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July 16, 2014

Dealers to learn to manage company 'killer'

Dealers at the Georgia Tire Dealers and Retreaders Association meeting learned how to manage payroll to maximize profitability on July 19, 2014. “Payroll, the killer of companies” was presented by Norm Gaither, owner and founder of Dealer Strategic Planning Inc. (DSP).

Gaither says many tire dealers mistakenly put the focus on sales and expect their gross and net profits to increase.  By accumulating data from his hundreds of clients and 20 group dealers, he has identified one of the key components to profitability in a tire and service shop operation. 

“A store’s payroll should never exceed more than 45% of gross profit,” says Gaither. “I can almost guarantee that if a dealer’s payroll is less than 45% of gross profit dollars, the dealer will be making a good return. Our dealers aim for 10% net profit and many experience 15%-20%.”

DSP says the presentation is packed with ideas for independent tire dealers on how to maximize profitability. In his presentation, Gaither:

* explained how to measure technician’s efficiency to tell whether a store is staffed appropriately;

* provided templates on how to monitor payroll on a weekly basis;

* suggested ways to pay mechanics so that profitability is maximized; and

* discussed the importance of  alignments, monitoring labor rates, shop fees and other ideas for improving bottom line profits.

DSP offers tire and automotive service dealers the opportunity to share best practices, benchmark against the industry and improve financial performance.  Each group allows a maximum of 20 dealers who meet three times a year to help each other improve their business performance. 

Formed in 2007, DSP  is the only tire-focused 20 group available in the industry.  Groups are forming. For more information visit  www.dsp-20group.com or contact:  Pat Brown, VP Marketing, 419-420-5915 or pat@dsp-20group.com or Paul Chizeck, 910-409-7293 or paul@dsp-20group.com

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