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Everyone is breathing a sigh of relief, Well most everyone anyway. Business is fun again, we are making money again. Phew. But what have we learned from this still fresh slowdown? Remember if you don’t study history you are destined to repeat it.

Recently I had the opportunity to hear a great speaker talking about results and effort. He introduced me to an interesting point which might be obvious to most of you. “Ignorance” is defined simply as not knowing what to do; and “Stupidity” is knowing what to do but not doing it. This might be the shoe that fits us. What have you done in your business to minimize your risk for any future slowdowns?

This past year we touched on a series of subjects trying to provoke your thinking and also a call to arms for action. From training, to process improvements, from product support selling to the paperless office; from market share to customer service, we have covered a lot of territory. But other than keeping up what have YOU done this year?

• Have you increased your customer retention?
• Have you increased you asset turnover?
• Have you developed more skills as a group?
• Have you improved your processes?
• Have you changed your market coverage?

We have all had our challenges this year and yet we are still standing and thankfully many of you are doing better. But I need to return to the starting point again. Are we stupid, ignorant, or something else? Perhaps you find that politically incorrect. Do you?

We have gone through a three to five year period of time where we struggled with sales down, profits down, numbers of employees down, asset turns down. A perfect storm hit us and we battened down the hatches. But what did we do to improve ourselves to insulate us from another perfect storm?

Do we truly understand that increasing the revenue of parts and service will insulate us from these cyclical swings in our businesses? If we don’t then I guess ignorance can be our excuse. If we do understand it then it is something worse, much worse.

We can’t continues to go from one cycle to another having the business cycle manage us. Remember my definition of insanity? Continuing to do what you have always done but expecting different results. This is what I am seeing and am starting to get worried about.

I see the market slowing down again. I see interest rates climbing again. And I see very large orders outstanding for equipment, attachments and parts. If there is any serious slowdown, we are going to be caught again. Too much inventory at a time that interest rates are going up; too much inventory and then prices become soft; then to compensate for this reduction in gross profit and increase in expense we reduce the people cost. When will we learn?

I want you to start looking at inventory in terms of days or weeks or months of sales. But this time I want you to look at it from the perspective of the total on hand inventory PLUS the on order inventory. This is a reflection of the downstream risk that we are running if the market slows down. How do you stand up under that scrutiny? I mean in all areas equipment, attachments, and parts. It isn’t a very pretty picture is it? But there is still time to act. Which will move us from ignorant past stupid and on to something else; the choice is you. I apologize for my “bah humbug” this year, but I really do have your best interests at heart. I hope you have a safe and enjoyable holiday season. Be safe and have fun. I’ll see you next year.