by Chad Carr
There's been a lot written lately about the decline of our Industry. Many experts have pointed out that the ongoing reduction in new home shipments, the shrinking number of Independent Retailers and the lack of support from the banking sector are all signs that our road will be difficult to travel for some time to come. Some have even predicted we are on a road to oblivion.
While these opinions are certainly based on reliable facts, and the experience and knowledge of these opinion makers are beyond question, I have not yet been convinced that retailers and community owners of our industry are in a hopeless or, frankly, even a desperate situation.
I believe it is still possible to sell and finance homes at a profit. I believe owners can continue to build long-term wealth and stability in this market. I believe this industry still presents a great opportunity for Independent Retailers and Community Owners alike.
I believe these things are possible because I see them actually happening in this industry every day!
At Rainmaker, we call on retailers and community owners of every shape and size in every region of the country – every day. And while it's true that the majority of those we talk with are tired, beat-up, frustrated, hopeless and "Retired-In-Place," we also talk to people every day that are doing very well.
I know retailers who are making record profits. I know community owners with 99% occupancy rates. I know people with private portfolios of MH Loans that are performing very well and have been for a long time.
That's not to say that everyone is or even can be successful. But I am absolutely convinced that a much greater percentage of Retailers and Community Owners could be doing much better than they are.
I have written on this site before about the Best Practices that people need to employ during these times in order to be successful. A quick search of the Archives should produce several pieces on these Best Practices, but let me list 10 that we actively teach and promote:
Strategy #1 – Reduce your Overhead
Strategy #2 – Convert Fixed Expenses to Variable Expenses
Strategy #3 - Turn your P&L into a profit generating check-list
Strategy #4 – Learn and Implement Variable Gross Profit Strategies
Strategy #5 – Get Aggressive in Used, Repo's and Consignments
Strategy #6 – Develop Retail Finance Alternatives
Strategy #7 – Increase your Variable Sales Penetration
Strategy #8 – Move your Marketing and Prospecting Efforts to the Internet
Strategy #9 – Capture Market Share with aggressive Marketing and Follow-up
Strategy #10 – Upgrade your Sales Process and Retrain your Sales Team
We know many people who have used these strategies to not only survive, but to thrive in this current market.
Unfortunately, despite our efforts to help teach dealers these strategies, and the efforts of others like the staff of MHSMH.com to help spread the word about opportunities for dealers to improve their business, I am amazed at how few people actually want to do the work it takes to make something positive happen.
Don't get me wrong; I know owners are busy working. In fact, they are probably busier than they have been at any other point in the last 20 years. But they are busy working harder at the same things they have always done. They are busy because they have let their staffs go, not because their activities are making things better.
Every month, our company offers at least six free education seminars through the Internet focusing on how Retailers and Community Owners can implement the various strategies listed above to improve their sales and bottom line. We are lucky if we get four or five people from this industry to attend these webinars.
For those who do attend, when I follow-up to ask what changes they are considering to help improve their business, most tell me none. Just to be sure I'll ask if business is already good for them and almost always they tell me no.
Why is it that we can have so many smart, hard working people in this industry who are incapable of taking action or making changes? From my conversations with Dealers and other Industry Professionals, I have come up with a list of four reasons:
#1 – Fear
Many people are just plain scared. They feel the problems they face are so big, and their ability to fix these problems so limited, that they are just scared into trying nothing.
We all know how opossums play dead when they are afraid, even if it increases the chance that they will end up dead. Many people are so stressed about their situation that they just "play dead," try nothing different, and hope that they don't get hit by the one last problem that will finally put them over the edge.
#2 – Fatigue
I was recently talking to a dealer about changes he could make to grow his business and he said, "The problem, Chad, is that I'm just tired of working this hard. I spent twenty years working my tail off to build this business, five years working to save it, and I don't want to have to work that hard again at this point in my life."
This was about as honest an answer as I have received from anyone in the last three years. He knew he could do better, but he was tired and instead of getting back to work, he had decided to lower his expectations and adjust his lifestyle so he could meet his needs without having to re-grow his business.
#3 – Fairy Tale Thinking
I can't tell you the number of times I finish up a speaking engagement where I am trying to show people how they can turn around their businesses only to have someone come up to me and talk about how everything would be better if someone would just start sending again, fix the appraisal problem, put together an image campaign, enforce the duty to serve, etc.
There is no white knight coming to save this industry. This industry is going to have to save itself. Or at least each Retailer and Community Owner is going to have to save themselves.
We have always had to fight harder than other segments of the housing market. We have always had powerful enemies who do not want to see our industry grow. We have always had to overcome a stigma about our product.
And there have always been people making money in this industry despite all these issues.
#4 - Fatalism
As evidenced in some of the recent discussion on this and other sites, there are many who have finally given up on this industry. I talk to lots of people who say they would love to sell out and be done if someone would just make them a decent offer. I talk to many more who are just hoping to outlive the business.
This fatalism is understandable; it has been a very hard 12 years for this industry. However, it makes no sense to sit by and watch your life savings go back into a business that you are not going to make successful. Those who are "Retired in Place" really do need to cut their losses and move on.
Each of these four reasons for inaction can be excused on an individual basis. Each Retailer or Community Owner is allowed to do what they wish to do; and each can tell themselves what ever they need to in order to make themselves feel comfortable about their decisions.
I worry though, that we are collectively reaching some point of negative critical mass where we spend more time talking about the reasons things are bad than we do trying to make positive things happen.
There are plenty of people working hard as individuals, trying new things and being very successful in this business today. But we need more of them.
I'm not talking about working to solve big industry-wide problems (not that people shouldn't do this). I'm talking about working on your own business.
I don't think there is one magic solution to solve the industry's problems, but there are concrete steps that can be worked on each day to grow your individual business and be profitable. When we each do that individually, the industry will begin to improve collectively.
I am not ready to give up on this industry because I know many people who have overcome the challenges of this industry to be very successful. If some businesses are actually successful, then it must be possible for others to be successful.
For those who wish/want to break out of the cycle of negativity, there are plenty of resources to help. There are many people out there offering help in the form of articles, webinars, training sessions, consulting services and more.
You can find many of those resources right here on the pages of this site. As I mentioned before, our company hosts free webinars (on-line seminars) each month that go into detail on the ten strategies I listed above and many more Best Practices that we have learned from successful dealers through our 35 years in this industry.
If you want help figuring out where to start, you can give me a call and I would be happy to get you pointed in the right direction. But it doesn't matter so much where you go to find something new to try. What matters is that you make the conscious decision to seek out something you believe could help your business and then invest some time and energy in making it happen.
Chad Carr is the President of Rainmaker Software, a second-generation family business that provides Retail Management Software and Consulting Services for the Housing, RV and Trailer markets.
Rainmaker works with dealers ranging in size from five to six people up to some of the biggest and most well recognized names in the industry. Register for their free monthly newsletter at http://visitor.constantcontact.com/d.jsp?m=110294633464five&p=oi.