Repair orders also were off sharply in July, dropping to 81 this year from 135 last year.
“Just like accessories,” Shenk said, “you gotta sell the gravy service. [It] starts with outbound phone calls to new customers who have not been in for service yet as well as [for] maintenance service specials every month.”
Revenue from Parts and Accessories was flat in July, dropping from $24,961 per employee last July to only $7,366 per employee this year. Gross profit per employee plummeted from $8,657 in 2011 to a loss of $2,529 this year.
The same thing happened in Service: Revenue per employee dropped from $5,681 to $2,739 while gross profit per employee skidded from $2,602 to a loss of $1,053. So, what’s the problem?
“We have some good talent, and it would be easy to blame the techs for not producing,” Shenk says. “I don’t believe that to be the case. It is simply reactive management vs. proactive management. Our current management will need to grow into proactive managers, and soon.”
At presstime the summer had ended and the end of the year was in sight, so we asked Shenk what the last four months of the year were looking like.
He forecasts that 1) sales will remain strong; 2) parts and accessories will start turning around in October; but 3) Service will continue to struggle, perhaps for another two months.
Editor’s note: The Dealer LAB project is a joint effort between Dealernews and PowerHouse Dealer Services, a consulting firm run by Bill Shenk, detailing his efforts to return a Florida powersports dealership, renamed Destination Powersports, to profitability.
The financial information in this report is taken from the dealership’s Composite Report supplied by Shenk and is prepared as part of the dealership’s participation in the PowerHouse Dealer 20 Group. The Composite Report is produced from the store’s monthly financial report.In preparing these Dealer LAB reports, Dealernews reviews the dealership’s unaudited P&L statement and Balance Sheet and its Composite Report.
Bill Shenk is owner and 20 Group moderator of PowerHouse Dealer services, a dealership 20 Group provider and consulting/training company. He has worked full time in the powersports industry since 1976. To join a PHD 20 Group and take your dealership to Top Gun status, contact Shenk at 877-PHD-0911 or Bill@phdservices.com