Fresh ideas can stimulate the dealership, especially during years such as 2008. In the automotive retail industry, everybody has an opinion of how to do “it.” Some of them actually work.
Is your store struggling to drive traffic into the showroom or service department? Need ideas on how to generate cash or capital? How about creating more revenue streams?
Resources abound today for the dealer. Twenty groups, the National Automobile Dealers Assn.'s Lifeline to Profits and industry trade magazines such as Ward's along with respected industry consultants can and should help.
You can visit our web site, www.wardsdealer.com and type in a department name, subject or the name of one our columnists into the search function and you'll find articles going back to 1999. Many of the ideas and suggestions are timeless.
Go easy, though. Too many ideas at once can paralyze an organization or end up on the shelf. It's easy to come back from a conference or 20-group meeting excited about new ideas. Following through and making sure your personnel are on board is another matter.
Stick to one or two at a time, perfect them then move on to the next thing. That'll create a sense of accomplishment and limit the frustration in the store.
Perhaps one of the toughest things you may need to do this year is lay off employees. Many dealers are family-run businesses with employees that have served 20 to 30 years.
But right sizing your staff just might help the business survive. One dealer tells us he's cut his staff in half since 2004. It's a fine line though, he says, because if he cuts too much he'll overwhelm the remaining employees. That means dealers may find themselves being more hands on than in the past.
This particular dealer now handles all of the F&I transactions in the store.
We hear from dealers who say their dealerships are profitable yet are consistently short on cash toward the end of the month.
It could be as simple as having too much frozen capital. Often, that can be fixed by managing your receivables and assets more effectively. It might take only a few tweaks in your billing process to gain quicker access to money that's in transit, and thus fixing your cash shortage problem.
It's not enough for the dealer or general manager to understand the principles of sound cash management. Department managers also need to know the process and why it is important.
Dealers are confronted daily with decisions that can make or break the business.
How many dealers today wish they hadn't invested in the Hummer franchise or one of the many failed Chinese ventures? Other dealers have invested, at auto makers' urgings, millions in facility upgrades only to watch the manufacturer stumble from one recovery plan to another.
Several dealers are contemplating whether to sell the business. What's the right timing? Probably now, if you're selling. If you wait too long, you might leave money on the table.
If you're buying, wait another eight to 10 months. Prices should start to come down early in 2009.
There's much truth in the saying, “Knowledge is power.”
How well do you understand sound business management? Running a dealership is complicated. There are at least five different departments in the store, sometimes more.
Can you step in and provide guidance to each department manager?
Are you able to spot anomalies that might indicate a problem? Are you knowledgeable enough to know if an employee is stealing from you?
If you know the right questions to ask and are able to hold your employees accountable, your staff likely will pay more attention to the details and act appropriately.
Another area often overlooked is knowing which vendors to hire.
Talk to other dealers and consultants before making a big investment in a vendor or product. It might save you trouble later.
Keeping your ear to the ground probably encompasses all of the survival tools listed. Participating in the state and local dealer associations may put you in position to make that critical acquisition or possibly sell your store to the right buyer.
Much of it comes down to knowing the local buzz, but you have to be in the right places to hear it.
You also might pick up on something a competitor is doing that could be hurting your business. Your competitors likely are watching and listening to what you're doing. No harm in returning the favor.