|In this time of economic uncertainties in the U.S., it is important to your business that you have alternate plans, a clear vision of your challenges and the proper metrics with which to manage.|
Over the course of the last couple of months, I have been meeting with community leaders and business owners in U.S. Hispanic communities on topics of concern, such as immigration issues and economic issues. These are issues that are affecting Hispanic families—both immigrants and U.S. citizens.
Across these communities by and large, Hispanics are increasing their sense of caution with making purchases. I believe it’s safe to say that most U.S. residents are taking a cautionary view at this time of uncertainty, regardless of race, heritage, culture or citizenship; however, Hispanics typically are much more sensitive to economic climate changes. This has begun to be evident for businesses serving Hispanic communities.
Is this epoch of economic crisis a threat to your business? The answer lies in the preparations you have made for times when difficulties arise in your business. Most businesses plan for growth and prosperity, whether it’s a one-year plan or a five-year plan, but they don’t have a plan for difficulties that can occur. It is important to have alternate plans in place and to know what challenges and adversities you might face.
Some typical adversities are cash flow and interest paid on loans. If interest rates were to rise overnight, would you be prepared? Are you managing cash efficiently? Can you quickly convert assets into cash? When you have a plan for surviving difficult times, you can manage your business through adversities and come out strong.
It is also important to use measurements in managing your business. Do you know how long it takes your salesperson to sell a vehicle from the initial contact to delivery? If you want to improve your cash flow, you’ll need to know. This is especially true if you are selling to the Hispanic market, as it typically takes a longer time frame for the Hispanic customer to make the purchase decision, a topic I have covered in previous articles. You want to compare these times to the closing ratios.
You need to know the performance of all departments and employees within your organization. You should already be measuring your salespeople and sales manager for key performance indicators on productivity and profitability. Look at cars sold per salesperson, gross per unit sold and gross per salesperson, and use that return key performance indicator (kpi). What is the time frame per vehicle sold per salesperson? You may know that your closing ratio is 25 percent, but what’s the time frame? Is it the same to have a closing ratio of 25 percent in five days versus 20 percent in three days, per vehicle sold?
As for your Hispanic market sales, is the time frame longer and the closing ratio higher, or do you have work to do in that area? In your next monthly analysis, use kpi measurements and identify your weaknesses.
Regardless of your market, you can successfully manage your business during difficult times with appropriate preparation and measurements.
Hasta la vista.
Dominion Dealer Solutions announced the release or update of new vehicle-history, CRM, and inventory-management technology.