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It’s time for a reality check!
  • Rethink your parts strategy. As you transition into your slow season, your goals should be to have no more than 30 percent of your peak season inventory on hand and to position yourself to take advantage of the parts programs that every manufacturer offers in the fall. To accomplish these goals, wind down your parts inventory and get more aggressive on returns.

    Parts managers should change their minimum and maximum levels in the business management system. Every stocking order during this time should be evaluated and adjusted to take advantage of preseason orders with the extra discounts and dating that almost all manufacturers will offer. Don’t order filters, spark plugs, blades, or belts just to carry you through the slow season.

    Parts managers should put together parts returns for each manufacturer. This is an area parts managers often neglect, but it’s critical to the long-term health of your parts department that these returns take place. Don’t allow them to wait until the end of the year to start this process because if you do, it probably won’t get done. Every vendor has a specific return policy, so during the next 30 days, make sure you or your parts manager understand each company’s guidelines to maximize your parts returns.

  • Look at your service department. At this time of year, your service department should be slowing down to a point where there is enough flow to keep the department busy, but not enough to still be swamped. Take advantage of this time to meet off-site with your service managers to reflect on the year and plan for 2012.

    For all but a few dealers, this year was a strong growth year for service. As you run your year-to-date numbers, you should see a nice increase in labor sales and in the gross profit of your shop. Now, look at each service tech and evaluate how they did individually. What was each service tech’s billable hours compared to last year? A service tech can produce 2,000 billable hours per year, so how did each of your techs do in comparison to that number? Were you plagued with comebacks? What were your customers attitudes about the quality of the service work performed? Each of these questions will help you fine tune your service department.

    Now give thought to the attitude of each technician. Were they team players or prima donnas? Get rid of techs with bad attitudes. They are a poison to your shop, dealership and customers. There is no reason to carry someone through the slow season who will not add to the performance of the service department in 2012.
  • Maximize your slow season! Position your wholegoods, parts and service to reduce the negative effect the slow season can have on your cash flow and credit lines.

    The decisions you make over the next 30 days will determine your ability to move into the 2012 season with cash in the bank and a good line of credit. If you invest time and have the courage to make tough decisions, this next year can be personally rewarding and financially profitable.

    • Bob Clements is president of Bob Clements International Inc., consulting firm specializing in creating high performance dealerships. Visit www.bobclements.com for more information.