Welcome and thank you for making some time to come.
Not here to sell, just provide good content
This is what I’m passionate about – helping non-accounting business owners to understand the financial data in their business.
Lack of attention to your financial discipline could be the undoing of your business.
Picture yourself on a journey…
ABS Stats – surveys don’t become a stat.
Refer the person sitting next to you.
94% are small
4 areas of concern
Maintaining profitability
Economic conditions
Govt Policy / regulation
Technological change
My focus – 6 areas to increase profits – industry discussion.
If you care to reflect on this financial year and what has and what hasn’t worked for your business.
Where would you like to be at the end of this financial year and do you have the strategies in place for it.
Who uses budgets and in what detail?
Our experience helping businesses to budget and plan. – Break even per day.
Small Margins
Use actual info (seasonality, product & customer mix, opportunities).
Make budget realistic
Detailed
Who uses benchmarks?
Know the benchmarks so that you can rate your business.
Do you want to be a benchmark?
Do you want to set new benchmarks?
Is your current business model geared toward being profitable?
Every $100 is important
Margins on NV are only 7-9%
Luvata.com – features prevail over price & cost of ownership
What about good customer service and customer loyalty
This might include manufacturer incentive rebates – highlights the principle.
There are manufacturer targets to meet – customer mix & targeted strategy such as LinkedIn
Every $100 is important
Every $100 is important
500 units = $50,000
The slight edge – Jeff Olson
Customers will shop you on price not value – show them the value. Sometimes they are the customer you don’t want!
I’m not a car sales person – there are specialists for that.
Story = I know dealers who have lost the sale but get the service customer and turn them away!!
Discount – strategy for customer loyalty (service program, VIP service treatment, assist program etc.)
Lost service customers @ 67% as well as ongoing sales opportunities
24 days break even – Good luck in FEB.
About 50/50 split (F&I in front end)
Have you done the analysis of this split in your business
Sales specialists for service departments or cohesive approach to business.
Do you focus on a particular area within your business or do you have a cohesive team?
Don’t turn service work away!
Different markets, but the principles apply to the model variants in your business.
Work out where the most profit is coming from and how you can strategize for this.
Fleet / Govt deals can help achieve volume targets
Strategic marketing will help achieve profit targets
Have you considered how you can use tools such as linkedin or other social media platforms to drive your sales?
Gross – 15%
Net – 3.5%
Don’t just cut costs – get a return on investment
We’ve helped a client reduce staff overheads, but increase sales by 40% by changing pay structures.
Don’t be over-staffed – outsource where it isn’t yet necessary = like IUA HR.
Cost of floorstock holding – reduce floorstock or the value of it.
Moore Stephens Survey – 1 in 3 frauds were worth over 100k
Mostly from Used and Admin
Department managers
Uncovered by internal controls
Our audit background can help you here – I’ve done forensic audits and evaluated controls.
Good systems will help prevent fraud but will also improve efficiency
Monitor closely every month
We’ve helped a client use technology to improve their AP processing and archiving – There are lots of technology solutions out there.
Most businesses we’ve dealt with don’t have a cashflow projection.
You cannot manage the business from the bank account! – this is one of the leading causes of business failure in Australia.
Most businesses don’t know what the balance sheet is or how to read it.
Plan for your GST, PAYG and Super obligations – use separate accounts.
Historical trend analysis can help plan levels of stock holding.
Determine the reliability of the supply chain.
Manage customer expectations.
Collect your cash as soon as possible.
Holdback
Rebates
Warranty Claims etc.
Customers
Monthly detailed reports by age! How old are your debts?
Use terms to the fullest – up to 30 days but don’t abuse it
Use a credit card with points rewards
Speak to your tax agent
Our customers don’t have a good understanding of their departmental results due to lack of good information.
Good , regular financial reports
Variance analysis against budgets
Just like the journey of Apollo to the moon – keep changing course to stay on course.
Can reporting be fun?!
If you’re away – what reports will you get your staff to send you?
What KPI’s do you have set and how are the reported and managed?
What if analysis
These are the types of analysis that we prepare with our clients to help them understand where to make changes.
Electricity, telecommunications, Printing are just some easy ones.
There are lots of areas in which profits can hide
There are different strategies to find these profits
I’ve seen dealerships that;
Turn away service work,
Don’t process warranty claims,
Don’t process rebate claims,
Don’t have a process to follow up rebate claims,
Don’t have F&I solutions
These are the problems we are helping to find solutions to.
If you’d like to book a free consultation – fill in the form now and return it.
