I recently read an article by Emily Maltby in the Wall Street Journal, and it hasn’t stopped resonating with me, yet. Usually when something sticks with me like that I know it’s worth sharing.Maltby raised the idea that small businesses could be caught off guard by the recovery? My mind ran to dealers I regularly speak with and I realized this shoe could fit!
There’s no doubt the vast majority of dealers have been, and still are, so focused on managing to survive that they haven’t even begun to seriously plan for the coming recovery. In reality, the boating industry has been hunkering down for more than three years now. And it’s taken all we can muster to develop and re-develop plans to keep the doors open and employees paid.
But Maltry is right in looking ahead and admonishing small businesses to get ready by taking time to research, study and draft a recovery plan now. When the recovery gets underway — and there are some signs now – dealers who have already asked and answered the right questions will quickly out-distance their competitors.
Call it what you will – crafting a new business model or writing a ramped up plan for re-growth and profit. It should answer questions as diverse as: what current income streams will be expanded and new ones developed; what product lines will be continued and/or eliminated (or sought after); what level of risk vs. possible reward now makes sense, given the hard lessons of this recession?
How about: which employees will be called back, at what benchmarks, to fulfill the new plan; what’s the plan for short and long-term debt reduction; what terms and agreements from major suppliers are not just acceptable but best for the dealership, and who’s offering them; if demand for a major product increases 20 percent, 30 percent or more, how would the dealership handle it; have selling skills gotten rusty; and the list goes on. Truth is, every aspect of the dealership going forward should be examined and defined in the recovery plan.
Finally, the credit crunch remains a daunting hurdle for the retail boat business and rapid changes aren’t on the horizon, yet. In fact, according to the October Federal Reserve’s Senior Loan Office Survey, 16 percent of banks actually tightened lending standards in the past three months, and a big “zero” have reportedly eased them! It’s important, then, that any recovery planning takes into account such a problem but not succumb to it.
The state of the credit market, good or bad, only means each dealer should include such a variable in the recovery plan . . . but craft a realistic plan regardless.