A penny by itself just isn’t worth much any more. In some European countries they don’t even accept one-cent coins, instead opting to round everything to the nearest five-cent piece. However, pennies still add up to dollars and several dollars can change your bottom line.
Lately, in an effort to change the bottom line, many dealers have taken the time to review their operations to squeeze out a few more pennies. NCM Director of Business Development Kevin Cunningham recently shared a few of the ways they have done just that.
1. Consolidate clerical duties to one office location. There are often inefficiencies in these areas. Individual rooftops rarely require a dedicated title clerk; filter all title work through one location. The same thing can be done with accounts payable. Consolidate warranty administration to one position. You may need to train and pay a bit more to that individual, but it can translate to significant savings overall and a more loyal associate.
2. Credit card processing. There are different costs associated with different transactions. For example, there are differences in swiping a card versus keying in the information or processing a transaction as debit versus credit. Educate your staff on the differences and make sure you are running all transactions at the lowest rate possible.
3. Check for overlaps in credit bureau pulls. How many times are you pulling a credit bureau and paying for it? Several vendors offer this service along with OFAC or other compliance tools within their product set. Are you using the best one for the money?
4. Purchase shop supplies in bulk. Purchase high-usage items like brake cleaner and washer solvent in bulk. Most vendors will supply the refillable bottles and mixers for free.
Other suggestions for improving the bottom line included:
1. Closely evaluate to see if you have a sufficient number of service advisors. Adequate staffing of service advisors means that each advisor has the appropriate amount of time to invest with your customers. By adequately explaining the service that needs to be done, including maintenance items, dealers can see a significant boost in hours per RO and improve customer relations.
2. Schedule appointments for every special order part at the time the order is placed to ensure that those parts don’t sit on the shelf and become obsolete.
3. Review your printing cost to evaluate if you could save money by printing business cards and flyers in-house.
The best idea for finding ways to squeeze more from your operation is to ask your staff. Schedule a staff meeting with a requirement that everyone must have a cost-cutting or revenue-generating idea to present. Cunningham said, “Dealers aren’t likely to find that million-dollar savings anywhere, or even hundreds of thousands, but the small stuff adds up very quickly to total thousands of dollars, and in today’s market that’s the difference between red and black ink.”
Vol 6, Issue 2