TR Footnotes FN.0610 : Page 1

TOWING&RECOVERY June 2010 Reaching thousands of industry professionals monthly ON THE LIST? Rotation Tips To bid or not to bid is the question Page 13 EASIER TO TOW New,Lighter RVs Modern materials drop the weight Page 10 ALL WORKED UP The Lizard Lickers These tough towers thrive on danger! Page 11 WATCHING! Advertise Here! Call David Abraham 877-219-7734, Ext 1 BUYERS ARE Volume 21, Number 2 ❘ $3.95 By Stacey Tucker Footnotes has heard that towing business is picking up here and there, and we certainly hope it is. But just in case that’s not happening in your experience just yet, here’s a useful and straightforward guide to weathering the rest of the recession, for however long it lasts. We hope this is the last time we have to write about this issue, but you never know. So just in case, here are some tac- tics to help towing company owners get business back up in a down economy: The worst recession since the Great Depression has gone on long enough now that business owners can attest to the day-to-day challenges this envi- ronment creates. The economic symp- toms are visible first-hand for to and many other business o sales slowing down, pr creditors tightening up borrowing (such as cr lines of credit where these options ar still available), commodities pr creases, and de- creases in value of property and stock. It’s hard to imag- ine, given those ex- amples, that a recession can actu- ally be a productive oppor business, but it can be following well-known business enti- ties: Fed-Ex, Sports I IHOP, and the Hula H what they have in common? They were all created dur sion. Just as major brand-name business- es have capitalized on a w my to break into the mar Keep Your Customers On Their Tows!!! Save $$$ by advertising in print and online! Call 877-219-7734, ext.1 © 2010 Dominion Enterprises. All Rights Reserved. ness can not only survive this econo- my, but position itself to thrive. In this article are some of the tools and solutions that you can use in your planning to address current econom- ic circumstances and position your business for success as the economy slowly recovers. Containing Costs Businesses can be well into a reces- sion before owners realize the severity of the trend. A lack of awareness could be attributed to hopeful optimism of a situationally stalled-out economy (“Oh, it will pick up after the election”), an inability to see the trends happening due to being buried in day-to-day work, lack of time to monitor the com- pany’s numbers or telltale signs, or just plain denial. As recession impacts your business in slowed sales, when expenses have not been adjusted quickly enough, it is inevitable the business will experi- ence a cash-flow crisis. From there, the business owner will have to take decisive action to curb these expens- es, but make no mistake, you’ll al- ready be behind and playing a game of catch-up. Containing a financial free-fall will require great discipline, negotiation, creative thinking, and long-term plan- ning. Survival means dramatic and See RECESSION, page 5 FOOTNOTES ® www.trfootnotes.com Save $$$ by advertising in print and online! Call 877-219-7734, ext.1 Joy Hallock Towing&Recovery Footnotes® 10 Bokum Rd. Essex, CT 06426 PRST STD MAIL U.S.POSTAGE PAID Peoria,IL PERMIT 315 TOWBRIEFS Free e-News! www.trfootnotes.com

Revival Road

Stacey Tucker

Footnotes has heard that towing business is picking up here and there, and we certainly hope it is. But just in case that’s not happening in your experience just yet, here’s a useful and straightforward guide to weathering the rest of the recession, for however long it lasts.<br /> <br /> We hope this is the last time we have to write about this issue, but you never know. So just in case, here are some tactics to help towing company owners get business back up in a down economy:<br /> <br /> <br /> The worst recession since the Great Depression has gone on long enough now that business owners can attest to the day-to-day challenges this environment creates. The economic symptoms are visible first-hand for towing and many other business owners, from sales slowing down, profits declining, creditors tightening up, hard-money borrowing (such as credit cards or lines of credit where these options are still available), commodities price increases, and decreases in value of property and stock.<br /> <br /> It’s hard to imagine, given those examples, that a recession can actually be a productive opportunity for a business, but it can be. Think of the following well-known business entities: Fed-Ex, Sports Illustrated, MTV, IHOP, and the Hula Hoop. Any idea what they have in common? They were all created during a recession.<br /> <br /> Just as major brand-name businesses have capitalized on a weak economy to break into the market; your business can not only survive this economy, but position itself to thrive.<br /> <br /> In this article are some of the tools and solutions that you can use in your planning to address current economic circumstances and position your business for success as the economy slowly recovers.<br /> <br /> Containing Costs Businesses can be well into a recession before owners realize the severity of the trend. A lack of awareness could be attributed to hopeful optimism of a situationally stalled-out economy (“Oh, it will pick up after the election”), an inability to see the trends happening due to being buried in day-to-day<br /> <br /> <br /> work, lack of time to monitor the company’s numbers or telltale signs, or just plain denial.<br /> <br /> As recession impacts your business in slowed sales, when expenses have not been adjusted quickly enough, it is inevitable the business will experience a cash-flow crisis. From there, the business owner will have to take decisive action to curb these expenses, but make no mistake, you’ll already be behind and playing a game of catch-up.<br /> <br /> Containing a financial free-fall will require great discipline, negotiation, creative thinking, and long-term planning. Survival means dramatic and painful cuts; some of the most common areas include payroll, leases, higher-interest money borrowed, and variable expenses.<br /> <br /> Payroll and personnel costs are without a doubt going to be the top consumer of any incoming revenue. Lay-offs, or hiring freezes, to bring your payroll costs into line with your revenues means every single person in your business is going to be asked to do more with less, and ultimately pushed to the front line of service delivery. Administrative tasks will be coupled with direct service positions<br /> <br /> <br /> Focus On Revenue <br /> <br /> Revenue-producing positions should take ultimate priority over all others. It may require rethinking the entire business operation from the ground up. The first place this may show up is in scheduling, based on historical information of when and how many operators you can predict that you will need at any given time.<br /> <br /> With unemployment at an all-time high in the last couple of decades, business owners must leverage this position of changing hours to accommodate the business (vs. Leaving hours to accommodate the staff).<br /> <br /> After payroll, your next major expense will likely be your lease, or rent, for your office. Landlords are more<br /> <br /> <br /> than willing during these times to renegotiate leases rather than lose you as a tenant. If you have been a wise investor and personally own the land your business leases, whatever costs you can cut in your personal budget to allow for the business to bring its payments down will be of a benefit to you later.<br /> <br /> Refinancing the property may be one option. If traditional lenders aren’t able to do so now, it may be useful to go to the Small Business Administration to explore ways they can assist. However, the easier course, if you can do it, is to trim your personal budget enough to allow the business a decrease without having to go to the SBA.<br /> <br /> Is This Essential?<br /> <br /> It’s inevitable that your business will have to turn to “hard money,” like credit cards or higher-interest loans, for operational expenses to keep things solvent. Negotiating down these higher rates to minimize interest paid, as well as minimizing high cash-flow cost is paramount.<br /> <br /> For example: Credit card rates may jump to a high amount (say 29%) with just even one late payment. Contact these companies and negotiate a payment schedule back down to a more realistic rate (say 9%). You may have to cancel the card, but you probably can’t use it anymore anyhow.<br /> <br /> Imagine the savings you will benefit from with just one card, let alone with several — this will improve your cash flow immediately. Of course, if you have the ability to consolidate your debt to a conventional-lending institution, you can bring that interest rate even lower, saving you more cash flow.<br /> <br /> While time-consuming, you’ve got to comb through all of your variable expenses and ask yourself if they are essential items for your business. Take a critical look at where you are spend ing your money and on what. Make a determination of what you are going to eliminate, what you are going to cut back on, what you will attempt to renegotiate, and what you will keep at current spending levels.<br /> <br /> The business may realize some of these savings immediately, while other savings may not be realized until the length of the contract for that job or item has run out.<br /> <br /> The best focus for a business in these times is keeping it simple. Revisit the basics of what you do well and focus on selling that service through your network.<br /> <br /> Do you have a built-in network? Are you actively using it? If not, now is the time. The two things that you need to focus on to not only survive but thrive during these times are networking and customer care.<br /> <br /> Networking Tactics <br /> <br /> The power of networking is a great asset to your business — it takes more time than money (and isn’t time what we’ve got more of right now?). In a difficult economy, businesses are more likely to be loyal to those that have been loyal to them. <br /> <br /> <br /> There is a community mentality of “we’re all in this together.” Networking opportunities allow reinforcement of the values you demonstrate, and ability to provide a service to customers that lets them know you will take care of them.<br /> <br /> Networking does not mean an invitation to get behind a podium and create an advertisement for your business. Networking is about creating relationships of value that give you the opportunity to communicate who you are, providing reciprocal benefits to other businesses in the community, finding ways that you can help them, and identifying ways to partner with people for the good of your whole community.<br /> <br /> There are countless places to network, from local Chambers of Commerce, to service groups such as Rotary and Kiwanis, to Toastmaster’s, to volunteering for community events, to social networking sites (Facebook, Twitter, Linked In), not to mention your own towing association.<br /> <br /> <br /> The Right Priority <br /> <br /> Networking is a way to market “emotional branding” of your company. Working with customers, however, is a more specific and strategic effort. Use the majority of your time to retain your current customers by identifying the top tier of your sales and focus on that group as your top priority.<br /> <br /> Reward your loyal customers through continual communication, thanking them for choosing your services and asking them for Feedback on a regular basis on how to better meet their needs.<br /> <br /> Think creatively to develop a value for them beyond what service you provide. Why not have a Customer Advisory Panel that is made up of some of your most influential customers? Buy them lunch once a month and ask them to participate in a forum where feedback can be given on how to improve customer service.<br /> <br /> Not only will this help your business, but for key decision-makers in other businesses to hear ideas from you on improving customer service will strengthen all of their relationships and brings them new ideas as well.<br /> <br /> When it comes time to ask for a new customer’s business, be assertive and to the point. Ask for their business and tell them what you are going to do to earn it. Don’t go into with the same tired, old ideas trying to give the “sales pitch.” They don’t have any time for a sales pitch any more than you do. Don’t bother with cold calls and trinkets, but allow your best customers to speak for you by giving “warm” referrals.<br /> <br /> Be creative in bringing new customers on board by exploring unconventional ideas such as performance pricing, which may overcome any risk aversion for a new customer, or the use of bartering (particularly useful in tight cash-flow periods).<br /> <br /> <br /> Internal Customers <br /> <br /> Your greatest business resource are your “internal customers” — your employees. When times are tough, employers ask a lot more from them in terms of their work ethic, faith in the business, and flexibility. You want to create a business environment that helps your employees grow in their own skills, where they feel their needs will be taken care of, and by being a positive coach and motivator.<br /> <br /> Consistently and frequently letting them know they are appreciated earns dividends in terms of employee morale. Small gestures that go a long way in keeping employees engaged and happy may include posting “attaboys” so everyone can see their good work, providing a barbecue meal for them once in a while, or maybe just honoring a request for a payroll advance.<br /> <br /> Evaluate your work crew and retain those who are committed to the company beyond the benefit of just receiving a paycheck. If you can’t reward them financially right now, figure out other ways to acknowledge their loyalty both now and as times improve.<br /> <br /> Well-Positioned <br /> <br /> You will be positioned well for the economic recovery by containing your fiscal freefall, focusing on your best customers while attracting new ones, and properly networking and marketing your business. All of this will allow you to hang in there until the economy gets better.<br /> <br /> The next steps are simply to put these operational items in place so that your story of your ability to work through these times is easily seen by those who can be of benefit to you in the future.<br /> <br /> A business plan will be an excellent guide for you and your employees through the tough times, and clearly demonstrate to the bank your plans for the future and how you took successful corrective action to survive when other businesses did not.<br /> <br /> For the foreseeable future, traditional banking institutions are unlikely to be very helpful for your business. Most conservative banks are looking for perfectly organized businesses to loan money to, but that doesn’t mean that you should not be maintaining your relationships with them. As part of this, ask them for the benchmarks that they want you to meet to qualify for loan packages that will be valuable to your business.<br /> <br /> Don’t disregard the need to continue to strengthen and nurture these relationships. There will come a time when the lending market frees up and you will want to be first in line for the funding your business needs.<br /> <br /> <br /> Changing Focus <br /> <br /> As business owners, we have little impact over the larger economic picture, but we can make a difference for our own business. A recession is about more than just surviving — it should focus business owners on how best to thrive! Those that do will be the entrepreneurs who learned how to sell the services they have, creatively connect themselves with their community, and demonstrate the most fiscal responsibility.<br /> <br /> A recession is a time to take bigger chances, but bigger chances also can mean bigger rewards. Why not think big and take that leap now? Your small business can thrive in its own way just like some of the other big names born during recession like Campbell’s Chicken Noodle Soup, Diet Coke, UPC Codes, Hyatt Corporation, and McDonald’s.<br /> <br />

Next Page


Publication List
 
Loading