July 24, 2006: A model of how to weigh progress vs. comfort
July 24, 2006
Filed under Archives
Eighty-nine year old Ray Miller in Reading, Penn., had a big grin on his face when he said, “Hey, take a break and come look at this.”
Steve Richards and I had been at Ray’s store for three days. We had ripped the whole accounting system apart and put it back together again so Ray, his son Mike and his granddaughter Michelle could really see what his sales, service and parts departments were doing. All three of these racing Millers could tell in an instant which cylinder in an engine was misfiring just by listening, but their antiquated accounting system couldn’t tell them which department was sucking gas and not returning anything on the power stroke. We knew that our work would give them as much control at the shop as they have on a tight turn at the track.
So Ray catches us in the hall and motions us over.
We walked to the rear of the shop, Ray slid open a door and there was a vintage black Model T. It was shiny. It had rubber on the floor, every wheel was fully spoked, and with the hood canted up, we could see the motor, simple and clean as a whistle, with the crank running under the radiator and out to the front, just right of the choke wire — just like I had heard since I was a boy.
It was cool, and I couldn’t resist. So the kid in me said, “Hey Ray, could I start it?”
You would have thought I had asked Ray if the sky was blue. “Well of course you can start it!” What kind of a question was that, anyway, to a fellow who had been rebuilding engines since 1932? Of course I could start it!
So, after advancing the spark, dropping the dip stick (an honest-to-goodness wooden stick!) into the gas tank to check the fuel level, opening the petcock, pulling the choke and setting the ignition key from center to left, I grabbed the crank, moved it slowly from the 180 to the 270, and then with a quick motion snapped it from the 270 up to the 360.
And of course, it started immediately.
Ray’s grin just got bigger. He was in his element, and had shown us accounting guys a thing or two about something that really mattered.
It wasn’t until around 4 that afternoon when Ray and a half-dozen close friends and family were loading onto a 50-foot motorhome headed for a dinner show in Jersey that I realized what I had been taught. We were set for the big exit conference, to show all the important things we had done, and Ray was leaving for a pleasant evening with friends and family.
Think about it. The store was full of customers. There was money in the bank. Ray’s son Mike and all of Mike’s daughters (known locally as “The Racing Millers”) had good jobs driving at the track and working in the shop, Ray was headed for dinner in his motorhome (he’s driving of course), and the Model T starts on the first crank.
So what did it matter that their parts gross margin percentage was a few points below average?
And was it an issue that their margin on units was just average?
And was it so important that the company net profit, again, was only average?
The store was not spectacular. But it was stable, and it was comfortable. And it had been that way since 1957!
The things that Steve and I brought to Ray’s Yamaha were good: identification of problem areas, specific accounts for recording racing expenses, goals for improvement, a better accounting system, closer tracking of successes and problems, more accountability — all good in our world of dealership control.
But what these folks had before we set foot in the door was a nice little 4-banger that worked. I could see Mike and the girls would undoubtedly use our ideas to improve some aspects of the business, but all in all, they were doing just fine thank you very much, and could probably go for another 50 years this same way.
So, hat’s off to Ray, and Ray’s. I hear they enjoyed the dinner and the show in Jersey. Ray’s getting his 1981 Virago 750 ready for another long road ride, and as we left, customers that cheer for Mike and Michelle at the tracks were walking in the door looking for four-wheelers and street bikes. And Steve’s thoughtful comment to me as we drove back to Philly was, “You know, that place was really comfortable. They are doing what they enjoy, and I think they will be just fine!”
So, are you feeling the pressure to build the Taj Mahal of motorcycles in your town? Does your OEM keep talking about going single line? Is your bank hinting that they could easily finance that nice piece of land over by the interstate? Well, maybe that’s what you should do. And again, maybe it isn’t. Think carefully, and consider what you really want. New and big is always fun, but every level of success has a price, and perhaps you already have what you really want.
And one more thing.
Those accounts that we added to track the racing expenses separately and make them show up on the P&L? Well, maybe they will be used and maybe they won’t. I think that perhaps, just perhaps, they really don’t want to know. psb
Hal Ethington has been associated with the powersports industry for more than 30 years. Ethington is a senior analyst at ADP Lightspeed. You can reach him at Hal_ethington@adp.com