Gut Check Time

If there has been a single underlying theme to most of the discussions I have had with industry businesspeople over the past few months it is this: money.

In Ontario in particular, though we’re not alone, it has been particularly acute. A summer that wasn’t hot enough in 2004 was followed by a winter that wasn’t cold enough.

And while the trending of spring and fall tune-ups and the like has largely fallen by the wayside, the life-prolonging effect of mild weather on aging components cannot be ignored. In winter, jobbers from coast to coast can be counted on to stand staring out their front windows, smiling as wind and rain and frigid temperatures drive consumers into service bays.

Well, they haven’t had a whole lot to smile about of late. One jobber in particular told me he looked at his February numbers and practically fell off his chair. An emergency meeting was called. Year-to-date sales reports were pulled. Expense reports were analyzed. Staff was polled for feedback on what the heck was going on. Then, when the arc of trends over the preceding months was applied, it turns out things weren’t that bad after all. The business had, for the most part, been getting what it had expected from the market. It just wasn’t happening when or quite how they had expected.

That, my friends, seems to be the new way, and it is only one of many changes that have taken place. Even when the business is there, it may not be happening when it might historically have occurred, or quite in the same places, or in quite the same lines. It is enough to drive a business manager to distraction. Many rules of thumb have gone out the window.

Staying on top of changes used to be an easy task. When the store count was one, and the counterperson count was you and one more, you were in direct contact with the means of revenue. Even as a business grew, most of you could get a feel for the highs and lows just by listening to the activity on the counter. As the din of ringing phones increased, you could tell intuitively that things were rocking. Or, like a parent alarmed at the sudden silence echoing from the kids’ room, a quiet counter would drag you out of your wood-panelled office with a look of concern on your face, and pointed questions on your tongue.

Now, with on-line ordering becoming more commonplace, e-mail starting to make inroads, multi-store operations being the norm rather than the exception, and phones that, quite frankly, don’t even ring as loudly as they once did, business can be happening all around you with hardly a peep.

The tighter margins also mean that you have to look at different ways of measuring your business, all with an eye to uncovering areas of profit that you haven’t maximized.

Your only saviour is good, up-to-date information. And, while that is becoming a strong point of many current computer systems available, too many jobbers are still struggling with older systems that lack the clarity of reporting that has become critical to getting a handle on your changing business.

In the old days, that was okay. You could look at the information your accounting system was delivering, combine that with your gut feel, and usually be pretty close to the month’s end in your prediction. It was a great age for the intuitive manager.

The disconnection that is a consequence of today’s way of doing business, and of the different ways of conducting business, makes that no longer reliable.

It used to be that you could walk around the store and breathe in most of the data you needed. The air was so thick with unmistakable signs of how your business was doing you could taste it; the hustle and bustle of a busy counter was a feast for the eyes, and the bottom line.

Today, it’s not so much that your gut can’t be trusted, it just doesn’t have as much to feed on anymore.