Garry Bartecki Programmed growth
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 summarize. Book one educates you to understand what your business will have to deal with sooner rather than later. Book two provides methods to increase sales, improve margins, and add new product lines at minimum cost. By following their suggestions owners will be able to monetize the value of their business for an awesome multiple. Book three will assist with moving the program along at a faster pace.
We all know we are going to find ourselves heading into hard times. And hard times call for management skills to come out the other side. What I am suggesting is that these books will provide you with a way to come out on the other side much richer than you are today. And that will be on an inflation-adjusted basis.
About the Columnist:
Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail [email protected] to contact Garry.
