Several years ago, my sales manager convinced me to fire a salesmen with poor performance. I trusted the sales manger’s advice; the salesman in question had horrible closing numbers, was lazy and showed up to work late pretty much all of the time. However, this particular manager had fired two other salesmen in just two weeks, and I was starting to get low on salesman inventory.
If paid in the right manner, a low-performing salesman really isn’t too much a drain on the company if you look at it in a weekly overhead capacity. But, even at that time, I was smart enough to see the other side: Business isn’t just about the sales that you make, but also about those that you miss. A lost sale is nothing less than negative revenue. So, a poorly commissioned salesman might not be "costing" money in terms of a weekly paycheck, but he sure as heck does cost thousands in lost sales.
Another week passed and yet another salesmen was fired. "I had to let him go," said the sales manager. "He had too many customer complaints. Saturday was the final straw, man. He lied to a customer who bought a TRX500, and I ended up having to buy the darn thing back."
Fast forward a few weeks just after my return from a convention and I found my "trusted" sales manager fired our last two salesmen. His response floored me: "Man, I have to tell you something else, too. The competitor down the road made me an offer, and I really can’t pass it up. It’s just too good. I mean, I feel bad, but the deal is just too good."
I was speechless. There I was, just before opening on a Saturday morning during the busiest season, realizing that the guy I’d entrusted with my company’s sales department had just fired all of my salespeople and was quitting, effective immediately. I was lost. I was flabbergasted. I was so pissed off that I couldn’t even react.
I ran my butt off for the next few weeks, covering most of the sales floor with just myself and a couple of guys from parts, not to mention the constant interviews as I searched for any salesperson who might stand a chance. All of our former salesmen were either too sore over being fired or had already found other jobs.
That experience taught me a great deal about a number of things. I got a crash course in multi-tasking as I served as owner, general manager and about five salesmen rolled into one. I learned how to multi-exist as I appeared in about seven places simultaneously and, most importantly, I learned how to multi-oversee: I will never again entrust someone with too much free reign when it comes to managing my business. As it turns out, you’ve got to keep your eyes on pretty much everything that’s going on. Who knew?
The ensuing excavation process was interesting, to say the least. Digging through records to find out what had been going on was a task and an enlightenment. In our used department we were losing money on trades instead of making big margins. Something was wrong. In reviewing costs against trade, I soon discovered that this exit strategy had been long-planned for maximum profit on the final paycheck. Literally no over-allowances had been applied to trades for the whole month, meaning that the new units sold carried all of the profit and the trades carried the full burden of value — I was screwed, big time.
That realization led to a physical inventory of P&A, at first focusing on sales histories, where I found that hundreds of dollars of inventory had been "given" to customers off the books. What really burned me was talking to some of the customers who, thank God, had remained loyal to the dealership. More than one told me that they were offered free merchandise to follow this sales manager to his next job. None wanted to be involved in the form of a sworn statement or court testimony if I were to pursue it, but they swore to me that it had happened. Would I have sued had I had the witnesses? Absolutely.
Since learning that lesson, I’ve learned quite a bit more. I’ve been screwed by employees since that time. I’ve dealt with mechanics who’ve let me carry them through winter only to quit in the spring; salesmen who leave at the busiest times and think that they own the customers who’ve bought from them; even a service manager who handled some cash deals on the side using my parts and labor!
The biggest learned lesson, however, is one that pertains to trust. First off, an employee can also be a friend, but the two should never, ever cross paths. Business is business and business has to come first. Period. Most importantly, when it comes to business, a nice guy trusts his employees, but only a fool offers blind trust.
Now, you’ll have to excuse me. Reliving all of this has given me the urge to review some security camera footage. In fact, I may put on a disguise and go purchase something from my dealership. Maybe it’s time for another physical inventory, too?