Ceta Edge: Lessons Learned from 2015 and Preparing for 2016

Ceta Edge: Lessons Learned from 2015 and Preparing for 2016

By Diane M. Calabrese / Published February 2016

top-pic

 

Long before Groundhog Day became an event in the United States, sunshine on February 2 was considered a bad omen, or at least an indicator that winter would persist well beyond the date.

 

Close to the midpoint between the winter solstice and the vernal equinox, February 2 begins an interval when even the most unobservant inhabitants of higher latitudes notice the increase in the period of light each day. For our industry, it’s also a reminder that changes instituted for a new year of business ought to be firmly in place and ready for the rush of spring.

Late in 2015, some members of the Cleaning Equipment Trade Association (CETA) shared with us how they were preparing for 2016, as well as lessons learned in 2015. What they tell us provides reminders for readers who want to do a recheck on their own operations before the pace of the year accelerates.

For instance, one distributor is aiming for a less concentrated and more efficient process of monitoring stock. “We are planning for a change in the way we take our parts inventory,” says Chris Meyer, controller at Ben’s Cleaner Sales, Inc. in Seattle, WA. “Rather than doing a big rush/push to get all parts counted toward the end of the year, we are dividing up the inventory counts to do a portion of it each month,” explains Meyer. “This will allow us to plan better for inventory reorders and spread inventory and labor expenses across the year.”

Every gain in efficiency ultimately cuts costs. Time really is money for a business. So thinking about how to increase efficiency is a good place to begin any reappraisal of the year just past as preparations continue to get 2016 on a robust footing.

Sometimes reviewing the way 12 months unfolded causes a bit of melancholy. ‘There was a time when…’—that’s a phrase we most often use when we evaluate a time past and lament a business (or other) practice gone forever. The truth is that in the contemporary business world, there’s genuinely no time to dwell on wishing things were a way they are not.

“On our bigger transactions, all transactions and requests should be documented in written form,” says Roberta Savelli, president of Industrial Equipment in Chico, CA, which is a business lesson learned—confirmed—in 2015. “Sometimes being a small business, so much is done on a handshake, but people forget.”

Moving into 2016, Savelli is continuing with the best practices that are routinely undertaken by her company. They include “inventory review and assessment,” she says. As part of the appraisal, there are questions that are being asked, explains Savelli. Among them are: “Should I purchase it now before my vendors all increase their pricing? Did this item sell? What affects will the weather and economic conditions mean to our buying?”

Savelli says one thing she did to prepare for business in 2016 that she had not done before is purchase professional-style equipment for booth displays. Getting the immediate attention of prospective customers will be easier.

Recalling lessons from 2015 and readying a business for the future, it’s not possible to ignore certain questions that come to mind. “Mom and Pop stores—can they survive?” says Savelli, is a question we should be asking and addressing.

Pragmatic Preparation

Just the effort made to prepare demonstrates a practical approach to business. For all the accounts of exponential growth—first in the dot.coms, now in the app-driven businesses, and long before in the sale of tulip bulbs, established distributors and manufacturers know that sustaining a business is not synonymous with instantaneous growth.

A lesson learned in 2015 that makes the point is outlined by Brenda Purswell, president of Alklean Industries, Inc. in Pasadena, TX. “To stay conservative and true to your business model is imperative,” she explains. “Business changes and you have to be prepared. When business turns down, be willing to look for new opportunities.”

Moreover, in looking for the opportunities, be creative. “Think outside the box,” says Purswell. “Our company added some new products for 2016 to try to replace the products used by customers who have suffered setbacks in their business,” says Purswell. “Of course, if your customers have setbacks, that will trickle down to your business sooner or later. If you can keep it a trickle instead of a flood, you can survive and prosper.”

There is not exactly one thing that Purswell does each year to prepare for the next, she says. There are several interconnected links to readying for a new year. “I don’t know if it is one thing, but this is a good time to polish the old crystal ball and try to see what is coming,” says Purswell. “Read, study, listen, and pray.”

Established distributors and manufacturers must be as in tune with the basics of credit as much as new companies are. “Crucial to surviving slowdowns,” says Purswell, is to “stay debt free or limit your debt.” Purswell emphasizes she knows that businesses incur debt for good reasons. “Of course, it is a great blessing to be debt free,” she says. “But if that is not an option, watch your leverage because if one thing has been constant, it is change. Great years have a cycle and they are followed by difficult years.”

Be prudent to be able to move along with the cycle, says Purswell. “The time to develop a sound relationship with your bank and get on a first-name basis with your banker is when you don’t necessarily need them.”

Reminders

With the basics in mind, February is a good month to make certain that everything possible is being done to stay strong. CETA membership should be current. At the same time, because there is strength in numbers, it’s a good month for encouraging a colleague (or competitor) in the industry to join CETA.

Perhaps being more active in CETA is part of the plan in 2016. Be sure to take advantage of member benefits, which can be reviewed at www.ceta.org. Also, pass along ideas and suggestions to board members—whose contact information can be found at the same website.

As part of the process of making 2016 a good year, be sure to understand all the ways that CETA can help with tools, such as benchmarking to increase profits. (Recall that benchmarking goes beyond in-house assessment because it allows distributors to view their operation in context to answer a key question: How is our business doing relative to competitors?) Keep up, too, on the industry updates provided by the technical committee. Participate in education classes—at the annual meeting or through webinars. And plan now to attend the annual meeting, which has co-located with ISSA.

The premise of the 1993 movie Groundhog Day was doing the same thing over and over until getting it right. Certainly, we all do some of that each day—and year—without (we hope) as much to rectify in our personal or professional life as the main character in the movie.

Yet as long as we are earthbound, we must keep striving to do better each day than the one before. We move forward by learning, doing, accepting, and changing (for the good) what we can.