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Oct. 13, 2008: Defining a dealership owner’s responsibilities

October 13, 2008
Filed under Archives

These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.
Dealership details
This store began as a single-line store in the 1980s. They moved to a high-traffic highway location in 2001. Since then, they have added several major product lines. They’re located in a rural town with a population of 17,000. They are 60 miles from a major city. The bulk of their sales are in ATVs and UTVs. Their current volume is around 400 units, but the store has done close to 600 in the past. The store changed ownership last year.
In this first part of the series on this dealership, GSA reports on their operation.
Analysis
After considerable research into the business, the owner purchased this store late last year. He was a stock broker with a background as an enthusiast and a MX racer. The owner is enthusiastic about the business, but has not yet identified and accepted his role as owner. He tends to micromanage and this has created some issues with the department managers. The store is having problems getting approvals for retail financing, in spite of having access to several lenders. The owner feels this costs him up to 200 sales a year.
The dealership personnel are not setting department goals, and feel they are overwhelmingly reactive rather than proactive in the marketplace.
There are no monthly manager meetings, which could help improve communications and accountability. In the short term, managers should use these meetings to discuss the status of their efforts to implement the action items from this visit. Daily manager huddles that cover what happened yesterday, what to expect today and what is scheduled for tomorrow are encouraged. The GM should direct the meetings, with the owner providing monthly reports on individual department performance.
Employee surveys revealed a team attitude and a real desire to help the dealership succeed. They also indicated a good, experienced staff and a dealership with a strong service reputation. There were several comments about being understaffed in parts and sales. Comments revealed the technicians were doing a lot of things besides taking care of service business. The service department numbers reinforced this conclusion.
Job descriptions need to be developed for all positions. They also need to develop a Policies & Procedures manual. Each department was tasked with writing down their processes to be incorporated into this document.
An organization chart was developed during this visit. The owner was encouraged to run the dealership through his capable GM. Department managers report directly to the GM, which frees the owner up to observe and learn the duties of the various positions within his dealership. This will help in the development of accurate job descriptions and hiring of personnel.
Action Items

  • Define ownership role. Manage through the GM. Be a supporter and enabler.
  • Have all internal billing done at retail so you can compare with benchmarks and get more accurate pictures of departmental performance.
  • Monitor and measure all department numbers on a monthly basis. Share this information with department managers. Hold them accountable.
  • Ensure security of all non-public information, such as completed deal jackets and credit applications. Lock them up when the finance area is not occupied.
  • Establish monthly manager meetings.
  • Ensure all departments put all processes in writing. Assemble into a Policies & Procedures manual.
  • Do daily data backups and keep them off-site. Consider a locked room for the server.
  • Develop a store privacy policy. Post on Web and provide to all customers who purchase units.
  • Person doing deposits should be different than the person balancing the checkbook. All deposits must be counted by two people.

    Gart Sutton has been a leading provider of on-site dealer consulting, dealer 20-groups, online financial composites, accounting rescue services, and OEM and dealership training solutions for nearly 30 years. For additional information on these services, visit www.gartsutton.com

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