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GSA
E-News
(featured article
from latest edition)
Going Above and Beyond
by Mike Brunken
I’ve
seen some pretty special relationships come from 20-clubs. I’ve seen
dealers get to know each other so well that they take European
vacations together. Gart likes to tell the story of how a 20-club
member had some health issues and fellow 20-club members took turns
running the dealership for weeks until he could return.
Recently,
I found out that Bob Kee from Destination Cycle Sports (Kerrville, TX)
planned a riding trip with his good friend Rob Smith from Outdoor
Sports (Prescott Valley, AZ). This trip was altered when Rob Smith told
Bob that he had to cancel the mini-vacation to handle some major issues
at the dealership. Instead of cancelling the trip Bob Kee decided to
come visit Rob at his dealership in Arizona for the weekend. Bob has an
MBA and can really crunch some numbers. I will let Rob tell you what
happened that weekend.
Mike Brunken: How did Bob help while he was
there?
Rob Smith: It was much like having a "mini
visitation". Bob dove into my numbers, made observations in the
dealership and put together recommendations for us to address our
issues. I left the 20 group experience a few years back in an effort to
cut expenses. It wasn't that I didn't feel it was worth it, business
just got so bad I felt it wasn't really a necessity any more since so
many things were now out of my control.
I started running the business out of the check book.....that is, more
reactive than proactive. I felt I had departments as lean as I could
and was just trying to reduce inventories and sell. Focusing on this
took my eyes of the big picture and I lost touch with the numbers. Some
of the key items Bob identified were that we were holding on to things
that we thought were important but were in fact sucking the life
out of the dealership. For me it was a boat line that I thought would
be a profit center but in fact wasn't and for my partner, it was a
small second location that he couldn't let go of. By eliminating those
items and establishing an alternate flooring source for aged
inventory getting rid of 15+% interest, and focusing on profit
centers that were producing (used boats), we could turn things around
Mike Brunken: What have you done since?
Rob Smith: We have entered into a buy/sell
agreement on our 2nd location. This will also eliminate the
boat line that needs to go. We have established a line of credit to
flip the 15% interest units to, as well as to purchase used boats. We
rearranged the accessory showroom to position the items that need more
assistance in selling like jackets, helmets, etc. in the vision of the
counter. Now the parts manager, who was moved from an office
behind the scenes to the P&A counter, can capture more sales
and keep a better eye on the floor. The thing that still needs to be
done is new pay plans. I struggle with that, I don't know how to design
plans in winter in a economy that work now, then in the
busy season, and can adapt (hopefully) to an improving economy.
Mike Brunken: What did this mean to you?
Rob
Smith: It gives me confidence and hope. It got me on
track. It reinforces the importance of the 20 group experience,
having & knowing the numbers inside & out. On a personal
level it was one of the greatest expressions of friendship I've
ever received.
We
at GSA welcome Rob Smith back to membership in January.
Going
forward in 2012
I
remember teaching at our Dealer Candidate School in 2005. At lunch, one
of the General Manager students got to talk about business in Arizona
at that time. He had a Parts Salesman who made about $40,000 a year.
This employee lived in a $250,000 house that appreciated in value in
one year more than 15%. When you do the math the Parts Salesman almost
made more money on house appreciation (if he had sold) than his salary
at the dealership.
With
hindsight being 20-20 this made no sense. Of course, we all know how
this story unwound itself.
It’s
great to see motorcycle sales numbers trending in the right direction.
The feeling I get from my conversations with owners is that things are
opening up. No, the traffic count isn’t where it was four years ago,
but dealers are primed and ready to go. Most are already in the process
of hiring the salespeople needed for the coming months. They want to
spend quality time with them right now to make sure that in March they
hit the ground running.
We
look forward to helping you grow in 2012.
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