Are You Reaching Your Goals for ROI in 2018?

March 8, 2018

It’s always good to reflect on what we made happen last year, to assess how things went.

The year started out with... a thud. After the 2016 elections, the economy seemed to rev to life, and tire and automotive sales rocketed to the Dec. 31st finish line, improving everyone’s bottom lines. Then Jan. 1, 2017, rang the doorbell and tire sales — tire sales only — seemed to disappear into thin air. Customers were still getting service, the car count didn’t change, but something hit the market and scared all the tire sales away from everyone: internet, brick and mortar, full service, discount joints — no one was immune it seemed. This is something that happened to us.

The marketing and sales pushes started going full throttle by March, and it appeared by mid-April that unit sales were coming back across the U.S. There was life in the rubber business again! A rocky road lay ahead as unit sales generally came back over the summer, but one month was up, one was down (but not down too badly). It was hard to figure out the consumer this year, but most small businesses made it happen by the third quarter, pushing and striving to overcome a slow start and improve sales over the prior year.

What we let happen, in general, is another year of technology got ahead of us. The world is changing at a dramatic pace. Technology today, whether at your POS, your alignment machine, or in your customer’s car, includes the updates needed to do business profitably, and are things that are still not being implemented. And in five years, there will be a whole new list of technological essentials. If you get too far behind the tech curve, it will become a dangerous wake to surf in.

What about what lies ahead? This year promises to be a healthy year for businesses by all forecasting accounts. Not quite strong, not robust, but healthy. As long as inflation is kept at bay, and unemployment stays low, our customers will have to get their kids to school, go to work, earn a good paycheck and put gas in their cars and SUVs. All of this driving and putting miles on cars is good for our business.So, I have to ask: Are you at 10% net? If not, why not? Ten percent net is a respectable return on investment for the risk of running a business. It puts enough profit back into the business to buy the next load of tires without financing, pay the employees, pay the bills, the insurance (the list is endless), and leaves enough to get ready for the technological explosion that is coming our way.

If you are not at 10%, or at least trying, this year may be a very frustrating year. A year where already having put off updates and improvements in your business can put you between a rock and a hard place. Living off 3% net profit is not going to cut it by 2020. It barely cut it in 2017.

Be strong and determined, be thoughtful and kind, and put only the best employees in front of your customers so you can charge a fair price for services rendered. Ten percent is your business’ fair share and I hope every one of you puts in the effort and drive to get there. And if you are already there, what’s holding you from 15%?    ■

Dennis McCarron is executive director of Dealer Strategic Planning Inc., a company that manages multiple tire dealer 20 Groups in the U.S. ( To contact McCarron, email him at [email protected].