Mimic the Disruptors
The Disruptors take a process or product or service and find a way to do it better. And as a result, gain market share, increase profits, reduce costs and in general grow the business.
These innovators find ways to do things cheaper, faster and more convenient to process.
Does any of this apply to you?
It sure does. Finding ways to disrupt your own business is necessary for every business out there if you wish to stay competitive.
I guess the best way to look at this is to audit your business to see if you are doing things the way you were doing them 10-15 years ago. And if the answer is “YES” you have to assume are you falling further behind the curve, and in a position where “Catching Up” is going to be both costly and time consuming. But, if you analyze your situation and find that the required changes cannot be made in a reasonable time-frame, it may be time to transition out of the business.
Let’s stop and think about what I would expect to see in a “modern” dealership.
- More work being performed by fewer people
- Technology Spend higher than it used to be
- A digitized service and parts operation
- Internal operations becoming paperless
- Increased cash flow and profits from less overall volume
Go ahead and add a few yourself. Examples abound in just about every industry out there.
For example:
- German Car Manufactures taking a pass on Detroit Auto Show because “people don’t buy cars like that anymore”.
- Toyota combining their lift truck operations.
- Reports that auto dealers are changing the way they do business by putting more emphasis on selling used vehicles. They earn more profit compared to new sales and produce more volume from their parts and service department in the process.
- Auto dealers selling new and used cars on-line. That’s how I buy my cars.
- Big Rentz renting construction equipment throughout the entire US without owning a rental fleet.
On-line retailers finding ways to eliminate both inventory and delivery.
Hyster-Yale disruption programs …..Fuel cells to replace batteries ……and driver-less forklifts.
Rental becoming the norm to obtain the utility value of material handling equipment.
THERE IS NOT ONE AREA OF YOUR BUSINESS THAT CANNOT BE TRANSFORMED TO BE CHEAPER, FASTER AND MORE CONVENIENT. NONE!
Cheaper and faster kind of go hand in hand, don’t you think? And I believe a process both cheaper and faster is probably more convenient as well.
A good example is internal expense report accounting. Before an expense report had to be filled out, assigning account numbers was necessary, chasing down copies of invoices to support the report a real pain in the butt. But now there are numerous apps out there to simplify this process. Get the receipt from the vendor, take out your phone and copy/send the invoice to accounting. ALL DONE! The system knows who sent it, who the vendor was, the amount and what account to charge it do. As I said ALL DONE!
You can copy this transformation to every department, especially the parts and service departments. Using a proper PO system and bar coding can cut a lot of time out of the payable process. Vehicle tracking systems can speed up the service process. Using telematics can also do the same. Refurbing lift trucks is a sure way to make it cheaper for customers. And on it goes.
There is one more important consideration to deal with. And that has to do with your personnel. To make these changes happen you need a team of millennial’s to drive these changes. I have experienced this myself. You have a problem you want to address, and they find a system or app to fill your need, lay it out for you, train your other employees to use the new system or procedures and monitor the results. I am not kidding. No millennial’s in your store …..you may never catch up.
To get started get your industry specific system provider to pay you a visit. And you Mr. CEO ask their representative this question “Tell me what parts of your system we are not using to its full extent?”. That is question #1. Question #2 is “Tell me specifically what my competitors are doing that I am not doing?”
Do the same with your payroll service. You will be amazed what they have to offer these days that will reduce HR costs substantially.
Now move on to your bank. They can reconcile your accounts and provide services for you company as well as employees.
And suddenly you can be cheaper, faster and more convenient. Lower you overhead (which you will by following these suggestions) and you can become more competitive and thus cheaper. Max the use of your computer systems and apps (that the millennial’s find) and you will much faster at lower costs. Upgrade your ability to market and close deals on-line and you are now more convenient.
In the end, you can have a lower top line but better margins and cash flow…..not all bad because you are not cheaper, faster and more convenient to do business with.
Garry Bartecki is a CPA MBA with GB Financial Services LLC. E-mail [email protected] to contact Garry.
