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How To Turn Time Into Money

How To Dedicate Your Time To Profitable Pursuits.

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What is a owning a dealership really about? Is it about providing jobs in a tough economic climate? How about providing a service for your community and the enthusiasts who live there? Maybe it’s about paying taxes to Uncle Sam?

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Hell no! Your job as a dealer is to invest each and every minute in the most valuable areas of your business so you can make a profit! If you think about it, each day you are exchanging your dealership operations knowledge, skills and hard work for money, independence and hopefully an good quality of life.

Let’s say there are 220 workdays in a year, and you expect to take home $200,000 or the equivalent with perks from your dealership this year. That means that each hour of every working day is worth $113.64. Even if your annual earnings goal is $100,000, based on eight-hour workdays your billable hourly rate is $56 per hour. Notice I said billable hour? Yes, just like your techs.

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Here’s the problem. Most people who don’t work in a flat rate environment don’t have an income goal and a specific dollar value put on their time. If you don’t have an income goal, you really don’t know what your time is worth. If you don’t know what your time is worth, inevitably you don’t make good decisions and invest your time in the most important areas.

While I was running our four stores years ago, I had a service manager who failed to submit more than $20,000 worth of warranties at our Conyers location. By the time I caught this and terminated the manager, the department was a complete mess. I was so determined to straighten up the chaos and recoup the lost warranty payments that I became consumed and put on the service manager hat myself. I was trying to prove a point to my GM, but finally realized this was a huge mistake.

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I had to fire myself and fast! I was spending my time doing $20-an-hour work, and based my compensation level and benefits, I was supposed to be filling my time doing $100-an-hour work. In fact, had I been doing $100-an-hour work all along, such as performing a detailed analysis of my AR and ROs completed and not cashiered, this manager would have been called to the carpet long before the damage he’d done was so significant.

Had I been doing $100-an-hour work all along, the red flags would have been waving at me from every direction. Had I been doing $100-an-hour work, I would have been focused on our F&I department leaving tens of thousands of dollars on the table, on the showroom guests that weren’t getting logged or introduced to managers, that major unit inventory was aging, trade-ins were being over-allowed, our advertising was pitiful, I wasn’t making my rounds to the other stores, I could go on-and-on. My attempt to recoup the $20,000 probably ended up costing at least $100,000, due to my misalignment of priorities. This was a lesson learned I’ll never forget.

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As with most best practices, turning time into money is easier said than done. One study of Fortune 500 CEOs concluded they had 28 productive minutes per day due to excessive meetings and employee distractions. I’m personally of the opinion that whoever the management guru is that wrote the book promoting an open door policy must have been some college professor in an ivory tower who had never run his own business. Here at Dealership University, I have a closed door policy and it means: I’m working, leave me the hell alone unless it’s urgent! Otherwise, I’d never get anything done. Most likely your dealership is full of time vampires that would rather interrupt you and ask you dumb questions instead of utilizing their supplied reference materials. In my dealership days when I was asked a lazy question, my reply was RTFM. This is an old military acronym that stands for “read the f’n manual.”

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I’m proud to say that on March 23 my wife Ashley delivered our second set of twins. Two very special, beautiful baby girls named Haley and Hannah (yes I named Hannah after Bob the “Hurricane”). With five kids and an exciting business to run, I now more than ever clearly understand and value my time. It truly is my biggest asset and I place a sizable flat-rate dollar amount on it. I have a ‘Turn Time Into Money’ SYSTEM in place: Save Your Self Time Energy and Money.

My system has been adapted from a story I once heard of an efficiency expert who made $25,000 in the early 1900s for sharing this very simple concept. His concept was to write out the five most important things you have to do tomorrow on a sheet of paper. Then go back and number them in order of importance. Tomorrow when you wake up start on number one. I use this system, and I also block out the allocated flat rate for each daily task. Then I fight to link each of those tasks to my monthly goals and bar all distractions. No staff interaction, no email, no telephone calls, no voicemail. This system is all done through a good old-fashioned pen and paper, and daily planner.

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Everyone is different, but I’m convinced computerized planning systems such as Microsoft outlook have too many bright shiny objects there to interrupt and distract you. My whole system is all done in blocks of time, so I still take breaks and make my rounds. I walk the four corners and have staff interaction, coffee time, talk with clients, etc. Yet I’ve trained myself and those around me that I very much value my time and that it’s my biggest asset.

Self-discipline leads to liberation and is magnetic. If you don’t believe me, just ask Ricky Carmichael or Donald Trump!

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