Sweat the small stuff: Incremental savings yield big rewards

By Scott Lukaitis

ScottLukaitisBlogA couple of weeks ago I was having a conversation with a dealer principal about his marketing budget. He expressed that he would invest more money into the program, but he just didn't have it. Now we all agree that you have to spend money to make money, but sometimes it just isn't there. The conversation got me thinking about how can we find the extra money. 

There are probably dozens of places to find the hidden dollars in your dealership; you just need to know where to look. Here are some ideas:

I suggest that you look at each department for the hidden dollars. By carefully reviewing the policies and procedures already in place in your store you can ensure you are getting the maximum efficiency from each.

Service Department

Are all of your warranty claims complete and paid? Make sure you are getting what you are supposed to from the OEM. These easily overlooked items can cost you money if you aren't on top of them.

What about completed work that's been sitting around taking up space? Get that stuff paid for, picked up and out of your shop. And don't forget abandoned bikes or vehicles, start the proceedings to own these items and then sell them for scrap or if there is still value, fix and sell.

Do you have scrap metal, tires or oils? Do a little research and see if you can sell the scrap rather than paying to have it removed. Same is true for old parts and junk around the shop. Scrap metal might not be much individually, but in a trailer load it can certainly add up.

Look at the efficiencies in the service department. Are you paying techs to push bikes in and out? Wouldn't their time be better used for actual mechanic work? And what about who gets what work. Is an "A" tech doing "C" tech work? Take a look at the profitability of each job and see where you might do better.

Are you buying necessary items in bulk? Stop taking liters off the shelf to complete service work. Buy in bulk to save money. Most manufacturers offer engine oil, transmission fluid, anti-freeze, etc. in bulk containers. Buy in these larger volumes and save. And while you're at it, what about the non-industry specific supplies like shop rags, paper towels and trash bags. You are buying these in bulk, right?

Parts & Accessories

Take a look at your obsolete inventory. Get rid of it, whatever it takes. It not only takes up shelf space but, let's be honest, that stuff isn't going to get any more valuable. Don't let buying mistakes or changes in taste remain in your store too long.

Are you taking care of the OEM quarterly returns? What about all of your customer special orders? Are they all being picked up? Especially the ones that don't prepay for the orders. Carefully review all aspects of the business for waste and redundancy.

Sales and Finance

Take advantage of all of the holdbacks and incentives offered by the OEMs by making sure you are filing paperwork in the right time frame to maximize your incentives. Review all procedures to ensure they are providing the most value.


Finally, look at your admin costs. Again, office supplies come into play. When you don't monitor these costs, they add up quickly. Are you able to take advantage of pre-paying or net ten discounts? These savings can be quite substantial. How about the credit card you are using for business expenses. What type of rewards does it offer? Is that the right type of card for your business.

Make sure you are buying office supplies in bulk and pay attention to the small costs that add up. Remember everything has a cost, from copy paper to trash bags, it all adds up.

Take time to look at your business. Incremental growth, while not as glamorous as getting the big deal, yields dollars you can put back into the business. Take the time to look around and see where you can save. After all, a penny saved is a penny earned, right?

What other ways can you earn some extra cash for the shop?

Scott Lukaitis is a writer, photographer and powersports industry professional with more than 25 years of experience from the dealership to the manufacturer level. He owns and provides content for his websites njmotocross.com, lukaitisphoto.com, and scottlukaitis.com and is currently the chief operating officer at Engine Ice Hi-Performance Coolant.

He can be reached via email at scott@scottlukaitis.com

Instagram - www.instagram.com/scott_lukaitis

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