In his NRMCA Industry Data Survey presentation at the association's ConcreteWorks conference in National Harbor, Md., in September, Pierre Villere, president and managing partner at Allen-Villere Partners, gave advice to producers on how to manage risk in the future.
- Don't add to long term debt in the next boom, reduce it. If business is too good to be true, it probably is.
- Be a contrarian. - Don't expand at the top of the market.
- Husband you financial resources, keep your balance sheet strong, and spend the money on discounted assets in the next recession.
- Be wise on capital expenditures and acquisitions. Strong cash flows have a tendency to makes us fall in love with new equipment or acquisitions
- Review all mix designs
- Reduce all Fixed Costs by reviewing each line item
- Cost out all jobs to assure that each one produces a positive Marginal Contribution
- Maintain a Cash Requirement spreadsheet
- Reduce DSOs & increase Payables
- Reduce Inventories to bare minimums
- Maintain accurate & current Financials
- Maintain a current Break-Even Analysis
Check out "Slugging it Out" by Pierre Villere from the November-December issue.