2009 Business Re-Forecast
Six months later, distributors revise their 2009 projections.
Last January, The MHEDA Journal published the industry's Annual Business Forecast for 2009. Interviews with MHEDA members took place during the months of November and December 2008. At that time, distributors were cautious and uncertain about the year ahead. 32% of the distributors interviewed projected that their sales in 2009 would increase at an average rate of 13%. Only 15% of those interviewed believed their sales would be down, at an average decreaseof 9%; while 53% felt their sales would be similar to those in 2008. The title of that article, “Distributors Positioning For Success In 2009” challenged readers to look at the months ahead and powerfully prepare for the challenges.
Well, here we are, midway through 2009. We've watched new construction stop, businesses downsize or close, and sales slow to a crawl. In response, distributors have eliminated excess, stopped hiring, cut pay raises, put expansion plans on hold and hunkered down to fight for survival. In some areas, rentals and equipment repair are up. Expenses are trimmed and management is actively in front of customers pursuing prospects. Many believe their companies will come out of this period stronger.
- 42% of companies indicated in January 2009 that they would introduce new product lines and services. To find new sales opportunities, those companies are still moving forward, albeit at a slower pace to deal with cash flow challenges.
- Six months ago, 51% of distributors said they would hire additional people in 2009. Now, only 10% plan to hire new employees. Some companies have layed off employees, reduced hours and eliminated overtime.
- In January 2009, 15% of Distributors believed their sales would be worse than the year before, predicting an average decrease of 9%. Six months later, that forecast has been revised. Now 70% of distributors expect their sales to be worse this year, ranging from 5% to 50% lower than 2008's numbers, at an average decrease of 25%.
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The MHEDA Journal revisited the distributors who participated in the Annual Business Survey last January. We wanted to know how they were faring, and what they thought their businesses would look like for the remainder of 2009. No one is taking this period lightly. All are rolling up their sleeves and pulling in all the powerful positioning that comes with being a MHEDA member. And as the song “Only the Strong Survive” goes, it is very clear from this mid-year look at the 2009 Business Forecast that MHEDA members truly are the strongest of the strong.
| “The upside of this downturn is that it gives you leverage to glean productivity gains from your workforce, thus increasing margins.” |
Walter Albasi, Accurate Lift Truck
(West Berlin, NJ) |
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| “Convince your customers you are of value and get them to make the other business the expense they cut from their budget. Be prepared to move laterally, and remember to celebrate and encourage others. In order to see opportunity, you must have your head up.” |
Jesse Thacker, B&J Forklift Services
(Anchorage, AK) |
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| “Trucks are backed up and available from the factory, ready for quick delivery.” |
Shilo Monney, Southern Field Maintenance
(Victoria, TX) |
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| “Those companies that can survive this will do well in the future, though the business model will be changed dramatically.” |
Eric Landtbom, Allied Engineering
(Big Oak Valley, CA)
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| “Attitude is now more important than ever. In these difficult times, psychology plays a very crucial role in dealing with a group of people organized around a business.” |
Jack Alexander, BMH Equipment
(Sacramento, CA) |
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| “We changed our philosophy from one where we need to be the winner of 100% of the bids to one where we can hold a fair profit and win some, but not all. We are also upping our service levels to customers, recognizing that we are going back to the business philosophy we had when the company was started 33 years ago.” |
George Pimpl, Reno Forklift
(Sparks, NV) |
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| “I hope the younger members of our industry do not get discouraged and leave the business, as it is still one of opportunity over the long haul.” |
Ted Springer, Springer Equipment Co.
(Birmingham, AL) |
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| “We've continued our growth by expanding territory coverage and being fortunate enough to align ourselves with strong vendor partners.” |
Monte Himschoot, S&H Industrial Services
(Batesville, AR) |
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| “We will not stand still and let the world change without us. We will not be 'Me Too's!'” |
| Robert Kehley, Key Material Handling
Equipment Co. (Brooklyn, NY) |
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| “Get lean and mean.” |
Steve Evans, Universal Forklift Supply
(Houston, TX) |
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| Manufacturers Weigh In... |
| “We are doing whatever it takes to help our dealer network, including deals and prices that have never been offered before.” |
| Bob Martin, Incord |
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| “In addition to releasing new products, we have a new Web site that will help distributors connect with end-users.” |
| Kevin Risch, Mallard Manufacturing Corp. |
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| “We're making sure our dealers have the information they need to work closely with their end-users and close sales, including sending direct e-mails containing product news, price changes and case studies.” |
| Louis Coleman, Autoquip Corporation |
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