Reinvesting In Your Dealership

by: Stephan King, CPA and Partner, Moss Adams LLP

In my monthly series, 10 Secrets to Dealership Financial Success, I started off by suggesting success is not accidental. I have learned a lot from the best teachers— successful dealers. There is a commonality: a commitment to excellence and keen business acumen. Last month, I offered ways to unlock frozen and underutilized capital. The next question is what should you do with the extra cash?

I have a few thoughts after spending three days in Las Vegas at the 2006 RV Dealers International Convention/Expo. I am convinced that many RVDA members understand the concept of reinvesting. These dealers get it. Attendance at the annual convention is optional. Many dealers elect to participate; however, there are some that do not see the value in attending the convention.

There are a number of reasons to attend. The education and knowledge transfer that takes place is invaluable. Each year, I personally find out more about the industry in three days than in any other three-day period of the year. Why? Experience is often the best teacher. The collective experience of the attendees at the annual convention is unbelievable.

Success begets success. Dealers in attendance are interested in becoming top performers. Their success is not accidental. Dealers attend the conference with the idea it will only help them improve performance. Knowledge is king.

There are a number of ways to reinvest in your dealership. Clearly, attending the annual convention and getting better at your business is one way. I will elaborate on some of the others.

REINVESTING PROFITS
The industry has had a meteoric rise in sales and growth. The experts in the industry still believe the future is very bright for the industry. Periods of growth and prosperity are the best times to reinvest. Profits gained are useful for upgrading facilities, enhancing and rewarding positive employee behavior, developing and implementing a culture-based strategic plan, or renegotiating flooring and other credit agreements.

Dealers should consider the reinvestment as a hedge or protection from an uncertain future. Successful dealers create rainy day funds. Do you “self fund” for your rainy day?

SUCCESSION
Do you consider your own succession as part of your dealership’s future success? I would suggest that waiting for the deep-pocket buyer is not a strategy. It is never too late to plan your exit. Likewise, you should plan the exit of all key employees. Most of you know you never plan for the key manager, salesperson, or service technician to leave—but, you also know, it happens.

Do your key people create their own succession plan? Is it time to reinvest in a culture that rewards proper succession behavior?

I believe we can learn a lot from our peers. You can use this knowledge to improve your dealership. Isn’t the goal to become a top performer? Do you reinvest in your dealership?

Stephan King is a certified public accountant and partner of Moss Adams LLP. Moss Adams serves over 400 dealerships nationwide, providing creative solutions to clients’ complex issues. For more information contact them at (800) 905-4010 or visit their website at www.mossadams.com.