Remember the five-year business plan? Perhaps your dealership still develops them to set the stage for long-term goal achievement. There’s certainly value in a $20 million dealership laying the foundation to increase top-line revenues to $30 million and identifying a profitability percentage increase to meet by 2027.
Think about a dealer that developed a five-year plan at the onset of 2020 with the aforementioned goals. At the time, the company may have been banking on growth through MPS, increased hardware sales, managed IT and a newer offering such as unified communications. This firm is now three years into the plan, and barring a growth explosion over the next 24 months, that $30 million isn’t going to happen. Chances are, its hopes for executing the plan were shot to hell by the middle of 2021.
This is not to disparage the concept of a five-year plan. There was simply no accounting for an event that occurs maybe every 100 years. But the pandemic and its aftermath engraved fundamental changes into the business landscape, the results of which are still being reconciled and discovered. Business planning has become more of an inexact science, and what we’ve learned is the road to accurate projections is best mapped out in 6- and 12-month increments.
We can’t speak to what business may look like in five years. But this week, we offer you part two of lessons learned from 2022 that can be useful in planning out 2023.
One of the cornerstone lessons gleaned by Lauren Hanna, vice president of sales for Cleveland-based Blue Technologies, is the value of effective communication with clients and internal teams alike. The key to dealing with obstacles is to lay out a plan that avoids the pitfalls of over-committing.
“Another lesson learned was that you have to take moments like the supply chain crisis and use them to identify areas of strength and weakness,” she said. “If you don’t plan on evolving business processes through the challenges, you will be left behind.”
Hanna also stressed the importance of remaining true to who you are as a company. “Identify the core strengths and double down during the challenges,” she related. “There will always be more challenges; how you respond is what should evolve. Businesses should be focusing on more things than just pre-pandemic revenue. I think that business planning needs to include identifying profit centers and potential profit centers, as well as a team to sell and support them.”
Open Channels
The need to maintain open communication with both clients and OEMs to understand business needs and product availability is a critical aspect, according to Elliot Williams, director of product marketing, business imaging for Epson America. This will be essential to developing a realistic approach to meeting customer requirements.
“It’s no surprise that building and establishing a rapport with customers is a key element to a successful relationship. However, the art of face-to-face, in-person communication with customers has fallen to the wayside due to circumstances beyond our control,” Williams noted. “We had to adapt and have grown accustomed to living in a virtual world – meeting with customers on Zoom calls and communicating through email.
“We’re seeing the world change again,” he added. “Dealers should look to re-establish customer relationships – by way of cold calling, scheduling in-person meetings or attending open houses – as being physically present is very important because people purchase from whom they know and can depend on.”
Not shying away from investing is the primary mantra that Paul Archer, president of Automated Business Technologies (ABT) in Centennial, Colorado, ascribes to, and he has the receipts to prove it. ABT’s 2022 will be the best year on record for the dealer, and 2021 showed significant improvement over 2019. Archer is taking an aggressive posture toward the future.
“In spite of inflation and a possible recession, we can continue to grow,” he said. “We have focused on strengthening our company in every way. Our team is benefitting from this and our customers are as well. We will continue to invest in people, processes, and customer offerings.”
Profitability will always be among the key buzzwords uttered by dealers. Jason Habbal, vice president of Vision Office Systems in Charlotte, North Carolina, breaks it down to the individual account level.
“I believe dealers need to be looking at the profitability of accounts over buying new accounts,” he said. “The model of giving the equipment away to get the service revenue does not work, and I believe many dealers and even some manufacturers are realizing this.”
Protecting Profits
While scaling beyond print is sound advice, Jennie Fisher—the senior vice president and general manager of the office equipment group at GreatAmerica Financial Services—believes it’s equally important for dealers to protect their bottom line. One such avenue to attaining that end is enhancing operational efficiency.
“The most successful solution providers are realizing there are a plethora of touchpoints between them, the customer, the sales rep, third-party providers, and their systems,” she said. “Using technology integrations, successful dealers are automating many of these processes to improve workflow efficiencies and help maximize their recurring revenue.”
In devising its own business plan, Virginia Business Systems (VBS) and its sister company, Edwards Business Systems (EBS) of Bethlehem, Pennsylvania, is focusing on managed services, industrial print and net-new clients to grow business in 2023. EBS/VBS is expanding conversations with clients around IT needs and is leveraging the investments made by OEM partner Konica Minolta to create significant industrial print opportunities, particularly in the areas of packaging and labels.
“Innovative client engagement will be critical to success in 2023,” noted VBS President and CEO Jim Dotter. “The noise in inboxes and voicemail has created a fatigue for buyers, and we need to find interesting ways to engage clients, including video, physical correspondence via mail and in-person networking.”
Market conditions left an impression on Mason Smith, the president and CEO of MTS Office Systems in Anderson, South Carolina. There’s value in building a dealer’s inventory of stock, seeking out quality pre-owned equipment and, perhaps most importantly, devising creative ways to make it easier to do business.
“With rates rising along with equipment costs, dealers will need to get creative to maintain their current customer bases and net-new business,” he said.
Two key elements that bear watching are remote document management and security solutions. Brent Martin, director of marketing for ARLINGTON, sees a need for secure printer options at office locations, with document management and scan solutions available to office and remote employees.
“Look to provide other options that fit into post-COVID office environment such air purifiers, security solutions, and more,” he advised. “Continue to identify those needs in the modern office and align yourself with a distributor that can fulfill those needs.”
