Over the past 36 months, Truck Parts & Service distributors have experienced what are undoubtedly the most challenging times in their history. Much of the optimism coming from sustained growth that characterized our industry turned to pessimism. Many prognosticators are saying we may not return to the “salad days” of just a few years ago for many years to come.
If they are correct, investing time and energy in developing, documenting and executing a well thought out business plan may prove a worthwhile exercise.
Challenging times test our fortitude, increasing stress levels and taxing our ability to think with clarity. To survive, let alone flourish, we must look inside our businesses to our people and critically assess their skills and passion to lead our businesses into an increasingly complex and competitive marketplace. We must evaluate our existing processes to ensure they provide a proper foundation for profitable execution.
Equally as important are preferred supplier relationships which likely need to be managed with a newfound maturity. Communication with these critical partners in a successful supply chain should be transparent. Have you asked your team how they are helping your preferred suppliers maximize their productivity in serving your company? Have you considered vendor managed inventory (VMI) but never pulled the trigger? Tomorrow’s successful distribution models will likely need to improve inventory turns from our modest industry average of 3.5 to a minimum of five turns to provide needed cash flow. Is your team willing to adjust their past practices to new, more progressive ways?
Bringing together the resources of your employees and your suppliers to serve your customers and prospects is a great place to start the development of your sales plan. Identify the unique value that your products, people, suppliers and locations provide to your customers and prospects. Every company should develop a well-defined sales plan for 2010 and make sure it is “drilled down” to each salesperson so that their daily actions are well connected to company objectives.
The plan should focus first on sales retention and then support sustainable growth, with stated goals that are realistic, attainable and measurable. Growth should come from your core products where you are best known, but introduction of new products that offer value will help you keep and grow your customer base. Listen to your sales team and work with them to remove barriers to their success. Acquisition of new customers will be a greater requirement than in the past. Don’t forget to celebrate winning new business – so that this achievement is recognized and becomes infectious for others on your team to strive for.
Resources will be fewer for many companies than in past years, and adherence to well supported fiscal modeling will be more critical than ever. When an upturn begins, will your company manage its resources to achieve above average performance? Does your company have a well prepared budget process where all your key people contribute to its creation? Can you live and operate within your available resources and provide sustainable value to your customers, opportunity to your suppliers and employment to your best and brightest people?
A well written business plan and budget positions your team for success. Executing the plan provides desired results!
