Rome wasn’t built in a day, and neither was your dealership — or any of your other facilities, for that matter. Whether you are contemplating a new build, a factory-supported reimaging project, or a service facility improvement, it is critical that your efforts are guided by someone who can provide an unbiased opinion grounded in their automotive construction expertise.
Although there are many reasons to retain an owner’s representation firm, the five reasons listed below are the most common.
1. The Magnitude of Construction Steps and Decisions
It is estimated that a new dealership build will include more than 2,000 very complex construction steps and decisions throughout the preplanning, design, construction, and post-construction phases. To add to the complexity of the process, the project will have many stakeholders. Your factory, your general contractor, your architectural firm, and your municipality all have different goals.
Utilize a team that has subject-matter expertise in the construction process and experience with maintaining the demands of each stakeholder. It’s the best way to manage construction costs and keep your project on schedule.
2. The Need for an Advocate and Buffer
As a dealer principal, you and your company are easy targets. It’s not because your name is on the building. Blame the unique nature of the automotive business and the public’s perception of the sales process. Many vendors and supporting firms feel that dealerships have a magic Xerox machine that prints money. We all know that this is not the case. According to NADA, the average dealership posts a 1.75% return on sales.
Having a third-party firm vet outside bids and negotiate with local providers will allow you to stay out of the process. This buffer effect is also important for the sensitive discussions you may need to have with your factory rep.
3. Simplify, Simplify
Large construction projects tend to bring too many cooks into the proverbial kitchen. If the meal turns out poorly, no one takes the responsibility. And when family is involved, which is often the case for dealers, it gets even more complex. Establishing one point of contact will enhance accountability.
4. The Value of Your Time
As a busy dealer principal or GM, time is the one resource you cannot purchase more of. To quantify the cost of your time, simply take your year-end earnings and divide it by 2,500 work hours. Ask yourself if one hour of your time is better spent reviewing factory-approved flooring tiles and sourcing it out for local bids or developing your sales, F&I, and service teams.
The answer is clear: Spend your time and energy on the business of selling cars. Insist on detailed project updates from your owner’s rep. Stay informed and save time.
5. The Savings
Dealer principals are accustomed to spending money to make money. You invest in pay plans, trainers, and ad campaigns, all with the expectation they will more than pay for themselves. Your ability to focus on your core business during a hectic a construction schedule may be the difference in being profitable or not.
Your owner’s rep will forecast an ROI on project completion dates, number of project change orders, and overall project spend vs. project forecast. If they say they don’t know how, find another one. Project savings goals and project timeline goals are essential deliverables.
Creating a facility that is aligned with your business vision can motivate your team and enhance your customer’s experience. Take the reasons listed above to heart when preplanning your next facility build.
Brent Tally is the founder and president of TallyCM, a firm that specializes in the design and construction of automotive facilities. Email him at [email protected]