Here’s a new concept, successors: bring value!
The opportunities are endless – your dealership is a multifaceted, financially complex business, employing hundreds of different types of people, and accounting for millions of dollars in sales. But when you dive deeper, these dealerships consist of unique, mini-economies that compete and thrive off of one another. Each department can be viewed as an interdependent business seeking to generate profit and minimize loss. The front end focuses on sales and exists in a variable world; working with manufacturers to acquire the right product, to sell as many units as possible, at the right price, in order to generate the gross revenue that will result in profit to the bottom line. Conversely, the backend relies on fixed costs, associated with the number of cars that come through the dealership and maximizing the serviceable hours of employees to generate adequate profit to the bottom line. Then there is the unique used-cars world that takes on its own special circumstances in regards to its place in the dealership’s greater-economy. In addition are the ancillary businesses associated with dealerships such as outside insurance sales, collision centers, quick lubes, cafés, employee benefits, reinsurance programs, etc. that co-exist within the major departments and serve as additional profit centers. Each of these interdependent departments can be reviewed for their solvency on a single statement, but ultimately rely on one another to achieve success. In fact, when departments work synergistically, the overall dealership economy produces generous profits, functions seamlessly, and provides a stable source of employment to the local community.
As a Dealer, you may be thinking, “Thanks Captain Obvious, for describing what I have been doing in my business for the last 20 years.” I get it – you don’t need me to tell you about the intricacies of running your dealership or how proper teamwork can be effective; you deal with the numbers and the people on a daily basis. My purpose for describing the intricacies of the car business are to illustrate to successor candidates – family or not – the many varied areas of expertise needed to successfully and profitably run a dealership. As a result, there are endless opportunities in each mini-economy for “rising stars” to latch onto a project and make it their own.
Successors looking to set themselves apart should be asking:
- Am I good with people and persuasive? There is a place to bring value in customer interaction, enhancing the customer’s experience and selling cars.
- Am I good with numbers and process oriented? Do I approach subjects on a more practical and/or technical basis? There may be a place for you to bring value in finance, developing new analytics to assess productivity or creating processes to help identify strengths and weaknesses in the various departments.
- Do I like to work with my hands – do I like to fix things? The car business is BEGGING for enhancements to the service side of the business.
Successful dealerships typically have department managers who specialize in and build an extensive knowledge base in a particular field. Their unique experience and knowledge are critical to driving their respective “mini-economies” bottom line. To consistently improve efficiencies, there is also a growing focus and expansion in the education provided and available to department managers.
Often times, areas with the most opportunity to bring value are the outside business activities that directly affect the bottom line, but are more difficult to comprehend. There are fewer opportunities to learn these activities within a dealership’s normal teaching processes, such as the effect of employee benefits on the culture of the dealership, analyzing reinsurance programs for maximum productivity and effectiveness, or providing needed metrics on a timely and relevant basis. Identifying high value opportunities and committing oneself to education and research positions a potential successor as the go-to, high value contributor to the business.
Family member employees have many unique opportunities to make their mark and become the “heir apparent” we want them to be; the culture, values and purpose of the business has been ingrained in them since birth. When family members decide to become a part of the family business, a popular course of action for training is to have them tour each department for limited amounts of time, more affectionately called the “tour of duty.” While this approach has been successful on many occasions, most often, the number one focus becomes, “How do I get out of this service department fast enough so I can see what mom’s/dad’s office looks like upstairs?” As a result, family member successor candidates float through the process looking to get a general overview of how to sell cars, learn the names of employees in the finance department, what the service bays look like, and who needs to be contacted in the accounting office when problems occur with the money. Consequently, they are missing opportunities to bring value.
Acquiring proven experience in each department is invaluable for advancing your career. However, go above and beyond the surface/minimal “tour of duty” and learn to bring something of value to your business that no one else can claim. And when I mean value, I mean reread the first paragraph that describes the various and extremely different departments that exist within a dealership. As illustrated above, there is opportunity for you to own a challenging concept that can bring value to the dealership’s bottom line and your family’s business. The value perspective of becoming the “go-to” source among your peers on a specialized subject enhances your standing within the organization and provides a place to stand as you work through the “tour of duty” to the second floor. Not only will your knowledge provide you with a growing source of wealth and self-confidence, it also shows your colleagues that you are interested in the business (not just being the owner one day); you are invested in the continued success of the dealership (not just sucking it dry); and you are a person they can visualize being their leader one day.
As I stated in the March Dealer article titled, “Win the Right to Be Heard: Successor Prep for the New Generation,” you will know when you’ve “won the right to be heard” when you have been asked for your opinion. Building on that premise and relating to the title “Successors Bring Value,” commit to educating yourself above and beyond what is expected. Building your own value will advance your credibility with colleagues, managers, other family members involved, vendors and shareholders. Seize the opportunity to grow, think outside of the box to educate yourself, identify an opportunity and sacrifice the extra time to learn so that you can ultimately be in a place to make a difference. In essence, bring value!