Mark’s Pillars Of Business Success

Part 2: Contain Costs and Improve Processes

In our last article, we talked about the perils of the slow season. How you’ll need adaptive and contingent plans in place along with new skills and pragmatic approaches if you want to make it through. We introduced Mark’s Six Pillars of Business Success: increase revenue, contain costs, improve your processes, develop talent, master your marketing and improve your management efforts. We covered ways to dramatically increase your revenue. If you missed it, get your hands on a copy as quickly as possible and put the ideas in place. This month, we’ll move on totwo more Pillars of Success.

Contain Costs
It’s been said that you can’t save your way to success. Well maybe not, but you can save your way to March, and for many stores, that’s what’s required. Here are some great ways to do just that.

Be more frugal on used bike reconditioning. It’s no secret that for many stores, used motorcycle sales are becoming an ever-increasing part of the revenue picture. You make money on used motorcycles when you buy and not when you sell — you have to buy them right and be judicious about reconditioning. You may replace hand levers and the occasional scuffed mirror, but sheet metal or larger cover flaws you may need to go untouched.

Work with all vendors and suppliers for better pricing.
Many businesses are having challenging times. You should use your negotiating skills to get a better deal on everything from service department laundry service to your advertising agencies media placement.

Turn odd sizes into cash. Instead of taking those XS and 3XL jackets and putting them on a discount rack in the back (taking the markdown can be considered a cost), go through your customer list and identify those customers who these sizes would appeal to and directly market to them using a scarcity approach (e.g. only a few left!). This way you could benefit those hard-to-fit customers and perhaps preserve your margins. And as an aside, stop buying those odd sizes (your clothing suppliers will hate this advice), treat these as special order items going forward.

Get better at using part-time staff.
You want to have your part-time staff around when you’re going to have customers around, not on Tuesday afternoon when they’re playing Angry Birds on their smartphones.

Use an annual parts return programs to flush your overstock or slow moving items.

Critically review your accessory and gear wholesale accounts.
Are you still doing business with that local business and giving them a discount? You may want to reconsider that. Do you have former employees who have discount accounts that are still active? Make sure you review those as well.

Can you get by with your cleaning crew coming in twice per month rather than twice per week?
I can remember when stores didn’t have cleaning crews. We did it ourselves! In the old days, we all took the trash out and pushed a broom, so why not now?

Review your store hours.
You want to be open when customers want to shop. And keep in mind that service can be open without the rest of the store being open.

Review work schedules.
You can encourage voluntary unpaid time off and consider some sort of flex-time, flex-pay for the off season.

Ensure your building is as energy efficient as possible.
Monitor your temperatures. Find the money pits. Is the door to service always left open?

Identify those motorcycles on the showroom floor that you’re being charged flooring on and put special sales emphasis on those motorcycles.

Do you need the grounds crew?
Put a plow on that ATV and clean the parking lot yourself (It’s actually kind of fun!).

Barter with customers for necessary work to be done.
If you need repairs or maintenance done on your building, you can trade product or service in a barter agreement. Just be clear on the exchange.

Containing costs is always important, and sometimes it’s the cash flow crunch of the slow season that can crystallize your cost containment efforts.
Improve Your Processes
The slower season is the perfect time to retool your processes. You can think more clearly and work more deliberately. Asking a store to retool processes in the height of the busy season is like trying to rewire the house while the lights are still on. In the off-season, you do have the time to improve your processes. 

Established processes enable you to hone and polish, enable repetition to minimize mistakes and allow you to train new people more quickly.

Solid processes create consistency. Think Fed Ex, Disney theme parks or Subway. These are great examples of businesses that use processes extraordinarily well. I would suggest you read the E-Myth by Michael Gerber. I usually read it once a year as it’s so grounding in terms of process improvement.

You can and should create your own unique processes. For example, there seems to be as many sales processes as there are Subway franchises, and none of them are magic. What works in one store may fail in another. Every store is different in terms of market, staff skill and ability and management accountability.

Seek to relentlessly simplify. Use a one-page rule: If you can’t break a process down so it can be communicated on one page with bullet points, seek to simplify further. Your process improvement doesn’t have to be management-driven; in fact, it rarely should be. Have one person (who actually does the task) capture steps and then work with others to improve and simplify the process.

Does the process work when you are busy? Does it work when you are short-staffed? If it doesn’t, don’t necessarily throw the process out. Often what’s required is a brief adaptation or contingency plan to help.

For slow season process retooling, start with your revenue generating actions:
• Incoming phone or Internet leads
• Outgoing phone prospecting
• Steps to the motorcycle sale
• Accessory consults
• Riding gear consults
• Service plan follow up initiatives
• Acquiring and leveraging referrals

These are all areas to work on that can yield immediate revenue benefit. Now that you know what areas will give you the biggest slow season staying power, here are seven steps that will help develop these ideas.

1. Start with the objective in mind: what specifically are you trying to achieve?

2. Identify the steps required to meet your objective.

3. Analyze and see what might work best with your team, their skillsets and your facility.

4. Identify ways to streamline process.

5. Test it.

6. Finalize it by putting it in writing. The basic tool for this is a checklist.

7. Review your processes consistently and frequently. Process erosion happens to the best of us and in the best of stores.

Next time, we’ll bring this series to a close talking about developing talent, mastering your marketing and improving your management efforts.

An award-winning author, top-rated trainer and founder of Peak Dealership Performance, Mark Rodgers holds a master’s degree in adult education and the National Speakers Association Certified Speaking Professional designation — only 500 people in the world have this coveted recognition. Contact [email protected] to improve your performance.

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