Want More Profit – Dealer Reveals What’s Holding You Back

I recently spent an hour with one of my dealer clients reviewing his monthly business plan. Rob and I then got to talking about the industry in general and I asked him a simple question. “Why is it when I see so many dealers struggling to make profit that they don’t just pick up the phone and ask for help? Here are the 4 reasons Rob gave me.

As you may know, I have some 30 years under my belt as a Manager of credit risk, inventory finance and retail finance in the Recreational Products Industry.

I got into the business of financial analysis and business planning because I knew that dealers were not making the profits they were capable of and certainly not on a consistent basis. I also knew that my knowledge of the industry could make a BIG difference to their bottom line.

The frustrating reality is most dealers are still not incorporating the concept of financial management into their business.  When I posed this question to Rob he said there are 4 big reasons why he thinks dealers hold back on asking for help.

#1 -  Ego

“Speaking from my own experience ego definitely played a role”, Rob told me, “I have been in this business for a long time and it was humbling to think I may need help”.

#2 - Change

Rob went on to say that “The second and probably more defining reason is we don’t like change. We get comfortable with what we know and how we have run our businesses, so making a change is really tough”

#3 - Fear

“There is the fear of, ‘what if it doesn’t work’” Rob stated, “There is also the concern of whether I will understand this concept and be able to incorporate it into my business, because I am not an accountant”.

#4 - Time

“Another issue that can’t be underestimated is that we are so busy working in our business we don’t think we have time for this additional management responsibility”.  Rob shared.

“The reality Chris”, he continued, “Is that business planning has freed up my time by taking out the guess work on how my business is operating”.

“Instead of spending hours looking at my statements each month I just look at my business plan update and my report on variances and I know exactly what I am doing right and what needs adjusting”.

Rob went on to say, “Sure, I could probably get my Accountant to do something similar but it is the extra set of independent eyes that understands this industry that I value the most”. 

“I cannot underestimate the value of someone like you who has a singular focus of wanting to make my business more profitable manage my business plan.  Yes, it costs me some money, but I look at it as an investment, not an expense”.

“In the old days when times were really good and product was flying out the door we made profit despite ourselves. We probably could have made a lot more if we incorporated business planning”.

Rob laughed and said “But back then you could count on your local bank manager to tear your statements apart and tell you what you needed to do to improve. Banks simply don’t do this anymore because they change your account manager like they change underwear”. 

He closed by saying. “I think the recession changed everything. It’s a lot harder to make a profit now because the lines of tolerance are so thin. Just a little too much expense or a slight turn down in sales can make the difference between breaking even, or making 3% to 5% of my gross sales in profit”. 

If you are not satisfied with your business results and want to make your business more profitable like Rob did when he first called me, simply pick up the phone and give me a call for a free consultation. Here’s the number: (905) 492-2979

Go ahead. What do you have to lose, what do you have to gain?

Comments (1)

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