By Meredith Kaplan Burns
If you haven't already started planning for 2011, there is still time to set and implement clear, concise, and obtainable goals for your business to keep your bottom line in the black.
Developing and implementing a business plan for your racing business is important because it acts as a guide and can give direction to your business in regards to sales, marketing, expansion, and much more.
According to Kevin Gerhardt, of Western Speed & Fuel, in Fresno, California, who plans his business up to three years in advance, having a business plan "is so important so you can plan depending on the changing times. Especially now with the economy the way it is. It used to be that a yearly review was good enough and now a three to four month review seems to be the norm. You have to be ready to change tactics 'midstride.'"
Because of the current economy, he said, "most people today are not buying anything in advance of needing it. They are waiting until they absolutely need it then we as retailers are expected to have it in stock or be able to get it quickly."
Gerhardt's business plan includes past sales history, current market conditions, and overall business climate.
Jim Morsch of Continental Motorsport Services, based in Mason, Ohio, with an onsite store at Mid-Ohio Sports Car Course, in Lexington, Ohio, agreed that business owners these days need to be quick to react and open to change. "I think the way the business is a year ahead is about all you can do in terms of planning. Things change too fast to plan five years ahead because you just don't know which way the industry is going."
Because Morsch operates a trackside operation at Mid-Ohio, planning inventory can be tricky. "It's a crystal ball," he noted, laughing, "and sometimes it's real black. You just have to go with your gut feeling about what has sold the year before.
"You mainly want to concern yourself at the track with items that they are going to need to keep going and all the other accessory type things are nice to have," he continued. "That is what we are running into right now with the way the economy is. It's 'gee that's on my wish list' or 'I'd like to have that, but I really need an oil pressure sender' or 'I really need a mirror because I just broke a mirror,' things like that."
One method of adding new products to the Continental Motorsport Services inventory is Morsch and his team keep track of all the requests from customers they get through the year. If they receive two or three requests for a particular item, they will seriously consider adding that to the inventory mix.
"You have to listen to the customer for what they want because what we've run into and one of the biggest changes we've had is you don't sell what you want to sell, you sell what they want to buy. That can be tough," he added.
Success is found by clearly stating goals, going after them, and achieving them. However, through that process, failure often happens, and the experienced and successful business owner is not deterred by the failure, but finding out why the failure occurred and how to overcome that issue in the future in order to achieve success.
When setting goals for your business, first, the goal must be clearly defined and measurable. A business owner may review product sales in 2009 and 2010 and see that sales of oil filters aren't as strong as he would like. He might decide, "I'm going to sell more oil filters in 2011." However, by just stating the increase of sales without a plan will not produce results.
First, set a goal of how many oil filters to sell each month. If the goal is 20 units each month during the race season, then how will that goal be reached?
There are several methods, which retailers are familiar with from putting the product on "special." These include highlighting a specific display in your showroom or even promoting the product in an e-newsletter as the "product of the month."
Bundling is another excellent option to increase sales of products when purchased together. For example, offer a special of the oil filter included as a package with the oil tank, pan, and pump. Often, bundling sells several products together at a reduced cost, which is appealing to the customer as opposed to buying the products individually.
Also, one of the most effective sales methods is for your counter people to just ask, "can I add a new oil filter to your purchase today?" Amazing what a simple question can do to increase a sale before the customer walks out of the store.
Once your goals have been set, write down the action steps to take. What are the goals and how will you achieve them? For example, if you plan to create an email marketing program, is this something that one of your employees can design and implement or will you need to outsource? What aspects of your business do you want to promote in the program? Some topics to consider including are technical information for products you carry, upcoming sales and events, customers who have achieved success on the race track, and anything else you believe your customers will find important. Also, ask them what they would like to learn in your e-newsletter. Customers can be a great source of ideas.
For other new, fresh ideas, the team that surrounds you day in and day out can be a terrific source of innovative strategies to implement that improve the business. Contributions can be made from every person to increase sales and decrease overhead, don't overlook anyone. Also, be open to their suggestions. Ask them why they believe the idea can be effective, how they would implement it, and the result. A simple suggestion about how to reorganize the workflow could save valuable time in an engine shop, or a newly designed showroom could focus customers' attention on specific products and increase sales.
Whether it's expanding your product lines or entering into new markets, look for new opportunities to expand sales. For example, if a shop specializing in the drag race market hires someone who is heavily involved in the sport compact drag scene, this might be a new market to explore. Or, an open wheel shop has an employee whose children are involved in quarter midgets. Reaching out to the quarter midget market is an excellent way to attract new, young customers who can turn into loyal, lifelong customers of the future.
Goal planning does not have to be time consuming and overwhelming. With just a few specific goals for your business in 2011 and beyond, along with some practical methods to achieve these goals, your business can stay strong and be ready for and open to change when needed.