It May Be Time To Kill Your Business Model Before Your Business Model Buries You
Think about this….How often do you readjust your business model? Unfortunately, there are some dealers that are still living off the same business model that they have had twenty years ago. Not to say this is a bad thing but tends to lead to missed opportunities.
This raises a key leadership question: Why do leaders wait too long to modify or abandon their business models? Take the US Postal Service for example, even with the constraints from their government mandate, the US Postal service has known for many years that its traditional model business model was coming apart. Think about Net Zero and AOL they knew that dial-up subscriptions were fading years before they took action. Look at our own industry and what took place in 2008 both GM and Chrysler needed Bankruptcy in order to force them to change their business models.
We must first remember that no business model lasts forever. The most dangerous trap that any dealer or manager can fall into is compliancy. The auto market, our environments, and the endless amounts of technology can change so quickly that no amount of profit today guarantees success tomorrow.
The second part is to continually, actively and aggressively be on the lookout for new opportunities to grow your business; you also must always be training and retraining your staff to keep them up to speed on new processes and personal improvement. Always keep this in mind if you are only investing in the refining of today's business model you'll without a doubt get locked into it and you will never grow beyond it. You must test, refine and invest in alternative models that will move against that reality. Sure there will always be speed bumps and sometimes failures, but with enough persistence, creativity and incredible amounts action viable alternatives will always emerge.
Prior planning prevents poor performance so here are some things to consider prior to making any changes to your business model:
First and most importantly take your emotions out of it. Change in any dealership can be extremely difficult, and not just from a financial or technical perspective. When you’ve worked hard to create a successful dealership from the ground up, there’s going to be emotions involved. Re-examining the idea of changing your business model you thought would work for your dealership is a giant leap, but one that must be taken if your dealership is struggling to grow.
Always evaluate all the warning signs all the time. There will be a few under-the-radar warning signs to show you that your current dealership model is failing. Being too dependent on what the other dealers in your 20 group are doing, spending money on the latest and greatest technical gadget without fully understanding how it will impact your current processes, having a poorly trained management staff that leads to high turnover in all of your profit centers. These are all signs of a failing business model. Before changing your model entirely, attempt to fix these standalone issues. Without repairing the issues that you are facing then you will not be able to adjust your business model.
With 2013 just around the corner this is a great opportunity to just take time to think about your dealerships business model. It may be time to make some small adjustments or major adjustments? This article was written with the hope that you will re-evaluate your current position and look at all possibilites for growth and opportunity. Make it Happen.....Happy Selling!!