#204 - Fix Your Dealership in 2022

Welcome to the Independent Dealer Podcast with hosts Luke Godwin and Jeff Watson. A podcast by Dealers for dealers. Here we go.

Hello, and welcome to the Independent Dealer Podcast, brought to you by Buckeye Dealership Consulting. Luke, we are kicking off season four of the Independent Dealer. We're on episode 206, I think.

Wow. It's been a lot, Jeff. That's a lot dealing with you, buddy.

Yeah, yeah. It's crazy that we haven't had a blown up. This is probably one of the longest relationships I've been in.

Longer than your first marriage?

Yeah.

Yeah.

Almost twice as long. So things are great. We're excited for a new season and excited to kind of share with you guys today some of our goals, our things that we're going to go after in 2022. You know, our fire, our drive. It's always good to have something to shoot for. We should all have goals, both personally and in our dealership. We should all have kind of forecasting models for our dealership growth. You know, maybe our portfolio, maybe our inventory, maybe reducing debt, maybe, you know, having properties. So we're going to share some of those with you today just in hopes that maybe we inspire some people and also puts it on the record so we can look back and say, hey, you know, Luke said he was going to, you know, grow his hair out to his shoulders this year, and he still hasn't done it.

I don't know it will anymore. It's going back so far. Not sure to go down to my shoulders.

Join the club, buddy.

Yeah, you know, it's. Forecasting is so important. And I actually was wrapping up yesterday what we did compared to our forecast, 2021, compared to what we forecasted starting the year, and I missed the boat. You know, we totally. We missed the mark, Jeff. But, you know, if I go back to what we forecast in 2019 compared to what happened in 2020, we were way over. So. And I even mentioned this last week, it's tough to actually see what you did compared to what you forecast, especially when it's under and we underperform this year. That's the reason I need to set some better goals for 2022 and look back and see what we did wrong in 2021 because we made. We made mistakes and we're going to get better. And the only way to do that is to forecast and to set goals.

Yeah. So let's start from the beginning. Luke, I want to talk to you about kind of your goals. We'll talk about mine for 2022 to kick it off. My first two goals every year are always the exact same. My number one goal is always to improve my relationship. It's more personal, improve my relationships with my wife, my kids. I always have it because it's the number one thing. And I think car dealers, we definitely lose sight of that. We're scrappy entrepreneurs. We're always pushing. We're always kind of, I mean, into it 15 years and I still lay in bed and think about dealership stuff. You know, it's one of those things that. Where I think a lot of us, it consumes us and sometimes at the detriment of our relationships.

Yeah, I think, you know, having that balance, Jeff, and the balance, if it's. It maybe even shouldn't be a balance. It should be heavy. Family heaven. Heaven. I was thinking about religion, spirituality, and, you know, and who you are. It should be heavy on that side because if you don't have that space. Right. It's hard to get your dealership right. Right, Absolutely.

And what's the point? You know, it's kind of where you're like, what are you building for? You're building to have a lifestyle that you can enjoy, but you don't have that lifestyle because you're too busy building, for sure. So those definitely all play on each other. I don't know if I'm any further ahead in that aspect than I was last year. I think if I went back and look at my forecasts for how I was going to take care of my family and my kids, I probably fell even shorter than I did at my dealership. But it's something we're continually working at. And, Luke, like you said, my number two goal is obviously my spirituality. You know, make it to church more often, read my scriptures more often, pray more often. All those things, I think, help your mental stability. And it all translates into your dealership.

It does. And it translates into the people around you, because if you're treating them with what the Bible tells you to do, then they're going to love you more. You're going to find people that are more willing to work for you if they see you going the extra mile for them. It's all these things that maybe we just don't think about, but maybe we do. But maybe we should start thinking about them a little more, setting those goals like you're talking about, hey, you know, this year I'm going to read this, you know, this portion of scripture every day. I'm going to do this, I'm going to do that. Whatever it is that gets you honed in to being a better person, I think will make you have a better company. And I think that's what it's about.

Yeah, it's the same for you and your employees. You take your culture, you take your vibe, your feelings from your home and the way you feel in your personal life, it's, of course, it comes into your dealership. You're spending more time at your dealership than you are at your darn house, you know, so. And you're with, you're with your, your coworkers and your employees way more than you're with your spouse. Definitely for me. So, yes, you've got to have that vibe, that culture and your personal life to take it into your business life.

Hey, hate to break in right this second, but, Jeff, one of the biggest goals you should have for this year is building wealth for your dealership. And we've talked about this so much, but the biggest way and the best way to do that is reinsurance. Right, Jeff?

Yeah. Yeah. You guys are, you're looking at your 20, 20 ones. You're realizing you got a ton of taxes you're going to have to pay because you didn't use your reinsurance company to put money away tax deferred, tax free, tax deductible into your reinsurance company. You're already covering these repairs. You're already helping customers out or you're sending this money out to some other third party yahoo that's probably not covering the repairs the way you would. So put the money in your own pocket. Get your reinsurance company set up.

Yeah, call Buckeye today. They will surely help you out.

Luke, what kind of goals did you set in your business life?

You know, I sent this to you the other day, Jeff, and it's something that I go back when we had. I'm just totally liking Joe McCloskey on and he said something and he said it because it resonated with him, because someone said it to him, but then he said it to us. Talking to everyone. It was run your business like you're going to sell it. And you know, you don't think about that when you're trying to buy cars. You're trying to do this and it's just, it's difficult. So my first goal this year is to have a brain dump. And I do have a lot of processes in place, but it's to take the processes that I have in place that I don't have written down yet and make it, you know, make it on. It needs to be on a piece of paper. It needs to be in Google Docs, it needs to be in whatever platform we're using to build that material. I want it there because if something, God forbid happens to me, I want someone to either wrap it up or keep it going because I don't want something to happen to my family because I'm not able to produce or because nobody knows what's going on. So yeah, I think that is my number one goal and I put a goal to have that done in the first quarter and that might be an ambitious goal, but I don't have a lot to more to write down because I've been doing it over the years. I don't have it in one specific place. Got to get all that done. But that's my first goal of the year. Jeff, how about you?

And I think a lot of dealers, we have that, we have those little spurts of, you know, oh, I need to write this process down. So we like write one down over here and then we do a Google Doc and then we do a word doc and then we do a piece of paper and then, and not only like do you need to have that down because you might get hit by a truck tomorrow, but when you have turnover, I mean, I was just talking to my receptionist, office manager girl the other day and she's like, well, I don't really know, I wasn't really trained. I don't really, you know. And I'm like, well, of course, because the one girl quit and you came in with one day, so you had one day on the job to learn what she'd been doing. I didn't have the tasks written down anywhere. I never even showed you our main manual. So of course you've got nothing to reference. You've got no step by step direction. So you can train yourself. You have to ask everybody every 10 seconds how to do something and then you start feeling stupid because you're bugging everybody and taking them off their job. So it's my own fault that this girl doesn't feel trained and doesn't have a place to go for a reference when she's trying to figure out how to do, you know, title work or add a new car to inventory.

And what's unfortunate, that's why people leave sometimes, Jeff, and you don't know it. If they're not trained properly, they're not continually train, they end up leaving. You don't find out until after they're gone. Why'd you leave? Well, I was aimless. I didn't know what was going On. And so the more you can train, the more you can write a manual, the better off you are. For instance, we had a new salesperson start today. I got a lot going on today, so it's easy for me to give him the schedule of how we train. Then I said, hey, Isaac, have you given him this? As I say, no, I don't have that. Well, I have it. So I printed it out. So right now he's going over our sales process. So at the end of all this, after I eat lunch, we'll go in there, we'll train on our sales process. So, and that's what we do every day. We just keep going over that process until we believe they're. They're ready for the floor. Then when they're ready for the floor, after they've gone through everything, then we have meetings once a week to make sure that we're sharp, make sure we're doing the role playing like we should.

Yeah, but, and you kind of mentioned that. And I think my process is the same, but it's, it's very fragmented. You know, it's very like, okay, well, who's got the, who's got the logins for him? Who set him up, an email? Who trained him how to do this? Who get. Well, that's in this manual over here. Okay, well, where's your, where's your, where's your HR docs? Oh, they're over here. And we have to print them off of this guy's computer because only Luke has it. And so, so, yeah, I understand. It's all very fragmented. And then three weeks later they come and ask you, like, hey, you know, how do I get my IDMS login logins, you know, what have you been doing? Well, I've just been using the one that was saved on the computer. Like, oh, great. Okay. So, yeah, there's so many of those policies and procedures and onboarding that the big companies really have figured out because they use those kind of processes and policies.

Well, they're lucky. They have people on staff to train people to which we don't have.

Yeah, you get to the point where you have a specific trainer HR person. So. And in conjunction with that, Luke, we've talked about the EOS system and the book Traction.

That's.

One of my goals, is to fully implement the EOS system. Some of the biggest, most successful dealers I know use it a hundred percent. And so I've been rereading the book for the fourth or fifth time, and my goal is within the first quarter to have sat down with my leadership team and have to go through all the exercises, setting up our values, our core values, our organizational structure. Review all the employees, make sure they're in the right seat, on the right bus, go through all the policies, set up our key performance indicators and our scorecards, and then start getting everyone to report. Make sure we have level 10 meetings, you know, every single week, where we're going over, what are our goals, what are our rocks for that quarter, what are our goals for that month, that week. Make sure everyone's reporting back their numbers so that we can track these things. So this whole EOS concept of how to run and organize a business is. It kind of brings in all the aspects that we've talked about, the things from good to great, the things from these other management books that we read, and it puts it in kind of a concise set of documents instead of procedures. So I'm pretty excited to finally feel like I can really push that.

Yeah. One of the problems I have with that book is when I'm reading it, I'm not taking super great notes. So then I have to go back and reread. And I'm with you. I think you set me. Another goal for this year was to get through that book and really start to implement it. You know, that's one of the second goals I have for this year, Jeff, is that I need to be more of a manager. And I talk about that a lot. And I try to be. And one of my goals last year was to try to be a better manager. And I think I'm, you know, a little bit better than I was last year, but still not where I need to be. You know, I'm not. I still don't like to have that difficult conversation sometimes that you need to have. And I think if you don't have that difficult conversation, you're not doing yourself any good, and you're not doing the employee any good. So I've got to get better at that. I've got to really, really measure how my employees are doing, measure their job, make sure they know what they're doing, like we talked about earlier, because it's hard to blame an employee for not doing the job properly if they don't have processes and procedures in place.

Yeah, they don't. They don't know what the. They don't know that that was even on their task list.

Yeah, they don't know what's expected of them.

You know, it was told them once that they should be the one doing this process, but they never were. Able to reference it after the fact. So then when it's not done, you're pissed or you didn't know you wanted, they wanted. Hey, every Monday you need to be doing this process or every, whatever, fifth of every month this needs to happen. You know, if you don't have that written down where somewhere they can review. And it's interesting that you say that, you know, the EOS system, they talk about the integrator and they kind of have, you know, your key management team over your departments and I think at a dealership, you know, depending on your size, but you essentially have kind of your product or your manufacturing, which is your, you know, reconditioning process, your purchasing kind of your shop. You have your sales team, obviously, and then you have kind of your, your management, hr, office manager, paperwork, internal type, you know, person. And then obviously collections is probably kind of its own thing for buyer pay your dealers. But so I'm going to set my dealership up with kind of those three heads, you know, three people that are in charge of those three aspects. And then I'm going to be the integrator, you know, I'm the guy that makes sure all three of those are talking to each other, that they're all kind of doing the right things, that I'm ironing out any issues that the three of them might have with the process. But like you said, managing. It's called managing, but they call it the kind of the integrator, the guy that's going to be the go between, between these three heads and then help them set goals, help hold them accountable, you know, to the whole company.

Yeah, it's. It's so important.

Hey, guys, we are in the midst of tax season. First part of January, we're going to start seeing W2s hit the ground. You need to be signed up with Tax Max. It's not too late to get on their program. It's so easy to file a return. Any of your salesmen can do it. They walk you through step by step. You file the return, you submit for the refund advance, and you've got money directly printed at your dealership that day.

Yeah, easy. Yeah, easy goal for this year. The goal would be to call tax max today, get set up, because you will get more tax money if you use tax Max.

Yeah, absolutely. Back to episode.

How about you, Jeff? What's your, what's your second big goal?

So, you know, it was family, it was spiritual. It's us. I'm going through some ownership structure re changes here at my dealership. And with my other businesses. So that's. That's kind of my. My. My ul. Ultimate number one goal is to, you know, get. Get some partnership stuff ironed out. Big one for me. It'll mean, you know, kind of shedding some of my other businesses and assets and going all in on one or the other. And so that's kind of a big. That's the one that keeps me up at night right now. So I'm really hoping to get that thing ironed out sooner than later so I can kind of be full speed ahead.

I had struggles with that a couple years ago, which. Which you know about and. And mama's family as. As well as yours is. It's difficult. And I'm sure there's people out there listening today that are going through those type things. The one thing I can tell everyone out there is if you're starting a partnership today or you're in one, the best thing you can do right now is get it ironed out before it gets too big, because sometimes things are too big to unravel. But if you have the partnership structure set up, you know, when you start and have buyouts in place and all these specific numbers discussed, it'll make the separation a lot easier. People won't get mad at you when that happens. Just make sure you have everything set up properly. And there's plenty of people out there. Our friend Mark Burkholder, he. He helps people with that great CPAs. I'm sure Ms. Sanchez could. Could help that. And all your. All your big companies can help you. CPA companies can help you set these structures up before you get to wackadoodle. Because I sold one dealership already, and I tell you, when I sold it, it was by here, by your store. We sold it because we had problems, right? We had problems that he wouldn't listen to what I was doing. I wouldn't listen to what he wanted to do. And so it came to a point where we had to separate. We got out of it pretty easy, honestly, because. Because we were both willing to give.

And take, Motivated to separate.

Yeah, we were, and it worked. But. But if I could go back in time and say, okay, this is the way it be done, it would have been so much easier because I could have called it immediately and said, boom, we're out. This is what you owe us. But unfortunately, we had to take months to figure that out. And it's hard.

So, yeah, you know, my number one advice to anyone listening that is an owner of a dealership in a partnership of Any degree is get an operating agreement in place, a buy sell, and the triggers that would trigger that, and iron them all out. Spell them out as in much detail as you feel like you can tolerate so that there's no vagueness at the time of what's going to be valued at what and what triggers a buyout. And you know as much as you can, even if you think everything's great and it's wonderful and it's me and my brother or me and my son, or me and my dad. Yeah. Have those hard conversations and get at least something on paper as far as ownership percentages. And then also put together job descriptions as part of your EOs. You're going to have job descriptions. And what is this job and what does it pay? You know, you are fitted for this job, and this is what this job pays. You can be an employee and an owner. Those are two separate things. In a dealership, you can be an owner and not be an employee, and that's okay. You know, if this job description is the one that fits you, but you don't want to work for that money, that's fine. Go find a job that does. You can still be an owner here, but you don't necessarily need to be in the dealership. So just make sure. Yeah, I think a lot of people are like, oh, yeah, we just divide everything down the middle, and he takes some and I take some, and we're both paying each other, you know, the same amount because we both do the same. Same amount of work. It's like, yeah, that's great because you're both single or because you both have little teeny babies at home. But wait till those kids have the X, Y and Z, and all of a sudden, you know, you have a health issue or your wife does this. It all changes.

Yeah. And it's. It's scary. So get it ironed out while you're young. That's the best advice I can do. And. And go to a professional, because you're not reinventing the wheel. This has been done before.

Yeah. Yeah, for sure. And you're going to pay an attorney. I don't know. Grand. 2, 3, 4, 5. It'll be completely worth it. Way worth it in the end to have it done and signed. Luke, one more thing to wrap this up. Goal for me, I think for both of us this year, is just to continue on with the podcast. You know, we've got some good things lined up. We've got some great guests that we've already spoken with that we'll be getting in 2022. We're hoping to engage with everybody at conventions and just kind of be out and about. Right?

Yeah, yeah. We got a lot going on this year. You know, it's going to be a full year of conventions and hosting podcasts and doing a lot of fun things. And, you know, our hope is to grow. Grow the podcast to help dealers. That's our goal, right?

Yeah, yeah. I mean, you really, you know, our reach has been great. We've been definitely flattered by, you know, the people that share this with their friends and family and other dealers and people that listen.

But.

But the dealer community is huge, right?

Yeah.

There's a lot of dealers out there that don't even know that, you know, NIADA exists. You know, that's what's funny. And there's a lot of them that know it exists, but they don't even know why they should be a part of the association or they don't even know why they should be in a dealer community. They think it's something or they, you know, just don't even care to put their head up and get better. And that's what we need to do. As the dealers that do want to get better, we need to help convince those other dealers that they also need to participate and do better to raise the reputation and raise the profile of all used car dealers. Right. So that guys like Vroom can't run commercials making us look like a bunch of punks and a bunch of troublemakers because that just doesn't even exist. Right?

Yeah.

So. So I think that's our responsibility as the dealers that are doing it right, is to bring in those other ones and get those other dealers engaged. And it just makes everyone better. Right.

It makes the reputation better, makes it easier to sell cars, you know, that, you know, sometimes people. People think they know everything, and so they don't like to go to conventions and things like that. So it's hard to be told you're wrong, especially when you're dealers like we are. But occasionally we're wrong or a lot of times we're wrong one or the other. And so the more you're told you're wrong, probably the better you're going to be in the long run, you know? You know, when I go to a. A 20 grade, I tend to try to know everything, but I'm told I'm wrong a lot. So it makes me humble, it makes me better. So I like to hear it.

Yeah, he won't admit it in public, but he'll go home and secretly admit it to himself. So with that, guys, if you're still listening to the podcast at this point, be sure to jump on and leave us a review. That's really the only thing we ask of the listeners is A, you leave us a review. B, you tolerate a couple of sponsorships in the podcast. That's what keeps us going. It pays for the production, it pays for us stepping it up. So we ask two things. Leave us a review, tolerate a couple of ads, and give us your ideas. Send us an email, send us a message. Let us know what you want to hear about. Luke and I are just stuck in our own little echo chamber and we talk about the things that are interesting to us. But we would love to know if you guys have a topic, if you have an idea, if you have something you want to get us to get a professional on, we would love to be able to make sure we're bringing those things to you that are going to make you a better dealer.

Yeah, for sure. And luckily, we're able to get those professionals pretty easy.

Yeah, yeah. It's gotten great. And it's. Think about it, you get a half hour from, you know, Mark Burkholder or Steve Levine or some of these guys, you know, their rates, 2, $300 an.

Hour or Sean Peterson or whoever.

Yeah, Sean Peterson. So you're getting professionals to come on here and share their wisdom with us that you would otherwise probably have to pay for. So, again, it's a great resource, and hopefully we can leverage that to help all the dealers get the education they need to just be a little bit better. So, Luke, any closing words for us?

You know, make sure you do your forecast this year. Jeff, I know last year we put out a forecasting document somewhere. Is there anywhere people can still find that?

Yeah, I think that's still on our website. If you go to the independentdealer.com we'll make sure we get that updated in the next day or two. So jump on there.

It takes some time over the weekend and just put some numbers out there, see how close you get, because it's a start. And if you start doing that process, I got a feeling you'll do a lot of other processes in your business. Write it down while you're still young, too. Don't wait till you get too big and it's hard to get all the processes down.

Absolutely. All right, Luke, let's kick some butt. 2022, here we come.

Sounds good.

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