Finish the Year Strong (and get ready for 2021)

We can probably all agree, 2020 has been a very challenging year. Businesses of all kinds, (not just those of us who are hardwood lumber manufacturers), have taken a hit, even while adapting to the difficulties created by the outbreak of COVID-19. But as we look towards 2021, it’s time to assess, evaluate, and plan ahead—all with the hope that the new year represents a fresh, upbeat start to economic recovery.

Just like many others in the global forest products industry, we here at Baillie Lumber, will be looking for imaginative ways to meet new challenges in the coming year. We intend to finish the year strong, and hope that same holds true for you, too.finishingstrong

A few things we are focused on this time of year are below. Perhaps you might find an idea or two here that will be helpful for you.

1.  Review your metrics for success.

 Before looking ahead, it’s imperative to review what took place in your business during this past year. It might make sense for you to compare your results to goal as well as the last year or two since this year contained such unique circumstances.

Review key performance metrics such as :

  • Financial performance
  • How effectively your website is creating leads
  • New customer acquisition
  • Average days to collect
  • The degree of successful customer retention
  • Rates of employee turnover
  • Updated company information on social media profiles

You may need to be able to answer a simple, but fundamental question: Did we make a profit in 2020 or is our business in a fragile financial state? Getting to the answer will help your business move forward.

2.  Invite your team to look ahead. 

No business owner or CEO should attempt to conduct all of the strategy for the year ahead. You have many talented, insightful individuals on your team—why not make the most of their accumulated knowledge and experience?

Leadership expert Steve Goldstein recommends asking “every member of your team to present two to three ideas on how the business can … end on a high note and discuss the most promising proposals.” Not only is this exercise likely to generate fresh strategies, “by asking your employees to brainstorm, they will feel included in the decision-making process”—a key to enhanced employee engagement.

We have found that including team members in in the discussion is particularly valuable for gaining a stronger awareness of the market.  For example, by expanding the team involved we have been able to get better information from our foresters on the forecast for the availability of hardwood logs. Our lumber sales group provides us enhanced insights in the potential future fluctuation of hardwood lumber prices and our human resource leaders help us understand the dynamics impacting the attracting young professionals into the forest products industry. 

3. Be prepared to act. 

When you have successfully evaluated business performance for 2020, it’s time to put together a plan for the new year. “Don’t waste too much time on formalities and spending time in the meeting room,” Steve Goldstein advises. That’s because “the longer things stay in the planning steps, the less likely they will be realized.”

Did you find ways in which your business could improve efficiency, produce a higher quality product, or maybe decrease costs? Take action! Perhaps it is a something as simple as substituting one species of hardwood for another. Or maybe it is utilizing ripped-to-width hardwoods which can improve lumber yields, save on labor costs and eliminate bottlenecks in your production. Whatever strategies your team comes up with, it is important to get moving on these goals so that you can hit the ground running in the new year.

4. Have Resources On-Hand (at least in the first quarter). 

Whether it be cash, raw materials in inventory or something else having the tools you need to hit the ground running or keep the business afloat can help you plan more effectively for 2021.

For example, as Idaho State Business Journal suggests, “consider how you will fill short-term needs such as bridging a seasonal cash flow hiccup and long-term needs such as adding a new business location.” The end of the year is also a good time to purchase equipment upgrades or replacements, since prices may fall and “there may also be tax benefits from making these purchases at the end of the year.”

In addition, December is a great time of year to evaluate your end-of-year inventory management. The goal should be to accurately estimate how much stock you need to get you through the end of year with enough left over to keep your manufacturing facilities going into 2021. Accurate estimates are very important here. If not, you will be left with a lot of excess inventory that has to be counted and valuable warehouse space that cannot be used for other things. Some tips to accomplishing this task:

  • Order smart - The more specific your order, the better your chances it will not sit in inventory long term. 
  • Analyze past sales data - Data compiled from your 2019 results can help guide your ordering activities now. Maybe even compare to your 2018 levels since it has been such a unique business climate.
  • Find ways to streamline the process- It is always helpful to look for opportunities to eliminate inefficiencies and speed up the pace of tracking inventory and shipping products.

I am sure, like most companies, you have become very skilled at adapting to changes in the business landscape. Since, as we all know, the only constant is change, we should all anticipate new challenges in 2021. But by working together and prioritizing wisely, it’s entirely possible to confront those challenges and continue moving forward successfully, into the new year and beyond.

Let us know what other suggestions you have to finish the year strong. We would welcome the discussion.

Brett Del Prince
Baillie Lumber
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