PowerSports Business

April 3, 2017

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SOLUTIONS 34 • April 3, 2017 • Powersports Business www.PowersportsBusiness.com Last fall I was blessed with an invitation to conduct a session at AIMExpo titled "Under- standing the Owner and Manager Roles." The session addressed such things as whether a dealer's management style was stifling the dealership's growth, and it included some descriptions of various types of owner and manager roles. The attendee Q&A following the session got me thinking about putting some of my thoughts in written form. What follows is a portion of my observations from over 40 years of working for and with dealers. I want to discuss a fairly common dealer- ship owner profile in our industry. We're talk- ing about the entrepreneur who purchased or started a small dealership without much back- ground in the business. The typical dealer/ entrepreneur becomes a micromanager. They do this for many different reasons: 1) Because the are undercapitalized and/or understaffed, they are forced to do many jobs; 2) Even if they have the staff, they feel it is the best way to learn the business; 3) They need to tightly control the cash flow; and/or 4) The are perfec- tionists and have to ensure things are done the way they want them done. Initially, an entrepreneur/owner should be deeply involved in the business — after all, it is his or her concept, passion and money that drives the store's growth. However, microman- agement tends to stifle growth because one per- son can only do so much. The owner is forced to back away from running every department, hire department managers and take on the gen- eral manager role. This is where a number of dealerships start to run into trouble. The true micromanager often struggles with hiring good quality managers because they threaten his or her ability to control every department. Even if he or she hires good man- agers, the owner might not empower them to manage. Among other things, the owner doesn't allow the managers to have adequate input on hiring and firing — even though the managers are being held accountable for the performance of their staff. Another common problem I see is a lack of budgets for the department managers. Again, these managers are being held accountable for things they can't control. Good managers become very frustrated when they don't have control over the things for which they are being held accountable. This eventually leads to the manager seeking other employment. Many dealerships do empower their man- agers to handle the hiring process, although the owner and/or general manager is almost always involved in the final decision. The simple fact to remember is: The more dealer- ship department managers can be empowered (assuming they have the skills), the less the owner or general manager is tasked with doing additional departmental jobs. At some point in the growth curve, it becomes increasingly difficult for an owner to play both the owner and general manager roles. This occurs when the GM job becomes a full-time, multi-tasking position. At this point, the owner has to find a high-quality general manager to run the day-to-day operations of the dealership. As above, this can be a daunt- ing task. Truly effective general managers with leadership qualities are very hard to find. They will require full empowerment in order to ful- fill the job requirements. If this is the case, the owner has to back away from the daily dealership operations to focus on the high-level business issues (capi- talization, cash flow, inventory valuations, property, etc.) and enjoy life more. The less an owner is involved in the day-to-day operations stuff, the more he or she can evolve into the role of a true "owner." That said, an owner still has to keep a close eye on the books — embezzlement is rampant in our industry. In over 20 years as a district sales manager and a field service rep for two different powersports manufacturers, I saw many dealers struggle with the impact of this "disease." There are only two kinds of dealers — those who have suffered from embezzle- ment and those who will. As a dealership grows, owners should become involved with planning for the end- game — where do they want to be in 5, 10, 20 years? Do they truly want to work in the dealership until they burn out or have a heart attack? Perhaps it is time to spend more time with the family. Maybe they would like to pur- sue their hobbies or travel to exotic lands. This process starts by building a succession plan, or a guide for how a dealer will handle the evolution from being a dealership owner to retirement. The plan spells out the details for passing the dealership along to a relative, or perhaps selling to an employee or an outside buyer. It also covers the reality of a possible injury, illness or death of the owner and what will happen to the business in that case. I can't overemphasize the importance of having a basic succession plan, regardless of whether you plan to retire next year or 20 years from now. You can't control what life may bring to you — you need to have guidelines that address these contingencies. PSB Steve Jones is senior projects manager at Gart Sutton & Associates. He has worked in the powersports industry for more than 30 years, for dealerships and manufacturers, and as a consultant and trainer. Contact him at steve@gartsutton.com. Do you, store owner, empower your managers? RETAIL REMEDIES STEVE JONES

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