Seasonality, inflation, politics, people, and technology are a few headwinds impacting fuel dealers, wholesalers, and service contractors in the energy space. We are often asked, “How can we create predictable revenues in an industry influenced by so many outside “threats?”
In this episode, Doug Woosnam, a Consultant with Cetane Associates, Clayton Latiolais, a succession planner with The Rawls Group, Marty Kirshner, Partner with Gray, Gray & Gray, and our very own succession planner Champ Rawls discusses strategies to take control of the ebbs and flows of your business, which include:
The strategic planning process is a collaborative initiative allowing you, supporting family members, and key management to discuss and confirm the vision and mission of the organization, as well as the resources needed to achieve business goals.
The outcome of the strategic planning process is a detailed action plan that addresses short- and long-term goals, operating methodology, talent recruitment, effective business structuring, and effective communication. The strategic plan will then serve as the compass for future business and succession.
Champ Rawls shares that sitting down with your team and engaging in strategic planning will help you identify your strengths and opportunities. Once you know where you stand, you can then evaluate what potential outside business lines you could add within your existing footprint, whether that be HVAC, home energy audit, concrete, pest control, or landscaping. Assuming they fit within your business model, other services can help insulate against change. You can also discuss your weaknesses, develop strategies, and identify resources to address performance issues.”
Create an operational budget so you can measure what they are doing. Doug Woosnam shares that it is surprising to see how few businesses have a proper budget, something they can measure current performance against past performance and compare where they are versus what they need to be doing. Commonly, Doug sees dealers lacking in preparation. They are in their third week of the month, down 20% on degree days, but they are at a loss for how to address the deficit.
Doug continues to share that if a Dealer has a budget, they often miss key performance metrics. A standard metric missed is how many drivers are needed to support the business, and dealers often express they are unsure even how to determine that metric which is:
- What your delivery efficiency is how many gallons per hour per gallon per stop
- How many services calls in a day
- How many installations
In this business, manpower is the most significant expense next to the product cost. But unfortunately, there is not enough appreciation and understanding of what goes into developing a budget that will maximize opportunities.
Break Even Analysis
Stay on top of budgeting, using a tool such as a break-even analysis. Marty Kirshner shares that this tool will provide insight into how many gallons you need to sell to break even or at what margins you need to make.
Standard Operating Procedures
Clayton Latiolais shares that sustainable revenues and growth depend upon talent, teamwork, and rock-solid systems for your people to follow, establishing standard processes for “getting things done.” Otherwise, people make it up based on their work styles creating inconsistencies and inefficiencies in the business. Creating the margins required to break even and create profitability depends upon efficient time and cost-saving processes.
For more insight:
Visit the “Create Control Over Your Future” discussion page or select one of the additional episodes of the series below:
- Generate What You Want and Need from the Business
- How Successful Propane Marketers Protect and Build Business Value
- Strategies to Attract, Retain and Motivate Employees in the Fuel, Oil, Propane and Energy Business
- Return on Investment: Why Expert Guidance Matters
- Political Pressures: How Fuel and Oil Business Owners Can Protect Their Business
- Keys to Maintaining Successful Business Partnerships
- Cetane Associates: a unique group of fuel industry specialists armed with assets and proprietary processes that help them perform wonders for their clients
- Gray, Gray, and Gray: With 77 years of experience working with fuel oil and propane marketers and convenience store owners, Gray, Gray & Gray has established a reputation as the energy industry’s leading accounting, consulting, and business advisory firm.
- Succession Readiness Survey: A 7-minute investment in time will put you in an informed position of opportunities many business owners overlook, impacting business value, growth, and lifestyle, and ultimately achieving your vision.
- Contact a Succession Planner: The Rawls Group can help you with insights and other resources and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business immediately.
The Succession Planning Matrix
The Succession Planning Matrix
Many people put off succession planning because they think it means retirement, exit, and the end. However; succession planning is just the beginning. It gives the owner options in terms of what “their next” looks like, whether that be growth, philanthropy, or a new business venture. Our process focuses are addressing 10 key areas of what we call the Succession Matrix.
Click the following link for more drill-down resources on The Succession Matrix, or check out our Facebook post.
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We can help you with insights, other resources, and see if it makes sense to work together. At the very least, in 30 minutes, you may get some ideas you can apply to your business right away.