According to David Moore of The Panamint Group, financial consultant for Nationwide Marketing Group, there are 5 actions independent retail dealers can and should take now to lower costs and in turn lower their sales breakeven point during these challenging economic times.
Action 1 – Employees
Lower overall employment costs and required state and federal payments you make by ensuring that all employees are an asset to the company. Remember, each employee is responsible for his or her salary, their benefits and a fair and reasonable profit.
Action 2 – Sales Training
Look closely at your sales force. Are they well trained in product knowledge? Do they sell what they see in-store or special order around on-hand inventory to make the sale? Should you make it a policy to get 50 percent to 100 percent of retail cost on special orders?
Action 3 – Cash Flow
Review your accounts receivable and accounts payable each week. Project cash flow based upon decreases in accounts receivable and charges in accounts payable that can be re-negotiated. Keep your creditors in the loop of knowledge, they will usually work with you if you remain open with them.
Action 4 – Assets
Look at all your assets and dispose of the ones that are not generating a return on investment. A decrease in assets is an increase in cash flow and a reduction in overall costs.
Action 5 – Balance Sheet
Before you look at your income statement, carefully review your balance sheet. This document is a statement of the health of your company and the document your creditors put most emphasis on. Look for areas in both the asset and liability sections for potential cost savings.
Robert Weisner, Executive Vice President of Nationwide Marketing Group