July 2, 2007: Focusing on the PG&A and F&I departments
July 2, 2007
Filed under Archives
This series of articles recaps a portion of the opportunities that were uncovered by Gart Sutton & Associates’ powersports specialists during actual consulting visits.
These opportunities are followed by recommended actions that address the issues. The goal of this series is to provide you with ideas to help you improve your dealership.
The focus for this report visit was to determine the cause for the lack of profitability in P&A and create proper categories to monitor the inventory, develop inventory tracking systems and improve efficiency in the P&A department; provide training on the value of offering F&I products to all customers; and install the processes necessary to make these departments into more profitable contributors to the dealership’s bottom line.
This is the last of a four-part series on this dealership. The June 4 edition identified sales and F&I process for the dealership to improve. Following the assessment of the processes and the facility, GSA consultants prepared a list of recommended actions and reviewed them with the dealer principal. The goal of this review was to determine if the dealer principal was willing and capable of accomplishing the action. Once the level of commitment and capability was established, the recommended actions were prioritized. Following this, the recommended actions were reviewed with the affected department managers in order to get them to buy in to the action items.
This small, multi-line dealership is located in a rural market that is a popular destination for year-round recreation. They recently completed a multi-phase dealership remodeling project. Their volume is under 500 units annually. Though they reported gross sales of nearly $4 million, they ended up losing money. GSA consultants discovered all departments were below recommended benchmarks. The P&A Department was showing a gross profit margin of 25 percent and very few of the profitable F&I products were being offered to the customers. The dealership is carrying a large accounts receivable and interest is not being charged on past-due accounts. No independent audits are being performed to verify the accuracy of financial data.
Issue: Lack of profitability, structure and basic inventory management processes in the P&A department.
Solution: GSA consultants assisted in establishing a flow sequence for repairing the P&A issues. The following priorities were established:
Training was provided for the parts manager on applying the procedures necessary to make this an efficient and profitable operation. These procedures included:
Issue: Ineffective, unproductive sales and F&I staff
Solution: GSA consultants assisted the sales manager in developing a written procedure for the sales department. This covered their greeting policy, the steps of a sales process, the prospect follow-up process and presenting all F&I products to every customer. Tools and job aids were provided to the sales manager.
Author, speaker and educator, Gart Sutton has been retained by every major powersport manufacturer/distributor. He is a frequent keynote speaker for national motorcycle conventions and state motorcycle dealer association events. Visit www.gartsutton.com.