Financial Management and High Performance
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“A successful dealership is like a successful sports team – not only should the manager be keeping his/her eye on the ball, but so should each team member.”

The above is from Kelly Mathison’s article in the 2018 spring edition of Western Equipment Dealer and it’s worth reemphasizing. Dealers and management will create high-performance teams when they have everyone on their team fully engaged in their goals.

Let’s begin by reviewing where we are at in our industry. The latest WEDA Cost of Doing Business Study (CODBS) shows results that definitely are not high performance (see opposite). These are not results to be content with. The long-term survival of our dealerships depends on significantly improving these results. How do we get every team member’s eye on the ball so we can move to high performance and acceptable results?

Educate your team
Many dealers follow the age-old path of training employees to execute their jobs without ever helping them understand departmental, store or dealer complex targets and goals. High performance is only possible with a highly motivated team. High motivation happens when you have the right people in place and they buy into the plan. Employee buy-in happens when they understand where you are and where you are going. Th ere are no shortcuts to this. If we expect the parts department to improve its parts turnover, everyone in the department must know all the things that affect parts turnover – and the key people within the department need to be able to calculate it. These are complex issues that are not easily understood.

A significant majority of dealership staff have never had training on dealership financials. Help them understand why your goals must exceed the CODBS results in order for them to have greater opportunities. Explain to them what it allows your organization to do when you achieve 100 percent-plus absorption. Show the team what happens to cash flow when you sell new equipment and take trades. It is critical to explain the difference and importance between profit and cash flow.

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Western Equipment Dealer Magazine Summer 2018 Issue
By Gord Thompson

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