By Annie Kang
The SEMA Recession Survival Series webinar program included expert speakers skilled in supplying companies with tools for growth and survival.
“SEMA is taking extraordinary measures to help member companies prosper in this challenging economy,” said Nathan Ridnouer, SEMA vice president, councils and membership. “The Recession Survival Series speakers took on some of the most essential focal points of business management and turned them into concise tutorials on how specialty-equipment industry players can grow their businesses.”
The following highlights have been taken from the webinar series, which was initially offered in the spring of 2009. The series is available online here.
Taking Positive Control of Your Company When the Economic News Is Negative
Presenter Justus Breese of Automotive News stressed that a company must design a turnaround plan in order to survive until there is an economic recovery. Breese referenced Mike Jackson, CEO of AutoNation, for managing the country’s largest auto retailer through the economic crisis by successfully committing to cut $200 million from the company’s cost structure.
Co-presenter Richard Jones, chairman and CEO of Management 2000 Inc., advised companies to change their management approach. As opposed to going to the office and dealing with typical daily tasks and those that appear throughout the day, Jones said that “…it is absolutely critical that you now focus on mitigating loss by developing a plan of action and implementation.”
Relationship Management Within the Supply Chain: Get the Most from Your Suppliers, Company and Teams
Presenter Nancy McGuire, president of McGuire Consulting Group, stated that one of the three foundations to building a strong relationship is trust. “If you tell someone you are going to return a call within 24 hours, you do it,” said McGuire. “Those types of dependability items develop trust in the other person.”
Mutual value was the next key category that McGuire revealed for establishing a solid relationship. She stated that both parties must be getting value in order for a relationship to work well. “You need to have frequent contact, meaning you don’t just call when you need something,” said McGuire. “Oftentimes, I will call when I want to offer help.”
The third component of a strong supplier relationship is a long-term horizon. McGuire emphasized how essential it is to think in terms of long-term results. She warned against burning bridges, even if the working relationship is one that you view as short-term.
Increasing Profits With Fewer Customers
One of the methods of business intelligence that presenter Dan Kettelson of Performance Inc. outlined was to acquire additional information from your suppliers, manufacturers and customers. He advised attending trade shows where you can obtain product information and finding and attending social functions that may provide inside information to gain knowledge from suppliers and manufacturers. Kettelson also suggested accessing Dun & Bradstreet credit reports.
But Kettelson recommended sourcing customers as the best supply of information on such topics as discounts and policies. Kettelson stated that, once the information is collected, it will provide evidence of your buying power. Also, make sure to perform quarterly updates on customers with credit terms.
Kettelson also revealed these quick cost-saving ideas:
Protecting Your Finances in a Volatile Economy
Presenter Matthew Egan, vice president and senior financial advisor at Merrill Lynch, advised listeners to maintain an asset-allocation strategy that includes stocks, bonds, cash, real estate, bear market weightings, cash (CDs, money funds and FDIC insurance) and precious metals.
With stocks, be on the hunt for the highest quality “survivors.” Also, pay attention to the payout ratio, mind the sectors and create enter and exit strategies. Always administer risk management. “The number-one way to control risk: Control dollar exposure,” said Egan.
Within mutual funds, Egan stated that you must know what you own. Figure out where your mutual funds fit into your asset allocation. Control risk with monetary exposure, and maintain a long-term mentality.
In terms of a cash investment, Egan steered participants away from money funds. “Most money funds now are paying like 0.1%, 0.2%” said Egan. “You get a tenth, two-tenths of a percent interest—peanuts.”
Inventory Management: Stop Storing Cash in the Warehouse
Businesses that think their inventory is too high first need to examine the concept of velocity coding, a computer term that helps identify what products are selling,
Shay invited specialty-equipment companies to visit the Profits+Plus website and access an ROI calculator to analyze their businesses. In one example, Shay demonstrated that by moving the inventory turn up one time, a business’ ROI increases from 42% to 53%.
He advised businesses to ask themselves if their current inventory level is too high, just right or too low. Businesses that think their inventory is too high first need to examine the concept of velocity coding, a computer term that helps identify what products are selling, Shay stated, and almost everything that businesses sell has at least one, if not multiple, seasons during the course of the year. You can track the variation by individual products, certain categories or departments in your business—but you need to know something about how things are going.
Job-Costing Systems That Will Boost Your Cash Flow
Presenter Tom Aiono, SEMA accounting manager, revealed that you can better manage and thus increase your cash flow by effectively assigning costs to specific jobs. Aiono emphasized the importance of job costing, because it identifies exactly how much it costs to construct a project in terms of labor and materials and your markup. Job costing will also help you predict costs of future projects. He noted the importance of weekly meetings with supervisors and managers to determine how well the job costing is being implemented. “The key of job costing is to stay under budget,” said Aiono.
Presenter Peter de Jager, speaker/writer/consultant, identified solutions to overcoming the challenges of implementing the changes necessary to move your company forward.
De Jager explained that the reason why people are resistant to change is that they do not like losing control. De Jager stated that you must make your team understand what is going on and request their input in order to overcome this resistance to change.
De Jager also identified the difficulty of presenting change when there have been previous failed attempts. He stressed that the first step to bypassing this stumbling block is to regain trust.
View a complete audio or a PDF download of each of the webinars from the SEMA Recession Survival Series webinar program.