Get Prepared in 200926 Jan, 2009 By: Chris Polek imageSource
Get Prepared in 2009
2009 is beginning the year with its fair share of economic turmoil with
likely more still on the horizon. I had the opportunity to listen to an
economist discuss the economic outlook prior to the Presidential election. His
prediction was that the recession we are now in may not bottom out until end of
2009 or into 2010. Credit conditions are tight but should improve along the
way, etc. However, included in his forecast were some good indicators...
Today’s news will hardly lift up your spirits, yet this economist had two
positive comments on the current economic outlook that I found extremely
important to focus on:
- Businesses that have prepared for this downturn will be able to make
money in this downturn.
- Leaders with intestinal fortitude to make tough decisions can move into
fresh markets & take market share away from both weaker competitors & those
not traditionally thought of as competitors.
Last year I wrote an article on 8 questions to ponder for the New Year, so I
am following up with 9 questions to ask yourself for 2009. These questions will
take thought to answer, developing a strategy, and hard work to implement them.
The reward will be more sales and profits for your company in 2009, and also to
survive and take advantage of the opportunities still found in an economic
What are you doing to reduce your costs and spending?
You need to take immediate action on identifying your areas of waste and
excess, and implement a strategy to get these areas in order. Your key
managers should be able to give you a quick assessment within 3 business days
of the most important areas to focus on. If you are taking longer than 3
business days you are just getting mired in the details; speed is of the
essence! This economic environment is the time to challenge your assumptions
on your business!
What are you doing to increase revenue and profits on the service and
supply side of your business?
During the economic downturn, this sector of your business is going to be
leaned upon as your biggest contributor for revenues and profits because
equipment sales will continue to decline.
Businesses avoid durable goods expenses like office equipment and computers
during a recession, so if this sector has been a major contributor to your
revenues and profits, you need to shift gears right away. What about if you
are fortunate enough to live in an area where the economy has not been hit as
hard? The answer is credit/leasing. I recently spoke with an owner of an
independent copier dealership and asked how is our economy impacting him on
being able to sell and upgrade customers to new equipment? His answer: “Oh, I
am not having a problem getting the deals. I just had an $ 80,000 deal last
week. The only problem I had was that everything fell through because the
leasing company would not sign off on the deal!” Talk about financing
Expect this scenario to be more commonplace in 2009; and if our economist’s
prediction is correct, this will begin to improve in early 2010.
How well do you know your customers?
Do you know who your top 100 customers are? Your customers are 100% of
your revenue and 100% of your profits, so you should get to know them and their
business better. Your competitors are constantly working on a list of “Hot
Prospects.” Do you know who is on that list? Likely your top 100 customers!
You better guard those customers with your life!
How effectively are you using the Internet?
The Internet has seen tremendous presence in the business to business
community over the last 10 years. It is the most productive business
transaction and marketing tool we have seen in our lifetime. Are you missing
The copier industry has increasingly become intertwined with IT departments
of businesses over the last 10 years as well. When IT people have to research
companies to partner with on their printing needs what do you think they first
view for their initial perceptions of these companies? You got it. Their
I look at websites of dealers on a daily basis and I would definitely say
for the most part there is a real need for improvement. There are many websites
that have barely been updated in the last 4 or 5 years. An IT person can smell
that a mile away! Is your website is static or says “Under Construction” you
might as well put that same sign on your front door as well!
Truly, If an IT person or prospect was doing research on vendors and looked
at your website and your top two competitors, how would they rank your website?
Would they even give you a call back? Or take you seriously as a provider for
reliable business offerings and service? If your website is in need of a
makeover, get it done right away. It is today’s best calling card. And you can
upgrade and maintain a website very affordably instead of unnecessarily driving
business to your competitors.
How are your customers faring in the economy?
It is easy to gripe about business being down because many of your clients
business have been suffering from the economy. If you find this is happening
to you, you need to take a closer look at the types of customers that you
service. Start getting organized on finding customers that are in sectors of
the economy that are resilient to economic downturns.
Try looking for new clients in these sectors: healthcare, food distribution,
water purification/distribution, electricity, natural gas distribution,
consumer non-durables, and education, particularly community colleges. Right
now unemployment is at its highest level in 14 years yet community colleges
will have record enrollment levels as the unemployed return to learn new
What are new markets you can move into this year?
How well of a job has your organization done in selling more printers to
your customers? Even though most of the economy will hold back on a purchase
of copiers, they may be willing to purchase some printers, since they are less
expensive. If your techs are not trained to service printers, you can work
quickly where they can learn the skills to do that.
Right now copier dealers are connecting their equipment to networks. It may
or may not require much additional staff for your business to also offer
network support to your customer base, but this area should not be overlooked.
Start asking your customers about this aspect of their business. You may be
able to do a good a job, maybe even better than their current provider; you may
even save them some money. If you could do this, would your customers consider
giving you a shot?
What is your compelling reason that your customers and prospects should
buy from you?
If you don’t have this figured out yet, you need to get to work on it right
away. Once you do, everyone in your organization, and all your marketing
efforts need to be communicating this message. If you don’t do this, you risk
your business being just another face in the crowd. During tough economic
times, your company needs to stand out, and be recognized, if you want to be
successful in an economic downturn.
Can your business afford the mindset of “OEM only”?
Earlier I stated that during an economic downturn the service and supplies
end of the business will be leaned on to contribute more revenues and profits
to make up for that loss on the equipment end. Most industry experts will tell
you that for your business to be profitable and competitive; your benchmark
needs to be a gross profit margin of 52%. How does your business measure up to
Using compatible parts and supplies will significantly help you get in line
with this benchmark. Savings average anywhere from 30-60% versus the OEM! If
your buying behavior has been OEM only, is time to consider making some
A common objection I hear from dealers is that their manufacturer has quotas
for them on parts, supplies, and equipment so that they get an additional
discount on their machine purchases. Remember that in 2009, you can expect
equipment sales to slow down, and the last thing you need to do for your
business is to tie up too much cash in inventory.
As an independent dealer you have to think about the survival of your
business first. Today’s environment for the independent copier dealer is
tougher than ever. Your OEMs are not only putting quota pressures upon you in
2009, more of them are also competing directly against you. Does your business
fall into that category? You need to be a tough negotiator with your OEM to
work out what will work best for your business, and help you survive the
economic downturn. If you carry more than one brand you have much more
bargaining power to negotiate the conditions you are looking for in 2009.
Okay, what about your attitude?
Now more than ever is the time to re-focus your attitude. As a business
owner you need to lead with confidence and optimism, with the attitude: “We can
beat the economic downturn!”
Chris Polek, CEO, Polek & Polek. If you would like to discuss any
questions or need more information, feel free to e-mail Chris at: