I've often heard the comment that business people would be “better off” if they quit watching the news and reading the newspapers (plus web sites today).
In the last 10 days, we have been bombarded with negative news. It seems all we hear or read about are items like the following:
The stock market is in turmoil with its daily ups and downs; just yesterday, the Dow saw its second heaviest 1-day plunge since 2003.
The Fed chose to keep interest rates at their current level. Financial markets and the housing markets are in turmoil.
July auto sales were terrible, the Detroit 3's share dropped below 50% and fuel prices remain high.
Wow, is there any more good news out there?
Well, as we all know, one month or quarter does not a year make, and remember, we are running a marathon, not a sprint. The stock market, interest rates, etc., impact dealers much more than our typical customer.
I'm not saying there aren't reasons to be aware of what's going on outside our businesses, but we can't let that dictate our futures.
I'll always remember a dealer's comment in a meeting a few years ago when there was a great deal of uncertainty about the business climate.
He said, “Guys, it's time to park our golf carts and boats and figure out a way to take advantage of this.”
His point was that there are two kinds of business people in this world, those who watch things happen and those who make things happen.
My bet is that, if you are reading this column, you fall in the category of those who make things happen.
Speaking of that, I can name many dealers who are having a better year in sales and net profit in 2007 than they did in 2006.
How did they do it?
Most of them decided to be proactive rather than wait to see what was going to happen.
Generally, these dealers found a way to be profitable based on today's volume and gross.
They made the tough decisions on right-sizing their operations. They explored other opportunities and identified those that are applicable to their markets. They found ways to make these an integral part of their operations.
What opportunities? Well, how about the growing certified pre-owned vehicle market; diversified used-vehicle sales offerings; subprime; ethnic marketing; the Internet as a tool for marketing service and parts as well as new and used; and last but certainly not least, full-day, full-service Saturdays?
Most dealers with net profit improvements this year have focused their energies on improving their operation's efficiency.
From an expense standpoint, it has become common for dealerships to use a preferred-vendor list. It is routinely checked to ensure the lowest and best price is being received.
Overall, dealers are becoming much stronger with regard to inventory management both from a unit-count standpoint and also from what they put into their inventories.
New- and used-vehicle inventory turn measurements have become common and are a part of the decision regarding which inventory to purchase.
Personnel certainly must be addressed as a part of the profit improvement this year. Improved gross per employee can generally be accomplished in one of two ways, one method being less employees generating more gross, and the other, more gross from the existing employees. This is a critical element of any dealer's road to success.
I'm trying to convey to you the same thing I was told many years ago by Art Niemann. I remind myself of it as I begin each day. It is this: “If it is to be, it's up to me.”
It is up to you, and I'm betting you will do it!
Tony Noland is the president and CEO of NCM Associates, Inc. He can be reached at [email protected].
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