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Before I get started on this article, let me ask you a question. Is your business located near the Interstate 35 corridor between Fort Worth, Texas and Minneapolis, Minnesota? If it is and you have been thinking about having a business tune-up, then this July may be a good time. This year, Jim and Lynn Counts will be taking their annual RV trip along this corridor. Email Jim at Jimcounts@wans.net if you would like more details. Recently my brother, Robert, and I were discussing the state of the recycling industry, and Robert said he felt like some recyclers’ businesses look like a leaf that is circling the drain. He was suggesting that unless a few recyclers make some serious changes they were gradually going to go out of business. The reason this happens is because competition increases for inventory (vehicles), other companies sell low cost new or reconditioned parts, payroll and taxes keep going up, environmental expenses, gas and oil sky rocket, supplies and services keep going up, etc., etc. At the same time, recyclers are reducing prices on parts because they believe they have to match a price on someone’s screen or estimate. Some owners find themselves in the situation of not knowing how to stop the frightening cycle. They know they have to buy inventory so they put off paying bills for a month or two. Then the collection calls start coming, late charges pile up and disconnect notices arrive. Their solution: stop buying inventory and try to pay enough bills to get everyone satisfied for awhile. Result? Not replacing the inventory they sold causes sales to drop, so again they stop paying bills and the cycle goes on and on. Unfortunately, each cycle leaves owners with less and less money to buy inventory or pay bills. As a result, the leaf floats around and around, each time a little closer to the drain and each revolution goes a little faster. At some point, owners may take out a loan on some asset in the belief that all they need is more money to get things back like they used to be. Unfortunately, if they don’t correct what caused this cycle in the first place, they gradually eat up this new money and now they are back circling the drain and have even more debt. If we don’t change this continual cycle, sales and customers will be lost until owners can’t pay themselves, let alone the employees or creditors. This brings to mind a definition of insanity we have all heard, “We keep doing the same thing the same way and then expect a different result”. So what can we do to get out of the whirlpool and back to the days of good sales and profits? Visit WWW.CountsConsulting.com for ways to stop this dangerous cycle. When you get there, click on “Favorites” or Bookmark” at the top of your internet browser and add this site. Each month, you will only have to open your internet browser, click on “Favorites” or “Bookmark” and then “Public page of Counts Consulting” to read the new article. Now, look on the right under “Free Information” for “….The Rest of the Story”. Jim Counts
You
have a question....We have an answer!Copyright 2001. All rights reserved. Do not copy or reproduce without prior approval. Jim has owned and operated three successful automotive
recycling businesses. He has been doing consulting for auto dismantlers from San
Juan to Anchorage and Ottawa to Australia since 1991. He has been a featured speaker
at ARA, APRAA in Australia, Parts World in New Zealand, Canada and numerous U.S. state
conventions during the last 9 years.
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