I hate winter. I hate winter. I hate the stinking winter! It comes around every year and it still always catches me off guard. Sometimes it seems like no matter how much I prepare and plan for it, I’m still not ready when it hits. Business usually turns off like a faucet every year around November, but with a little foresight, I can usually keep the money trickling through until spring. During my first year in business, my dad told me to save my money in the summer because the motorcycle industry was like a Dairy Queen — we’ll be busy in the summer and slow in the winter. He knew if I was going to make it through the slow time, I’d have to save during the busy times. Guess what? My dad was right on the money, as always!
If you don’t save and prepare for the slow season, you’re just pissing on your boots. We have a separate winter account that my wife funnels money into during the good, solid, busy months to help us get by in the winter months. This money also helps us pay the wonderful year-end taxes that we all love so much!
In the spring, summer and fall, we try to capitalize on our crowds and the good weather to make as much money as we can. We have lots of events during those months to help build up funds in our winter account. As I’ve said before, events are a great way to bring people in and drum up business. The thing to remember is that you can’t spend all the money you make right after each event. You have to set aside a portion of it for later. In other words, instead of gearing up for the slow season right before it happens, we try to prepare for it all year long.
One of everyone’s biggest expenses is labor costs. I hate having to let people go in the winter who I hired during the busy months, so I do everything I can to keep my labor costs down year-round and keep everyone on staff.
I do my best to avoid any overtime, even in the busiest months. I tell my employees that we all have another year and if they want to keep their jobs, they need to shift into their high gear when we are busy. This will help them keep their jobs when we are slow.
In the service department, we work to do a better job of scheduling so that we get the bikes out on a timely basis during busy times. I have found that if you have good communication with the customers, and you underpromise and overdeliver, it goes a long way toward keeping customers happy, and they don’t mind a little longer turn-around time for their bikes.
I keep the same number of full-time employees in the winter as I do in the summer. This past winter, for the first time ever, I cut my full-time employees back from five days and 40 hours a week down to four days and 32 hours a week. They didn’t like it, but we made it through the slow months, and I didn’t have to lay off one single employee. As soon as spring got here and business picked up, everybody went back to five days and 40 hours a week.
During the busy season, I might hire some part-time employees and/or some seasonal help. They work out well because I typically pay them a little less and they understand that it’s just a temporary job. I also don’t incur all the other costs that come along with a full-time employee, such as benefits and insurance. Then when business slows down, they go away, along with their costs, and nobody gets their feelings hurt (well except for maybe the gals. They’re sensitive, ya know).
We also try to watch our apparel inventory very closely year-round. About 30 days before the cold north wind starts to blow, I bring in a good order of winter gear like leather jackets, chaps, winter gloves and all that moneymaking winter stuff. Then when the winter is winding down, I’ll take the entire winter inventory that’s left and have a sale to reduce inventory. Hey, it’s not rocket science. The trick is to have what customers need, when they need it and not before or after! That’s the hard part, right? It’s called “just-in-time inventory,” and it’s easier said than done.
Thank goodness some of our big parts suppliers like Biker’s Choice and Drag Specialties have “spring dating” programs. We utilize these programs every year because they allow us to get parts and accessories now and pay for them in the spring. Hey, that’s such an easy decision that even I can figure it out. I don’t have to tell ya’ll how tough the motorcycle business is right now. In fact, we all know it has been for the last few years. Is this the new normal? Please, God, I hope not, but maybe it is. The good ol’ days of everybody and their brother buying bikes and paying top dollar to customize them are long gone. We have to work harder and smarter for less dough now than we ever have. I’m willing to do it, and I hope ya’ll are, too.
The only good thing I can say about this sucky economy is that it has weeded out lots of the chickenshit guys that were doing nothing but screwing up my industry! To those cats I say, AMF. To the rest of you I say, Get up early, work hard all day, and good things will happen!
This story originally appeared in the Dealernews October 2010 issue.