Mid-year review of your dealership

There is power in those numbers

By Jeff Sheets

Wow! Do you feel like the first half of the year has flown by? If you are like most of the dealers I talk to, you have been working hard through the busiest part of the season, and you are ready to take a vacation. But before you head off for a summer siesta, let me ask you the following questions: How’s business? Is it where you expected it to be or not? What are the numbers telling you? Where do you need to go from here? Sometimes, we don’t want to see the numbers because they will tell us things we don’t want to know. But knowing the facts allows us to correct course and helps us become better business leaders so we can focus on the possibilities for future growth.

Jerry Clay from Clay’s Outdoor Power Equipment in Raleigh, N.C., is a dealer who knows a tracked number grows. And he knows the numbers reveal the overall health of his dealership. When Jerry was recalibrating his business a few years ago, we poured over his numbers at least once a month. We looked at how the month-end numbers compared to the goals we set the previous year. “I had set goals before, but I did not have to be accountable to report the numbers to anyone,” he said. “That was a big change in going over the numbers with Jeff each month.” We laid out strategies toward reaching the goals, including a flexible marketing strategy that allowed us to respond to how each season unfolded. We created a sales plan to ensure his team was not only hitting benchmark goals, but shooting for new targets they hadn’t hit before. Jerry also wanted to hire an additional employee during his busy season, and the monthly review allowed him to look at his current numbers compared to the previous year’s to know whether a part-time or full-time employee would best benefit the dealership.

When Jerry and I set out to do this every month, it really took some front-end work on his part. He pulled numbers on his sales from all his departments, including percentages of gross margins. He also set goals for every area that were attainable but also a stretch at the same time.


Jerry Clay from Clay’s Outdoor Power Equipment in Raleigh, N.C., believes in the power of knowing and tracking his numbers.Armed with the goals and really what would be called a business plan, it was time to — month after month — go over the results and make adjustments. By the mid-year point, we were so familiar with the numbers that Jerry really didn’t need me all that much anymore. We would touch base every month about what was happening and whether a piece of the plan needed to change, but he was confident about what needed to be done. “I learned a lot going through that process, and it taught me I need to know and look at my numbers to make sure I know where we are heading,” said Jerry. “Now with two locations, it is even more important.”

What are other advantages of a mid-year review?

You can detect improper discounts, waste, inefficiencies or even fraud.
Problems because of poor performance aren’t a surprise.
It gives you peace of mind because you will know your business is running well.
All seasons may not be the same, but this gives you a chance to see where you are at a given time each year.
It allows you to make mid-course adjustments. If sales are slow, then there may need to be discounting or advertising decisions based on your analysis of the situation.

Here are some of the goals that I like to see dealers I work with looking at each and every month in the various departments, but especially at the mid-year point:


Dollar sales by product line
Unit sales by product line
Gross margin % by product line
Individual salesperson sales and gross margin %
Average dollar sale per units by product line
Discounts on equipment by salesperson (listing of all discounts)


(Everything above)
Shipping revenue vs. shipping cost
Average inventory (Ending inventory each month totaled/# of months)


Labor sales
% of labor cost (labor cost/labor sales)
Billable labor hours (labor sales/labor rate)
Service parts sales
Average wait time for customer (# of pieces of equipment waiting for service/average # of repairs per day)
Technician efficiency percentage monthly [labor sales/labor rate/165 (average # of monthly hours per tech)] Shop efficiency percentage (labor sales/labor rate/165 x # of technicians)
Shop fee revenue
Pickup and delivery fee revenue

You might have noticed I suggest tracking the number of units sold in product lines. It really is a better measure in many ways than dollars sold. Our goal each year should be selling more units of all products because we could easily have sales increases every year just because of the price increases on our products. It can really be deceiving to look at just our sales dollars in product lines because it could be masking a possible reduction in unit sales while seeing our sales dollars increase. Tracking units also allows us to make better decisions on inventory. We can easily gauge our strengths and weaknesses in product lines. If a line isn’t doing well, it may be time to get some input on whether we need to adjust the sales approach. You may also see customer trends that help you make decisions to change or eliminate product lines. We obviously want to look at the sales dollars of all products because that tells us how profitable we truly are, but these are “numbers” that we need to pay attention to.

There are other numbers we could look at, especially on the expense side of the ledger, but these are a good example to start with. With this information, we can create a dashboard of statistics that we can easily track on a consistent basis and at certain points of the year, such as monthly, quarterly or semi-annually. A good business management software system will make this much easier for you because these benchmarks are easily calculated for you based on the sales and expense information you input into your system. If you don’t have a business management software system, then you are going to need to set up a spreadsheet where you can you track the data you need.

The numbers we use to evaluate the business now can also be used as a way to reward your employees to help you drive business growth. Reaching goals takes the entire team, so you need to include them by sharing the numbers so they see how their work is important. Numbers provide motivation for teams when they see putting forth a little extra effort can lead to huge payoffs.

I’ll let Jerry Clay sum up why keeping track of your numbers is so important. “As an owner, you need to be in charge of the business and be the one who keeps it on track,” he said. “Taking the time each month, and specifically at mid-year, to review the numbers is important to the long-term health of your business.”

Make it your goal this year to “know your numbers.” Reach out for help if you need it. Your staff will be more committed, your customers will enjoy better service, and your summer siesta will be filled with happy dreams of a job well done.

1504_OPE_FS_Profit Center Series-Part III-Service2_author-Jeff Sheets-webJeff Sheets is the founder and owner of OPE Consulting Services. For the past eight years, Sheets has worked extensively with hundreds of outdoor power equipment dealers to address all of their needs from marketing and inventory management to designing layouts of new facilities and helping rescue businesses that are in trouble, and more. He has a vast amount of experience of bringing “best practices” to OPE dealerships. For more information, he may be contacted at opeconsultingservices@gmail.com or (816) 260-5430.


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