Is Your Business Great?

I’m thinking your business has been pretty darn good.

One of the more interesting dynamics of the automobile business is dealers make the most money when they are coming off tough times.

When things are tough, dealers get back to the basics and grinding it out. As business gets better, they are in a great position to make a lot of money because they have cut out all the fat.

As business gets better, dealers tend to add this and that to the expense line and get further away from the basics. From where I sit, I’m seeing dealers making good money, but many have started to get lax with spending, processes and their daily disciplines.

The standard in the business has been that we should make at least 2% net profit to sales dollars generated. If you are only making 2% right now while business is good you may be in trouble when business goes south.

Right now you should be making 4 to 6% net to sales. It stands to reason that if you can get the percentage up during the good times, then in the worst of times you can still maintain the 2% plus number.

If you’re in the 2% bracket or less, then you are missing something somewhere and need to re-evaluate your operation and do what you have to do to get it fixed.

Here are 11 things to think about as you move forward into the spring and summer:

1. Refine and stick to your basics.
2. Don’t get stupid with your expenses.
3. Keep the inventory turning.
4. Evaluate the inventory on hand vs. anticipated selling rate.
5. Examine every process from front to back.
6. Eliminate Legacy Thinking.
7. Get out of your little world and join a 20 group.
8. Don’t be afraid to fail; try something different.
9. Study the best of the best.
10. Improve your coaching and leadership skills.
11. Don’t think you have it figured out because you don’t.

Only you can make it great. That’s all I’m gonna say, Tommy Gibbs