What is the first thing you look at when you get your company's monthly financial statement? OK, once you have assured yourself that there is money in the bank and that you actually made money last month, what do you look at next? Do you have a systematic approach to analyzing the financial health of your company?
Most dealers don't have either the time or the ability to effectively analyze the financial vigor of their organization. Decisions often are made based on “gut feel” and “street smarts.” While there is no replacement for experience, the stakes are too high to rely strictly on intuition when running your business.
In keeping with its core mission of promoting the success of America's lumber and building material dealers, NLBMDA has joined forces with MGT Strategies to sponsor and launch a powerful, industry-specific financial management tool—the Strategic Analysis Report (SAR) package.
The SAR package of reports is designed to provide you with a quick “CAT scan” of your company's financial health in important areas such as sales, margins, key performance measurements, and cost center expenses. These industry-specific reports focus on issues that relate to the LBM dealer, including delivery costs, yard management, and sales efficiency. Designed with color coding so that you are directed to the trends that require attention, they can be reviewed quickly each quarter. The structure is standardized so that benchmarking comparisons can be made with other similar dealers. The reports take into account the distortion inherent in standard financial statements based on varying owner's salaries and tax-based depreciation strategies. Perhaps best of all, the reports are very affordable.
Enrolling your company is quick and easy. Once you subscribe, you will gather and submit key financial and operational data to MGT Strategies at the end of every quarter. The information is then compiled into two comprehensive reports, the Management Performance Report (MPR) and the Dealer Report Card (DRC).
The MPR takes the key financial and operational data from dealers and performs more than 3,000 calculations and ratios resulting in a concise and very user-friendly report that points out the key business trends, good and bad, that have the greatest impact on the success of your business. The report is generated and in your hands within 10 business days after you submit the data to MGT Strategies.
The DRC is a benchmark of your performance for the latest quarter versus other similar dealers that participate in the program. The DRC shows you what is possible, and unlike many other benchmarks the data being compared is for the previous quarter. The timeliness of the data makes it easy to spot changing industry trends and helps you identify the areas of your company that are leading or lagging behind in comparison with similar companies. Due to the timeliness of the reports, adjustments can be implemented quickly.
Together, the two reports that make up the SAR package provide you with the analysis you need to determine whether the management objectives and strategies you develop for your company are being executed effectively in your drive to create a more successful organization. By becoming more strategic and aware of the trends within your company and industry, your business will be efficient and profitable. To find out more about this program, contact me at 864.322.8874 or [email protected].—Steve Davis is president of MGT Strategies in Greenville, S.C.