January 1, 2010 - Many of us will be glad to see the back of 2009, one of the hardest years for some time. In spite of substantial falls in revenues the majority of crane, access and telehandler companies – whether rental or manufacturers have come through bruised but alive.
While the economic news is beginning to look rosier it will take some time before that starts to filter down into the capital investment areas that will give a real boost to our industries. Although there are some bright spots on the horizon in areas such as utilities and power generation and there are plenty of companies out there that still need to lift things and work at height.
It is at times like this that choosing the right strategy really separates the weak from the strong, the wheat from the chaff, the men from the boys.
A key element for 2010 will be timing, with the need to keep a tight rein on overheads while cranking up new business generation efforts, not to mention keeping a keen eye out for acquisition opportunities and maintaining the ability to take advantage of them when they come along.
Cash management and the access to funds will be another key factor of course, too many companies have come this far by simply stretching out payments to suppliers. This is a short term patch which rarely ever works over the long term and they are likely to be the first casualties of the year.
Certainly it is critical that payment days are similar or greater than collection days. No company will prosper by being squeezed by paying suppliers significantly faster then they get paid. Not only that but with many customers on the edge, slow collections will ensure that when one goes down the loss is greater.
As always pricing is a major factor, this month we publish the latest Cranes & Access rental rate guide which does not make great reading with rates having fallen significantly in most sectors. The crazy thing is that they did not fall from grossly overinflated levels, so are now uneconomic even at decent utilisation levels. Rental rates must and can go up, it is about time the industry put more effort into this.
Manufacturers have been hit even harder than rental companies, with revenue falls averaging over 50 percent, however with some markets now really beginning to pick up those with strong international distribution will see some improvement in 2010. At the same time the results comparisons with 2008 will soon come to an end, allowing many to start posting positive year on year numbers, helping boost morale if nothing else.
2010 is an opportunity to shape up our businesses – put a stop to knee jerk un focused pricing practices, get more rigorous on cash control and most of all to focus on what our customers really want and need. And then making sure that they all know what you can offer.
Easier to say or write than to do of course, but those companies that get it right will not only have a good year in 2010, but will be way out in front to prosper from the better years ahead. Don’t believe those that say “it’ll never be as good as it was” I have heard that at the bottom of every recession and the reality is totally the opposite. You just need to be running smoothly with a good product and strong brand image for when the good times roll again as they most surely will.
Wishing you a very happy and hopefully prosperous 2010.
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