2008 Re-Cap: The Perfect Storm

Wow, what a year! Gas prices are up, real estate transactions are down - its almost a perfect storm...

Budgeted for little to negative growth this year, boy was I wrong! Well the year started out pretty good. Q1 was profitable and we had decent numbers, experienced some small growth over the previous year (even when factoring in the aquired business). This lead me to believe my projections were going to be close.

Q2 was when reality set in though! We have been off by as much as 30% in a month over the same month previous year. Its been a tough pill to swallow. Bonuses to staff were cut. Our daily bonus program (commission) has taken a beating hence so have the paychecks of the field staff.

What the Hell are we going to do now?

Well, first get out the P and L. Fuel is up 33% over last year, not a huge cost for us but its still shaving something off the bottom line, which has to be protected now! So where can we save some $$ now? Well, Labor is our number one cost, this is managed pretty carefully and we do well here, plus the staff are already seeing less $ in their paychecks and we dont want to rock the boat too hard going into summer, they might start leaving and if things pick up we will need them to capture some profit quickly. so we go to the next line item (franchise royalties, well those are fixed on Gross Revenue) so short of defrauding the franchisor, we cant change these! Next... Our third largest cost is somewhere we can shave, so lets get our staff religious about saving as much as we can here.

Long story short, it has worked and worked well. We have pretty much counteracted the increase in fuel prices here.