roads to furniture success, The

Office World News, May/Jun 2003 by Heilborn, Jim

FURNITURE STRATEGIES

If you've ever gone on a long driving trip to place to you've never been, you probably spent some time planning your route before you left. While some people go to AAA and have them mark out their route on a map, others enjoy figuring out their route by themselves. Either way, not too many people just get in the car and start driving. Unfortunately, many business leaders take their companies along for their "annual ride" with no real idea how, or even if, they're going to reach their "final destination."

These are some of the toughest economic times that the furniture industry has ever seen. We have all witnessed seemingly successful dealerships and manufacturers cut way back or go out of business. We shake our heads and ask how it could have happened. Was there a turning point or a sign that they missed? Where did they go wrong and perhaps, more importantly, how can we avoid making the same mistakes? While there isn't one easy answer that will apply in all cases, many companies don't plan for their success or failure. Most companies have no contingency plans that they can turn to for guidance; making decisions based on outdated information and then reacting when it's too late.

CHARTING A COURSE

It is possible, however, to improve a company even in these uncertain times. The process starts with what some people call "think time." Too many companies start every business day without a goal or objective to achieve. They haven't thought through what needs to happen-today. If you ask one of their employees what their company's goal is they will probably respond, "To make money." If you ask what the goal is for that day, the answers are much less clear.

Employees will perform some tasks every day, but are they the right ones? Are those tasks profitable? Do they know the difference? Does management know the difference? The challenge for most companies is to identify the most important daily activities that will lead to the achievement of the company's short- term goals that lead to the ultimate goal; make money. To do that, someone has to take the time to sit down and think through the business and many people claim they can't afford the time. I contend that they can't afford not to take the time.

PLANNING AHEAD

The first step to starting a business is often skipped-the business plan. Even after the company is successful for a few years, the process of writing an annual business plan is left out. This omission may be the difference between survival and bankruptcy. Why is the plan so important? The annual plan does more than just describe the business. The plan is intended to be the roadmap to guide the company each year.

A business plan should help identify where the company plans to go and how it's going to get there. It should help to pinpoint where and when opportunities or problems might arise and how to deal with them. An effective plan will look at all sides of a company and the business climate at that time. The fastest way to do that is by writing a SWOT Analysis for the company-Strengths, Weaknesses, Opportunities, and Threats. This exercise should clearly point out the areas that require further concentration, allowing the company to become proactive rather than reactive. The following paragraphs are a brief description what each section should discuss.

* Strengths-These are seen as competitive advantages that provide organization leverage and allow a company to accomplish more with less. Does everyone, from sales to warehouse, know what the company does best? What its strengths are? Is the staff using this knowledge to promote the company in presentations to current and potential clients?

* Weaknesses-A company's weaknesses are situations or conditions that, once recognized, can either be improved or compensated for in some way. What are the problems keeping the company from reaching its goals? Have they been found and the root causes identified? Is there a plan in place to correct them? Are the people working in the problem areas aware of the problem? Are they in a position to correct the situation? How severe are the problems? What will it mean to the company if the problems are eliminated or reduced?

* Opportunities-These are marketplace situations or conditions that can make the organization's products and services more acceptable or desirable if the proper link can be made between these situations/conditions and the product/service. When companies stop buying new furniture there is an increased need to maintain their existing products. This is an opportunity for dealers to provide maintenance and repair services. When a company closes buildings and has to store product this is an opportunity for a dealer to offer storage and asset management services. The key is to identify the trends in the marketplace and link them to products or services the company can provide profitably.

* Threats-Threats are external situations and conditions that can negatively affect marketing efforts. Although threats can seldom be controlled, they can be influenced if identified before they become too strong. By being aware of threats, the organization can often plan around them. This is why companies need to have contingency plans, even in strong economic times. Companies don't plan on losing their top salespeople, but it happens. Major projects can be postponed or cancelled but then what? A company is awarded a long-term project that will require a staff twice as large as its current one. How will the company continue to provide and maintain service levels to its existing clients at the same time?