In September, Automotive News published an article about dealership profits plunging 33%. You might think that, based upon the title of this article, I am a purveyor of fake news; however, I can assure you that I am not. What’s more, I’m here to give you a plan to thrive in this current reality — and one that is not merely based on hope. Sure, margin compression has come into play since the highs of COVID. Have expenses risen? Yes! Some have even risen significantly. If you started selling cars in June 2020, you might see things that are happening now through a different lens — in that market, sales were easily gotten even without a plan. The reality is that success in this environment comes down to having a good plan and executing it. Many of you may be thinking: “So Fagan, what’s your plan?” Here it is: Focus on today and you’ll find a way! It’s not as simple as it sounds. Let me explain. First, all successful business plans begin with a vision. So, let’s discuss your vision. The owners set the standards and have specific KPIs because they are the risk takers (and therefore have the most to lose); they need to not only keep the lights on but to thrive and ensure all teammates have a great lifestyle. I know this firsthand, having recently attended a dealership group’s forecast meeting. Just like sports, the vision to win is paramount — except, of course, if you are the Chicago White Sox. The plan accounts for current conditions. Take the accounting office. If the Big 3 expenses have risen 19% over the past year, how much more gross profit needs to be made and what expenses can be cut to meet the standards of performance? There might be some anxiety and increases in the heart rate which then increases pressure to perform. But isn’t pressure part of the business? Yes, it is. So, once the standards of performance are set, what happens with them? They are given to everyone involved so that everyone knows the targets. Well, that doesn’t automatically mean there’s buy-in. If it were only that easy. How do you get everyone to buy in? You have clear standards and KPIs that can be measured and looked at daily to ensure compliance and timely course corrections. So, the first step is to have standards and KPIs that are looked at daily while holding your leaders accountable for hitting them. The second and most critical step relates to managing and inspiring your human capital. A few years ago, I wrote about hiring and training. How are you doing in this department? While discussing training not long ago with a group, there were plenty of comments along the lines of “We used to do this,” or “We used to do that.” The past few years have been phenomenal for store profitability because it was a seller’s market. That paradigm has changed, and how quickly it did. The old saying that “training isn’t an event” is so true today. Daily training in all areas to ensure the customer has a world-class experience and is given the opportunity to buy versus being sold is critical. This will only come through daily and consistent training. Someone once said, “Every day means every day.” You either train and get better or do not train and get worse — there is no middle ground. As a leader in your store, have you paid your dues daily to grow and stretch your team? If yes, congrats! If no, what are you waiting for? This crazy world I know doesn’t wait — you are either moving forward or slipping back into oblivion. When discussing your teammates, how are they doing with personal development? Are they growing in all areas of Everything’s Right So Just Hold Tight By Francis Fagan, Regional Training Representative, Brown & Brown Dealer Services 20 Illinois Automobile Dealer News
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