Running a business isn’t all that different from solving mysteries. You find a lot of clues, put them together in a way that makes sense and hope that the end conclusion is correct, or it’s back to the starting point. The great Sherlock Holmes once said, “It is a capital mistake to theorize before one has data.” It makes perfect sense in solving mysteries - and running a successful business. Making decisions on product, operations, personnel, capital investments without the proper data is an enormous risk and, thanks to the American Supply Association, one that none of us has to take.
Since January 2009, ASA has produced an ASA Industry Intelligence Report – Monthly Sales Report, documenting trends in sales, inventory and employment in the PHCP and PVF wholesale distribution industry on a national level. This is the only report of its kind available to us. If you participate by sharing your data and using the information produced as a result of that, I thank you. If you do not, I have to ask, why not?
In these unstable times, it is difficult to know how we are doing in our marketplace. Much of the business available to us is project work, with billing and shipping happening in large pieces with many starts and stops. The old market with a nice flow of business is just not there. This makes it very difficult to gauge how the general market is doing. Especially important is, “Am I keeping up, gaining, or falling behind?”
The best benchmark available to me is this monthly sales report generated by the ASA. Each month, ASA invites all of its member wholesaler-distributors to participate in this report by completing a confidential survey on sales (both MTM and calendar YTD), inventory levels, three months average DSOs, and YTD profit before taxes. Typically, the participation deadline is on the eighth business day of the month, and the report is available within four business days. The report provides a breakdown of the data across different sales volumes, industry segments, regions and specific state/metropolitan market areas.
Sounds like something you need in your hands every month, right? I can assure you it is.
I’m writing about this today to request that every company who is not currently submitting their data for this report consider doing so for all of 2011. It costs nothing to participate - it’s a member benefit provided to you through your dues. The resulting report is available free to ASA members who submit their data. With a 15-minute investment each month, you can gauge the market and how your company compares on key items such as sales, gross margin, inventory, and headcount.
The report available now is excellent, but it could become even better. The quality of the information can improve for all of us if we all participate, making our industry stronger, more sustainable and proactive in advancements. Taking risks is all well and good, but save that for an area in which there isn’t such a valuable resource available to you. Make sure you have the data before you theorize on that mystery we all strive to solve each day - achieving business success.
Bill Kenny
Kenny Pipe & Supply
