An excerpt from Bob’s upcoming book, “The 7 Principles of a High Performance Dealership”.
Is your dealership bleeding? Is it a small cut or is it losing blood by the pint? Perhaps your business is on the brink of losing its life? I meet dealers across the country whose businesses are on the equivalent of life support – struggling each day to simply keep the doors of their business open. The names and locations of those dealers change, but the words they use to describe where they are at are universal. Anxious. Frustrated. Exhausted. Angry. Guilty. Worn out.
If you are among the small business owners experiencing some of these emotions, know that you are not alone. Approximately 1 out of 10 small business owners battle with simply staying in business for the next month or next year. In my estimation, businesses are in one of the following three categories and at any time can slip from one category to another depending upon the decisions and changes they make.
Category One: Hanging By a Thread. You know this one – everything might look good on the outside but don’t look too close. If you do, you will see a business owner who is worrying how they will make payroll, praying that there is not a floor plan check, and wondering how they will ever make it through the next 30 days.
Category Two: Surviving the storms and staying afloat. This is a crowded category. The majority of dealers and business owners across North America that live in category 2 are doing “okay” and generally weathering the storms that comes their way. They have beaten the “5 year” rule that says that a small business won’t survive that long. While that seems great, they have never really have caught their stride and continue to do daily battle with their employees, the government, and even at times their customers. These dealers are working hard and giving it everything they have with some, but not great, progress to show for it. Maybe next year…they hope to turn a corner.
Category Three: Prospering and Growing. This is the category everyone strives to be a part of. Some dealers look like a category 3 business but few really achieve it. Prospering and growing business owners have earned a great reputation in their community, with their customers and vendors and have the goods to back it up. You will find that they have long term business and personal goals in place and a plan on how to reach those goals. With a winning combination of hard work, good business management and reliable input from outside counsel, they have created a business that is valuable and marketable. In essence, they have figured out how to really run a business and not let the business run them and in doing so have created a good living and will be able to retire with freedom and dignity.
Keep in mind that you can move from Category 1 to Category 3 or just the opposite, simply by some of the basic business decisions you make each day. Sometimes those in Category 3 who are prospering and growing can develop a small wound – here or there – and before they know it they are in the Business ICU. It is important that every year you, as an owner along with your managers, look at your entire operation to evaluate where you are bleeding. Then once you identify those areas, take action and make sure to apply pressure or, if needed, a tourniquet and stop the bleeding.