Indianapolis -- Do it Best CEO Bob Taylor offered dealer-detailed advice in the form of an address that was part top 10 management tips, and part to-do list for difficult times.
“We’re no doubt going to see continuing challenges, both within our industry and within the economy in general,” Taylor told Do it Best members at a packed ballroom in the Indiana Convention Center during the co-op’s shareholders’ meeting. “The challenge is to find the opportunities.”
Taylor proceeded to elaborate on the management objectives in today’s economy:
• Revisit your assumptions. Taylor pointed to the importance of a simple S.W.O.T. analysis. Looking at a company’s strengths, weaknesses, opportunities and threats. “Even in the last month, there are a lot of things that have changed,” Taylor said. “How have those changed our assumptions?”
• Budget reduction goals. Use of industry spending benchmarks can be a helpful tool in keeping expenses down, he said.
• Manage payroll. “You’ve got to take time to match your demand against the payroll dollars and watch overtime like a hawk,” he said. At the same time, protecting key employees should be a major concern.
• Cross train your people. Taylor harkened back to the powerhouse Baltimore Colts as an analogy for how a successful organization should have versatile players at several positions. “That’s really important in times like this to make sure that the bench is deep,” he said.
• Control inventory. The key to control is weeding out the slow movers and staying in stock, without tying up excess inventory.
• Evaluate vendors. Consider total procurement costs when evaluating vendors. Taylor stressed that procuring merchandise through the co-op provides benefits such as indemnification programs that might not otherwise be factored into costs.
• Target advertising. “Sell the advantage of convenience and service, or whatever you’re known for.” Taylor reminded owners to see their stores as the customer sees the store. “What’s it look like, and what are the obstacles?”
• Closely watch accounts receivable. It’s increasingly important to stay close to customers and also to evaluate new customers very closely, he said.
• Watch capital expenditures. The questions to ask are: “What is the payback time, and what is the opportunity?” He pointed to successful examples of capital spending and expansion but cautioned dealers to spend wisely.
• Manage cash flow. Taylor repeated that cash is king. Another part of this objective, he said, is to talk with your financial partners about your business and your challenges.
Taylor added that perseverance will be a necessary trait for retailers to thrive in the coming year. “We’re absolutely going to be tested in the year ahead, and I can’t think of a better word than ‘perseverance,’ for what it’s going to take,” Taylor said.