Recycler Newsletter – September 2015
Written and published by Ron Sturgeon. autosalvageconsultant.com, email to firstname.lastname@example.org. To register for future free issues, visit http://www.autosalvageconsultant.com. Don’t forget to watch for our management articles monthly in Recyclers Power Source Magazine, or posted at our web site.
Tools for Success – Financial Statements and Metrics
The first article in this series listed several tacticsto increase your business success. I will devote the rest of the series to taking a closer look at each of those tactics. Last time, we talked about banking smart and the need to have a second banker. If you want to know the ins and outs of building a great banking relationship, get my book Getting to Yes with Your Banker.
We will expand on financial management of your enterprise in this installment, specifically financial statements and metrics.
Financial Statements and Metrics
I can hear the groaning. I know you hate the financial statements, but they are unavoidable. I will give you one escape hatch: If you have enough employees, you can delegate preparing them to a trusted employee.
If your business is small and you can’t delegate preparing them, then buck up.
Get Them by the 10th of the Month
You must have monthly financial statements by the 10th of the month,whether you do them yourself or have them done for you.
You don’t have to understand every single line item, but I do want you to dig into your Profit & Loss (P&L) by the 10th. Make sure that your P&L shows the prior 13 periods so that you can see how you were doing in the same month last year and get a sense of how things have been in the periods in between.
Shine Your Light
Wherever you shine your light, you will improve.For the moment, let’s shine a light on expenses. Once you focus on expenses, you don’t have to be a college graduate to see which ones have gone up, which ones have stayed the same, and which ones have gone down since last year. Why have some gone up? What can you do about it? Where can you find savings that will translate right to the bottom line?
Make sure your financials show percentage of sales. You will figure out very quickly which expenses need your attention.
Make It a Habit
If you make poring over your financials a monthly habit, you will get better at seeing where you need to make improvements. You will also get better at seeing figuring out if the changes you are making are affecting your results the way you expect.
Why You Should Do it by the 10th
That last point is why you need those financials on your desk by the 10th. You need to get them analyzed in time to make a change so that you can see results when you look at financials next month.
Like every other owner, you get 12 opportunities to review your monthly financials. If you don’t get them until late in the month, you can’t make the needed changes at the pace you should. As I see it, if your financials are not on the desk by the 10th, you are giving away six of your 12 opportunities and will solve problems half as fast as a competitor who gets timely financials and acts on them.
Why wait one month to start working on a problem?
Build Cumulative Advantage
Remember also that the advantage of timely financial analysis and action is cumulative. How much farther along could you be if you used every month to solve issues revealed by your financials? Once you see problems and start working on them, you will see results and get excited about making your business all that it can be.
No matter what anyone else tells you, ALWAYS have and use two banks. Have a business bank and a personal bank, or mix it up. No matter how you do it, you must have loans at two banks to keep your bankers on their toes.
ARA Convention and Expo October 7-10 in Charlotte, NC
It’s convention time again for the ARA. Don’t miss your chance to meet other owners and improve your business. Details about the convention and agenda at https://www.pointview.com/e/908#event.
Google Update Affects Sales for Recyclers with Non-Mobile Responsive Sites
Google is now factoring in how mobile-friendly a site is when it ranks search results. If you have seen a big drop in your web traffic because your business site is not mobile friendly, I can offer you a free website audit to find the trouble spots so that your site will show up in high in the search results. Most shoppers never leave the first page of Google results, so having a site that ranks well can mean that the cash register rings a lot more. Email me at email@example.com and put free website analysis in the subject line.
Remember only you can make business great!
Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.
Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.
As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.
“Whenever you see a successful business, someone once made a courageous decision.”
~ Peter Drucker
AutoSalvageconsultant.com was formed in 2001 to help recyclers improve their businesses. With over 50 years of experience in 3 staff members, the group is THE definitive source for recyclers’ management and training needs. Mike Gibson and Tammy Sturgeon joined the team in 2003, and bring a wealth of experience to the team, plus more resources, as there have been more requests for help than Ron could meet. The founder, Ron Sturgeon is past owner of AAA Small Car World. In 1999, he sold his six Texas locations, with 140 employees, to Greenleaf. In 2001, he founded North Texas Insurance Auction, which he sold to Copart in 2002. In 2002, his book “Salvaging Millions” was published to help small business owners achieve significant success, and was recently reprinted and published in Chinese. He also manages his real estate holdings and investments. You can learn more about how to help your business at www.autosalvageconsultant.com.