If Your Sales Aren’t Going Up Then They Are Going Down

Are You A Survivor? Or Are You Going Out Of Business?

Not all businesses whose sales are going down go out of business. But all businesses that go out of business had sales going down. Think about it. Who is most at risk of closing? Yards with annual sales of less than $500,000 are almost certainly going to close in coming years, and yards from $500k to $1m are also at a greater risk.

When your sales are below $40,000 per month, you are very fragile. All you need to do you in is one environmental rule to comply with, a windstorm that blows your fence down, a health issue, or the loss of a key employee. Retail and DIY are almost gone, and at the smaller sales volume, you can’t buy later model salvage and have a competitive growing
robust business.

It may be time to think about your future. One thing is almost a certainty, what you have been doing in the past is not going to work in the future. The exception is a very small operation in a small rural area, but even those yards are at a much greater risk of closing.

As I visit smaller yards, I find stubborn operators who are undercapitalized and, frankly, just not up to the standards or challenges today presents. They don’t have any employees on pay for performance, and almost always have too many employees and or too much payroll.

The owners don’t know what they don’t know. If they had been attending recycler conventions and using what they learned, they could have made many of the required changes. Most are not focused on buying the right cars; they just buy the cheap cars. This makes their inventory turns and cash flow too slow.

They refuse to think differently about how they buy and refuse to make better data-driven purchasing decisions. Many of them don’t have a SWPPP or environmental controls, and since the government agencies only focus on those that have applied for permits, they are under the radar. And at risk. Yes, it’s true. There are a noticeable number of these small operators who don’t have any refrigerant machines and who don’t make any attempt to capture environmentally sensitive fluids.

Many are operating on land that’s worth much more than their business, and they should sell the land (not the business, it’s likely worthless) and put the cash to work.

In any case, if you are in the sales volumes mentioned, it’s time to reconsider the viability of your operation and if called for make an exit plan that maximizes the value of what you have for you and your family.

Remember only you can make business great!

Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can deliver wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.

Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.

As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.

To inquire about consulting or keynote speaking, contact Ron at 817-834-3625, ext. 232, rons@MrMissionPossible.com5940 Eden, Haltom City, TX 76117.