There are many things we invest in in this business. We invest in the right location in which to place our business. We invest in the right employees to run it and we invest in the right inventory to sell and make a profit. But does it stop there?
When I graduated high school, I took my small savings that I had accumulated through work and graduation gifts and brought it to a friend’s father, who was a financial advisor. I told him that I wanted to invest. He chuckled a bit and said, “You want to invest? Ok, invest in your ability to earn and that will bring you the greatest returns over your lifetime.” It made sense, and so I left there with marching orders to get a desk and a new computer so that I could get better grades in college and therefore a better job with better pay. (This was 1996 and Apple stock was .69 cents and $2k would have bought 2,898 shares which would be worth $503k today without even factoring in splits — Damn hindsight! Truth be told, if I did invest in Apple, as soon as it hit $5k I would have sold and bought a new dirt bike, but I digress...) Much like investors must analyze and rebalance their portfolios once a year, you must also analyze your ability to earn through your department, store or business. Let’s take a look at some areas that may need rebalancing:
Social media — What is your presence? Are you updating it often enough? Are your customers engaged and posting to your social media? This has the best return on investment because it’s really just time and effort that you are putting into it. Don’t have anything cool to post? It is your job to come up with something.
Online presence — There are a large amount of people who google things. Is your google presence up-to-date? Do they list your hours, directions to your store, pics and maybe a walkthrough? How about Yelp? Invest in cleaning up your footprint here. Answer some questions so that your information is all up-to-date.
Your building — Are there some repairs that need to be done? How about freshening up the paint? Cleaning? Do them now. A deep clean should be done on a yearly basis and necessary repairs as needed. Do you get snow where your dealership is located? Make sure you are removing all snow from walkways and outside displays and not just shoveling “goat paths” which make it difficult for consumers to navigate. Take the time and do it right. Is it time for a new location? To sub-divide? To expand? I don’t know, and you won’t either unless you invest the time to research these decisions.
Inventory — In this business, this is how we make our money. However, inventory can become toxic quick. What is toxic? If it’s had a birthday, it needs to go. Inventory that has had a birthday is your profit from sales of other items sitting on your floor instead of in your pocket. Get rid of it as too much toxic inventory is what chokes dealerships. If cashflow is the lifeblood of this business, then toxic inventory is the cholesterol buildup in the veins. In investment terms this would be equivalent to selling your losers so that you can free up cash to invest in some winners and make that money back.
Employees — I quote Richard Branson; “Train people well enough so they can leave, treat them well enough so they don't want to.” You must invest in your people. They are the front line of your business and in many cases the reason that consumers come to you. They have the most potential to earn for you. In addition to that, our consumers are used to a well-trained, customer service oriented, polite, knowledgeable sales associate in the mainstream marketplace and they expect no less from you. This is one of the most important areas in which to invest and an area that you cannot afford to skimp out. Sales ability, product knowledge, phone etiquette, customer service skills, business concepts, retail and merchandising are all areas we can all grow in through proper training. Practice does not make perfect, good practice makes perfect. Doing the wrong things again and again do not make us any better, it just makes us better at doing the wrong things. If your employees are leaving, that’s a whole separate issue.
If you take the time to review and rebalance the investment in your business now, you will be setting yourself up for a healthy return later. We cannot count on more door swings, better margins and increased sales to grow our business. We must ensure that we are making the right investments today in order to reach our profit dollar goals tomorrow.
Napoleon Tetreault is a sales representative with Tucker Rocky, an aftermarket PG&A distributor in the powersports industry. He works with powersports retailers on merchandising, profitability and management of the parts department as well as the education of dealership personnel. His experience includes being the GM of the largest indoor motocross facility in the U.S., owner/operator of a regional distribution company and current role with Tucker Rocky. He can be reached at:
Email: email@example.comClick here for reuse options!
Copyright 2018 Powersports Business