Business Still Not so Hot? Go On A Safari

“Go on Safari with the way my business is? Allen Ray you have lost your mind!” says a mid-western distributor friend last week.

Here's the point: It got your attention.

"The big game that you need to hunt for is “CASH”. Finding cash in your business is open season and there is no license required.

Need a reason to Hunt for Cash? Here's some:

· Haven’t paid yourself lately?

· Bank won’t loan you money?

· Having to put cash into your business just to survive?

· Gross Profit gone south on your existing business?

· Selling ‘more stuff’ and not covering all your cost?

· Got too much of the ‘wrong stuff’ sitting on the warehouse shelves?

· Matching up paper to claim SPA’s? Takes forever to get SPA credits?

Neil Gillespie and I laid out possibilities in the post on Sunday March 14^th, of where a lot of your cash may be tied up in SPA’s. Many distributors don’t treat SPA’s as a RECEIVABLE….this is a mindset issue that you seriously need to consider changing. Take the steps now. SPAs as a receivable issue, needs to be front and center, just like your other receivables! How do you get paid back on SPA's sooner? Handling paper is NOT the way to do it.

Here is a tip that will help you start to automate your accounting by letting your computer match invoice/receiving documents and purchase orders and this may not cost you any money! It starts with the product and pricing data you run your business with. If you use a commercial product database such as the ones that Trade Service Corporation offers, you might want to contact them directly about matching your data up with their benchmark databases. The Custom Data Service (CDS) allows you to cleanse product database that you run in your ERP system…..it’s free for the asking. But you have to ask!

Hint: Questions are directly related to possible gains: but Action is required on your part.

Why clean your data up?

Clean, accurate price and product data is the foundation to several automated functions that your ERP system can perform. Several examples are:

1. SPA (rebate) collection velocity. Collect sooner using EDI

2. Generate current inventory velocity.

3. Increase Back Room velocity in purchasing, accounts payable, warehouse and account receivable. This is a long term project you can work on your own.

4. Pricing productivity (make more money per line item right now)

5. Sales productivity. We'll get into this more later on.

6. Greater Gross profit per order.

The recommendation is that you get your price and product file cleansed and start moving

toward back room productivity.

Be on the lookout for the new video series: 

Seven Great Myths about Pricing or as some might say: The Seven Deadly Sins of Pricing.....

that series will be followed by step by step moves to get your inventory moving again.

In distribution, it is all about the cash. We don't make stuff. We pay for it, spend money to get it to people and they pay us for doing that. So start looking around!

Go on a Safari and hunt down the cash!!!

Cash is better than an American Express Card. And you can't grow without it.