Our world is forever changing and many of us liked it the way it was. Now, it doesn’t matter “when” we're taking about, we just liked it better. Why? Because most of us don’t like change and many dying companies still live by the famous eight words “Because we have always done it that way.” We have seen several industries lose many, if not all, of their independent dealer base (ours included) for several reasons and the lack of willingness to change is one of them.
What if you had to take drastic measures for your company? What if your decisions were the difference between survival for your company or extinction? What would you do? What overhead and expenses would you eliminate? If you had to shrink your business down by half of the people you have today to survive, what would you do? Who would you pick to stay and why would you choose the people to get rid of that you do? Of the people you wouldn’t cut, why are you keeping them now? What is your current ratio of revenue-generating employees to support team members (such as bookkeepers and installation managers, etc.)? Mine is 4 to 1. Don’t know how that compares but I should.
What would I do advertising wise? Cut it? Increase it? Do I even advertise? I am always amazed at the number of people where the first thing they cut is their advertising — advertising that is bringing them new business. And if they cut it because they felt it wasn’t doing that, then why were they spending the money to begin with? If advertising was getting me the return at a reasonable percent of sales, I most certainly would not trim there. I struggle and question my ad spend regularly as the change to digital still has me spinning, but not to the point where I don’t try. By the way, if every independent in every market would help the cause and advertise flooring, we would all grow.
What about technology? I am told that less than 50 percent of our industry uses industry specific software verses products like QuickBooks or other off-the-shelf software. And of those, very few use the software to anywhere near its full potential. Most of the time, it is due to fear by employees, with some of that being justified. The fear of losing your job to technology has been with us for decades since computers became a part of our daily lives, but, as owners, (I quote Mr. Spock), “the needs of the many outweigh the needs of the few.” Survival is going to be the goal for your company when you get in these situations.
What are the “nice-to-haves” we spend money on versus the “need-to-haves?” We seem to be an industry that wastes money when times are good instead of stockpiling for the downturns. We load way too many expenses into our businesses just because it’s a write off. Remember, you have to make money to write things off and you need to show profits if you want to sell your business someday.
This is an exercise every business owner should do today — sit down with your key people, your long-term people, and put a plan together to trim the fat and challenge yourselves as to what you would do if things got bad. While we have been experiencing a nice growth in our economy the past four years, things like the Coronavirus and the political environment can change that quickly. Be ready!
Don Roberts is a 40 year flooring industry professional who has managed teams from seven to more than 700 to success. Don can be reached via email at don.roberts@myflorstor.com.