Let's Grow This Business...

Everyone both wants it and needs it but have we defined on how to grow it. Over the past few weeks I have seen many people place job recruitment to layoff posts, what do they have in common? In my opinion a failed growth strategy. Let me explain why.

In developing a simple business plan one of the fundamental strategies is a sustainable growth platform. On the commerce side it allows for increasing income to pay down accumulated debt thereby creating equity. As the commerce increases typically depending on the industry structure both staffing, inventory and real estate accordingly grows especially in the automotive space. Inventory and real estate are the easiest to manage as the former is usually controlled by the OEM and the latter is just a matter of developing a process or property.

If we were to separate these two briefly for a moment, in most purposes inventory is designed by the OEM. They are aware of how many cars they can produce and subsequently wholesale to the dealers. It's there job to manage this with excelling dealers getting better access to more inventory and restricting vehicles to those who perform poorly. If the dealership is hitting the standards and targets set by the manufacturer more than likely you'll get the vehicles you need. With real estate is somewhat trickier but also easily managed. At most of the dealers I worked for in my career we had a problem with real estate footprints, they were always smaller than what we needed. To combat this issue we had compounds, PDI and clean up centers. We created processes to maximize efficiencies and lower liabilities never once challenging the customer experience we offered. As we grew in volume it was never reflected as a bottleneck or choke point as we strategically planned our growth in these areas.

Where we were always challenged was in staffing. It always seemed like it was feast or famine. Staff were treated like they were expendable and the only culture that was grown was in the back of the fridge from the one person who never took home their leftover lunch. I never truly experienced balance until I met some great people in this business, for them it was about sustainable growth that was measured, creating a culture of teamwork and loyalty. This ownership knew about planning on all levels but most importantly they knew staffing.

It was their understanding to have a success business their team would have to be able to be driven by performance, with an uncapped potential giving them the ability to be hunters as well as farmers. This ability of individual growth each and every year was carefully designed into the strategy. For them it was math, volume divided by staff multiplied by commission equalled income. They wanted a specific income for their team and until that income could be met by dividing into a pool with another team member they would not be added. Let me explain... if the dealership sold a 1,000 units with a staff was 8 and the average commission was $850; there was an intended belief the team would earn over $100,000.00. For the dealership to add another team member the volume would have to increase to 1,100 before they would start looking. This kept the culture thriving as nobody ever starved.

Now how did they find that additional team member? In most case scenarios it was someone who was aware of the culture and income capabilities, that wanted to switch and thrive. They wanted what we had and they knew it was a dominating career move. It was more about reputation than anything else. However that was over a decade ago and times have changed faster than cell phones.

Today in this industry we are challenged by staffing, people will and are chasing the almighty dollar, that will get them there faster typically wins. Many are never factored or have factored into their own plans a growth strategy. Most employers aren't transparent with strategies, targets, or future plans. They are scared of their teams leaving if they know too much. They keep them in the dark hoping that on a "need to know" basis will suffice in capturing their loyalty for another year only then with this hope and a prayer attitude will their business grow enough to survive and not force them into a layoff situation.

It has always been my belief that the dealership is as strong as its team members and what better way is to recruit within with a definitive growth strategy. Each department can operate in this manner, whether is Sales, Finance, Service, Parts, Collision, or any other structured department. For example, a Finance Manager operating efficiently should be earning a six figure income and bringing someone on in this role could have a negative effect on the department either financially or culturally depending on the source. Now, if we were to design a strategic way of promoting within while setting timelines, goals setting and assisted training all combined with our own growth strategy we'd have a winning formula. The Finance Managers would be grateful for the assistance while sharing their experience. The internship pathway might start with licensing clerk, followed by deal administrator, accounting assistant or even may include internal service advisor. The interns would be aware of their specific pathway of success, where they in-turn would be mentoring down the road and more importantly what timeline would be involved. Sales could have a similar pathway with pinnacles as a Senior Brand Ambassador or Management depending on the growth strategy.

Attacking this as a growth strategy one can design exactly how many team members are needed for any given department, they can isolate statistics/KPI's and define pivot points. Nothing should catch you unaware. Tracking trends will display success with limited reliance on historical data. Last year is just that. We need to work in the now to maximize growth with every day is a new day and a new opportunity to grow. Who says that you should match what you did last year, last year or last week. Why is this the measuring stick? I don't believe it should be. Every day a vehicle is sold, serviced or in an accident, parts are needed for all of them. Shouldn't we plan correspondingly with a focus on capturing this business regardless of what happened before. Remember doing what you always have done will get you what you always got. Change your plan.

If you follow this form of staffing and plan accordingly the cultural change within the dealership will be enormously positive. The team members will look into their employment no longer as job but as careers. As a dealer you'll no longer be placing those ads with signing bonus for qualified individuals as they will be within the organization already. Moreso they will know the focus and growth needed for them to move to the next level. If we all act as servant leaders each level of the foundation of the team below us will grow stronger and that strength will allow for an untapped success. Just think of a mighty oak tree... it starts at the unseen roots, carries through its core the trunk reaches for the sky with its branches and leaves bringing the nourishment up and down the tree allowing for the entire entity to grow equally.

Peter Smith is an accomplished Sales Professional with a career in the Automotive Industry holding awards and leadership accreditations from multiple brands. Branching off into sales mentorship Peter has worked in the Automotive, Hospitality, Pharmaceutical, Legal, Printing, Retail and Mining Industries as well as Charities. Peter latest endeavour is a consulting company, The Lion Partnership offering full operational analysis to a variety of industries and market segments which will be opening September, 2022.