Part 2 of 2: Analyze RatesIn the last article, we discussed how the first step to achieving profitability is to examine the Facility Utilization and Labor Sales potential. Once the potential has been calculated, a comparison of the efficiency, productivity, proficiency, and penetration rates will reveal areas of needed improvement.Effective Labor Rate [...]
Part 1 of 2: Analyze Department PotentialToday’s technologically advanced Service Departments can spend millions of dollars in building expenses and equipment. Many dealerships consider the Service Department a necessary evil and the expense as a cost of doing business for the goal of selling units.Monthly reviews often consist of how [...]
Imagine that you’ve just finished speaking with your doctor. The doctor tells you that your health is critical and that you will need a triple bypass. Now you could go to your local hospital and have their best surgeon take care of you, or you could have your next [...]
Chances are your parts department is leaving money on the table and doesn’t even realize it. The majority of dealers that I have visited simply use supplier part numbers for parts in their inventory, and might even take the time to slap a barcode on the items before shoving them on [...]
Communicating to consumers is sometimes a tricky and difficult process, but it doesn’t have to be! Understanding the consumer mentality when they say yes to a sale is paramount for determining the right marketing strategy, and a lot of it comes down to basic psychology. 1. It’s not just what you [...]
I frequently talk with dealerships that have not yet adapted Flat Rate billing and technician pay programs in their service departments. Without a clear understanding of the benefits and how to effectively quote and bill repairs, moving your shop over to Flat Rate can seem daunting. There are numerous [...]
1. Your management team will take ownership of monthly and annual goals. When managers bring their projections and goals to the budget meeting, the team’s mindset shifts from what the owner wants to what the departments can contribute. Managers take ownership of the plan and become more invested in the outcome. 2. People do what’s inspected, not what’s expected. Managers will track their department’s results [...]
A large warranty receivables account or a manufacturer audit can be a serious concern for many dealerships. Employee turnover, sloppy documentation, issues with warranty procedure compliance, inefficient paperwork processing and a lack of training can all contribute to rejected claims and lost revenue. If possible, hire a dedicated warranty administrator [...]
Good business practices are always important for highly successful businesses. Consultants or 20 group members can usually sense if a dealership has good business practices after discussions with the management team and without looking at “the numbers”. Here are seven habits I find in highly successful dealers: 1. Always [...]
Dealer principals are rarely accountants and rely on their office managers to ensure that accounting is correct and financial statements are accurate and timely. But dealers need to be on the lookout for signs of poor accounting. Here are 10 situations that should set off alarms. Financial statements are [...]
