#36 - Monday Minute - CIADA Part 2

Hope you all are having a great, great Monday. Today we are going to play part two of Luke and Marshall at Carolina Independent auto dealers association 2019. They wrap up their presentation, helping you put a plan into place.

Are you managing your business or are you business managing you? How many people in here woke up today and checked their bank account to see how much money you had in the bank? Come on, y', all. Let's talk about your business account. Any dealers in here? Is that how you're operating your business? Okay, gas, you gotta change. You gotta change because you don't know what checks are outstanding, right? You do. I don't check it.

I check it once a week unless I'm expecting a deposit from a finance company, and then I check it until that deposit hits.

All right, so our question is, are you. I'm so sorry. Are you currently operating the financial portion of your business? How are you doing that? If you're looking at your bank account every day to run your business, that's not the right way. And the reason is because you don't know what's outstanding by just logging in and going, oh, I got. I got $50,000 in the make. I can go to the auction and buy $50,000 worth of car. Can we do that? Payroll's coming next week. It's coming on Monday. Our payroll is 20 grand. Well, I bought $50,000 worth of cars at auction. What am I going to do? Right? I better sell some this weekend. So we got some issues. Are you looking at it daily? Are you looking at it weekly? Are you looking at monthly? I think you should be looking at it daily. A whole look of your dealership every day. So when we start out, we said, what is a dock? Well, a dock is your daily operating control. Now we are moving off sales. Sales is done here. We're talking about managing your business. Okay? Sales is part. Sales training is part of that. But this is business training. This is training to us. We've trained our staff. Now we need to train us. So some things you can put on your daily operating control, your dock cars sold. We all want to know how many cars we sold this month, right? We were here yesterday. We're here today. We want to know what's going on our dealership, right? So we can say how many cars are sold to this point and what are we trending to. If we sold eight cars so far this month, it's the ninth day. So we're selling about a car a day. We're going to sell 30 cars this month. Something to that Right. That way we can plan for our inventory. Inventory amount. How much inventory do I have? Do I have 80 cars? Do I have 100 cars? Do I have 10 cars? Well, if I'm selling 30 cars a month, I probably should have at least 50 cars in inventory, right? Pretty close, because I got to have 20 getting ready or. So your receivables. In the buy here, pay here business, we want to know how much in net receivables and what number do we have each day. That's what I want to know. Right. If you're a retail dealer, your contract's in transit. Why do I need to know these two numbers? Cash flow. Very important. Cash flow is very important. It's also.

Sorry. Cash flow is the main reason. But if my contracts in transit are sitting at, you know, $50,000 for three days in a row, I mean, why.

Do we have a problem in the F And I, did we not get some stips? Did we not do this? So you've got to know if there's a cog in the will of your process. These are things you have to know. If my accounts receivable keep going down and we're selling more cars, are we repoing a bunch of cars, you know, or we have a bunch of insurance wrecks out there? What do we got going on? These are things you got to know every day. Your available cash balance, we accrue it. Now, everybody wants to say we could go down that rabbit hole, but what I like to do every day is take. If my payroll is, you know, $10,000 a month or whatever it is every day that goes by, I want to take a slice of that out of my cash. So I know if I go to buy cars that, hey, I've already accounted for my big bills, my rent, I've accounted for my payroll. I've accounted for things that I know are coming out, okay? So that way I know if I go to auction, I buy $20,000 worth of cars, and I had $30,000 of bank. I've got a $10,000 cushion there. Okay? Other things, you go in there, you can put your floor plan, balance, all these type things can go on there. This is what sort of what mine looks like.

How do you do this in a day? Because everybody's writing this down and they're going, okay, yeah, I understand. You have to look at that. But the how to is always the hard part, right?

Sure it is.

So how do you do this and look at it every day? I don't want to take the Time to do that. I know it's probably some people thinking like, yes, who does this and how does it get done?

So I'm lucky enough to have a comptroller or someone in my office that does my books. I'm not the person doing that every day. If you are doing that every day, wake up an hour earlier is what I tell you to do. And fill this page out. Okay. And this, we have it in a Google Doc or Google Sheets and actually Marshall created. I did it really rudimentary to start with. It was just a piece of paper that every day, my bookkeeper wrote down everything we had. She scanned it in and emailed it to me. Every day I pulled up, I saw it every morning. I knew exactly what I was working with. Well, this sheet is just a little easier. It figures everything out for you. Put in the numbers and off you go. But I can open this Google Doc from anywhere that I have my cell phone, right? And we just see that we've got 12 cars sold. We're trending at 37. Our gross profit on those 12 cars was $24,000. We've got some interest income coming in. We also have some repo losses. I know what that number is. Total profit for the month so far, gross profit, 41,500. I've collected $70,000 already this month. I know I'm going to collect $217,000. These aren't real, my real numbers. These are just numbers. But I know that right now we're trending to collect $217,000. So I have that much more cash that I can envision coming into my dealership every day throughout the month. I've got 75,000, 75,075 cars in inventory, $100,000 in the bank right now, and I got $525,000 tied up in inventory, in inventory tied up. And I've got 800 receivables. Let's just say those are numbers. So I know where my position in my business is daily. I don't want to let this go a week or a month. What if I look at it today? Because I pulled my reports last week for my dms. I look at it in a day. Okay, well, I don't need to worry about that until next month. That's not the way you need to operate in your business. You need to be operating your business every day.

Okay, I'm just going to touch on this for a quick second because I know it's going to come up in the. In this summary here. It's really important for us as dealers and managers to be working on the business and not get tied in the day to day business, right? It's very easy for us to get distracted with an angry customer, putting out a fire, selling cars because we're really good at it. Maybe that's part of our job. That's fine. Or writing ads, washing cars, whatever it is, right? We get distracted, we gotta come up with a plan. And you guys got a lot of stuff here and hopefully you took away something, but you're going, hey, you want me to do sales training? You want me to keep an eye on my books every day, Luke, you want me to wake up an hour early? I already work 10 hours a day, Right? Well, if you don't put a plan in place for your month, your week or your day, then you are going to. It's going to be really hard to put together. It's going to be really hard to do this. It's going to be really hard to do sales training. If I could sit down and this is the best opportunity for you guys to be here at CIADA and not go back right away. Maybe take an hour to just go, you know what, what does my day look like when I get back? When I get to work in the morning? What am I working on? Am I going to check the bank balance? Maybe I need to spend half a day putting a dock together and maybe I need to spend an hour just putting a training schedule together for the month. Not just what we're training on, but who's training and when, what time, how long do they last, who's attending it? I know this is something that Luke brought up, like what about the people who only have one salesperson? Okay, well, you know, does nobody else help customers there? Because anybody else who helps customers is involved in my training. Right. It's not just a salesperson. I'm having everybody in there. I need everybody to know how to greet. Right. Maybe they don't pick up everything, but they're gonna pick up some stuff.

So.

So we also put in here some good resources. These are some good books that I know, Luke and I have read together and we just recommend to everybody. And there's also a podcast on here that I know a lot of you guys are in the independent dealer network on Facebook and that podcast, it's pretty cool. I was on the last one.

We got a special guest in the podcast this week, so check it out. Marshall is on the podcast this weekend. We go through a lot more of this, so it might be Something you can download the podcast, listen to it a few times. We really to get some more out of this thing we call training.

If you want to know more how to get that, talk to Luke. Good to great. It's a great one. If you're a dealership wanting to know just how to get better. It's got great things on people and processes. I love that book. I reference it all the time. I just screenshotted some things and sent them to some of my managers this morning. Great leaders ask great questions. That's a fun one to give to a sales manager and then you will be satisfied. Is good service book and then see you at the top. Zig Ziglar hopefully all of you guys have read that's a great sales book. If your salespeople haven't read that, please read that. And then the new gold standard is just I really want to make things over the top customer service. So. All right, questions if you don't oh yes. One.

No.

Let your salespeople do everything I want.

My sales people have every opportunity here. I believe in a bdc if your salespeople put in a full eight hours worth of work. If your people put in full eight hours worth of work and you can't keep up with it, you either need another salesperson or possibly a bdc. If your people are putting in three to four hours worth of work a day, you don't need a bdc. Make sure you hold your people accountable.

Yeah, there's a bunch of ways to look at this. Make sure your salespeople have known task they need to do every day. If that's call 30 people. If that's send 30 emails. If that's call 60 people. Just make sure they're doing it. Make sure you're looking in your CRM to make sure they're doing it. Because like he says, if you've got BDC setting appointments and doing this and your sales people are twiddling in their thumbs all day, then you have an issue.

Second thing is no one following my stores right now. Wash guys, technicians, salespeople. What are you guys doing when you.

Say problem, what's your problem? You just don't like having them. So you like the people you have?

The ones I have. Some of them are buying.

What's your biggest problem? Getting the people or having or getting the people that you have to do what you want to do?

Getting people.

Getting people.

Yeah. I think everybody's having that problem in today's economy. You know, some of the lowest ever unemployment rates. I think Training, you know, taking people who are less qualified than you think or people who are really young and train them up to do different jobs is something that Marshall believes in, something I believe in. We don't hire a technicians. We hire lube guys and we train them up. You know, that's what we do. We don't hire salespeople because salespeople have bad habits. We hire big, very friendly people and we train them to be salespeople.

How do you hire a little guy.

To be a tech?

Well, you need a master tech there.

Yeah, you gotta have a master to start with.

And then you have to have a plan to get them there. But here's the biggest thing that I would tell you. One, people have to love working for you, because if they love working for you, they're talking about you and they're going to want other people to work for you. The other thing that we do is we do referral bonuses. So if you refer somebody, you work for me and you refer somebody to work there, after 90 days, they get 250 bucks. If that person and if they're a salesperson and they level up, they get another 250. If that person stays for six months, they get another 250. If that person stays for a year, they get another 250. I got one guy who referred three people and he's making like, I don't know, three grand off of me for that. I mean, referrals are your best people. Yeah, but I don't pay them until they made it 90 days. So they're also helping me in the training process to bring that person up.

That's the only way we hire technicians, is from technicians and from our technicians bringing people in.

The other thing is don't hire just when you need. Always be recruiting. I got this really good person we just interviewed, and I don't have a spot in my finance for her, but she's got the best personality. She fits into our company. We're putting her in there. I'm squeezing her into the budget because I don't. When I do need somebody, she's gonna have another job.

What is your recommended pay plan for salesman?

Oh, that's.

Oh, goodness.

You can probably talk to me after that. But recommendation is commission. To sum it up commission. And then make sure accountability is in there. Absolutely. So if you don't have a part of accountability in the pay plan, like what Luke said, what's their daily tasks? What are they working on? If that's not included in the pay plan, your pay plan's wrong because you're going, okay, I know you're paid to sell cars, but what are you doing the rest of the day? And you're just going to sell them? On the fact that, hey, trust me, making these phone calls and reaching out to your customers will lead to more sales. I mean, there's got to be a little bit more in it than that.

And I'm just the opposite. I pay flat.

So anyway, commission is a flat thing, too. I mean, commission. They get paid to sell a car either way.

Yeah.

Yes. This has been great.

By the way, your scripts. Have you asked.

Do you have anywhere.

That your scripts are written down?

Yes, it is sales training manual.

It's a 78 page sales training manual. But here's the thing, it's got to be yours too. So I have mine. It's a little bit ingrained in me. And so the biggest recommendation I tell salespeople when they're starting, don't try to make it your own, okay? Follow my scripts until you get yours. Your own. Because they get too caught up in trying to say exactly what I said, but twisting it to their own, and then it just doesn't work. So I say, just memorize my script. And then once you memorize that, then you can turn it into your own, and then you can be your own. Right? People are scared of the word script, right? How many are scared of the word script and don't like it? My sales guy is doing scripts. They already do scripts. It's called How Can I Help youp? And they wrote it down in their mind years ago. Found my scripts. How do you find my scripts?

How did you. How did you find.

How did I find mine? How do you find mine?

Come to work at Freeman Motor Company.

Yeah, I. I help dealerships. Put those together.

Okay. All right, y'. All, thank you so much. Give it up, Marshall.