Now that the recession seems to be easing a bit and dealers are picking up, especially in the pre-owned department, there is one lesson I know I learned at Progressive Basics, along with the dealers we work with on a monthly basis learned. That lesson was learning how to cut expenses to the bone when sales really started dropping in 2009 and 2010.
During that time, we cut things that we thought we couldn’t do without and dealers started to look at more efficient ways of doing things at the office. We learned ways to cut cost in power and phones by eliminating extra lines that were not needed. Also, we looked at printing paper usage, advertising and how to get more bang for the buck, etc. etc. etc.
In a dealer perspective and in talking with you guys and gals, I have found that on a much larger scale you did the same. With the market coming back and the pressure easing a little with sales picking up, it seems as if the salesmen are back on the phone and at our doors with products we just can not live without.
We set one rule hard and fast at Progressive Basics, “if we cut it back then, we do not need it again.”
In the last three months on less gross dollars, we have netted more than I ever thought possible in our business. Our overhead is pretty well balanced, so I thought, until revenue dropped because dealers couldn’t afford to send their people out of the store. This was both from a financial point of the training cost along with travel costs, and also not having the individual there to oversee their department. I noticed our income naturally suffered and we had to come in line with that adjustment.
Also, along with expenses, most of you cut back on pre-owned inventory. Your cost of sales went down and your net went up. You should take a look at your inventory today and make sure it will support the expected volume growth.
Remember the title of this article, it is certainly working for us and I hope you remember it, “If you cut it back then, you probably don’t need it again.”