Moving Words – Reset

Timothy Brady

“Sometimes, in order to be successful, a business must reset.”  – Bob McNair

Being prepared for the post-pandemic economy is going to be a challenge. As we emerge from shutdowns and quarantines, the economy is going to experience many false starts. As people start going back to work, taking vacations, and attempting to return to what they remember as ‘normal‘, we’ll see inflation trying to rear its head. We’ve already seen fuel prices increase substantially (influenced not only by post-pandemic economic improvement, but also due to the heavy freeze in Texas in February cutting gas and diesel production, and even a huge container ship blocking the Suez Canal). Add to this the shortage of building materials for new homes, adding significantly to the cost of a new home – doubling in price – and the shortage of available homes for sale nationwide, creating the possibility of a housing ‘perfect storm’ in our future. All factors which are now and will continue directly impacting the moving and storage industry.

The forecasts which have been presented for the trucking industry for 2021 and even into 2022 and 2023 are all over the map. The one part to keep in mind is that these are industry-wide forecasts. For individual moving and relocation companies, the ability to adapt to a changing economy will predict their future. Just because the COVID-19 Pandemic seems to be winding down doesn’t mean we’re going to bounce back to the booming economy we saw from 2014 through 2019. What it does mean is that we’re in an economic reset. And that “reset button” will probably be pressed several times before our economic engine begins to purr again.

Our best course is to go back to the basics of operating a business. Be prepared to roll with the punches while positioning ourselves so when the engine starts purring, we’re ready to function at full throttle.

Here are the steps to be ready for what the economy throws at us and to be prepared when opportunity knocks:

• Know how much revenue your company produces against your costs, your accounts receivable and the quality and diversity of your customers.
• Manage all of your assets: cash, equipment, property, accounts receivable, customers, employees and contractors, with a plan.
• Be prepared for the lean times, equipment breakdowns and replacement, and covering the daily cost of operations while waiting for customers to pay. This strategy must not let growth out-pace capacity, and above all, there needs to be a vision of building the company’s net worth.
• Be willing to listen. Have your antennae out for new and innovative cost savings and revenue-producing ideas.
• Get input from your drivers, dispatchers, safety and sales people.
• Look for information outside of the moving and relocation industry and stay on top of the trends and news from your shippers’ perspectives.
• Know the risk your customers represent to your revenue-producing capacity. What’s their credit rating? How’s their paying history? What are their projections for growth? What are their weaknesses?
• Don’t let a single customer represent any more than 20% to 25% of your total revenue or accounts receivable.
• Continually farm for new business.

As we make our way through the next few years, the moving and relocation companies who will survive and thrive are the ones doing their business by the numbers. Controlling costs, diversifying and finding new revenue sources, listening for new opportunities, understanding their customers and not taking any unnecessary risks is the way to be prepared for the future, whatever it turns out to be.

“This pandemic has provided an opportunity to reset. This is our chance to accelerate our pre-pandemic efforts to reimagine economic systems, that actually address global challenges like extreme poverty, inequality and climate change.”  – Pierre Poilievre