SURVIVING A SLUMP
7 Ways To Step Up Your Business When Sales Are Sluggish
Most salvage yards go through sales slumps tough economic times at some point. The price of scrap, availability of inventory, weather, holidays and demand for parts can all lead to downturns in business. Having a plan in place for dealing with both planned and unplanned slow seasons can not only help your business survive during tough times but thrive afterward.
Monitor Your Spending
Be aware of changing economic conditions, and watch your cash flow. Some experts suggest projecting cash flow for at least three to six months ahead, and others even recommend 12 months or more. There are several accounting tools on the market that can help with managing and forecasting your cash flow.
Encourage customer to pay invoices in a timely manner, and look for ways to cut back on expenses and inventory. Conduct an audit of current practices, and make cuts where possible such as reducing the number of the slowest-moving parts you keep on hand.
Even while trying to cut back on spending, be on the lookout for deals. An industry-wide slow-down may lead better prices on equipment or machinery that you’ve had your eye on.
Improve Business Operations
From little fix-it projects to repairs or major improvements, a slow time can provide the time needed catch up on projects around the yard.
Look at computer systems, software, your web site and social media accounts too. Nearly 80 percent of consumers use search engines to find the products or services they need, according to the Local Search Association. If your website can’t be found, you’re losing opportunities for revenue. Make sure your website is mobile-friendly, check your meta data, and update your Google My Business listing.
Step Up Your Marketing
Marketing is, according to Tim Ross in a 2017 MotorAge article, “an easy expense to cut when times are tough.” But it’s a risky one.
“That approach reduces your exposure to potential customers at a time when you need it most. By taking a break, you’re also giving competitors – who will likely continue their advertising efforts - a chance to steal your market share. Although it’s hard to do, you should actually increase your marketing expenditures in the slow season,” he explained.
In addition to traditional marketing, try sending out news releases, increasing the number of social media posts or starting a blog. All those efforts could help position you as an expert in auto recycling.
You should also freshen ad copy and make sure all efforts are receiving maximum return on investment.
Check In On The Competition
Understanding your competition is an important step in evaluating your business operations and attracting new customers.
Look at the industry as a whole. Is everyone experiencing a slow down? What are other recyclers doing differently? Take notes of how other yard owners handle current economic conditions.
Strengthen Industry Relations
Use a sales slump as motivation to become more involved in the industry. Trade shows and seminars are great ways to network. It’s often hard for owners to take time away from their yard, so planning a trip during a slow-down makes sense. You’ll gather new ideas, make new contacts, and have a pulse on the latest laws and regulations.
You might also look at volunteering on a committee, signing up for specialized training or becoming certified. Each can take time that you might not have available during a busy season.
Get Involved In Your Community
Building a solid reputation within your community is important, and strengthening ties during an economic slump can help sales bounce back. According to the Forbes Human Resources Council, 82 percent of Americans take a company’s social responsibility into account when choosing whether to make a purchase.
Reach out to firefighters to conduct training at your facility, take part in charity events, sponsor sports teams or supply parts to organizations in need. You could even host a class or event at your facility.
Inspire Your Staff
A slow time gives you ample time to catch up with employees.
According to a Kenexa study, organizations with highly-engaged employees achieve twice the annual net income of organizations whose employees are not as engaged. Keep employees in the loop on current operations. Ask for ideas on cuts or improvements that could be made. Plan staff outings or activities to help team members feel connected and appreciated.
Just remember, don’t panic when your facility encounters a slow-down. Instead, look at it as an opportunity to re-evaluate your current operations, get inspired, make improvements and prepare for the future.