Information Equals Power, SuccessBy Garry Bartecki
Article Date: 03-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
For the dealer CFO, obtaining the right data is integral to your strategic role of driving company growth and profitability.
Information is available on any topic, available at your fingertips, easy to get at, available 24/7 and usually accurate and timely. It's tough not to be able to get data when you need it. You really have to work at it.
On the business side, having current data is as important as ever. If you don't have it you can bet your competitors and customers do. There is really no doubt about it. To operate a dealership successfully you need timely, industry-specific data as well as general economic data to make buying decisions, banking decisions, business plan decisions and selling decisions. Get two weeks behind and it's hard to catch up.
What are business mangers doing with this information? They are deciding how much inventory to purchase, and when. They are deciding to hire or terminate personnel and in what department. They are deciding if they are going to invest in capital assets. They are renegotiating their banking arrangements. They are benchmarking their performance against peers. They are setting sales and margin goals for the sales department. They are getting a feel for the market and adjusting sales and marketing programs.
In 2008, especially 2008, CEOs and CFOs need information to make their business successful.
CEOs need information to benchmark and assess business plans and to compare operating results against the plans. They need daily, weekly and monthly operating statistics to compare to monthly goals and to determine that the company business plans and policies are being followed.
The role of CFOs has changed. They need to provide the CEO the information they need, they need to set up procedures and policies to make sure the data received is accurate, and they need to compare data to goals and objectives and report material problems to the CEO. In addition, they need to maintain an efficient operation by outsourcing services when they can and ensure that the operating system is being used to its maximum level. CFOs today are not just accountants any longer; they are part of the strategic management team required to maintain company growth and profitability.
To assist with this process to obtain information for dealers of every size, I again encourage all dealers to participate in our annual Cost of Doing Business Survey. You will soon be receiving the survey needed to participate in the form of an e-mail from AED.
CEOs: take the survey and march on down to the accounting department and tell them to fill it out and get it back on a timely basis. The survey should take about two hours to complete and if you save your work it only needs to be updated on an annual basis. You can also map your financial statements to generate the figures needed for each line item, and again, if you do so you can generate the survey responses automatically every year. This is not a major time commitment, but it's one that provides meaningful payback.
Two other points regarding the survey: If you need help completing it let me know. Also keep in mind we do not need your final year-end reports for this survey. Just use your December 2007 internal statement if you need to. If the results are close, there will be zero effect on the results of the survey.
CODB participants receive a special report that compares their performance against the norm and offers suggestions for improvement. To provide an example of what this report offers see the Performance Scorecard at left on page 98.
AED is also planning two CFO conferences again this year (CEOs are welcome) April 24 to 25 in Chicago, and Sept. 22 to 23 in Nashville. Based on recommendations from past participants we will have more workshops allowing participants to express their ideas and create solutions to specific problems. We will feature industry-specific outside speakers. We'll also spend time on dealer tax issues (and there are plenty to discuss), as well as the new Tax Stimulus Package from the dealer and customer standpoint.
Information about the conference is on AED's Web site. Space is limited and we encourage questions or suggestions for subject matter. If you need information to improve your company's performance this is the place to be.
There is a lot to consider about how you run your business in 2008; to get the information required to make informative business decisions please give serious thought to the annual Cost of Doing Business survey and one of the CFO conferences. Call me at AED if you need further information (630-574-0650 ext. 323).
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