From my dealership experience and observations from my current seat, good processes and good people are the pinnacles of success
I argue these two points here:
I am no stranger to personnel expense. Fifty-two percent of my annual gross as a dealership manager went to personnel, making it the most expensive line on the financial statement.
I’m not here to preach about spending less on people or arguing you should save yourself into a bigger net profit. I will talk about efficiency and how dealerships everywhere miss the mark when ignoring or minimizing the value of non-revenue-producing employees to your dealership’s (and yours) success.
When support is asking for something it’s because they need it to complete a more significant task. Holding a payable is just a small part of cutting a check, finalizing a car deal, and getting a vehicle titled. You have a $250 bill on your desk, but it’s holding up $80,000. Plus, your dealer is still covering holding costs until that $80K is in your bank.
You have taken an hourly employee off their task. There’s only one of them (AP Support), but they support 11 of you (department heads). That means this holdup is also delaying 11 people because a five-minute task isn’t getting done, which quickly turns into an hour of inefficiency. I was a department head before I realized I was the problem. Arrogance is expensive, and you can quote me on that. When your support asks for something, the importance of getting it done quickly is much greater than you.
I talk efficiency every day, but it’s usually related to service, parts, body shop, and sales. Business office efficiency rarely comes up, but it’s just as vital (if not more so) from a financial standpoint as vehicle holding costs and contracts in transit. Inefficiency here adds up to big money when the dealer’s left holding the expense instead of the bank.
Let’s talk tools, specifically technology hardware. I visit many dealerships, and too often, the business office is stacked with hand-me-down computer equipment plagued with slow, inadequate processors and low memory. That gigantic copy, scan, & print machine you require team members to share is stuck in a corner room away from desks. Reread those last two sentences, and if you don’t cringe, I believe you’re comfortable with wasting money.
We literally have people paid by the minute carrying out tasks that take time. Rather than asking someone to work harder, think about what we can do as department heads to help them work smarter by eliminating things that slow them down. Making minor adjustments can easily justify a $500 investment in hardware and could keep you from having to add that extra headcount. A $10.00-perhour-employee that is 10% more efficient will cover your $500 investment in 2.8 months.
Two ideas:
Now that hardware is upgraded and other efficiency changes made, it’s wise to focus on the softer upgrades that inspire.
Everyone in the dealership behaves and performs to the level set by management. A little attention and kindness paid to those rarely in the limelight will, as the great motivational writer and speaker Dale Carnegie taught generations, “How to win friends and influence people.”
A successful business is built on a solid foundation supported by non-revenue-producing personnel. Give them the leadership, communications and efficiency tools and respect deserved.
Anthony Greenhalgh is the Director of Marketing and Sales for reconditioning workflow company Rapid Recon. He joined the company in 2016 out of dealership operations as a fixed operations manager. www.rapidrecon.com
