BILL SHENK HAS BEEN WORKING in dealerships for more than 30 years and has worked with more than 175 dealers in his PowerHouse dealer 20 Group, but he faced his biggest challenge when he bought a small, failing shop in Punta Gorda, Fla., and put his own money and reputation on the line.
Shenk and a partner, working as absentee owners and non-employees, were able to turn around the operation in 22 months, going from an annual loss of $283,455 on revenues of $2.7 million in 2009 to a net profit of $223,432 on revenues of $5.2 million in 2011. Here’s the story.
Picture this: you take over as GM of a small multiline dealership in July 2009 and quickly discover that the store lost $139,001 during the previous six months — and those six months were in the money-making season for southwest Florida.
June alone saw a loss of $50,495, with only four units sold for the whole month and 100 units sold YTD. And there were 413 units in inventory worth about $3,316,892. Many of those units were three-year-old new bikes, and one new unit was a 2000 model — nine years old.
Embezzlement and theft of parts was rampant and costing upward of $30,000 annually. To top things off, there was more than $30,000 in expired warranty claims on the books, and employees even had applied illegal warranties to older bikes owned by their friends. They also pre-registered many new units to receive OEM sales incentives, thus leaving new bikes without warranties.
That’s the situation Shenk faced when he signed on as a consultant in July 2009, and agreed to serve as general manager for the company’s stores in Naples and Punta Gorda, Fla. In March 2010, he and a partner purchased the Punta Gorda store. “It was a nightmare once I got in there,” Shenk recalls. “And it kept getting worse the more I dug into it.”