Rome was not built in a day…and neither was your dealership, or any of your other facilities for that matter. Whether you are contemplating a completely new build, a factory supported re-imaging project, or a service facility improvement, it is critical that your efforts are guided by someone who can provide an unbiased opinion that is grounded in their automotive construction expertise. Although there are many reasons to retain an owner’s representation firm, the five items listed below were the most common reasons for dealer principals and controllers.
Creating a facility that is aligned with your business vision will provide a newfound motivation for your team and will enhance your customer’s experience.
1. Magnitude of Construction Steps and Decisions
It is estimated that a new dealership build will have over 2,000 very complex construction steps and decisions throughout the pre-planning, design, construction, and post-construction phases. To add to the complexity of the process, the project will have many stakeholders. Whether it is the general contractor, architectural firm, municipality, or the factory, they all have different goals. Utilizing a team that has subject matter expertise in the construction process and experience with maintaining the demands of each stakeholder is a proven method to lower construction costs and keep a project on time.
2. Owner’s Advocate and Buffer
Dealer principals and their company are easy targets. Not because their name is on the building, but because of the unique nature of the automotive business and the public’s perception of the car 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 effectively negotiate with local providers will allow the dealer principal and GM to stay out of the process. This buffer effect is also important for the sensitive discussions dealership principals may need to have with their factory rep. When researching which owner’s rep firm to partner with, learn how many different factory design programs they have implemented and how frequently they do them. Inquire about their reputation with your factory representative.
3. Central Point of Accountability
Establishing one point of contact for the dealer principal will allow for a higher level of accountability. All too often with large construction projects, there are too many cooks in the kitchen. If the meal turns out poorly, no one takes responsibility. This aspect in the automotive world is made even more complex if too many family members are involved with a large project. When researching an owner’s rep firm, look for a firm that has a track record of taking the lead from day one of the project and is there as a valuable partner throughout the end. Soliciting references from previous dealer principals and GMs will help your company find the correct owner’s rep.
4. Time is Money
As a busy dealer principal or GM, time is the one resource you cannot afford wasting. To quantify the cost of your time, simply take your year-end earnings and divide it by 2,500 work hours worked in a year. Your ability to view your time as a resource is critical. Ask yourself if one hour of my time is better spent reviewing factory-approved flooring tile schemes and sourcing it out for local bids, or developing my sales and service team. Spend your time and energy on your business of selling cars. When retaining an owner’s rep firm, ensure they provide detailed project updates. This consistent process will keep you and your team informed, and it will save you time.
5. Owner’s Rep Cost is Quickly Equated to Project Savings
Whether it is an incentive for your sales team, a new direct mail campaign, enhanced sales training, or any other initiative that will drive sales, many dealer principals can draw the return on their investment back to the cost of the associated initiative. Retaining an owner’s rep firm will allow you and your auto group to forecast a ROI on project completion dates, number of project change orders, and overall project spend vs. project forecast. When retaining an owner’s rep firm, it is critical that they establish project saving goals and project time line goals.
Your ability to focus on your core business during a hectic a construction schedule may be the difference in being profitable or not. Creating a facility that is aligned with your business vision will provide a newfound motivation for your team and will enhance your customer’s experience. Take the reasons listed above to heart when pre-planning your next facility build.
Brent Tally is the founder and president of TallyCM. His team provides owner's representation and general construction management services for the automotive industry.