Like any other professionals who have been lucky enough to have enjoyed a successful career in an industry we love working in, we have many people to thank for the opportunities entrusted to us and those who have mentored us along the way; there is no doubt that just like anyone else lucky enough to be successful in their chosen career, we have benefited from the people we have chosen to work for and alongside.
During our journeys and in the future, the one piece of advice that all those at Autoformance agree was the best piece of advice they ever received, was this;
You Will Pay For Your Education One Way Or The Other; Either From Your Mistakes Or As An Important Investment In Yourself,,,, It Is Your Choice!,,,,,
It is something we have all never forgotten and still remember now, even after decades as successful used car professionals; there is always something you need to learn and never be too arrogant from success to think you do not need to continue to invest in yourself, your education and your business!
Now this article is not to dig deep into our journey only to highlight that this is the first thing we say to all manufacturers looking to build successful used car business development programmes for their franchised dealer networks; and it is important to point this out, if the standard approach to developing successful used car businesses is to change and franchised dealers are to make the most of the opportunity that the used car market offers.
And we have had this conversation a lot this year; 2019 has been a challenging time for many and the trading conditions have led to many manufacturers and their franchise partners enquiring about our services because there is a general trading theme forming this year. It appears that for many, 2018 was an OK year, used car sales grew and there was a lot of patting on backs and saying well done! But now performance is declining and profitability is reducing, so people contact us looking for answers and in most cases the answer to any decline in used car sales is simple; no investment was made in the used car business at the end of last year that was going to ensure that the business could receive the dedicated attention required if it is to continue to grow!
Sounds simple we know but in reality this statement covers an awful lot, but invariably the situation and the statement are born out of the following used car trading environment;
Business A, (shall we say), has no dedicated focus on used car retailing but does some things right and grows when the market conditions are favourable. Now the owners of Business A like this growth, but because they don’t know what they don’t know, they increase the target for next year without an understanding of what will be required, in terms of investment in used car expertise, if the used car business is to continue to grow and move on from its current status as a retailer of part exchanges and ex-demos.
And herein lies the fatal flaw for Business A, because with no dedicated focus to the business with the most potential to grow, (the used car business), in the past vital used car operational responsibilities have been shared within the current sales team, (all of whom have had no used car business development training), so in reality the used car business has grown in-spite of itself! Unfortunately, when trading conditions then batter the used car operation, all the important used car KPIs go into a slide and Business A goes backwards!
Now this is not uncommon and our first priority for any business owner, is to make them understand the folly in how they have tried to grow used car retailing in the past and in order to achieve this “Light Bulb Moment” we revisit what successful used car retailing involves, and in simplistic terms it involves the following;
- Being responsible for a very large amount of someone else’s money!
- Continually investing that money into a heavily depreciating asset class!
- Dealing in a 60 day investment window of profit opportunity!
Now of course there is a lot more to successful used car retailing than this, but if you had to precis what the job entails, the statements above should be more than enough to make you realise that the skill-set required is unique and involving a lot expertise.
Now get someone with the ability to deliver the above and you should have a used car business delivering a profit of £500,000:00 within 2 years, then going on to increase these bottom line profits year on year. Yet no one seems to grasp that, if you want this level of profitability and a used car business that will secure the future of your business, then investments need to be made in both the business and the people, because guess what, delivering on this is not a part time job that you can learn on a part basis, or grow into. So why do we see again and again, people given the job of growing used car businesses at franchise dealer networks, with no experience and even worse, no training and development plan to enable them to grow into the role and deliver the used car objectives.
In all the time we have been developing used car businesses for manufacturers and their franchised dealer networks, we have never seen a business that could not be making £500,000:00 bottom line profit from retailing used cars within 2 years, providing respect is paid to what it is going to take to get there. And from there the sky’s the limit, in terms of where the right people, with the right training and development, can take your used car business.
However, continue down the current path and the painful lessons in used car retailing will come back to bite you, and worse than this, after taking the financial hit you will be no further along your journey of understanding, so there is a very good chance that you will be doing nothing other than setting your business up to fail once again! The worst of all “Groundhog Days!”
Luckily help is at hand; if this post has resonated with you and you would like to know more about our used car business development consultancy programmes, because you would like to partner with an organisation of professionals who are trading in these specialised markets themselves, have faced the challenges of fast paced evolutionary used car markets and know how to develop a successful and profitable used car operation on your behalf, (in order to keep your new car and total business objectives growing and on track), then we would very much like to hear from you.
The owners of Autoformance have owned and run successful used car operations and been at the forefront of the development of approved used car programmes for a host of manufacturers and their franchised dealer networks. More importantly, we are still trading and running used car businesses in specialised used car markets ourselves. For an exploratory conversation regarding our services and how we can develop bespoke used car business development and consultancy programmes on your behalf, please do not hesitate to contact one of our Used Car Business Development Directors; Andrew Banning at ajb@autoformance.com or Malcolm Thomas at mgt@autoformance.com
Alternatively please feel free to call me on 07796 260261.
For more information about our services please visit our website at www.autoformance.com
Andrew Banning.
Used Car Business Development Director.
No comments:
Post a Comment