The MHEDA Journal - Second Quarter, 2014 - (Page 28)

CONVENTION ECONOMIC FORECASTING SPEAKER Get Aggressive and Start Thinking Big Position your company for economic expansion BY ALAN BEAULIEU F or many in the material handling industry, the past few years have seen strong growth. In the first quarter 2014 issue of The MHEDA Journal, many MHEDA distributors reported seeing record sales in 2013. Many more expected to eclipse those sales records in 2014. And while we expect a bit of a soft spot in the second half of this year, there is no reason to believe that that the positive trend won't continue in 2015. At last year's MHEDA Convention, we warned that the economy would see a slight dip this year. However, given the proper precautions, this could be seen as nearly a non-event for MHEDA members. Among the steps that can be taken to protect yourself are borrowing and locking down the lowest interest rates possible. Another thing that every MHEDA member should be doing is forecasting. We should all be watching the leading indicators and benchmarking our companies accordingly. At this year's Convention (May 3-7, 2014, at the Loews Portofino Bay Hotel at Universal Orlando, Orlando, FL) our message is to get aggressive! Getting Aggressive While Staying Protected We know there will be a soft spot in the second half of 2014. However, we also anticipate that 2015 will be a year of favorable economic expansion, 28 MHEDA | especially in the second half of the year. The trick is positioning ourselves so that we are insulated against the downturn but also poised to pounce on the way up. An important thing to realize is that "getting aggressive" is something that takes time. You can't wait until after the downturn to order capital equipment and expect it to pay dividends all at once. Likewise, you don't just hire people to push into new territories and have it all happen in six months. It requires planning. So take this year and start getting the pieces in place to capitalize on the upswing in 2015. In the second quarter 2013 issue of The MHEDA Journal, we wrote, "Ultimately, your success boils down to how much cash do you need to grow vs. how much cash do you need to survive? And it actually takes more cash to grow than people think. You can go out of business by not having enough cash when the growth period comes. You will just continue to grow and end up growing beyond your cash reserves. If you grow beyond your working capital requirements, you can very easily find yourself strapped for cash and behind with your creditors. It really takes meticulous planning." One way to manage the cash flow is to take advantage of the optimism and opportunities in the first half of 2014. You may want to consider purposefully thinning your margins a bit in the first half of the year in order to ensure you have the orders and backlog to carry you well into 2015. You will stay profitable and concurrently not have to dramatically thin your margins in a scramble to bring in work later in the year. The overall message of our presentation is that with an expanding economy over the next four years, do what you need to do in order to grow your business. That could be adding personnel, more space, more equipment, or a number of other things, but those are things that can be done now. Forecasting One thing companies must be doing to protect themselves from potential downturns is forecasting. There are several things to look at to get the pulse of the economy. The first thing to do is to compute your rate of change and then find industry indicators you can relate to. Also, be aware of lead indicators such as the Conference Board's U.S. Leading Indicator and the ISM

Table of Contents for the Digital Edition of The MHEDA Journal - Second Quarter, 2014

President’s Perspective
From the Desk of Liz Richards
Editor’s Note
Ask Your Board
MHEDA Member Profile
Howard Bernstein and MHEDA: 60 Years of Superhero Leadership
Get Aggressive and Start Thinking Big
Managing an Acquisition
Creating a Best-in-Class Safety Program
Exhibitor Product Guide
Floor Plan
MHEDA University Calendar
Inside, Outside or Upside Down
Six Secrets of Top Performers
Finding Your Path in (Or Out) of the Family Business
What is This Thing Called Employee Engagement?
‘Fleet Centricity’ and Finance Partners
New Members
Spotlight on Association News
MHEDA Milestones
Index of Advertisers by Product Category

The MHEDA Journal - Second Quarter, 2014