Garry Bartecki Now what?
Good question. Who the hell knows? But whatever it is we all need to be prepared to address the permanent changes we can expect as a result of this medical and economic event we are currently living with.
Last month I addressed the seven major issues facing your industry. The article was prepared pretty much before the spread of the virus along with the mediation policies were adopted to the full extent. Consequently, I believe I may have a bit aggressive when I mentioned a three to six-month timeframe before we get back to normal. Since then I have both extended my “normalcy” date to at least 24 months while at the same time not knowing exactly what the new normal or new reality will look like.
But one thing is certain. You will be doing business differently. The dealer business will change. How you deal with suppliers and OEM’s will change. Interacting with employees will change. And how you communicate with and service both potential and existing customers will require new programs, policies, infrastructure, and technology.
Here is what I personally see happening:
- DIGITAL IS HERE TO STAY.
- EMPLOYEES WORKED FROM HOME AND LIKED IT.
- OFF-SITE WORKING CAN BENEFIT YOUR COMPANY
- YOU WILL HAVE TO DO MORE WITH LESS
- GROWTH OPPORTUNITIES WILL SURFACE
- TOP OF THE LINE CUSTOMER SERVICE A MUST
- THE MARKET TO REPRICE VALUE OF GOODS AND SERVICES
- TAX SAVING OPPORTUNITIES AVAILABLE.
That is my initial list. You can add or subtract as you see fit and I would like to hear what you added to the list. Let me know. Looking at my list now I can see where many items on the list interact with other list items and three main themes stick out.
A TOP OF THE LINE DIGITAL ONLINE PRESENCE IS A MUST
BECAUSE OF THE MARKET TURMOIL YOU WILL NEED TO REVIEW EVERY ASPECT OF YOUR BUSINESS
EMPLOYEE RELATIONSHIPS WILL CHANGE.
Notice that I did not mention any of the Government stimulus programs. Hopefully, you were on top of the issue and obtained capital to keep the business running. Just make sure you follow the rules associated with the funding which will be reviewed when you seek forgiveness. I am amazed at how fast those programs were developed and implemented. The Payroll Protection Program opened on April 3rd and I had my application filed at 8:30 pm on the 3rd and received the funding ten days later. Amazing.
Back to the future.
As far as customers are concerned, I think that we can surmise that they are also dealing with a new set of fears, uncertainly, and trust issues. Dealers who can address these issues NOW have an opportunity to increase market share. Customers are looking for seamless service, new ideas, pricing considerations, and in general any assistance you can provide including your industry expertise for their type of business. Can you provide this level of service?
Because of what your customers are going through and will continue to go through I can well anticipate changes in your expected profit centers which overall will produce both a profit and cash flow squeeze. Consequently, it may be time to rethink your entire business and revenue model. What will sell going forward? Where and how to market. Investments to make in technology. Manpower adjustments. Employee involvement.
Taking all the changes into account most dealers if they hope to maintain a healthy bottom line and cash flow will need to do more with less. Fewer assets and less cost. In other words, clean up the balance sheet and resolve not to add to the left side of the balance sheet. In terms of cost, it is time to review all current processes and policies in place to see if they still work and fit current customer needs. What especially needs to be reviewed is the digital presence and how it is used to streamlines customer service and add values to the relationship. If it does not you are going to be in trouble if your competitors do.
The best thing you can do is to fully explore a work from home program. They work. Employees like it. Adequate controls are in place to secure data and workflow. And they are cost-effective. You supply a company only laptop and printer to your employee, invest in a program that supplies a company the only network for this type of work and employees have access to all files in the cloud, can communicate with other employees and customers without dialing a phone, can participate in meetings visually and use conference calls when necessary.
Now what work from home really does for you allow you to engage permanent part-time contractors with higher-level skills than you currently have in your workforce to work on certain aspects of the business to improve the systems, profitability, and cash flows. In short, you can eliminate less talented full-time people and substitute expertise where and when you need it. The result is more productivity and less cost, which is just what the doctor ordered if you need to do more with less.
One last thing. If you did not read Steve Pierson’s column last month dealing with the tax opportunities available by recent changes to the tax code, please do. There are MAJOR beneficial changes available with the use of operating losses and interest expense deductions plus many more. Steve has been involved in the dealer business with me for many years. If there is money to be found he can find it.
