| How is it that these companies didn't survive and | | | | operating profits, then he could attempt to sell his |
| how is it that some companies that were in business | | | | business. |
| for 50 years or more, closed their doors? The normal | | | | However, when you're trying to sell a business that's |
| response; the economy: | | | | unprofitable, zero plus zero equals zero. When I made |
| • The economy is the worst it's been since | | | | that statement to the owner, his comment was; |
| the Great Depression. | | | | • How can I expect you to get anything |
| • There were too many trucks and not | | | | accomplished, if you're only at my terminal facility for |
| enough freight. | | | | 3 days? |
| That explanation is one of the causes for the | | | | • I don't believe anybody can observe my |
| problem, but the most significant reason that these | | | | business for 3 days and know what the problems |
| businesses failed, begins with the owners. | | | | are. |
| Operating a trucking company is like being an airline | | | | My comment was; when you're sick, you go to a |
| pilot. A pilot has to offset the effects of wind in | | | | doctor, why do you go to the doctor? His response; |
| order to stay on course, because if he doesn't, the | | | | because I'm sick and want to get better. My |
| plane can change directions many times per second | | | | response to him at that point; |
| and the same applies to a business. When you're the | | | | • When you go to the doctor they take |
| owner of a business, you must compensate for your | | | | tests; |
| own internal flaws. It's your attitudes, ideas and skill | | | | • Do you get the test results in 2 or 3 days? |
| limits that are standing in your way. Like a pilot, there | | | | • His answer was, in most instances, yes! |
| are many variables that can get a business off | | | | • Based upon those test results, then you |
| course, but if they are corrected, you can survive in | | | | know what you have to do to feel better; is that |
| any economy. | | | | correct? |
| In my auditing practice, I continually note that; when | | | | • The answer; yes! |
| we're engaged by struggling companies, the single, | | | | • I asked; what's the difference between |
| most important problem starts with the owner; | | | | going to a doctor or utilizing my firms services? |
| • The owner spends much of his/her time | | | | All my auditors are Ex-President's and Chief Executive |
| performing the work of the business, but; | | | | Officers of major trucking and logistics companies. |
| • In order to perform the work of the | | | | They've seen it all, they understand the industry and |
| business, they're not leading, planning, organizing, or | | | | they understand operations, lane balancing, |
| marketing their company. | | | | receivables and maintenance programs. We require a |
| Particularly if you're a small trucking or logistics | | | | substantial amount of information, prior to arriving at |
| company; | | | | a facility; my auditors review the information that's |
| • You go to work every day. | | | | sent to them, before they ever arrive and, |
| • You do it all: | | | | therefore, they have a good understanding of what |
| 1. You make sales calls. | | | | the problems are before they arrive. |
| 2. You write invoices. | | | | My point; this person was very narrow minded. He |
| 3. You fix equipment. | | | | wasn't willing to change and, if you're not willing to |
| 4. You troubleshoot. | | | | change, that's the "kiss of death". I've stated, on |
| 5. You call on clients. | | | | many occasions, that; |
| However, the problem is; you have no written | | | | • You need to set goals. |
| procedure and no business plan. In many cases, your | | | | • Objectives. |
| systems are not automated enough to keep up with | | | | • You need specific time frames to |
| technology. Many owners are very knowledgeable, | | | | accomplish your goals and objectives. |
| have innovative ideas, but the ideas only remain in | | | | • Employees should be treated as assets or |
| their heads because they're focusing on what they | | | | liabilities. |
| believe to be the essential part of the business, and | | | | • Any liabilities should be eliminated. |
| they forget the aspects about planning goals and | | | | I've also further stated that, employees need |
| objectives. | | | | direction; |
| Many owners; | | | | • You need to provide them with specific |
| • Don't outsource – they don't believe in | | | | goals. |
| it. | | | | • Specific objectives, and; |
| • They don't believe in beneficial strategic | | | | • You need to provide a time frame in which |
| partnerships. | | | | to accomplish your goals and objectives. |
| • They don't delegate to employees, and; | | | | At the same time, if they accomplish the goals and |
| • Many of them don't seek counsel from | | | | objectives, they should be rewarded accordingly. |
| outside professionals. | | | | Over the last 6 months, I've written articles on; |
| I'm only called by an owner when the company is on | | | | • Partnership programs. |
| the verge of bankruptcy. Many times, when I'm | | | | • Professional Employer Organizations, and; |
| speaking to a company that's struggling; | | | | • I've explained each of these programs. |
| • And when I speak to the owner; | | | | For anyone that's experiencing; cash flow problems, |
| • He/she believes they already know what | | | | back haul problems, receivable aging problems, |
| they need to do, they just don't do it. | | | | insurance problems, wants to improve their safety |
| I classify these people as unconsciously incompetent | | | | department, wants to focus on their core business |
| and if they remain that way, their business will most | | | | and let somebody handle the back office; a |
| certainly fail. | | | | Partnership Program and a PEO can be a very cost |
| As we all know, the trucking business is a pennies | | | | effective way to; |
| business; | | | | 1. Reduce operating expenses. |
| • We have peaks. | | | | 2. Increase cash flow, and; |
| • We have valleys, and; | | | | 3. Become part of a larger organization without |
| • The last two years, the economy has been | | | | losing your identity; there is strength in "numbers". |
| as worse as the Great Depression. | | | | The fact that there is an increase in freight demand |
| However, many trucking/logistic companies survived | | | | is good for our industry. However, that doesn't mean |
| while others did not – why? I believe the failure is | | | | that, as capacity starts to change, your business |
| tied directly to the owner; | | | | model is going to work. There will be fewer trucks, |
| • Many owners get sick and tired. | | | | there will be more freight. However, at the same |
| • They stretch themselves too thin. | | | | time, if you're a logistics company or a freight broker, |
| • They feel rushed and overwhelmed. | | | | how are you going to handle the capacity shortage? |
| • They worry they can't do it all. | | | | • Carriers will start moving their own |
| • They worry that others won't do it right, | | | | shipments and freight brokers won't have access to |
| and; | | | | as much equipment. |
| • They know they should let go, but they | | | | • I've already started to see the market |
| can't. | | | | pendulum swing, and; |
| The owners have a failure to fix serious flaws; they | | | | • Even though the market is turning, how is |
| have a short term "put out the fire" mentality. Then, | | | | that going to help a freight broker or a logistics |
| when the pressure gets too much, they disappear, | | | | carrier if his/her rates are going to go up, or their |
| as if that's going to do any good. When they come | | | | truck capacity is going to shrink. |
| back, they discover that their business has come to | | | | Just because you're good at something, doesn't |
| a screeching halt; the work is piled up, they've lost | | | | mean you will succeed at running a business. Over |
| money, they have frustrated customers/frustrated | | | | the next several weeks, I will be discussing how to |
| employees and they missed golden opportunities. | | | | improve your management skills so that you can |
| Recently, I was speaking to an owner of a trucking | | | | improve your company's profitability. |
| company who my office has had continuing | | | | As part of that process, you must; |
| discussions with for the last 4 or 5 years; | | | | • Assess your business skills and knowledge. |
| • This individual wanted to sell his business, | | | | • Play to your strengths. |
| but; | | | | • Seek support from others. |
| • The individual's company has not made | | | | • Focus on your weaknesses, and; |
| money 3 out of the last 5 years. | | | | • Automate. |
| • I explained to this owner that, in order to | | | | It's never been easier to communicate with |
| create shareholder value, he had to fix his company | | | | prospects, trouble shoot problems, and stay in |
| first, and; | | | | contact with customers if you're automated. |
| • Then, once it's fixed and it's demonstrating | | | | |