Are you feeling the same way I am? Stretched to the point where you start getting inefficient? I don’t know about you, but it is starting to get a little nuts when you have a hard time remembering what you have to do and where you left off on that project you set aside last week. Maybe it’s time to prioritize, focus and get organized.
As an executive in a material handling business, or anyone in the material handling business, it is going to be important to hit this fall running as business starts to pick up. And it will be particularly important to address areas where we’ve gotten sloppy regarding communication and customer service because of past staff reductions. Let’s hope all customer files are current, inventory records updated, rental rates reviewed, bank loan agreements and related covenants reviewed. And most important, is training up to date? Probably EVERY CURRENT EMPLOYEE needs some form of training before you go much further. You can probably continue to operate at reduced staff levels to max out profits if training is current. On the other hand, continuing with a reduced staff without a solid game plan and procedures in place might cost you money in the long run. My vote is to get the troops organized and more efficient and save the money.
A couple of bright spots:
A bill to extend bonus depreciation for all of 2010 is on the table. By the time you get to read this article we will know if it passed. I believe it will.
Equipment pricing is firming up. From what I see, pricing in your used equipment inventory and retired rental units is increasing. It’s about time.
If used unit prices are firming up, new units can’t be far behind. It will happen. In some cases, dealers are finding a shortage of new units when they need them for a proposed deal.
It appears interest rates will remain reasonable for an extended period of time.
Some things to make happen:
- Review all current business practices, and get them back to where they fit the business plan.
- Update budgets and cash flow for the balance of 2010 and 2011.
- Review pricing and reconsider any discounts you have been handing out during the downturns. No more discounts. No more credits. Get paid a fair price for what you do.
- Clean up AR. Review credit terms and how you deal with credit card payments. Get more aggressive on those more than 60 balances. You might be surprised at the lack of pushback when you ask for payment terms.
- Review all pricing schedules and update as necessary. That includes used units and rental rates. It’s time to ask for more money despite what the sales people think.
- The same goes for parts and service business, including transportation costs.
- Make sure you are up to date with the latest payroll tax rules and small business tax credits available.
- Compare expenses to the MHEDA DiSC report, and if there are material differences find out why.
- • Know your tax position.
I hope all of you read John Walker’s article in the last issue where he discussed ways to sell parts and service business to those customers using other sources for this or who are doing the work internally. It was well done (as usual) and certainly worthy of consideration. Click here to read John Walker's July Aftermarket article from August 2010.
Business might be coming back, but it will remain competitive in the marketplace. All the more important to put forth the best sales effort you can by informing the sales staff about goals and objectives and by having procedures in place to maximize the potential of your sales efforts.
The sales team should know about F&I matters, tax opportunities, rental functions, parts and service capabilities. Some training in these areas certainly will pay for themselves.
Just a reminder that a health insurance captive is available to material handling dealers and manufacturers as a means to keep health care costs in line. Believe me when I say you should take a look at this. If you are interested, let me know and I will send you some info.
Garry Bartecki is a CPA MBA with BG Financial Services LLC. You may contact him by e-mailing editorial@mhwmag.com.
| -End- |
| Related Articles | |
|---|---|
| The recession is over - June 15, 2010 | |
| What Next? (Part 2) - May 17, 2010 | |
| The 31 percent solution - April 16, 2010 | |
| What next? - March 15, 2010 | |
| Still scary, but somewhat better - February 17, 2010 | |
| Welcoming in 2010 - January 19, 2010 | |
| Reinvent the wheel - December 21, 2009 | |
| Rebuild under control - November 17, 2009 | |
| It’s a new dawn - October 15, 2009 | |
| Slow comeback - September 15, 2009 | |
| How do you run your dealership at 60 percent of last year’s volume? - August 17, 2009 | |
| Forecasting – 2010 - July 17, 2009 | |
| Two, maybe four quarters - June 15, 2009 | |
| How should we look now? - March 16, 2009 | |
| Circle the wagons - February 16, 2009 | |
| New tool to provide instant experience - January 16, 2009 | |
| Cleaning up the mess - December 16, 2008 | |
| What's new? - October 16, 2008 | |
