DealerLAB: 2013 earnings up 76 percent but ...

Publish Date: 
Feb 27, 2014
By Joe Delmont

While the year-over-year improvement was impressive, it looks even better when one considers that BRP dropped the dealership in August 2013, pulling its boats, PWC, Spyder and Can-Am off-road vehicles. In the period September through December 2012, the dealership did $504,796 in total revenue with BRP products and produced a gross profit of $44,603 on BRP products. “We did not have access to that revenue and gross profit in the last four months of 2013, but we were able to exceed 2012 revenues and profits with our existing business growth,” noted Shenk.


Unfortunately, as Bill Shenk will tell you (and as he tells his 20 Group dealers) there’s no magic formula to increased profitability. The gains in sales and profitability come, he said, from the application of Shenk’s 4 P’s To Profit philosophy.
Here’s the program:

  1. PURPOSE. Control your destiny by knowing what’s going on in your marketplace, where you want to go and how you’re going to get there. Identify the strengths and weaknesses of your competition and your own operation, and then promote your strengths. Finally, make sure you stick to your purpose in everything you do, from staff selection and training to store hours, promotions and advertising.
  2. PEOPLE. Build a team that reflects your dealership’s purpose. Look for commitment and competence, but hire on commitment first. You can educate your staff, but you can’t teach commitment.
  3. PROCESSES. Strategy gets you on the field, but execution pays the bills. Success comes from working smarter, not harder. That means building processes into your operation. Processes give you a consistent starting point for all of the operations within your dealership. Processes should be uniform and systematic. Set up a good process and then repeat it, repeat it and repeat it again, Shenk said. A good process will give you more time with your customers and will not create extra work or duplication. Look at building processes everywhere from the phone and sales operations to product ordering and month-end accounting.
  4. PERFORMANCE. This management task involves setting expectations, measuring performance and offering rewards for performance.

Using his 4 P’s, here is what Shenk sees as the keys to the dealership’s improved performance in a down market over the last four years:

CHANGING staff until the right team was put in place. It is important to remember the rule: fire fast when you identify a problem employee and hire slow so you have the best chance to hire the right person.

DESIGNING and implementing processes, especially financial processes. The most important were PHD FasTrak Payroll budgets for each department (profit center) and FasTrak commission-driven pay plans for all production and sales team members. “This creates a win/win/win situation for customer/team/dealership,” said Shenk.

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