Taking Stock of 2017: Failing to Plan is Planning to Fail, Part II

Submitted on: Tue, 10.17.2017 06:51pm - Annie Eissler |
Taking Stock of 2017: Failing to Plan is Planning to Fail, Part II

What every distributor should be doing right now to prepare for 2018 and close out 2017 on a positive note
 
In the first installment of this blog series, we looked at the reasons why companies should be planning and measuring their progress year-round, and highlighted some of the common missteps that distributors make. In this segment, we’ll show you how to take a “step back” and use key benchmarks to assess your distributorship’s progress, set measurable goals right now, and start preparing for 2018.
 
Set Your Intentions
Anyone who has ever taken a yoga class has probably heard the phrase “set your intention.” In that setting, it basically means to become aware of your breathing, clear your mind, and visualize what’s to come in the next hour or so. Use the same approach with your company’s goal setting, understanding that whatever economic, sales, or revenue environment you’re dealing with at the time, establishing goals, metrics, and key performance indicators (KPIs) will play a critical role in your success.
 
“It doesn’t matter if you’re fighting upstream or cruising downstream, depending on the economics at the time,” says Brian Friedle, MITS’ VP of Sales. “Everything you do must be done with intention, and with a specific goal in mind.” Once that foundation is in place, figure out what has to happen to achieve those goals, and then make it happen.
 
Cold Hard Cash Counts the Most
Everyone loves to see a good profit and loss (P&L) statement and positive sales statistics, but companies actually run on cold hard cash. A distributor that has growth aspirations—new branches to open, a new website to launch, a competitor to buy out—needs cash to support those moves.
 
So how do you get that cash? You manage your inventory well. You take care of your margin well. You plan ahead and leverage metrics to understand exactly how the money is going to move through your business. “In a lot of cases, cash is overlooked and not taken into account,” Friedle points out. “That’s a huge pitfall that companies don’t always understand until it’s too late.”
 
Intuition Versus Actual Numbers
If you spent a lot of time putting out fires this year—and if human resources were maxed out and it was hard to keep inventory on the shelves—you’ll probably assume that your distributorship had a great year. Many times, this assumption is based on intuition versus the actual truth.
 
“There’s a big different between having the feeling that you’re on the right track or making a certain margin and working the right customers, and knowing that these things are actually true,” Friedle warns. “This occurs when you rely too much on intuition, and you don’t balance that out with the data that proves the performance and where you’re actually at.”
 
One way to overcome this pitfall is by looking at past history and then project it forward, knowing that a tweak (such as a reallocation of resources) will help you achieve a better result. “Anytime someone calls you at your house, and says, "Hey, I need directions to your house," the first thing you have to ask them is, "Well, where are you now?" Friedle says.
 
“It works the same in business, where the first step should also be focused on where you are today,” he continues. “When you understand what did and didn’t go well this year, you can get an accurate snapshot to work from.”
 
In the final segment of this 3-part blog series we’ll give you five action steps to take right now to end 2017 on a great note and prepare for the New Year.