Tightening Your Belt In Tough Economic Times
The two friends who helped me on that project were Ken Rohl, the owner and patriarch of the Rohl Corp., and Ellen Cheever, a great friend and one of the best-known folks in the kitchen and bath industry.
We knew that there are only three ways to improve the bottom line: first to grow sales, second to grow gross profit margins; and third to reduce expenses. The ultimate goal would be to do all three. But in really tough times like we’re experiencing now, that’s a lot easier said than done!
I will direct the “belt-tightening” ideas to the showroom business - but many would apply to the wholesale side or any small business - and will group them by areas of the business.
So you’re thinking: Okay, Darlington, how come you waited so long to share these gems? In all honesty, like many of you, I didn’t believe the economic conditions would fall as sharply as they have or that this situation would last as long as it evidently is going to. Nobody wanted this situation to happen and nobody enjoys the “belt-tightening” exercise. But it is what it is! You have to know that this too shall pass.
Let’s take a look at some things that will help you weather the storm in these tough economic times.
Overall Showroom Operation:
Grow Your Gross Profit Margins:
Credit and Collections:
Inventory and “Tag and Hold”/”Work in Progress”
As you know, I do a lot of consulting with plumbing wholesalers and independent dealers. With rare exception every one of my clients is feeling the effects of these “tough times.” I feel that pain, too. I also know that it could be worse. It isn’t a terminal health issue; it isn’t the loss of a loved one; it’s simply a very difficult business environment. As I said earlier, “this too shall pass”! Work hard, work smart and keep the faith.