Knowing your business and knowing your market area are essential when planning for reinvestment. What is even more important, according to Marks, is that dealers know themselves and trust their instincts. “Dealers need to follow their instincts,” explains Marks. “In their heart, deep down inside, dealers pretty much know what they need to do to benefit their business. They know their customers, and can see where the market is going.”
Planning for reinvestment into your business may seem like a very overwhelming task. For tips and ideas on how to reinvest successfully, discuss it with dealers who have successfully reinvested, your distributors, your bank and even customers. To find additional resources, reach out to your local dealer association.
It is important to consult as many resources as possible when developing a plan for reinvestment. After all the year’s hard work, you want to be sure that profits are invested wisely, so ensuing years are even more profitable.
Characteristics of Highly Profitable Dealers
70% grow sales at a rate of 5-10% per year
81% say less than 60% of total sales come from wholegoods
60% say 21-40% of total sales comes from parts and accessories
64% say 21-40% of total sales comes from service labor
87% service mass merchant-sold equipment
60% charge a $60 to $80/hour shop labor rate
74% say less than 40% of total sales comes from commercial customers
74% say more than 40% of total sales comes from residential customers