March 8, 2010: The importance of defining the owners’ roles

These articles recap some of the opportunities uncovered by our GSA powersports consultants during actual consulting visits. These are followed by recommended actions that address these opportunities. Our goal is to provide you with ideas to help improve your dealership.

This small dealership is in a market area containing around 150,000 people within a 50-mile radius. This number increases considerably during the summer months because of the large number of seasonal lake homes in the area. They sold just more than 200 units in the past 12 months. The original owner of this dealership sold them one of his major product lines and moved the other line to a new location. He reportedly sells more than 500 units.
The current owners are powersports enthusiasts who were customers of the original dealership. After the buy-out, they built a new facility on a state highway with good traffic volume (more than 5,000 cars per day). They also acquired an additional major powersports product line.
Since they are not visible from the freeway, they have used billboards located near the freeway off-ramps to draw additional business. They have sold their other large, successful (non-powersports) business and have good capital to back the dealership.

One of the strong segments of this dealership is its thriving Internet sales profit center. They stock heavily in specialized OE clothing (primarily snowmobile), and do a good volume because of product availability.
The dealer recently changed its DMS and accounting software. They have a fair amount of work to do to get the system performing and reporting the way it should. Additional consultation services may be required in this area. Suggested Charts of Accounts for their system were provided.
It was recommended the owners develop their owner/manager job descriptions. Because of their skills and preferences, it was recommended that one of them take on the personnel management duties and the other assume the administrative duties.
After defining their ownership roles, they should create an organization chart that addresses all contingencies. It must be shared with all staff members and the chain-of-command enforced. They have job descriptions for the staff, but they need to be updated and enforced as well. Employee reviews have been conducted annually. It was suggested that this be done bi-annually.
One of the staff members has the title of GM, but he is primarily performing sales and F&I tasks. His skills are an asset to the business. He has some management skills, but no management training and he lacks knowledge of the overall business structure and benchmarks. He is not performing management duties, such as tracking, training and enforcement of basic processes and procedures.
A dealership of this size can’t really justify a GM. It was recommended that one of the owners assume this role.

Action Plan
Define the ownership and owner-manager roles. Once this has been done, define them to the staff and create an organization chart to support them.
Work on getting issues resolved with the DMS data. Compare reporting data with benchmark data to determine areas that are not realistic.
Recruit an experienced, high-quality tech/manager.
Put all processes in writing and hold staff accountable. Utilize the “counsel, warn, act” management tool.
Hold weekly meetings with key staff. Initially, focus on implementation of action items. Long term, these should focus on performance data and goals.
Acquire e-mail addresses for all customers. Utilize this in your marketing efforts as well as for CSI follow-up.
Develop a privacy policy document for the store. Post it on your Web site.
The general manager should conduct brief daily huddles with key staff. What happened yesterday, what is happening today and what to expect tomorrow.
Develop monthly goals for sales and performance for all departments. Communicate them to the staff and hold them accountable. Provide rewards for exceptional performance.
Define/refine the marketing strategy/branding of the dealership. Make this a part of the dealership culture. Follow the theme in all your marketing efforts.
Install an electronic door counter so you can begin tracking floor traffic. This will provide a base for important measurements, like log entries, write-ups and closing ratios.
Develop a customer waiting area for sales and service customers. Provide a table, chairs and a TV running product videos and refreshments. Staff should be prohibited from this area unless with a customer.

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