Beyond price competition and staffing, independent retailers face a unique set of challenges compared with their big-box competitors — namely, they have often have less capital to properly expand when an opportunity presents itself.
Small- and mid-sized businesses, furthermore, are often unprepared for the issues that can arise when an owner departs and there are no parties available (or willing) to pick up the reins.
In order to aid dealers in making more strategic decisions, Wells Fargo is offering a series of modules to equip them with information about financial statements and succession planning.
The CDFconnect Education Series, which is typically presented during dealer meetings as part of learning agendas, introduces such ideas as key ratios and cash flow to enable greater comprehension and application of financial statement information. A session on succession planning, meanwhile, helps attendees build a roadmap and anticipate what they should know when it comes to valuation.
“Most of the smaller independent dealers have carved out a small niche that they serve well,” noted Chad Lyon, head of electronics and appliances at Wells Fargo CDF, in a recent call with TWICE. “[But] expansion can be a challenge. … When we see challenges, it seems to be [retailers becoming] over-reliant or too comfortable with how their business model is operating, and the cash they’re taking relative to the cash they’re generating.”
Independent dealers are further pressured by ensuring they have the proper amount of backup cash to support their needs and dips in revenue, he added.
Workbooks, checklists and supplementary reading accompany the presentations and sessions, and Lyon cited follow-up engagement as one of the most useful tasks a retailer can undertake.
“Make sure you’re engaged and connected to people,” he advised. “Take notes, ask questions, engage with the other people in the room.”