Surviving uncertain economic times

A struggling economy makes it imperative for businesses to closely scrutinize costs

By Charlie Mathews, Herald Times Reporter

TWO RIVERS — Wisconsin Nationwide owner Dave De Rosier, 61, has been in the logistics business for more than 40 years moving goods from points A to B first while in the Air Force and now with the trucking firm he founded in 1987.

With a recessionary economy gripping the U.S. and world, De Rosier believes, "We are in unprecedented times needing to make unprecedented changes in how we operate."

His sons, Scott and Brian, help him run their multimillion-dollar company with some 100 employees.
When it comes to fiscal management they don't go it alone. They use Schenck Business Solutions to prepare their multiple state and federal tax returns and for economic advice.

Two Manitowoc branch executives, Tom Giesen and Stephen Shellman, recently presented "Survival Tips for These Uncertain Times."

The two certified public accountants know that just because a business had a strong 2008 — Wisconsin Nationwide's sales grew by 20 percent to 22.2 million from $18.5 million in 2007 —doesn't mean 2009 might not present formidable challenges.

"Steve can sit there and see things that we might look past," the elder De Rosier said of his company that has earned a favorable reputation in how it handles "LTL," less-than-truckload shipments.

Wisconsin Nationwide picks up freight from customers within a 75-mile radius of Two Rivers, and consolidates the freight to other regions of the country with a fleet of 50 tractors and about 115 trailers.

Knowing business' costs

A key focus of Giesen and Shellman's talk was urging businesses to know their costs, including:

• Understanding what it costs to produce the product or deliver the service;
• Understanding the total cost of doing business — overhead;
• Knowing the business' breakeven point; and
• Reviewing costs on a regular basis.
  

The De Rosiers agree and they have made cost-cutting changes they might not have considered several years ago.

They continue to do what they believe are essential preventative tasks on their fleet but have increased the time between truck maintenance cycles.

Scott De Rosier said Wisconsin Nationwide has reduced its inventory of parts.

They have delayed purchasing new trailers, which cost about $23,000 each.

Employees wanting to be on the company's health care plan must go through health risk assessments to potentially identify chronic or acute conditions that would benefit from medical care or preventive measures.

The De Rosiers intend to implement differential health care premiums, with bad lifestyle habits hitting employees in the pocketbook.

Just because diesel costs have decreased doesn't mean the company has backed off on detailed computer monitoring of driving habits impacting fuel economy.

Knowing one's customers

"In economic times like these, it is common that some customers are not as quick to pay," Shellman said.

That can be a problem as cash is king and a company's bloodline.

Shellman and Giesen urged seminar attendees to identify their most and least profitable customers and strive to make unprofitable customers profitable.

Of course, that latter goal isn't always possible. In that case, the accountants suggested, "Fire them!"

Dave De Rosier said when his company can't negotiate a fair contract they don't do business with the prospective customer.

"It goes back to knowing your costs … we can't be all things to all people," he said.

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