We hear a lot these days about “the New Normal,” and how the world will be different when the economy improves.
Now is a great time to sit down with your management team and other key employees and ask them what is different now with your company, the local market area, competitors, new technologies and potential new market opportunities.
It's a great exercise to go through before you start developing your 2010 business plan. This issue of Electrical Wholesaling is loaded with data and tools that can help you develop the sales forecasts for this plan. But before you start plugging the numbers into your spreadsheets, you first need to figure out what has changed in your world that may affect how your company goes to market in the next business cycle.
I don't think the basic business equation for a distributor of electrical supplies is going to change on the other side of this recession, no matter what the New Normal turns out to be. Most electrical distributors will still be trying to turn a profit by providing local inventory and business expertise and extending credit for the purchase of electrical supplies.
But when you break down that last sentence into its basic elements it opens up a whole new world. For instance, the products you sell, the quantities in which you stock them, and your roster of vendors could change. You may have to refine your sales strategies and the marketing and promotional strategies that support them, invest in training for your sales force, or provide them with new technological tools to do their jobs.
The following questions will help you focus your discussion on the relevant changes in your world. Once you start drilling down into each of these areas, I bet you will come up with a dozen more questions to ask and answer.
Your Company and Employees.
First take a look at your company's finances, employees and the tools you need to run it profitably.
- How is employee morale after what they have been through during this recession (layoffs, pay cuts, furloughs, etc.)?
- Are there any cost-effective ways to improve morale right now?
- Do employees have the training they need to do their jobs effectively?
- Do employees have mobile communication devices or technology they need to do their jobs better, faster or more efficiently? Examples: mobile bar-code readers for the warehouse; GPS navigation systems for company vehicles; and personal digital assistants like Blackberries or PalmPilots.
- Do any new tools or technologies exist in the distribution software business or e-business arenas now worth the investment? Examples: IDEA's Industry Data Warehouse (IDW); IDX (online document exchange); or updates from your existing distribution software provider.
Then get your employees together and see if anyone has any competitive intelligence on what's going on with your largest competitors.
- Which competitors will emerge the strongest from this business cycle and how will they use these resources to gain market share?
- Which competitors will be weakest? Which of their key accounts are most vulnerable? How can your company get that business?
- Are any competitors now more likely to sell out? Are there any acquisition opportunities for your company?
- Have any new competitors emerged in the market?
Now look at your vendors and see if you need to add or drop any lines.
- What are the 10 most interesting new products now on the market? What are you doing to create and meet demand for these products in our market?
- Has anything changed about the green market that makes it more (or less) appealing? What would it take to become the go-to distributor in the local market area for green electrical products? (Examples: taking on new product lines; providing salespeople with more training or certification; or attending or exhibiting at green trade shows such as GreenBuild, LightFair, Department of Energy conferences on LED lighting or SolarPower.
That's plenty to chew on. But they are important questions to ask as yourself and management team as you position your company for the New Normal.