By: Myril Shaw - Dealer Profit Services
Here is a hint – you can't have a great 2021 by settling for good enough…
Are you setting stretch targets for your sales? Are you training your sales team to maximize all aspects of profit? Are you ensuring that you have enough new and used inventory to meet demand and allow for exceptional results?
It is a guarantee that at the end of 2021, if you look back and say, "Well that was good enough", you will be disappointed.
The only thing standing between you and fantastic is, well…you!
Let's simply drill down on your F&I results. We will work with some easy sample numbers which you can quickly adapt to the reality of your store.
Let's assume that you did $10M in unit sales in 2020.
Are you targeting 10% to 20% growth in 2021? (Or are you simply saying that flat sales are good enough?)
With $10M in unit sales, what was the net F&I contribution to your net profit? (If you don't know the answer to that question, it is definitely time to figure it out.)
You should not be comfortable in any way – not even good enough – if your Net F&I Profit on Unit Sales was one penny less than $400,000 (4% net F&I profit). So in 2021, you have to be focused on $440,000 or $480,000 just based on your new unit sales – and you should be driving for 4.5% Net F&I profit on unit sales – so if you grow your unit sales by 20% and your F&I net profit to 4.5% - your F&I will be adding $540,000 directly to your bottom line.
Oh, you're okay with a 3% contribution from F&I, then you are okay with adding only $360,000 to your bottom line and leaving $190,000 on the table – REALLY?
Why would that be good enough? Now the excuses start:
• Our sales team is comfortable with the current F&I profit
• We don't want to rock the boat
• We'll make it up somewhere else
• Blah, blah, blah
A leading 20 Group facilitator and industry consultant, David Parker, founder of Parker Business Planning talks about the for modes that dealerships can be in:
• Growth mode – always looking for ways to improve and constantly stretching for improvement
• Trouble mode – doing badly, knowing it and actively seeking help
• Steady state – We are comfortable and don't want to do anything to upset our comfort level
• Know-It-All – We don't need help because we are so smart already
Dealerships in Steady state or Know-It-All are actually in Trouble, they just don't know it yet.
Where are you? Are you ready to drive your F&I profits to new, previously unseen levels? Are you ready to institute the training and processes to facilitate extraordinary F&I success? Are you ready to set stretch goals and targets? Are ready to ensure that your F&I expenses are minimized while your success is maximized?
A focus on continual improvement in all areas is what Growth Mode is all about – and Growth Mode will drive your 2021 success!
Here is to a FANTASTIC 2021 and currently unbelievable while actually achievable F&I Profit in 2021!
Dealer Profit Services - Driving Profit Through Fun and Inspiration
Dealer Profit Services, LLC can help you achieve F&I excellence - no matter where you are in the development and/or maturity of your store or stores F&I success model. As the industry's best Finance Solutions Provider and the only one to take your customer to Fun and Inspiration with a Free and Idyllic lifestyle through F&I, thus driving industry-leading levels of F&I profit, Dealer Profit Services can and will equip you with what you need to take that next step in your F&I success - regardless of what that next step might be. Whether you want someone to help you take over take over your F&I and with our experienced personnel just help you drive profit to your store, provide help to you some of the time, need some quick advice, or just provide F&I Training/Consulting, we are here to help you. If you are not fully equipped with all of your Compliance Manuals and Training, Dealer Profit Services can do that too. Contact us anytime at info@dealerprofit.com or give us a call at (470) 326-0966.
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