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Professional Business Resource for Wholesale Distributors.

John Harvey-Mediation, Arbitration & Settlement Counsel

@JohnHarveymediation.com

John@JohnHarveyMediation.com

For your speed dial: 214.906.8783

 

 

 



 


 




Growth | Productivity | Business Consulting

Got what it takes to Grow?

Getting serious about growth? Take a short 10 question survey.
These are the questions to ask your management team.
Take the survey and see what everyone else said, too. Encourage your team to take the survey.

We've been studying companies that grow above the rest for a while.

They do all the things reflected in these questions. So, ask yourself HONESTLY if you really KNOW HOW TO DO and actually DO these things. To take the quiz and see what other think either click the link or copy paste the link into your browser:

http://www.growthwizards.com/growth-requirements-survey/

At the end of the 10 question surveyyou'll have an opportunity to see how others answered.

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To get the Business excerises free, send me a email with Excerise # below

Want to get caught up on the Business Exercises from Growth Wizards(TM)? Register out on the face of my wed site or send me a email for a copy of the slides: allen@allenray.com

Excerise #1   "Purchasing to A/P Processes"

Exercise #2  "Order to Collections Processes" 

Exercise #3  "Pricing and Rebate Processes"

Excerise #4  "The Matrix (secret weapon of pricing)"

 

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Productivity....where the money is.

This may sound crazy! But would you believe
it if someone told you that your assumed business beliefs or even your business attitudes were keeping you from increasing your Productivity and thus greater GP?

Virtually ever business executive talks at one time or another about achieving ‘greater productivity’ to achieve some sort of profit and business goal. They use terms like EBITDA and greater Gross Profit per Order. In addition they talk about a productivity journey that may never even get off the ground. Why is that?

All understand that change is needed. Variable cost keep nipping at your bottom line. So how do you flatten out that variable cost and reap the profit rewards that elude your company?

First you have to get past your assumed beliefs about the way you price and run your business. You really have to look inward and not accept the same old excuses like:

  • I’ve got other problems to worry about.
  • We are in great shape. I learned from the very best.
  • My mind goes numb and my eyes glaze over just thinking about it.
  • We’ll get productive someday and then I’ll delegate it (Productivity & Profits)
  • We’ve got all the productivity we can stand ("The High Cost of Low Profits-#1")
  • Our processes were set up years ago and there still good today.(High Cost of Low profits-#2)
  • Come on, our software makes us as productive as we can be.
  • Sure we have profit leakage, but we are good as the average distributor
  • My sales handles profit and their customers

Looking beyond those tired old excuses, you need to step back and look at your business differently. In the past most have looked at bank documents and inventory to gain some sort of leverage. But guess what, for the most part banks aren't lending unless you are solid gold. Many banks don't want to finance inventory (because they don't know the real value and what inventory will actually be sold in a timely manner). In addition, you have probably endured collection issues with some of your customers. And you are the only one who knows how much ready cash reserve you truely have.

So, if you have the emotional energy to carry on, you'll want to look at your business like this:

Front Room (Outside sales, Internet-Web, Counter, EDI orders),

Back Room (Purchasing, Warehouse {receiving, picking, delivery}, A/P, A/R. SPA Claims)

Asset Productivity (Inventory TO & Days, Receivables DSO, Payables, Net Cash Flow Days and Total Asset turnover).


There are two main areas that you'll want to address right now: (there will be more later)

  1. The need to increase profit on current sales and
  2. Cash that is hidden in your business.

Increasing profit from current sales can mean neogiating better prices from your manufacturer. but it also means that you need to develop and maintain your sell prices. But that is where many fail to understand that the learned and assumed business philosphies (myths) about pricing product actually limit your company's ability to generate more profit.

What if those truisms were really myths? And what if they were costing you money, cash flow, profit and etc. Would you be willing to question them and make changes. And some of you will say....NO! That's not possible. The way I learned it is the correct way. And if you were talking with me I would say: How's that working for you right now? Probably not well enough.

Over the years I have observed what were thought to be "truisms/myths and business pricing rules that have been passed down through generations. Those assumed and learned truisms are part of the reason you are not making the profit you want on your current sales. For those that are in denial about all these myths, here's a primer to help you understand that you should should examine and change the way you price product.

Click on the link to download: "7 Myths/Sins of Wholesale Distribution Pricing"

About that cash that is trapped in your business, you've probably looked in all the obvious places such as:

  1. Amount of inventory you actually need to run your business has probably been reduced.
  2. Sent back as much product as your manufacturers will let you.
  3. Worked your DSO's (Daily Sales OUtstanding.
  4. Worked on your SPA/Rebates...but they are still a problem.
  5. You may have re-neogiated all you vehicle and machine leases

But, there are other hidden spots you probably haven't looked at. The hint is: It's in your processes. Take a look over on Growth Wizards.com

For more about Myths and Sins of Pricing, I'll be posting some short talk videos that will be available for you to down load from Allen Ray Associates and on GrowthWizards.com™. To sign up for email notification, fill in the form in the upper right side. We will not spam, sell or share your email address with anyone. For the in-depth executive video series about product,pricing and productivity, including examples of what works and doesn't, you'll need to go to Growthwizards.com™ and sign up for the series as they are released.

A note about GrowthWizards.com™:

 Growth Wizards.com™ is about Executive business learning. There are premium video, books, confidential white papers about productivity, quality data that Drive Process Productivity. In addition there is a free section of short videos about new product subjects.. There are a wide variety of delivery systems including e-mail, Linkden,SMS and  Twitter.


Can You See the Forest for the Trees?

Small businesses are dropping leaves everywhere.  Credit is so tight after the financial meldown that there's little capital for growth.  Banks, which have tightened up on loans, are requiring more collateral against smaller loans--if they have money at all to lend.  There's no real room for more debt to foster growth.  You are going to have to generate cash some other way.  That's why we started Growth Wizards™.

It's going to take time for credit to become available for businesses that want to grow.  It will be awhile before the economy begins to really grow.  Easy money created the bubble, which has now burst.  So, where do you get the cash to grow again?

The Growth Wizards™ know what you're experiencing--that lost-in-the-forest feeling. We can help you find the path out, and we know others who have led the way.  Here's a lesson about growth that everyone learned in school but may have forgotten.   Growth is all about nutrients.

Trees, the most prolific growers on the planet, absorb material nutrients (knowledge) and water (inspiration) through the roots.  Light (market realities) starts the process that allows the tree to grow, branch out, sheltering others.  A person or a business needs to do the same things. 

Let us help you absorb the knowledge about how to grow and where to focus your energy.  Get the inspiration to nourish your core.  Stretch with us toward those market realities that will promote solid growth planning and execution. 

We are Growth Wizards™.  We have proven experience helping businesses growth even in the shadows of a recession, and we have the connections to other wizards.  Together, we'll find the path out of the dark forrest.   Follow these wizards:

  • Sam McCamy who led Roden Electric Supply to 500% growth and tripled profitability
  • Jim Lucy, editor of Electrical Wholesaling Magazine, who's seen it all and still has a positive outlook
  • Jack Justillian, known as the Turn-Around-Guy, grew one company's sales from $6 million to $40 million

 

 

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