2017 is all about Revenue Growth. As we are finishing up 2016, let’s think about how we are going to manage our growth this coming year, and how we are going to continue to pursue not just excellence, but a new level of distinction for our companies. How do we figure out a growth and revenue enhancement strategy as we look at the economy right now? How do we meet the challenge of staying profitable during a time of growth? How do we achieve a new level of “what it looks like when it’s right”? The answer can be found in Curie Success Principle #4: Strategy..
According to the Bureau of Economic Analysis (http://www.bea.gov) the U.S experienced a slim GDP growth of .8% in the first quarter of 2016. The second quarter showed a marginally larger growth rate, around 1.1%. Also noteworthy is the fact that profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment [CCAdj]) decreased $24.1 billion in the second quarter, in contrast to an increase of $66.0 billion in the first quarter of 2016.
Warren Buffet shared some encouraging economic insights in his most recent annual letter to shareholders at Berkshire Hathaway, Inc. His approach to predicting economic activity is to take a long-term view. A deceleration in GDP growth for the short-term is not as alarming as some people would have investors and business owners believe. And the measurement is not one that can be looked at in isolation: consumers, business owners, and politicians need to think about other correlating factors, and include the consideration of those factors when looking at economic growth or decline.
One such factor is population growth. The U.S. population growth rate is trending around .8% annually. The per capita GDP growth rate, and dollars per capita, depend upon population growth as an element of the predictive calculations that economists project.
Another area that must be considered is the development of technology. The efficiency that technology has created in the American and global workplaces is not something that is going away –rather that continuous transformation in our lives will endure and thus carry on a trend of higher efficiency as we move into the future.
Taking those, and other factors into the equation, the math tells us that the economy is headed toward a substantial yield in actual per capita dollars per person, as the next generation comes of age. Remember last quarter when I shared a review of Andrew Carnegie’s The Gospel of Wealth? Buffet, and other experts, believe that income and lifestyle inequality will always exist. However, when predicting long term outcomes, we must also consider an increased life expectancy, and higher standard of living as time moves forward. This validates the mindset that analysts need to look long-term, and Currie clients need do so as well. Remember Currie Success Principle #2: Vision and The Big Picture.
Here’s an interesting quote from Mr. Buffett’s letter:
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve). As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do. That view is dead wrong: The babies being born in America today are the luckiest crop in history.”[i]
Although long-term analysis is key in predicting the wealth of future generations, we experience cycles in our economy, and sometimes those cycles can be quite dramatic. Currently there is a slow rate of GDP growth and the impact of that can have a severe effect on the short-term health of many businesses, as indicated earlier by the reference from the Bureau of Economic Analysts. However, all is not gloom and doom in our corner of the world, but since equipment dealers and distributors today are facing a slowdown cycle, the Currie team is introducing this new theme aimed at rolling out a comprehensive revenue growth strategy for 2017.
Currie Management Consultants, Inc. has identified the key areas that are critical to a new, and precise, overall strategy. Bob Currie will lead the charge on implementing specific actions and best practices that will keep our businesses strong and healthy. Throughout 2017, the Currie Team will stand together with Dealer Principals and Investors, as we navigate through a short-term tight economy and a downturn in the availability of new business. And Currie will introduce new, innovative methods for industry leaders to succeed and grow through account management, account penetration, and winning business from your competition. These strategies will be supported by micro-strategies including:
- Managing the Sales Force
- Achieving Growth in the Aftermarket Departments through methods such as second segment service work and proactive parts selling
- Measuring the key liquidity benchmarks to keep your “finger on the pulse”
- Marketing the new strategy through Internet and social media
- And more…
This program is offered October 11-12, 2016 in Washington DC. Registration is available here: 2017 Revenue Growth Strategy for Equipment Dealers. This year’s theme has been designed specifically for our highly successful dealer clients, and it is also in keeping with Currie Success Principle #8: Growth and Adaptability. Call us at 508-752-9229.
[i] Warren Buffet’s 2015 Annual Letter to Shareholders of Berkshire Hathaway, Inc. http://www.berkshirehathaway.com/letters/2015ltr.pdf