Top 10 Management Tips for Marine Dealers

The following “Top 10” management tips may just help you reach your business goals earlier that you expected in 2007.
1) Have a business plan in place. It should be a comprehensive document that clearly shows how you intend to obtain your desired profit objectives for the year. It should also serve as the basis from which you measure your monthly performance. This requires that the projections contained in the plan be presented in monthly segments. Every employee’s projected performance should be communicated so they are clear on what is expected of them throughout the year. If prepared properly the plan should enhance your chances of obtaining funding from lending institutions and may lead to lower interest rates. Make sure you project your cash flow so you do not run out of money in the off-season.
2) If you do not have “competitive advantages” at your dealership, then you will be competing on price alone. That practice leads to low profitability and does not allow the dealership to grow. Identify your competitive advantages and use them in your marketing messages. Examples of competitive advantages might include hours of operation, level of service, quality of product offerings, or quality of employees.
3) Establish a “Customer Service Management System” that ensures there are no gaps in the quality of your service. Identify the events in every department that need to be managed on a daily basis to ensure flawless delivery of impeccable service. We call these “moments of truth.” Anytime your customer or prospect comes into contact with any aspect of your dealership and forms an opinion of your level of service is a “moment of truth.” You either pass or you fail. It is the collective “moments of truth” that your customers will experience that will determine whether they elect to do business with your store again.
4) Stay on top of your financials. Make sure you clearly understand what your P&L’s and balance sheets are telling you. Compare these numbers to the projections contained in your business plan. If you are not achieving the projected results, find out why and make the necessary adjustments in a timely fashion.
5) Control your inventory. If you do not achieve an inventory turns number of at least 3:1, you will probably experience high inventory carrying costs, which results in lower than acceptable profitability. Remember that your inventory includes parts and accessories. Keep those at an acceptable level to meet your immediate customer needs. Having the biggest parts inventory in town is not necessarily a plus. For those of you who do not understand how to measure your inventory turns, it is simple. Take your total inventory by month for the year and add them up. Divide that by your annual sales and you have it. As an example if your average monthly inventory is $3,000,000 and your total annual sales are $9,000,000, your inventory turn number is 3:1.
6) Make sure your service shop is profitable. The key to service shop profitability is your shop efficiency. It should be a minimum of 50 percent and should preferably be 70 percent or more. Know what the efficiency level is for every employee and rigger on your staff. Reward them financially when they meet or exceed predefined acceptable levels. Price your parts smartly. Price your lower priced items such as washers, bolts, nuts and screws at significantly higher gross profit margins. Control your parts inventory by making sure that nothing leaves the parts room without being logged against a repair order or rigging order.
7) Motivate your employees by recognizing them as the key to your dealership’s success. Take care of them financially. Educate them every chance you get. You cannot expect top-notch performance from employees that are not properly trained. The primary difference between successful dealerships and those that are not are the quality of their employees.
8) Make sure your marketing program is professional in every aspect. Establish a marketing calendar that contains at least one customer event for every month. Schedule your advertising to effectively support your projected sales by month. Make sure your advertising dwells on the “FUN” of boating rather than the lowest price in town.
9) Become part of the community. Network through organizations such as the Chamber of Commerce. Become well known as a supporter of worthy community projects. If everything else is equal, your community involvement will influence your buyers to do business with you.
10) Brand your dealership as the best place in town to do business. The quality of the brands you represent, the appearance of your facility, your level of service, your policies and procedures, and your friendly employees all lead to a perception that your dealership is the place to do business in your town. This is all part of branding. Use your branding position prominently in your advertising.
If you take the steps now to incorporate these 10 tips into your management practices, you will see positive trends emerge in your business, and 2007 will prove to be a great year for you and your employees.