Yep, here we are again. October has just ended. October is the perfect month. “Perfect for what?” you say. Perfect for figuring out where you’ve been and where you want to go.

I can’t say that math was one of my best subjects, but I can divide by 10 real easy. At a glance I know what the averages are for any line item expenses, sales volume and gross profit.

What also makes October a perfect time is it sets the stage for the next year. Now is the time to start planning for 2015. Waiting until the last week in December to get your plan together is a really bad strategy.

This is the perfect time to dig in and firm up your fundamentals in all departments. This is the time to get back to basics. This is not the time to cut back on your training.

This is when you need to amp up your thinking, stretch your organization and stretch your imagination. If you don’t have a solid foundation of basic processes you will never maximize your success.

This is the time to take control of the “evaporation factor” that’s been occurring all year long. This is the time to stop the “process bleeding.”

Your long term plan should include joining a Twenty Group and attending the NADA convention. Look, we all get lazy, and get caught up in our daily routines. Attending these meetings gets you revitalized. It gets you outside of your daily box and opens your eyes up to what the possibilities might be. Seems like a no brainer.

This is the time to make those plans. Teamwork is critical if you’re going to maximize your bottom line. To keep your team on the same page you have to constantly communicate to them what the expectations are and what processes they are expected to follow.

There is no “shake ‘n bake” solution. You don’t fix it and walk away. You fix it and re-fix it.

What to do?

1. Ask yourself if you can improve your processes? If you focus on revamping your processes, what effect do you think it will have on your business? It is an absolute fact that regardless of how well disciplined you are over time your processes are going to evaporate. The best piece of advice I can give you is to lock yourself and your management team in a room and review every detail of your selling processes. Be brutally honest with yourself. Then take the necessary action to get you back on track.

2. Can you improve your team? Got the wrong players? Now is the time to make the changes. If you already have the right team in place then it’s time to let them know what your expectations are and show them the plan and the path to achieve those expectations.

3. Don’t think of your planning as “you now having a plan.” Think of it as a “mission.” Plans can fall apart. When you’re on a mission you stay after it until you succeed and then you stay after it some more.

I’m on a mission to get you to re-think what you’re doing…That’s all I’m gonna say, Tommy Gibbs

If you read the likes of Automotive News or pay attention to media reports you may have heard there’s a glut of used inventory coming from off-lease vehicles and prices are going to start to drop.

Some of you have already experienced the so called “price drop.” If you’ve had conversations with Bubba or been to the auction of late you absolutely know about the “price drop.”

For whatever reason, you may have beefed up your inventory over the last 60 days or so and now you’re going, “Oh crap, I’ve got a serious problem.”

Let me ask you something. And before I do, please don’t get mad at me. I’m not trying to be a smart butt. But, what planet have you been living on? Don’t prices start to fade a bit this time of year? Would you call this the real “selling season?”

Doesn’t it make sense to tighten your inventory up just a tick as we move into the late fall/winter season? This media thing is a trick, a mean trick to make you think you don’t know what you’re doing.

Maybe you don’t or you had a slight memory loss when it comes to remembering how the market works. If you went out and purchased a bunch of inventory over the last 60 days, what were you thinking?

You need to stop thinking about what’s going on in the wholesale market. It’s not any different than it’s ever been.

What you need to be thinking about is how to retail your inventory, not wholesale it.

While I’m at it, I have another trick or treat for you.

If you have a vehicle and it’s priced number one in the market and it hasn’t sold, guess what? It’s not cheap enough. Trick or treat, that’s all I’m gonna say, Tommy Gibbs

I recently purchased an iPhone 6. Nice little gadget. I also tried the 6 plus. A bit too big for my style of running through airports.

At first even the 6 felt a bit too big. After a few days it felt pretty normal. About a week later I picked up an iPhone 4.

Geez, that thing feels so small. It didn’t feel small until I got used to the 6.

The question is what have you gotten used to?

1. Have you gotten used to low grosses?
2. Have you gotten used to low used car volume?
3. Have you gotten used to 60 day plus used cars in stock?
4. Have you gotten used to 7 to 10 days to get a car through service?
5. Have you gotten used to having lots of $25,000 used cars in stock?
6. Have you gotten used to buying cars from the rental car companies?
7. Have you gotten used to listening to “I can’t find used cars”?
8. Have you gotten used to crappy ROIs?
9. Have you gotten used to lousy used car photos on your website?
10. Have you gotten used to giving up discounts on used cars that you’ve priced “really, really right” on the Internet.

Yep, I’m just asking, what have you gotten used to? You’ve probably gotten used to a lot of things you shouldn’t. That’s all I’m gonna say, Tommy Gibbs

Sometimes it’s simplest processes that are the most effective. Pressing your cost down may be the easiest and fastest way to improve your used car business. Most new car dealers are not in the used car business. Most are in the NEWSCAR business.

That’s when the average cost per unit in your inventory keeps creeping up and up and before you know it you are too close in price points to your new car inventory. I have an easy experiment for you to do.

Take out your financial statement and go to the used car page. To do this correctly you will need to chart each month for the entire year. On that page you will see a column that has used car sales dollars in it. Simply put, that’s as if you sold one car for $10,000 and one for $20,000, thus you had $30,000 in Sales Dollars.

That in and of itself doesn’t mean much to you. Now, subtract your total gross profit from that sales dollar number for each month. That will give you your cost of sales.

Divide the cost of sales by the number of units sold each month. That will give you the average cost per unit sold for each of the twelve months. I know, I know, pretty simple stuff.

Hang on… When we do this little experiment here is what we generally find: the month in which you had your best retail sales is the month in which your average cost per unit sold was the lowest for the entire year. And, the month in which you had your worst retail sales, your cost per unit sold was the highest for the entire year.

The bottom line is that the more you press your average cost down, the more used you will sell and the better off you will be. You end up getting in the used car business and out of the NEWSCAR business.

You end up selling more units with fewer dollars tied up. Oddly enough, most of your problem cars go away. Your ability to get on a 45 to 60 day aged inventory goes way up.

So, what’s the magic number to get to? There is no magic number. Every dealer’s number will be different. If you are at $14,500 today, your mindset should be “How do I get to $14,000,” then $13,500, then $13,000 and so on.

The more you press your average cost down, the better off you will be. I find it interesting that when I’m speaking to a group, they think they are hearing me say go out and buy cheaper cars.

No, that’s not what I’m saying. I fully realize how hard it is to buy cheap cars. What I am saying is that it’s not so much about what you buy, but what you don’t buy. If you are buying a high dollar car you have to buy it with great caution. You need to either have it sold, or have data to back up that it’s going to move fast.

I’m often asked two questions:

1. What should my target goal be? There is no target, just try to get it lower than the day before.

2. Can I press my average cost too low. The answer is no.

Pressing your average cost down is a no brainer. That’s all I’m gonna say, Tommy Gibbs