The Challenge of Planning for the Long-Term

While planning several years out may be a challenge, a road map is a helpful tool to grow your distribution business.
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One of the first interviews I conducted for Industrial Distribution magazine many years ago was with the president of a regional power transmission distributorship tucked away in a rural town in Pennsylvania. The business had about $20 million in sales.

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I should explain that before joining ID, I had been a business editor and writer for a newspaper in the Boston area. I regularly interviewed some of the top officers at many large companies such as Wang and Digital, both then significant players in the computer/software market.
 
So it wasn’t unusual for me to ask if I could see his three- or five-year business plans.
 
He looked at me with puzzlement: “Five years? I don’t even know what our plan is for five days from now.”
 
That’s when I learned about distributorships and planning. Few distributors have ever been involved in some type of strategic planning. Yet many top management consultants say that without a road map or plan, you’ll never grow your business.
 
Today, it is increasingly difficult to plan for the future. We’re in the midst of a roller-coaster economy where one day it looks like we’re turning the economic corner, and then the next day we have to take a step backward.
 
Yet, it is critical to at least have (on paper) ideas as to where you want your company to be in one to three years and how you intend on getting there. Those plans, of course, will need to be updated on a regular basis depending on business conditions.   
 
Here are some recommendations that I learned from some very successful distributors over the years:
  • Meet with your employees (not just your management team) to get their input into developing a realistic plan for growth. Where can you improve your operations? What barriers are there for you to accomplish those goals? Do your workers need additional training?
  • Carefully evaluate your product lines. Should you add or drop lines?
  • Closely evaluate your competition. Are there acquisition opportunities available? What are they doing better (or worse) than you?
  • Examine your inventory. Do you really need some of the “D” items you are carrying?
  • Conduct performance reviews. Do you have the right people to carry out your plan? And unless you get those employees to buy into your plan, you’ll never execute any strategy, now matter how good it is. And that ultimately could lead to the demise of your business. 

Jack Keough is a contributing editor to Modern Distribution Management and the owner of Keough Business Communications. He can be reached at jack@mdm.com or by phone at 508-734-0029. Keough is the former editor of Industrial Distribution Magazine.

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