Making Wise Decisions

March 2009, Auto Dealer Today - WebXclusive

by Harlene Doane - Also by this author

Be Resourceful During Slow Times

Many years from now, we might remember 2009 as “The Year Cash was King.” As important as profits are, cash is what this year will be about. How liquid can you keep your operation? Many dealers over the last several months have been looking to shore up cash reserves and slash expenses. Inventories are being controlled more tightly than ever, and in some cases, even personnel are being slashed.

The decisions to slash personnel may have the biggest long-term impact on many dealerships and it might not create the anticipated effect. In the short run, it does reduce expenses, but at what cost? The hardest thing to replace in a dealership is good talent. You just can’t afford to make the wrong personnel decisions.

Choosing to let someone go based purely on salary is short-sighted. The most expensive employees usually have experience or drive a lot of revenue to your P&L. Either way, simply choosing to trim based on earnings could be very detrimental to your organization because it will be extremely expensive to replace that experience or revenue. When business picks up again you will need those employees more than ever. Now, this doesn’t mean you should retain unproductive employees or those who can’t adjust to changes in your dealership environment. You have to evaluate all aspects of performance, while keeping your future business in mind.

Keep your best talent and use the slow times to your advantage. Take care of some tasks that have been on the backburner for a while. If sales are slow or your service department isn’t working at capacity, it is the perfect time to make sure everyone on your team is executing at 100 percent performance with every customer. Train your team during this slow time. Can you use your best people to do the actual training? Are there other activities you can employ like having sales personnel contact service customers, etc., if time is on your side?  Look around and be creative.   

If you don’t believe your staff could use more training, take this challenge: Take a salesperson to the lot and ask them to give you a vehicle presentation, or ask a service writer to do a full write-up for you on a vehicle you just purchased. How much value did they present? Did they cover all the steps you expected them to?

The average amount spent for training in the dealership as a percentage of total operating gross is 0.7 percent for highline, 0.9 percent for imports and 1.1 percent for domestics. That percentage pales in comparison to many expenses in the dealership, but if you feel you can’t afford that amount for training, there are many ways to train that are free or inexpensive. Many industry vendors have recently begun offering webinars at no cost, industry Web sites (like have hundreds and hundreds of educational articles that are free, and most dealerships have training material they previously purchased just laying around. Put these resources to use!

How resourceful are you when it comes to training your staff? How do you train? What do you use? How do you implement it? Send your best and inexpensive training tips to [email protected] We will compile the list to share.
Vol. 6, Issue 1

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  



Jim Ziegler
20 Things a GM Must Do Every Week

By Jim Ziegler
Ziegler returns to list the 20 essential tasks you must master to become an executive GM and reap the financial rewards, including that elusive $500,000 salary.

All Things Must Pass

By Jim Ziegler
Ziegler mourns the loss of Gregg Allman as Ford and Hyundai shake up their leadership teams and Carvana struggles to stay afloat.

Join the Battle of Jericho

By Jim Ziegler

Don't Run, We Are Your Friends!

By Jim Ziegler

Opening Observations

Over the Curb