So, I was thinking about not writing this week figuring most of my readers would be so busy selling cars that they wouldn’t have the time to read in the first place. Mentally this was a great opportunity for me to do less work, not more. 

The problem with me is that I always seem to find myself in a mindset to do more not less.

I have come to realize everyone does not think the same. More people probably think about doing less than more people doing more. I’m hopeful you’re thinking about doing more this week and even more in 2012. If you’ve not gotten 2012 planned out, you’re probably going to be happy doing less because for sure you won’t be doing more.

For you to do more you have to "do different." Different than what you’ve been doing. "Doing different" means stepping out of your comfort zone and getting on with it. I really don’t like that term comfort zone. I think it should be called "lazy zone." Sometimes we are just plain lazy and won’t get off our fat duffs to do the things we know we need to do.

"Doing different" would mean that we need to do is shake the joint up once in a while, but for heaven’s sake why would we want to do that?
It would only cause us to have to do more.

"Doing different" would mean infusing some high energy into the organization, but that would require us to do more, so why do more when you can just as easily do less?

If you were to do more you would have to be blatantly honest with yourself. Being honest with ourselves really requires a lot more. Do you remember the quote by Jack Nicholson in the movie "A Few Good Men," when he says "You can’t handle the truth"? Maybe you can’t handle the truth.

Doing more may mean you coming to grips with the fact that you have really bad processes in place. No, that’s not true. It means acknowledging that the processes you thought you had in place aren’t really in place at all. Now, that will require you to do more, but it is so much easier to do less by pretending and lying to yourself that you’ve got great processes and your little world is ok.

Doing more means having to terminate an employee who cannot and will not change. We often think of our older staff members as those who won’t change, but that is not always the case. Doing less means keeping those "closed minded" folks on board. Doing more means getting rid of them.

Doing more means spending some money to get to the end result. Doing more would mean hiring a guy like me to help you get it done. Doing less is sitting on your hands thinking you can make it happen without spending any money. Deciding to do less is cheating yourself and your team of more success than you can handle.

I’d like to say more, but I’m feeling lazy. So that’s all I’m gonna say and not a bit more. Tommy Gibbs. 

Since it’s the holiday season there’s a good chance you will be sitting around chatting and hanging out regardless if you celebrate Christmas, Hanukkah or another holiday. The odds are also that you might take the time to enjoy a cup of coffee.

The first of anything is always the best. Coffee is a great example. I highly anticipate each morning the first taste of my cup of coffee. It’s amazingly the best. Most things are like that. The first time you kissed your wife, husband, girlfriend or boyfriend is far better than the smooches you get today. The first lick of your ice cream cone is better than the last and so on. It’s called the law of stuff tastes better at first. (Yes, I made that up.)

Used cars are that way too. Selling one in the first 10 days tastes a lot better that selling it on day 50. The biggest difference between selling a used car and getting a kiss is that selling a used car is based on math. Kissing is based on kissing. Imagine that?

So, at the risk of boring you let’s go over some numbers on the chart at the bottom of this page. When discussing ROI the sweet spot that you are looking for when analyzing return on investment is somewhere between 110 and 120%. The most accepted practice when calculating ROI is to use only front gross.

In example "A" it’s a car that you have 12,000 tied up in. You make $2500 on it, sell it in 25 days and earn a very respectable 303% ROI. How many of you would like to earn a 303% return on investment of a stock you owned in the stock market? Me too, that’s as strong as goat’s breath.

When looking at the three numbers that calculate the ROI what you should be seeing in example "A" is that all three of the components that create the math lined up nicely. You only had $12,000 tied up, the gross was respectable at $2500 and you only kept the car for 25 days. Sweet!

In example "B", it’s the same car, same numbers except the car stayed in stock for 60 days. When you run the math, the ROI is still a respectable 131%. Can you figure out why it was so good? That’s because you only had $12,000 tied up in the car, and you made a decent gross of $2500. So, let me ask you something…how often are you going to keep a car for 60 days and make $2500? Only when a miracle happens. But, we humans tend to want to remember the miracles.

So, somewhere tucked in the back of your brain, you’re thinking about that one time back in 1902 that you had a car in stock, kept it 90 days, made $2500 and the little voice is going off in the back of your head, "I think I can, I think I can, I think I can." The reality is you can’t, so stop thinking that silliness.

In example "C" you have a car that you have $27,500 tied up in, you make $2500 on it and hold it for 25 days. You earn a respectable 141% ROI. It should be obvious why you did as well as you did and that would be you made a respectable $2500 gross, and you turned the car in 25 days.

So, the question is what hurt the ROI in example "C"? Well, well, well aren’t we smart. Yep, the amount of money you had tied up in the car. So, Einstein, what’s the moral to the story? Yep, you got that right too. If you have a lot of money tied up in a car you gotta turn it FAST!

Look at example "D." The miracle happened. You made $2500 after keeping the car for 60 days, but you still went in the tank with a horrible ROI of 61%!

You can’t fix what you don’t know. You need to know your ROI on every deal. Once the formula is in place all you need is the three numbers mentioned above.

I have an excel spreadsheet that calculates both ROI and GAP. (GAP stands for Give Away Profit, it’s the difference between the Internet asking price and the transaction price.) Just send me an email and I would be glad to send it to you. I also have a website, FixRoi.com, that you can go to, put the three numbers and bingo it calculates ROI.

You need to focus on cars that turn quickly. Keeping a used car around past 30 days or so is like a really bad kiss. You can deal with a bad kiss, but it’s just not as satisfying as a fresh one. That’s all I’m gonna say.

Many of you probably know my good friend and outstanding car dealer, Alan Spitzer from Elyria, OH. If you know Alan you also know that when the government took over GM and Chrysler, Alan lost 10 of his Chrysler and GM franchises, some of which ultimately were reinstated.

Alan and his daughter Alison have written a great book titled "Grand Theft Auto." If you’re at all related to the car business it’s a book you need to read. Another good read on the subject is "Outraged" by Tamara Darvish and Lillie Guyer.

Most of my readers are actually in the new car business. And, for most of my readers, being in the new car business is a huge part of the equation of their success. What a blessing it is to have a new car shingle hanging in front of your business. I am in no way against the new car business/franchise. It’s one of the greatest businesses anyone could ever have an opportunity to be in.

However it becomes a reality day in and day out that the factory is not exactly on your side. A few years ago I wrote an article titled What Happened to Jim Press. Jim Press was for many years a top Toyota executive prior to moving on to Chrysler back in 2007.

The crux of that article was not so much about Jim Press as it was to make the point that "you’re never as smart as you think you are and you’re never as dumb as you appear."

We often find ourselves in a good set of circumstances and other times in a bad set of circumstances. Of course those who can figure a way to maximize either of those are the real winners.

Ok, back to Alan Spitzer and Grand Theft Auto. On page 28 Alan and Alison wrote:

…in the winter of 2008, in a series of conference calls with its dealers, each more desperate than the one before, Chrysler sales and marketing president Jim Press, along with executive vice president Steve Landry, took their case directly to the dealers across the country. Many dealers interpreted these requests as thinly veiled threats to order their quota of vehicles, whether they needed them or not. In almost all cases, they did not. The calls continued into 2009, right up to the Chrysler bankruptcy.

There was an infamous call on Feb. 5, 2009, when Press said to his dealers, "You have two choices. You can either help us or burn us down." And then shockingly: "Those of you who don’t give us the orders, you better hope we fail … because we’ve got a long memory!"

That was Jim Press making the call, but this sort of call could have been made by any auto executive during the course of the history of this business. Maybe not as blunt as Mr. Press, but certainly with the tone and meaning being the same.

So, what’s the point? When you consider the pressure on the new car franchise from the factory and deals like True Car, then you have to draw the common sense conclusion that the only franchise you have total control over is your used car franchise.

My good friend and terrific car dealer Dick Swope out of Louisville, KY, often quotes his father Sam Swope, "We value every one of our new car franchises, but our philosophy is we are a used car dealer who just happens to be a new car dealer."

It’s fascinating to see the money dealers are willing to tie up in a new car franchise, on a bet, like Fiat, yet they won’t invest but so deep into their most controllable and best franchise, used cars. (Have you seen the Jennifer Lopez Fiat commercial? I mean really, do you think she’s ever going to be seen driving a Fiat?)

Many dealers are "sorta" in the used car business. They stick their toe in the water, sometimes a whole foot, but few, very few will get in with both feet. Getting in with both feet means making the same commitment with people and resources as dealers do with a franchise like Fiat.

Grand Theft Auto by Alan and Alison Spitzer was about stealing your business from you. Being in the used car business is about taking control of what is rightfully yours. Used cars are like a college education. Once you get it no one can ever take it away from you. I hope you "get it." That’s all I’m gonna say. Tommy Gibbs

Let me teach you how to effectively and profitably move your used car inventory.