIN. BUT THIS DOES NOT MEAN THE PRICES WILL FALL BY ANY SUBSTANTIAL AMOUNT AND STAY THAT WAY. PRICE REDUCTIONS, TO ANY GREAT EXTENT, WILL CAUSE DEFLATION, WHERE PRICES WILL, IN FACT, DECREASE UNTIL THE DEMAND EQUATION IS IN BALANCE AGAIN. DEFLATION IS USUALLY CAUSED BY RECESSIONS OR DEPRESSIONS, WHICH PRODUCES A WHOLE OTHER SET OF ISSUES TO DEAL WITH. IN THIS DAY AND AGE, AN OEM OR DEALER CAN PRODUCE DEFLATION AND, AS A RESULT, BE MORE COMPETITIVE IN THEIR MARKETS. YOU CAN ACHIEVE THIS GOAL BY DEVELOPING A PROGRAM COMPRISED OF INNOVATION-PRODUCTIVITY IMPROVEMENT- AND AUTOMATION. BY REDUCING COSTS AND SPEEDING UP PROCESSING A COMPANY CAN OFFER MORE EFFECTIVE PRICES AND CREATE THEIR OWN DEFLATION, WHICH FLOATS DOWN TO CUSTOMERS. One last point on inflation: It contains two indices: one for products and services and one for payroll. The payroll results may not decrease as much because of a shortage of help in most industries. Keep this in mind when planning for 2025. The experts are expecting payroll increases in the 3.5-4.0% range. Another reason to do more with less is to keep costs in check. Your financial arrangements also need review. Bank terms and rates to see if you can renegotiate your loans to reduce interest costs or to spread out payments in some way to reduce cash outflow. I would not hesitate to shop my loan package to reduce my rate and/or to push out the payment schedule. And what about customer financing? Customers would also like to reduce their rates and spread out the payments. Can you or your OEM do anything to reduce their cash flow burden? Insurance has also been costly. Shop your program with at least three carriers. Work with an experienced broker who can read and suggest upgrades or changes needed in the policy. Please pay special attention to cyber coverage because it will require internal upgrades on your part before it begins. I would ask my IT folks to review the Cyber policy to ascertain that you can provide the IT coverage required to support and protect your systems and information. And how can any tune-up not discuss local, state, and Federal taxes? I suggest you take advantage of the current tax programs before year end because many of the current breaks are set to expire in 25. And it goes without saying that customers should consider doing the same if it fits into their current financial plan. Have your tax folks make your sales department knowledgeable about these opportunities. There is, of course, a possibility that the current tax breaks will be extended, but that will depend on who wins in November. You have heard a lot about FREE CASH FLOW, which is next month’s topic. I would like to know if any of you have had the opportunity to discuss AI, etc., with Connor Group. If so, please let me know how it went. HAPPY PLANNING! About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Must read: Dealers, we have an opportunity for you

Fri, 20 Sep 2024 05:00:39 +0000

Another year-end is approaching. But I’m not sure what to expect for next year. Before we do anything further, I wanted to review the AI program we have made available to you. Some of you must be thinking, WHAT IS BARTECKI UP TO NOW? Well, let me tell you. The goal is to produce a dealer standard for investigating AI, to determine if your system and data can provide meaningful data to assist customers and improve internal processes and knowledge to do more with less, to determine how long it will take to implement a workable program, and finally, how much investment is required over what period, along with an estimated ROI to expect from this investment. Can you see the benefit here? What you do with Connor Corp will become an industry-specific dealer program where you will find industry-specific answers and suggestions about using AI in a dealership. Since this is a no-cost program until you decide to move forward, you can contact Connor, and they will compile a file based on what they hear from dealers and address it in their monthly column in MHW. And don’t worry; no specific dealer will be identified in the column or during conversations with dealers. I suppose dealers representing a particular brand could assemble an AI group to discuss how their group could benefit from AI and, if so, have the OEM participate in the AI planning. All participants in the process are on the same page. So please take advantage of this benefit for two reasons: 1. It will benefit your operation internally and externally when dealing with customers. 2. Going through this process will provide you with a path to assist customers who are going through the same process. In short, this would be a value-added benefit on your part. So please give this a shot if you are investigating AI or have decided to move ahead based on your work to date. In either case, industry-specific findings will help reduce the cost of implementing AI and the time it takes to install it. I hope readers will provide input into the process so that other readers can benefit from their conclusions and findings. To me, having a process to help me through this type of expenditure geared to my kind of business would be at the top of my list. I want nothing better than to be able to compare notes with other dealers to avoid costly mistakes. So please use Connor Corp, and let’s get the program going because it will make your life a lot easier regarding AI decisions. On to another subject. How about we review where we stand regarding inflation and deflation? Inflation is moving downward for certain products and services but is still above the 2% rate the Fed is looking for. In terms of inflation, James Altucher states we are suffering from a case of EconCovid because 40% of all money printed in the history of the US was printed in the six months after COVID-19 started in March 2020. Now you know where the inflation originated from. To contain and lower inflation, the Fed increased interest rates to reduce the funds and move them into banks to earn interest while slowing down borrowing to keep borrowed funds out of the money supply. Let me say that again: BORROWED MONEY CAN CAUSE INFLATION. I HOPE OUR RESIDENTS IN DC UNDERSTAND THAT. Deflation is also something to consider because if we have a slowdown that causes increases in inventory levels, prices will fall, and margins will take a hit. These deflation hits will have to be offset with payroll reductions and general cost-cutting to try and make ends meet. However, another cause of deflation could pop up even if we avoid a recession. This deflation will result from new forms of technology that will produce INNOVATION, BETTER PRODUCTION, AND AUTOMATION that will lower costs and thus pricing while maintaining margins. How about that…. a good deflation. With all that is happening, you can expect to deal with many variables in 2025 when planning for CAP-X, which contains technology, AI, and general production spending, no matter what industry you are in. My brother was in the machine tool manufacturing business until they opened the gates to China. You can guess the rest. In any event, he always told me that YOUR COMPETITOR IS YOUR BEST ENGINEER. FIND OUT WHAT THEY ARE DOING AND DO IT BETTER. In other words, who is considered to have a better operation than yours? Then, do your homework to find out why customers feel that way, and “poof,” you have a list of issues to work with to catch up and overtake them in your market. One last thing. I just finished reading Masters of the Air by Donald L.Miller. It covers the air war in WW2. This is an outstanding piece of writing, about 500 pages, that will personally impact you. It will make you cry, lose sleep, and maybe even come up with a nightmare or two. What we put those kids through is unbelievable. And they were kids…. flying B-17s. Give it a try….you will not forget it. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Help is on the way

Sat, 20 Jul 2024 05:00:17 +0000

According to a PwC Pulse Survey ….40% of Executives plan to implement significant reorganization, including layoffs. That is up from 23% a year ago. The changes will focus on productivity boosts and top-line growth, with technological changes leading the way to achieve the goals planned. It appears that margin compression is the key driver of the reorganization. If you cannot pass on costs to customers and remain competitive, actions need to be taken to reduce costs and find ways to increase revenue. Of course, artificial intelligence (AI) will be part of this program. A. McKinsey from McKinsey & Company has also reported that its latest Global Survey reflected that 65% of the respondents are using Gen AI regularly, double the percentage from their last survey ten months ago. WOW! And 75% of the respondents predicted that gen AI would significantly change their industries in the years ahead. The benefits of AI use relate to both cost decreases and revenue increases in the business units adopting AI technology. Many are using AI in multiple functions, meaning their analysis indicated that it would work in this function and provide a positive ROI. This is all valuable information, but we must consider that these McKinsey respondents are large companies with IT departments and managers who can spend to get the “learning” they need to make decisions about AI. Can smaller companies do the same thing? Not so sure they can, but if they do not, they will find the larger companies nipping at their heels in terms of supplying services to customers. It is no secret that large company reps attend conventions and shows to learn how to steal gross profits from smaller companies. Does anybody know Amazon? I have probably read about 100 AI-related articles to figure out what I would do if I were sitting in your office and decided that the company needs to take AI seriously or find ways to offset threats from competitors. So, what did I do next? I read another twenty-five articles and made fifteen phone calls to find a source to help me with my problem. One call I made was to my granddaughter, who happens to work in the system installation world, and told me why we can do this now. when I asked her for a referral, she responded, “Hell, we do that and are very good at it.” She works for a CPA firm that specializes in high-end financial management and, along those lines, has an IT department with a particular unit that helps companies of all sizes with AI implementation. The firm is Connor Group. I asked my granddaughter to send me the section from their website regarding AI, and after going through every page of the website material and related articles, I said to myself, “Self, this is what you have been looking for.” I say that because any small to medium-sized company could use this material to get a very good understanding of what is available, what choices need to be made, how to go about implementing the system, and how to measure the results from the standpoint of return on your investment (ROI). Not only did I send Dean a copy of this material to make it available to you, but I also called the managing partner of Connor Group and asked him if he would be willing to set up contact with our readers to address questions about how to set up AI, provide a range of the cost to do that and help you determine if your data can give the “answers” you are looking in terms of decreasing costs or increasing sales. Dean jumped on board and suggested we make this a part of the monthly Wholesaler publication you receive. This way, we could answer readers’ questions and share the information with our print and electronic readers. Only the questions would appear; the sender’s name, rank, and serial numbers would not appear. In short, MHW is taking an active role in making your company more efficient and profitable and assisting you with your AI effort so you get it done right the first time. In addition, I could see this work for twenty groups or work for OEMs who need to keep their dealers competitive. I could see dealers helping customers relate to AI. If you helped a customer become more profitable, do you think you would lose the business any time soon? In the end, we wind up with systems designed for equipment dealers. And you may want to inform your OEM that this opportunity is available. They may even want to work out a deal geared to their brand. What is in it for Connor Group? Fees, of course, if you use them to assist you. The goal is to learn the industry and get to the point where they have the expertise to where dealers would go to them first before calling another vendor. I think you will like their AI materials and see what I mean by saying they are presented in an understandable format using the right sequence of events. What do you think? What else can I do for you? Let us hear from you. Send your comments to Dean. His email address is editorial@MHWmag.com. I made a deal with him to only forward the nice ones and toss the others. On another front, I sent Dean the last issue of John Mauldin’s Thoughts from the Front Lines, dated June 15, 2024. It will give you an understanding of what we are in for and who it will hurt. There is more reason to shoot for the moon regarding AI to keep your financial position in the top 20% of the market. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Ready–Get Set–Do Something

Thu, 20 Jun 2024 05:00:00 +0000

Technology Rules. Every business or industry publication you pick up states….IF YOU DO NOT START TAKING ACTION NOW YOU WILL QUICKLY FALL BEHIND. Makes sense. But once you are in GET SET mode you have serious issues to deal with. What should you do? Who should do it? Can you fund it? Will the results improve profitability and cash flow? If you take steps to improve the business and it does not work, you may be in worse shape had you done nothing. Nothing is easy these days. Interestingly, those three books I referred to you last month deal with the doing and measuring side of the project. As a reminder the books were BUSINESS WEALTH WITHOUT RISK, HOW TO LISTEN WHEN MARKETS SPEAK AND NOT HOW BUT WHO. The Wealth Without Risk book covers ways to find and buy businesses and how to increase the size of your business with minimum risk. Buy small businesses because the multiples are MUCH smaller. Buy two or three small businesses and suddenly you have a large business that provides much higher multiples. Not interested in buying a business then enter joint ventures or partnerships where different businesses can bring added value to the table for minimum cost. In other words, what else could your customers buy from you? You can sell it directly or via a referral program. I always liked the “menu” approach to help customers where I share in the profits resulting from my referral program. And the menu is a great way to lock in your relationship. One more comment about the Wealth-Risk book. If you have someone living in your basement that needs to go out and make a living, I would provide them with the book and tell them to find something to buy that can be paid for out of the seller’s cash flow. A lot of targets exist. How many times have you heard that Joe or Mary is giving up the business because their “kids” do not want to work there? So, do you think Joe or Mary just want to walk away and sell off the hardware, or would they prefer a sale for one year’s profits and not have to deal with the liquidation? If you want to find something to focus on, I suggest you sign up for all the Distributor Strategies Group presentations, which seem to pop up every other week. I participate in about everyone and find they can help distributors increase sales, margins, and profits. For example, they reviewed a customer survey program where they must see how customers relate to their products and services. They asked for input regarding direct contact, inventory levels and fill rates, logistics, relations with sales personnel, and how company technology impacts the customer experience. The survey covered all “touch points” with the customer, from the purchase dept to the CEO. What was interesting and probably an issue all of you should consider is that the lowest grade from every customer touch point was directed to the company website. After all the work companies put into their website this result was unexpected, which means you may want to evaluate your website to see where you stand. Be a shame if you lose business because of your website. I suggest you sign up for DSG and force yourself to listen in to their presentations. So let us assume you come up with a plan to update or create new revenue sources, or you decide to take your initial shot at AI. Now all you must do is get it done. We are assuming and you should know that this project you have in mind will produce a meaningful result when it is completed. But you are a busy person that is asking yourself “How am I going to get this project done?” This is where the NOT HOW, BUT WHO book comes into play. The premise of the book is that folks will procrastinate because they do not know what to do, and if they finally get around to it, the work will extend beyond the original due date. So, the author suggests you find a WHO to complete the project without constant interference from the person asking “HOW”. Have a team scout out an expert who is qualified to complete the project and let them go at it. Of course, you will have to pay that person, but if the project has provided the original goal, it should provide a reasonable ROI to justify the cost. I guess the bottom line here is that there is just too much discussion going on about how a company could lose customers because they cannot service their accounts like the dealer who upgraded their technology or value-added services to the point where they are a better option for the customer. This would be a good time to discuss ideas and challenges with your OEMs to find the WHO’s who can do the work or who can put together a program to improve dealer bottom lines using some of the cost-effective ideas found in the WEALTH WITHOUT RISK book. READY- GET SET- FIND SOME WHO’’s. About the Columnist: Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail editorial@mhwmag.com to contact Garry.

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Programmed growth

Mon, 20 May 2024 05:00:19 +0000

Tracking the markets as I do, the April results left me wondering what the heck is going on, especially when META reported far lower-than-expected guidance. In addition, earning reports were soft in many cases with the industrial base reporting a lower confidence index. Adding in what you read about logistic companies leaves you thinking that a problem is brewing which could impact an industrial lift truck business. So, do we achieve growth via the GDP, do we have inflation under control, or do we not expect a cut or two in interest rates? I went into my files and found a chart titled Where Inflation Is and Isn’t. It covers 29 cost categories and when you put together all the increases and decreases in costs you wind up with an average inflation rate for the last twelve months of 3.5%, which is 75% above the rate the Fed is looking for. It is hard to believe we will get to the 2% level anytime soon. Even if we try our hardest to get that inflation rate down, the onshoring or re-shoring efforts will surely kick prices. New factories to build. More personnel are required. Higher financing costs. And if unions are involved you can bet that your costs will be higher. I believe we are in Stagflation … where we have inflation as well as shrinkflation….even though the economy is slowing. A tough place to be if you are a business owner. Shrinkflation is the twin of Inflation. Inflation is where you get higher prices for your standard volume. Shrinkflation, on the other hand, lets you keep the older price but removes the product to make up the difference. I don’t think you can do that with a lift truck …but dealers are probably paying for products that are now coming in smaller packages. Then add on the ever-increasing government regulations that will cost you more to comply with. They continue to tell you how to run your business, how much you must pay employees, and what is allowable regarding non-compete agreements. When you look at a chart covering the number of regulations that are in effect, it is overwhelming. Business and Industry organizations are now suing the government to reverse many of these costly regulations. And, on April 24th it was announced that the Trump tax mandates scheduled to end in 2025, will be allowed to expire. Get ready to write bigger tax checks and pay more for the utilities that provide energy to run your shops. You may have heard the new rule about Overtime that creates two separate increases to an employee’s minimum annual salary threshold in a year, leaving you to assess how best to comply. Here is the link to the article on this Overtime rule from ManufacturingDIVE. Be sure to sign up for this free newsletter while you are on the website. Nikole: Link: https://www.manufacturingdive.com/news/overtime-rule-2025-lawsuit-flsa-compliance/714435 And I am not to even mention AI … since you hear about it every single day. The last is a statement by an AI expert that companies that do not adopt and use AI will be out of business by the end of the decade because they will not be able to compete on either a cost or service basis. In past articles, I mentioned numerous times that dealers need to do more with less to reduce costs and improve efficiency. I believe that every business out there needs to perform at a more efficient level to generate the cash flow needed to pay the bills and provide an adequate ROI. So, how do you do this and retain your sanity? Since I brought this new business model to your attention, I thought I should provide some guidance on how to “make more with less” with not much investment on your part. I am going to give you a list of three books to read that will help with this process. The first is HOW TO LISTEN WHEN THE MARKETS SPEAK by Lawrence McDonald. This book will educate you about what is going to take place because of the disastrous policy decisions and artificial disinflationary forces in place. And how we are about to witness a new era of sustained inflation, corporate debt crises, and great shifts in wealth. In addition, the US is weakening the reserve currency status, while adding Russia, Iran, and Saudi’s because of our stance on oil and gas. READ THIS BECAUSE IT WILL HELP YOU UNDERSTAND WHAT YOU NEED TO DO TO MANAGE YOUR WEALTH. The second is BUSINESS WEALTH WITHOUT RISK by Roland Frasier and Jay Abraham. You will learn from these two gentlemen how to grow, scale, and exit your business. They provide a list and worksheets to help you improve your business, how to add more value to your customers for the products and services you provide, and how to then sell the business for a much higher multiple compared to the multiple you could currently get. Once you read this book, you will keep it on your desk and read parts repeatedly. Not only do the authors provide information. They will also assist you on your path to greater wealth. The third and last book to read is titled WHO NOT HOW by Dan Sullivan and Dr. Benjamin Hardy. Want to learn how to save time and money and add to your business value? Who doesn’t? Unfortunately, many of us have great ideas about what we need to do but do not know or have the time to develop or execute the plan. The authors suggest that if the idea is “real” then it pays to get the professional help you need to build the plan and get it implemented in a much shorter time compared to doing it internally or yourself. YOU FREE UP YOUR HOURS AND RUN THE BUSINESS. The hired hands take our ideas and get them put into place. Follow this program two or three times and the value of our business increases. To

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