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Random Lengths Survival Tips Survey Comments

Supplemental to article appearing in Random Lengths, Friday, October 23, 2009


What is your best survival tip or cost-cutting move to help make it through the approaching winter?

Don't cut back too much-this is going to be an opportunity to take market share from those that cut too much.
Save, save, save as winter income will be very limited...
Spend time networking vs. Dollars advertising.
Looked back and have brought certain items back in house instead of subbing out
Communicate with employees and customers about changes in the company based on the local market
Examine expenses as frequently as possible.
Keep your mix of customers as diverse as possible. Our mix of industrial /builder/retail is a huge help.
Keep your eye on the "overhead ball." No matter how much cost cutting has been done, there are always the little things that make a difference. A dime here and there soon add up to be a dollar.
Big ones have been done. Staff reduced, owners uncompensated, salaries rolled back, rotating lay-offs in place, hours of operation reduced, unnecessary inventory, equipment liquidated, employee burden of insurance premiums increased, customer appreciation expenses slashed, etc. Now it's thermostat lowered...dress warmly, unscrew every other light bulb, poop at home,...
Think long-term, extreme negative attitudes create opportunities for those with long term plans. If you are financially healthy you will lose more competition over the next 6 months. Don't confuse competitors' desperate moves as reason to do battle on price only. Pricing patterns in 2010 will not mirror 2009. Supply has been cut dramatically, any additional lost production could dramatically affect pricing on some items in the short term, but any industry that is operating at records levels below capacity will still struggle to have any long-term control over their destiny.
As a purchaser of wood products, I want some assurance that the price I pay is fair. I recognize the need for my suppliers to make a profit, but I want to share in the advantages that lower costs offer. Conversely I'm willing to share the pain of higher prices with my suppliers. A pricing index has worked to our mutual satisfaction.
Cub-scout motto: prepare for the worst and hope for the best. Focus on internal improvements versus external improvements.
Be very careful who you extend credit to and what amount you extend to them.
Flex hours and shipping routes.
Keep looking on the side of the fence---just because it worked in the past isn't always the answer.
Our best advice is watch every dollar you spend. Also, keep a positive attitude during the ups and downs.
Keep a lean inventory, review your product mix closely, don't lose contact with your customers and keep a positive attitude.
Low inventory use it as you buy
Keep the best cross trained employees who can do more than one job or task. Operate only the most efficient machinery. Manage inventory as close to just-in-time as possible. Invoice as soon as the job is done. Request prepayment to cover any material not in stock. Look for new applications of your core business. Partner with someone when a customer what's something not your core business. Do not lose the sale. Try to get more of each job. Manage your schedule to keep out of overtime. Network with other businesses to gain knowledge of new work developing. Use the time to revamp and re-think the way things are done. Remove as many steps in the process as possible.
Sell the labor to install the material you sell. This allows you to control the delivery mechanisms and the material used on the job.
Do all of these jobs and more, president, purchasing agent, yard foreman, dispatcher, sales and sometimes truck driver. Go to work early and stay late. Hope your heart and the money holds out and that somehow there is somebody that wants to build something in the spring as well as now.
I am optimistic that business will come back. In the meantime I am spending more quality time with the wife and kids to make up for what I missed when we were too busy. My wife and I are also cultivating old friendships- all who are in the same boat.
Stay on top of credit. Don't allow yourself to sell less than desirable credit risks just to get an order.
Assume we have not seen the worst in spite of recent performance. Cut out anything and anyone not absolutely necessary to function at the barest minimum. Any uptick can be gladly handled.
Just-in-time inventory and strong communications with staff and clients.
1. Reduce all unproductive personnel if business does not warrant them as full time employee over the winter. 2. Reduce all on ground inventories. 3. Reduce all unnecessary business trips, except customer visits, but reduce the amount of expenditure dollars on them. 4. Make sure all sales activities are proactive not reactive.
#1 will be to not put yourself in a position to fail...period. Taking a position and assuming more risk than one can afford will be devastating to anyone who cannot handle a mistake. There will continue to be few opportunities to succeed and certainly not enough to cover any losses. Stay awake but be conservative.
Be diversified. Be able to sell to various customer groups with a minimal inventory investment.
Reduce your accounts receivable and tighten your controls on the institutional accounts you are forced to keep. Raise your operating margins because you won't be able to cut costs enough and don't take business unless it meets your margin requirements.
Find efficiencies anywhere and everywhere. Cross train and don't assume anything
What you've done in the past to make money isn't enough at present. Improve on what works well and change what isn't working. You may need to work twice as hard to get the results you want and remember competitors are going to try harder to take your business.
Make sure you get paid and don't go after jobs with shaky financing.
Stay focused on your core strengths and key customers.
Bid a lot and hope for the best.
Watch your expenses and invest in your employees. Take the time to sharpen the skills of staff and prepare them to provide the level of knowledge and service customers expect.
Operate lean over the winter months, if you aren't moving that much product save the inventory dollars till demand perks up.
Lower inventories, close supervision of maintenance costs employee hours,
Sell as much as you can for as much as you can.
Daily management of inventory levels, receivables, expenses and sales!
Keep your inventory as low as possible. Cut out any unnecessary expenses. Do not buy material based on price alone, purchase only what you have to have to stay operating.
Keep your focus on your customers. They may not be buying as much, but they will buy more from the traders who care and go the extra mile with service. Emphasize specialty products which are not as price sensitive as the commodities.
Improve communication between my company and the people we interact daily with.
Watching inventory levels closely along with market prices. Keeping staff hours to a minimum and watching productivity. Focusing on customer service.
Instead of right sizing to business volumes 2 to 3 months after reduced volumes, try to anticipate on a very conservative basis and get ahead of the curve by 2 to 3 months. Protect cash and try to hold margin as best you can.
Sleep.
You must remain aggressive in all areas of your business plan. Sometimes when you pull back or go into cost cutting mode you save in the short term, but it up paying a higher price in the long term. By aggressive, I mean one must be vigilant in making the right decisions for the company as a whole.
I recently joined forces with another company to cut duplicate cost down and relieve some liability costs. My emphasis has been to focus on industrial markets rather than contractor suppliers. Smaller markets also produce some business because they are not as affected as larger tract builder markets.
Buy low, and try not to sell lower.
Customer service is more important now then ever. Quit complaining you can't do something because you're short of help. We all are.
Decrease inventory, A/R and labor.
Hold inventory levels down and turn material to maintain or increase cash flow. No loading the boat. Weather and lack of business will keep down prices. No panic buying. Reduce hours and cut expenses. Due more with less.
Don't miss an order...
Vendor relationships are key, communicate your exact needs and work with your vendor to develop the best strategy. No more can we play one against the other, it must be a partnership for both parties to survive.
Lower the thermostat, tighten your belt and above all, keep the customer satisfied.
Improve cash flow.
Keep inventory to a bare minimum. Wait for an improvement before buying extra.
Diversify. Run very thin inventories to reduce carrying cost and reduce risk on a very non-liquid market.
Sell more hardware, floor covering, non-lumber items.
Be aggressive and positive.
Sell off your slow moving inventory and buy mixed trucks to fill in the holes through winter and this will allow you to order special order items more frequently. Special orders usually demand a higher margin. Go outside your normal box and look for other opportunities you usually wouldn't before. Do market research on new products to see if they will sell in your best areas. Use the slow time to your advantage to make the best of whatever good time you will get in 2010.
We have cut inventory and buy our lumber just-in-time to make delivery to our customer which lets us get paid lots of time before the invoice for the lumber has come due.
As a distributor cut expenses / lean and mean for winter survival.
Maintain relationships with those brokers and companies that you know are solvent. Old stable dependable sources are your best bet going forward. ---they "want" the business, they know from experiencing previous downturns, what it takes to maintain sales in this economy.
To remain flexible enough to accommodate customers needs for specialty items in a very timely fashion.
Cut labor cost. Fewer people. Little or no overtime.
Cash is king. Don't commit to inventory that's not needed for operations/sales.
We have cut our hours to 40 per week, instead of 45/50 before. Keeping our inventories lower. Keeping our margins lower.
Keep your medical safety kits well stocked for your crew and employees to use. Trying to get through with less crew during this stressful economic time can be tough. Yet keep your safety kits stocked up! An ounce of prevention will save you a great amount of money in medical costs down the road.
We have downsized and reduced our costs of insurance, energy and pulled the inventory down to a minimum level. Also we have been very selective with credit.
Cut cost. Build up good inventory now so we can ride through the winter with less people. Upgrade our equipment were we can. Work with new customers and old. We are looking at getting busier after the winter.
Dress warm.
Maintain adequate inventory & continue to provide excellent customer service.
Dump advertising, it's useless in this market. Don't lay off or cut hours so much that your service suffers, in this market service is more important than ever. When you cut pay, cut your own pay the most. When it's good you make the most, when it's bad you make the least. If you're in it for the long haul, you don't want to kill the goose that lays the golden egg.
Watch credit like a hawk. Cut expenses before you think you need to
Provide the best possible customer service that can be produced, some customers are still out there and your effort will bring them to you. Also, train, train and train for better times.
Pare inventory to the bone.
I have my hard hat, protective eyewear, chest protector, and protective cup on, and am ready for business. In other words, paying attention to all facets of your business will help you survive. Cost reductions alone will not make you succeed. You need to be vigilant on credit, a bulldog on sales, a supreme motivator, and very diligent. Good luck.
Diversify - wood products come in many forms and end users have many different needs. Try to find some of each that aren't in your normal comfort zone and see if you can make some margin there.
Controlling overhead costs will be key to surviving the winter... For example reducing inventory, cutting employee hours as needed.... We see some promising signs for 2010.......
Stay in front of your core customers and take advantage of this slow period to expand your customer base in new directions.
Our company has always been lean and mean and we continue to operate that way. Customer relationships are more important as ever. Have stock to deliver when the customer needs. Inventories are light, be open to heavily mixed trucks and tallies. As always don't spend every dollar earned.
Sharpen your skills.
Right size your company last winter. If you are waiting till now to figure out how to survive in this economy, you should probably just fall over dead now and stop screwing up the market for those that will survive.
Don't count on what you have done in the past to pave the way, diversification may be the best move you make.
Keep your overtime to a minimum. Don't wait to layoff. As tough as it is you will be thankful and so will the laid off employee when you are still there to call them back.
The largest variable cost for the producers are seen in binder costs, so look for the best CARB 2 compliant (most cost effective at dosing rate ) resin that you can, evaluate the total cost package including energy, testing costs, stack emissions and factors not often reviewed, our analysis shows that MDI is the cheapest overall binder.
Take care of your current customers better than you have in the past. Remember that someone is right around the corner who is willing to do what you do not want to do.
Buy good quality, from good quality suppliers. Pay your bills on time and it get easier to survive. You don't have to focus on the past, just look forward to the opportunity may that come your way.
Watching cash flow.
Keep inventories low. Invest in equipment to prove maximum processing flexibility to take advantage of product/pricing opportunities as they arise whether it be in lumber form or species.
Consolidating inventory, minimize large purchases, and reacting quickly to quotes.
Keep overhead low.
Every order is a good one no matter how small.
This has nothing to do with winter, more with the economic cycle. We are trying to lock in commodity prices wherever we can in order to take risk off the table. We've already been through a supply initiatives program where our materials have been competitively bid out, we also have qualified plan b suppliers identified, and we've explored where we can substitute less expensive materials. For some critical categories we are dual sourcing in order to reduce our supply risk.
Sell an extra truck. Drivers on call. Use timers on truck heaters. Trade with competitors to keep inventory low. Wear an extra sweater.
Make sure you have the home order firmly in hand-do not speculate.
Keep it simple. Core business is the best practice. Look at specialties first.
Keep close eye on credit and continue to increase inventory turns.
Watch all expenses and question any and all unnecessary ones.
I compared job descriptions to what my purchasing department employees actually did and determined that by reallocating responsibilities I could reduce the workforce by 18%. I also required the remaining staff to work longer hours so we could maintain a consistent service level to our internal customers. We're reducing inventory and reviewing pricing strategies to make sure we don't leave any money on the table no matter what the item is. We've narrowed our supplier base to ensure we have more clout with those who make the cut. We've worked with them to eliminate arbitrary fuel surcharges, stop off charges, and order minimums.
I now do the buying so I can keep inventory needs more in line with projected sales.
We have to stay lean & mean...what little business there is, we must stay aggressive, progressive & vigilant.
As a treater, try to pay bills quickly, within 10 days, if possible. Credit is tight, and won't ease up soon, but the need to stay responsive to customer's needs is still present. Ordering mixed, just-in-time TL's a must. To make sure you get what you pay for at the best possible price, pay for it sooner rather than later.
Cut overhead and employee benefits. The government is going to save us all.
Have a good relationship with your customers ---do what you tell them you are going to do, do it when you say you are going to do it and maybe the loyalty factor will kick in and whatever business you customer gets you will get a shot at it.
Cut back on inventory and watch overhead real close.
Be flexible. If you cannot find the material that you traditionally have used due to price or availability you have to look at modifying your operations to process the material that is available at a cost that is reasonable. Take advantage of any price breaks that may be available if you can buy in volume.
Tight control on inventory, personnel and receivables. Have parked and canceled insurance on unnecessary equipment or sold if reasonable price could be obtained. Reevaluated all insurance policies for property values and changed to an HRA health insurance plan.
Try and keep an upgrade in quality, but without paying a premium. Keep inventories lean, but don't run out!
We are and have been in an inventory cutting mode. We have cut other costs to the bone. The next step is more of our staff, which I genuinely hate to do. We are down to our core, and I will miss them badly when business once again picks up. 2010? All I can say is that it can't be as bad as 2009....CAN IT?
Work hard and smart.
Reduce the number of employees and hours worked so that the company can remain profitable.
Unfortunately almost all our variable expenses are in people, we have already gone to bare-bones as far as number of employees, so our future options include cutting hours and salaries across the board.
Take no positions. Back-to-back trades only!
****
My best survival tip beyond the obvious-trim payroll and variable expenses is to get involved in the politics of the day and vote this November for those who understand economics 101 and the capitalist system. Our greatest impediment to recovery is our own government. Vote the anti-capitalists out!
We have cut all overtime. We replaced a couple of people that left that were full-time with part-time. Having to keep a real lean inventory... Sales are just down right slow... And nothing looking good for the next few months... I have been here 31 years and it's the worst I have ever seen it...
Review all G&A expenses. Small savings in several areas could result in significant savings. $100/mo. adds up to $1200 annually.
Negotiate continually, retool during downtime to capture every efficiency possible.
Service people the way you want to be serviced. Our customer base is changing all of a sudden the carpenter that was working for a major builder is out doing either handyman work or side jobs to feed his family. Find ways to help these guys make money and you will not only help them, but help your bottom line.
Don't buy logs and make lumber.
Stay on top of your customer's real needs. Do not allow them to over estimate their business. I also try to show them a wide variety of products and wood species that may work for them. This gives them food for thought in this ever-changing market so they do not get "bogged" down on things they have always used.
Target government sector.
Get plenty of exercise, work on what you can control, don't worry about the rest. Get a good night's sleep
I have no magic answers...low, low, low overhead
Be more aware of your competitors pricing strategy and extended term offers. Do not downplay your competition, get more one-on-one with your customer.
Cutting back of hours and trying to keep the best employees busy in these tough times cut back of inventory.
Stay as close as you can to your remaining customers, and cut all expenses you can.
Practice the fundamentals, which is what made you successful in the first place. The fundamentals never change. Focus on the 20% of your customer base that generate 80% of your sales.
Cut the fat, then the meat.
Keep overhead as low as possible and only buy when you need it. It's better to bring in a few bundles of lumber through distribution at a higher cost than to buy cheaper lumber in bulk if it's going to sit on your yard for 6 weeks. In times like this, cash flow trumps margins and being the cheapest place in town.
Write the number down of what you have to write in profit each day and how far you have to go to make the number happen. This will help you focus on profit not the noise that is around us. Of course counter every piece of the deal...material...freight...terms...discounts....everything. You are gonna have to take some chances to make the gross....be as careful as you possibly can. Do not risk your minimum cash capital requirements.
Good people working hard, staying close to what your core business is with customers that keep account current.
Don't take a bad order, just to get an order. A bad order in bad conditions is worse than a bad order in good conditions!
Cut payroll and expenses as much as possible, and pray for a change in government.
We are remanufacturing low grade 4x4's into low grade 2x4's to keep lumber in stock at our reman facilities. Low grade is the hot item right now and I think that low grade demand will drive the market up, carrying #3 and #2 lumber with it. I've never seen this happen in my 19 years in the industry, where increases in low grade lumber prices drives all lumber prices higher.
Instead of waiting for the storm to pass, we now love dancing in the rain. Let it rain, let it rain!!
We have adjusted hours to keep everyone working and suspended all donations. All heat & air units are on timers so they are off during non business hours.
4 day work week.
Take care of your good paying customers the best you can. Follow the three rules of Warren Buffett 1. Only do what you know how to do. 2. Don't lose money doing it. 3. Never forget rules #1 and #2
Buy only what you must have, nothing else. Stay with your best customers and look for ways to increase business together.
Expand customer base and products.
Stay in touch with your customers, give them what they want. Customer service is the key and staying in touch.
Build a shed, sell what you need to survive and hang-on.
Maintain the disciplines that gave the sure foundation of successful selling: 1. Financially sound customers. 2. Prospecting for customers. 3. Keep in contact with what the mills have to offer. 4. Have something to offer when talking to a customer. 5. The best rapport you have with a mill is to buy from them, best rapport with a customer is to sell them.
1) Reduce inventories. 2) Monitor receivables closely. 3) Cut out all unnecessary expenses.
Be as optimistic as you can! Spring will come soon!
We would like to know what we CAN DO to survive! What we have done is to curtail hours to (3) days a week.
Instead of making lumber, cut the logs into fire wood and burn them for heat during the winter. Go hunting and kill something edible. That will provide your family with food and since you are such a poor shot you will use up all of your ammunition. Without any commission checks, you will not be able to buy more bullets and therefore you cannot shoot yourself. This way you can still be a provider for the family and still live to work another day. :)
Stay proactive.
Continue to do what everyone should already be doing. Cut overhead as much as possible. Focus on diversification in product and customer base. Focus on products that yield the highest margins and try to eliminate errors that take away from profits. Other than that pray a lot.
If you are buying not many are, remember that.
Work with suppliers to make sure a fair price is given and work with customers to help them to be profitable.
1. Make a monthly budget and stick to it. 2. Find the quickest route to work and drive the speed limit. 3. Get there early and stay as long as it takes 4. Carry your lunch. 5. Drink water all day speed up the metabolism.
I have no tips.... Would love to hear what others have to say.
Keep inventory levels in line with sales - have target range that alerts you when inventory level is approaching high or low limit. Review and renew marketing efforts. Review accounts not currently active and look for new products/opportunities that you have not considered before.
Don't pay your executives.
Just stay as close to your customers needs as possible and keep good contacts with your suppliers. Look for new opportunities in other/related industries that might offer something different.
Increase inventory turns.
Being receptive to counter-offers. Asking questions. Offering solutions.
Continue to serve those accounts that are credit worthy and prompt pay. Concentrate sales of items that historically have consistent demand to DIY stores. Under no circumstances allow any account extended terms....if this occurs, clean up receivables and discontinue selling.
You have to make the cold calls!
Survival should not be thought of as a "through the winter" challenge, but a 1-3 year process.
Hunker down while I take over.
Cutbacks on all levels. Finding ways to do more with less, maintaining sales positions and market share of down market. Inventory reduction, renegotiating payment terms with vendors, exploring new product lines and incorporating into sales, etc.
Rely heavily on long term relationships and keep your customers informed on market conditions as soon as you see a change.
Look for other products and servicing to offer the customers
In an effort to maintain enough cash to operate - closely monitor overtime hours, cut hours of production, and purchase only enough raw material to keep running.
Get inventory and operating cost down before the business slows. 2010 will be like 2009 in the first half with 2nd half up about 20% we hope.
Get rid of anyone that is not related to sales, starting at the top, with admin assistants, it people, sales assistants, all the way down. Get lean, roll up your sleeves and get in the trenches. If you have to pull your own orders that you sold, so be it. You know it will be right and these times accuracy and orders complete are real important to get continued sales.
Keep your quality consistent and try to keep the customer base you already have, and hopefully try to add a few new ones. Keep all expenses down without jeopardizing business. Stay in constant contact with your customers and be aware of what they are seeing on a day to day basis.
Continue to network with mills and customers
Make them wait for quality
Buy as needed in the troughs. With the limited production capacity, it is a bit easier to predict.
Reduce inventory. Run lean.
Make the tough decisions about overtime and employee count. It is much better to make the difficult decisions to cut employee related overhead, thus maintaining the health of your business for those that remain. Constantly look for ways to cut your expenses.
Treat every inquiry seriously. Special orders can generate a higher margin than lumber sales.
Inventory turns/inventory investment is key--have enough but not too much.
I'm digging out some old Zig Ziglar CDs that I haven't listened to in years. A positive mental attitude is probably the best overall asset to acquire and keep through tough times like this.
Payroll measures: - cutting staff hours - cutting staff - cutting pay.
Keep inventories at manageable levels. Look for high profit quick moving items that your competitors don't have and service the hell out of your customers. Don't be afraid to say no to customers if it is not profitable to your business, let someone else take the hit.
Keep it tight. Watch every expense.
We have lowered the price we pay for logs and only buying those sawmill parts absolutely necessary to keep operating. Most of our repairs are being done in house and with materials that may be used but are operable.
Keep inventory levels lean, buy only what you need at the best price, keep manpower as lean as possible, and listen to what the customer is requesting/saying!
Watch your inventory and maintain a good balance.
Back to back orders.
Have your inventory where you need it to be for year end. Not overstocked, not understocked. Demand isn't likely to be your biggest problem during winter months. However, with most mills looking at the bottom line and production cutbacks, be sure you have enough to cover your planned needs. Taking a "position" during slower months, means an outlay of cash and is an expense from an interest standpoint. Therefore, if you're going to pick an item or items to take a position on, make sure it's one that will be tough to find latter and has good upside potential. Otherwise, make sure you turn your inventory. Interest expense, even when rates are as low as they are now, can be a big impact to the bottom line.
Go back to the fundamentals: practice prudent and ethical business methods, bird dog processing methods and quality control, keep all employees on the same page. Don't take anything for granted. "Keep your friends (those who can make or break you) close and your enemies (overlooked details, missed deadlines, and complacency) closer". Beware of false economies. For example, saving on maintenance cost today will cost you more in the future. Over attention to employee concerns may harm morale and consequently productivity. Take the opportunity to do things right and face the times with class.
Call! Call! Call! When all else fails call again!
I have none. We are all screwed!
Don't try to force things. When volumes are good (and they are not) you can often buy a "block" and easily spin off a few extra loads, often at a profit or at worst at a push. Not now, and you can't afford to write many losers.
We have cut back hours as best we can. We are also re-negotiating rent that we pay on our office space.
Don't reduce your inventory too much. You will need it to keep the customers you have.
Lots of cold calls, stay on top of current customer base, look for a need and find the filler. Business is out there and you just have to keep looking for it.
Just keep on plugging.
Ratchet back payroll, holding on to those you will need to make the turn around when the market breaks. Hold off on major expenses where possible, reduce # of vehicles on the road to reduce maintenance costs. Keep inventories slim.
Regardless of how painful it may be, expenses (inventory related, payroll, operational, etc) must be cut to match anticipated level of revenue.
We must get the timber prices down enough to be able to run- sales prices will not improve until the industry can run at a very high utilization rate- until the sales prices are not going to improve-
1. Take care of your good customers and suppliers because those are the ones you plan to work with long term and when conditions improve. 2. Keep your marketing department intact because these are the folks helping you survive today and the same folks that will help you exceed expectations in a better performing market. 3. The floor has been established, so if you are operating at the current level then you can survive. We anticipate next year to be much like 2008. It won't be easy, but brighter than the first half of '09. We are more bearish than most in our industry. Many others expect a significant turnaround in 2010.
Purchase "just in time" to reduce inventories to free up cash for other important aspects of business.
Make the hard personnel decisions if you haven't already. Raise gm% to help offset the lower unit prices!
Control expenses! If you have not been doing this over the last 2-3 years, you most likely are in deep trouble. Any improvements in the coming months or over the next couple years will be minimal. Controlling expenses are a must. Every position (top to bottom) in a company should be reviewed and determined if it is truly needed and does it generate revenue. Positions and projects created 3-5 years ago may need to be placed on the back burner or eliminated completely until better times return.
Cold calls, cold calls, and more cold calls. Although in business for over 30 years, in 2009 we doubled the number of cold calls we made compared to 2008. Also we did research to determine core industries served in past, best rate of success with getting business and sustaining profit margin. This is the only way out of the trough. As a result we have added a dozen new accounts to our customer list this year, several purchasing large volume and/or repeat buyers.
I have never seen it tougher than this in my 56 years, although during the great depression, unemployment was at about 40%. As for advice, it's old, old advice. Diversify. Don't have all your eggs in one basket. Have another option business wise and personally up your sleeve, just in case what you're doing takes a dump. Get out of debt and stay out of debt. Be willing to jump in and work in the mill or woods or wherever help is needed. In our business, four sawmill owners are working in the sawmill since we have had to lay off so many workers. Also this last season I worked in the office in the morning, in the sawmill in the afternoon and hauled logs till dark. You have to do whatever it takes to "gitter done".
Reduce variable costs by not renewing leases on equipment (e.g., trucks, forklifts), cutting staff -- both in sales and operations, tighten credit policies, and reduce "perks" such as travel, promotional items, etc.
Best survival tip is to reduce operating costs as deep as possible for the winter months.
Keep inventories low, stay close to customers. Also watch employee hours.
Cut all costs across the board and improve customer service. Eliminate errors that exist within the company and improve the system to eliminate any future errors. Outperform the competition and outlast those weaker competitors that may or may not survive.
Re-evaluate your customer list with an eye for minimum haul distances. Local stores should be buying product from local mills instead of brokers that bring in long distance products.
You have to have an inventory, without product there will be no sale. Keep a lean inventory but have product.
Very simple- live within your means, not OVER your means.
Control all controllable expenses. Live within your means. Keep a good sense of humor about everything.
Multiple sources in the US and Mexico with increased lines of credit.
Convenience stores are hiring
Stay lean, watch all variable costs, and look for buying opportunities when they are available.
Cross train all employees and let dead weight go. I have found that there are people working for me that can do the job of 2 or 3 people. Give that person a small incentive to do the extra work and save thousands in unneeded workers. It works I have already done it with 2 employees, let 5 go and I am saving approx $15000 a month. It's not easy to let long time employees go but you got to do what you got to do to survive.
Spotless customer service. Timely deliveries
Take it one day at a time. Find a small victory every day. Little wins are still wins, they add up.
Tightly control all overtime labor costs. Don't accept a vendor's first price - always ask for better. Constantly challenge and ask why - challenge the status quo.
Along with cutting labor to the bone, we have reduced operating hours by 5.5 per week. Watching Sundays to see if they remain above breakeven every week. That would reduce payroll hours by 1 - 1.5 FTE (-10/-15%). The owner (me) cut his salary 75% to keep vendors paid. Have been making more money trading stock options. Much like buying and selling lumber...
We rely heavily on Random Lengths to plot our price structure and compare commodity costs. It's a great tool, it you really use it. It's not the perfect fit on all commodities always, but it's sure a lot better than no tool at all or worse yet, pure guess work.
Continue to work hard and do not get depressed. Try to be upbeat and listen extra hard to your customers and suppliers!
Reduce payroll cost. Hoard cash.
Customer service-- stay in constant contact---anticipate future needs---don't get sucked into a bad short. Most important--trade smart-- efficient calls--- offer a variety of items on each call. On the buy side-----move the tough items-- crappy mixes---clean ups.
Employee to company: 1) Volunteer to take a week or two off without pay. 2) Help cut down company expenses such as janitorial work and maintenance. Everyone has multiple company responsibilities. 3) Don't waste copy paper. Use both sides. Buy fillers for pencils and ink pens rather than buying a whole new pen. 4) Keep lights turned off that are not necessary. 5) Brown bag lunch and don't encourage taking customers to lunch. A simple personal visit should be enough. 6) Stop smoking and eating junk food for the sake of the company health plan and your co-workers. At home: carpool or bike/ take public transportation to work or play. Again brownbag it to work. Others will notice and hopefully do likewise. Start healthy eating habits and lose weight if necessary. Exercise--it will help your attitude, energy level, and your appearance. It'll save money in the long run. Fire the housekeeper and lawnboy. Family does everything. Go to friends' houses and play cards or other entertaining games rather than out
Cut overhead.
Remove non-essential items from the budget. However, don't short change things you'll need during and after the recovery.
Try to get another part-time job.
We plan to reduce our inventory to the minimum. Reduce employees by letting part timers go for the winter. Reducing remaining employees' hours. Advertise minimally.
If your company does not have the appropriate capital structure to position the trader for the future, find a new company. Now is the time to develop your business for the good times.
Do not reduce inventories too much. Last winter companies were caught scrambling to cover orders and losing business because they ran themselves out of wood. Wood is cheap. Unless you plan on getting out of the business keep some inventory. A distributor without inventory is an office wholesaler.
Cut all unnecessary expenses to make commissions go further.
Reducing production as demand drops. Cutting more specific to orders; producing items that are selling. With log costs going up, the only way to push prices up is to balance supply and demand. Primary manufacturers, right now, are their own worst enemy. Our only competition is ourselves. In fact the vast majority of customers would like to see prices move higher. Most of distribution are having difficulty making a profit at current prices, even selling at full margins. This is a direct reflection of manufacturers' inability to bring supply and demand into balance and is more willing to build inventories and cut prices than to reduce production.
Reducing inventory, limiting travel and advertising, and unfortunately, laying off some people.
Manage your receivables and do not allow to slip beyond your stated terms, create cash by eliminating stale inventory as quickly as you can, right size your employment base to a much smaller market. Cash and capital will be king for the foreseeable future and those that are positioned with a sound financial condition will be able to gain market share in a much smaller market.
Maintain your quality and support your suppliers.
By staying on the phone serving my current customer base, seeking "special" mill opportunities to be promoted and cold calling to establish new accounts to replace current slow or defunct accounts.
Cut inventory and labor.
It is what it is, keep a positive attitude, don't fuel negativism, and continue to work hard.
Hold short on log inventories and log prices.
Try to maintain a diverse inventory while keeping individual volumes at a minimum. The trick is to keep your companies' name on top of the customers' phone list because most are buying minimum volumes for quick delivery.
Keeping our employees aware of markets and why quality, production, market structure, raw material are big factor in our outcome.
Take good care of the business relationships you've acquired over the years
Be active in your business and know what is going on each and every day.
1. Talk to as many customers as possible. 2. Don't give up on an order until you know it's over with. 3. Don't tell your competition any of your survival tips or cost-cutting moves
All expenses need to be scrutinized for ROI.
Better cost management.
Keep expenses to a minimum, but at the same time, keep in front of the customer.
Know your customers.
Stop production and hunker down.
Cut overhead and inventory until you think it is enough, and then .........really get serious about cutting overhead and inventory.
Work 2 weeks a month, to spread the loss over the whole month.
Just get more sales.
Adapt as well as you can to each individual inquiry. Try to make it happen on each potential order tailoring your price & service wherever you can.
Build on existing relationships through new programs that also help your customers through the difficult times.
Reduce inventory.
Keep moving forward -- don't look back.
As a company we are doing many of the office chores and out-sourcing less. We are also maintaining our current computer systems and office equipment and will put off any capital expenditures unless they are absolutely necessary. We also won't hire any new sales associates until the market shows improvement. And, most importantly, when we do start to hire we will be looking for proven talent, where before we would have been willing to take on "young-blood." We will be looking for traders who can hit the ground running and who will require minimum training.
Hopefully everybody today is in this business because lumber is their life. We all have enjoyed the successes of this business and now we all are in the worst of conditions! When we come to work everyday we all know what to expect by now so next time you pickup the phone and somebody starts talking about the gloom & doom remind them that they are still here today and that they only can make the best of today! Your best today will help improve tomorrow!!!
Keep your focus positive.
Reduce production to match sales.
It is difficult to get up in the morning to face any tough job, but the only way out is through. I have been with AIFP for 35 years and the difference between traders that stay and those that cannot make it is perseverance, preparation, and attitude. Prepare each day for the next, and make sure you are in early and put in a full day. Most of all, our customers do not like hearing how bad things are, they already know it. You now have the opportunity to be the bright spot of their day. Be upbeat, as we have lots to be upbeat about. Know your product and do not be afraid to learn new items. Try to get 8-9 hours of sleep every night.
Be informed. What does that mean? Read things like the wall street journal, Forbes, local newspapers, publications that pertain to your specific type of business, etc... Listen to the news on radio and watch the news on TV. Read between the lines when possible. Being informed will help you make better business decisions. Listen to what people around in home and at work are thinking and saying. It's not all bad news out there, so don't psych yourself out. Be a realist and think positive. .
Reduced production, labor costs and elimination of all superfluous costs.
The fastest way to make money is to quit losing it. Protect inventory from degeneration.
Do not overcommit your ability to supply goods and services to your customers.
We do not operate on credit. That way if the cash flow dries up, we are not stuck with payments to make and no cash to cover them. We also are not extending much credit to customers.
We have cut our operating cost to the bone. We have moved middle managers back into jobs they did years ago. Two salesmen back to being a driver. Our yard manager back to being a driver. So when it gets better we will move them back. Everyone is happy to just have a job at this point.
Dump all data from previous years and just use the last 3-6 months of business to do your projections. Base inventory on current data not past use. Be lean by Halloween.
Be optimistic. Work triple hard. Visit customers more often. Think outside of the box.
Keep in mind that any business is good business.
Don't get desperate. There are only a limited number of housing starts. We can't change that. Driving the market down deeper is a lose/lose situation. Take business that makes sense and profit and will benefit in the long term. It will get better so decide now who to partner with and who will squeeze you and discard you.
1. Prospect, prepare for the future. 2. be upbeat no matter what.
Convert all inventory to cash and don't worry about margins - cash will be needed to survive the next 90 days!
Low inventories and high sales.
Use the big boys' inventories and save your cash for better spring business. Stay away from storage and interest costs. The wood doesn't have enough value.
Quality companies and traders need to stay close to their primary suppliers. Unfortunately most companies have put restraints on the trading floors taking them out of the large or block buying business forcing a back to back trading environment with little risk or cash exposure. This behavior has forced mills to go into the same survival mode and now compete directly against their once "good customers" for those orders. It's unfortunate that this horrific downturn has turned our normal trading markets into the hell with them attitude.
Cut the fat and dead weight from your organization and build and nurture relationships to get you through....and prospect vigorously.
I am using the internet more all the time. I can keep myself in front of way more customers than I ever could by phone...same goes on the purchasing side, I broadcast inquiries out to potential suppliers. They are learning to respond in a timely manner...by doing this it has freed me some time to talk to my key customers and mills and I am able to put together a few orders with the folks who like the internet...
#1. If your thinking is stinking, stay at home. #2. Always practice your ABC's = always be calling #3. Challenge yourself to think larger than you have in the past. #4. Take on problems with a win / win in mind. #5. Expect sales everyday, always expect the best. My expectations for 2010. In 2009 my sales YTD are up about 10% over 2008 sales. My trading margins were up 100% in 2009 over 2008. My income YTD is double that of 2008. In my mind, there is no recession. I stay away from people who talk sour grapes, and I look for those who want to buy and trade lumber, those who want to make money. I have obligations in my life, to others and to myself. We are in the most spectacular financial times ever known by modern day man, there is a whole bunch of opportunity to make more money in this market than any of the bull markets we have traded through recently. 2010 will be no better than 2009. Fasten your seat belts, do not look in the rear view mirror. My best survival tip, make more
Keep all your good people at 40 hours, if you need to cut, cut people not hours. Keep the people you have, happy. Make sure they see you cutting other items, coffee service, golf tournaments, hats, pencils, etc. Keep the people that can wear multiple hats. But watch your overtime.
Be able to offer LTL specified lengths or units--not just full trucks. Take advantage of local freight companies who are willing to offer LTL or stopover services. Carriers/brokers who regularly call on traders and buyers will have an established relationship will be more successful as a result. Mills should embrace LTL business as business--not an annoyance.
Run lean on labor. Keep good inventory levels so when you do get orders you won't be back ordering items. If you sell it make darn sure you have it on hand never want your customer to have a reason to shop elsewhere
Go back to basics lumber 101, keep your head down and keep swinging!!!! Keep in close contact with your customer ask what you can do to help him.
As a reman operation, we have stocked heavily anticipating a reduced supply will soon match the reduced demand, which may stabilize if not lead to higher pricing. This necessarily means layoffs and closures industry wide. The pie is getting smaller, and the only way to survive is to cannibalize the competition and vie for a larger piece of that pie, or consolidate and unite. Deep pockets will prevail. Debt laden companies will fail or be acquired for little to nothing. Brokerages and wholesalers will be replaced with mill direct sales. How to survive? Own the source, and have a broad customer base.
Keep prospecting for new clients.
Talk slow, talk low, and don't say much.
Buy what you know you can sell. Take the time to get to know your customers much better, it is not just about price and PO#'s, get a better understanding of his/her business, become a partner and provide a service.
Keep "just in time" supplies/parts.
Lean inventory - work smarter.
No job is too small to give serious consideration to and everything should be viewed as a must take proposition. If you are just starting to look at cost cutting measures, you are way too late.
In our logistics department the primary goal is to find the trucking company who's hauling the loads & negotiate an equitable rate which will allow the carrier to prosper and us to service our mills and customers in a timely manner. We have eliminated all but 3 top performing transportation brokers.
Keep inventories as low as possible. Keep staff at a "bare-bones." Eliminate any and all non-needed overtime. Try and keep optimistic with employees and customers alike. Keep a tight reign on customers who are constantly slow in paying.
Reduction of inventory levels, and keep inventory turning. While maintaining a balance of still being able to take advantage of the lowered costs of current production.
Don't sell slow pay accounts, now is the time to assess the level of quality of your account base
Stay active, keep talking to and visiting customers, keep talk to and visiting suppliers. Quote anything, any size, any quantity.
Make an initial revenue projection for the year 2010, and then go back and make it even more conservative. When that's done, scale your costs back proportionately. You can always add people and equipment it you need to if revenues exceed projections; however, you can never cut costs fast enough if revenues are less than projected.
Diversify.
Keep inventories lean.
In most operations I go to, the big items have been attended to. The next step is to take the 3 next biggest cost items, and attach them by either internal cutting decisions, or go to the outside to find consultants to help.
Increase margins.
It is not rocket science. Keep inventory for our customers and do what you say you will do on the day you say you will do it!
Watch every penny and keep the inventory dollars turning. Although we want to keep all our employees through the winter we feel we need to have the list made on who goes if things are worse then we think they will be.
Sell your house and move in with your parents, eat Top Ramen and buy cheap beer
Avoid taking large inventory positions. If you have to take a position, try to only buy half of what you would normally buy.
Be creative, do homework, focus your efforts, broaden your product base, be consistent, remain honest in your approach, concentrate on your strengths, networks with others companies for mutual growth and success. Marketing forest products will not be done the "same old way" any longer. A growing network of companies will outpace those who remain in the same old rut. Think outside the box and implement your ideas with those who have the knowledge to get things done or to help you. Team up for success. Dwell on positives always. You will sell nothing being negative or being negative toward your employees. Be real with each other. If you allow two faced behavior internally in your company, you will fail.
Eat lunch at your desk and prospect.
Prospect.
Match inventory levels to sales and pay current market rates for product.
Stay off the computer games/news...and refocus all efforts to selling lumber.
Get skinny. While we will be able to control what we make (traders 100% commission) we will have more control over what we spend. I'm cutting my cost down as much as possible. No car payment, no vacations, and basically nothing extra. Just the basics.
Get out now.....
No restaurant meals, no travel, no club dues, everything not necessary for survival gone. This is a bloodbath and it's here for a while (see breaking news report on 2009 projected U.S. home foreclosures out earlier today; 50% higher than 2008).
The canned food sales at Safeway! HA!
Quit your job and depend on Obama.... It pays more to be on welfare.

 

Monday, November 18, 2019

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