The New Year is upon us. Do you have a plan in place to make 2019 a better year than 2018? Could you set some new sales and even better profit records in the coming year?
Some of the things that you should have done by now include your annual SWOT assessment. What is a SWOT assessment? That is an honest and truthful look at your business identifying things into four categories. What are our strengths, weaknesses, opportunities and threats? Doing this analysis will help you decide what you need to work on to advance your business.
You should have already completed your employee reviews. Most of us hate doing them but either a formal or informal discussion about past performance leads into setting goals and expectations for the future. That is what allows people to grow and develop into happy longer term employees. A happy workforce with a positive attitude is a contributing factor to having a high performing company. While most people tie performance reviews to pay adjustments but that does not have to be the case. The beginning of the year is the best time to roll out any pay changes but that should have all been explained by this point in time. A big part of the performance review is the chance to set goals for the coming year. I was recently with someone who said that they needed to define what a win was for each person in the company. They had people celebrating doing a good job that weren’t and some who felt they were coming up short in performance that were really doing a great job. We ultimately need to celebrate the winning behavior or when we hit the targets set. This is an important part of keeping a team together. If all we count on is wages to keep people happy we can always be outbid and that is not a good thing.
Do you use a budget? You should and it also should be created or be close to finished by now. The budget sets us up for the year. It gives us a sales forecast which becomes the target which individual goals can be driven off of. It also lets us know what the cash flow will need to be like to pay for the salvage we have budgeted to buy. We should have also looked closely at the facility. What are we going to need for the coming year? Is there any equipment that is starting to cost more to repair than it would to replace? What upgrades are needed and are any major maintenance projects going to be needed? Will the yard need any leveling or fresh gravel added? All of these things should be factored into the budget when it is being created. The most important part of the budget is the profit target. Once we agree to that budgeted number we need to work to meeting or exceeding it. That starts on the first day of the year and lasts for the entire 12 months.
Have you reviewed your buying? A look back at the vehicles that you bought a quantity of that did not make money is a unit you need to minimize buying. How do you know the big winners and big losers without looking over your vehicle profitability reports? We are often surprised at the vehicles that do a great job of breaking even but not producing profit. Those are stay busy cars which I am not a great fan of. They are better than losers but you need to speculate some on your purchases so not all will work. It is a pattern or track record that you are looking for. Repeat the goods ones and eliminate the negative ones.
Have you looked over your vendor performance? We all should be brokering parts and many are participating in networks to accomplish that. We all need to see who we are profiting the most from and also see if any vendors and consistently creating problems by sending bad parts or not handling credits correctly. Looking over who performs the best will let you set the order that your salespeople see the vendors parts appear. You also can add people to your non-approved vendor list. It is ok to not do business with people that create issues within your company. There are a lot of vendors and a lot of parts for everyone. We can find people who line up with our general quality and thought process without much trouble.
Those are a few of the things you should have done in preparation for 2019. If you have not done so it is not too late to get started on them. They will help you grow your business sales, profits and team to new heights. Remember the new year is always full of optimism!
Mike Kunkel Lee Worman
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