Skip to content

Keeping Your Dealership Afloat and Profitable


Keeping Your Dealership Afloat and Profitable

“That which doesn’t kill me, makes me stronger.” -Nietzsche

The daily pressures of business have an insidious way of distracting us from our long term plans. You can easily forget where you want your business to be one year, two years – five years from now. As the dealer, you have to know where you are heading in the short and long terms and communicate those aspirations to those around you. It is your leadership, through your actions and words that will either move your dealership toward your goals or away from them.

The last few years have been difficult ones for most dealers. Naturally, when one goes into “survival mode”, as it seems many have done recently, standards are lowered and ethical lines can become blurred. When we are surrounded by “doom and gloom” prognostications, we are encouraged to modify the principles that have made our companies strong. A headlong “flight to safety” has killed many a company. Avoid these common errors and you can expect to survive with both your self respect and your enterprise intact.

  1. Here’s the best way to destroy a great company. Keep your expectations low and you will achieve only mediocrity. The assumption that you are “good enough” stifles creative thinking and innovation. If you set your goal at “average” both you and your customers will suffer. If that is the level at which you are satisfied, you will be lost in the crowd, obscured amongst all the others who have lost their direction and their dreams. When “adequate” is your goal, you will be forced to accept less as your due. In order to hang on to market share, you will have to lower your prices and your expectations. Choose to avoid all risk, no matter how calculated, and you will ultimately tolerate less innovation, less profit, less growth and offer less value to your customers.

  2. Can you save your way to profitability? If you start slashing people and customer service you enter a self-destructive cycle that erodes your standards. It may work in the very short run, but soon it’s time to lower your standards once again. There just won’t be enough time or people to maintain them. Your staff will feel exploited and under-appreciated. Your customers drift away as they lose faith in your ability to deliver. Certainly you should reduce unnecessary expense but you must also preserve your equilibrium. Make sure you don’t compromise the superior service that drove customers to your store and kept them coming back. The only sure way to profits over time is incremental revenue. The only way to increase revenue is to provide more value to the marketplace.

  3. “That’s the way we’ve always done it” leads to the most critical question, “Does it still produce the results we need?” If you remain complacent and stop innovating, you are on the path to self-destruction. Charles Darwin said it best: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

If we learned nothing else from the events of recent years, it should be that everything changes, sometimes faster than we can react. There were times in the last year when things changed for some dealers so fast that in one month they were facing an essentially unforeseen reality. Those that morphed, altered their actions and their thinking, survived and now will prosper. The ones who looked around, did nothing and felt unjustly put upon, are all gone. Even in the best of times, change is the norm. In the crucible of crisis, it is the only viable strategy. Refuse to change when times command it and your annihilation is assured.

Nor can you just change without sufficient reflection for the sake of change. Understanding, constant vigilance and analytical judgment are the keys. Search incessantly for a better way to do business, a more effective communication strategy or better response to the needs of your customers and you will surely flourish. Stand still, refuse to transform and you will surely perish.

If this all sounds difficult, don’t despair! Remember that the effect of Darwin’s adage cuts both ways. You rose to your current position and became a dealer ( a GM, a CFO etc.) because your efforts were focused and effective. You are obviously capable and an achiever. You just have to stay involved, figure out what needs to be done and make it happen!

Thanks for your attention and thanks for your business!

Our pitch (You must have known it was coming!):

Your DMS computer system can be an onerous expense or an agent for change and growth. You certainly don’t want to pay for more system than you need or pay too much for what you do require. Our job for the past 20 years has been to help dealers maximize their investment in their DMS by ensuring that they buy the right system at the right price and under the most favorable terms.

Let us help. Send us your current computer maintenance bill and we’ll do a complete analysis at no cost to you. We’ll even call you and tell you what we’ve found and what you can do to improve your efficiency and save money. All at no charge. Please call us with any questions you may have. Chances are we will be able to help you, as we do take everything we wrote in this article to heart. We want to improve our service to our clients and we want to grow our business on the right principles.