Before leaving for Louisville, review and reassess your business

By Jeff Sheets

Now is a great time to review what happened during the first eight months of the year. Reason: You are still close enough to what happened to remember the good and the bad!

Scientists say that the further we get away from bad events, especially ones occurring in our own personal lives, we tend to forget how bad they were, and as time goes by, we sometimes forget them altogether. Last night, I was having a conversation with my wife about some events that occurred a few years ago, and I had a hard time recalling the events because they weren’t really memories that I really wanted to keep. You may have the same problem remembering something that occurred in your business from one year to the next year, but be able to recall something today that happened in January 2015 and put that to good use for 2016. However, the further you get away from that January 2015 memory, the more likely it won’t be addressed. What I am trying to get at here is that you need to review your business now, so that you don’t gloss over what happened this year and say, “We’ll just do what we did last year. We did okay.” “Okay” is not what you are looking for. You are looking for doing better than last year — each and every year — and reviewing what happened is an important step in that process. Here are a few motivational reasons to do what you need to do and review your business now versus later.

#1 GIE+EXPO is next month

I am not a paid spokesperson for the Green Industry & Equipment Expo (GIE+EXPO), but I want to encourage you to attend this trade show Oct. 21-23 in Louisville, Ky. It is a great opportunity to see how to make your business better and is well worth your time and money. There are seminars that are worth their weight in gold in motivating you to do what you need to do and give you hope for the future. The product displays are awesome, and the manufacturers put their best foot forward to show you new products and help you in any way they can. If you are looking at buying or upgrading software, you get the chance to meet face to face with the representatives of many software companies. If you are looking at doing almost anything new in your business, there will be someone there to help you address that need. You also should attempt to meet other dealership owners while you are there and develop new contacts. It is a great networking opportunity! Sometimes being able to call or email another owner when you need advice is a great thing to be able to do.

You may even find this humble OPE contributing writer at booth #568 to help answer any questions that you might have. If you’ve never attended GIE+EXPO, you need to go, and if you have attended the show, there is always something new that you need to go and see! If you have not already done so, I would highly encourage you to read the “GIE+EXPO Show Preview” on pages 16-20 in this issue, as well as go to the show’s website at, in advance of leaving for Louisville to develop a game plan of which events that you should attend to address your needs for next year.

#2 Buying decisions on 2016 equipment

I used to be a sales representative in a previous life in what was an extremely seasonal business. Every year, I would go over orders for the season with my accounts in April when the season was in November and December. What I found was that about 80 percent of the people had no clue what they should order and really did not have much information on individual items sold. They usually only had anecdotal stories to tell me about how the year went. They relied on me to do their ordering for them. Although I feel most salespeople do a great job of handling a responsibility like this, sometimes they don’t have enough data to know the needs of their business. You need to review your sales, speak with your salespeople, and have them (or you) talk to their large accounts to really look to the future of what your needs will be. Is there a trend that you can be on top of now? Has a competitor either gone out of business or a new competitor entered the market? Is there new construction of homes in your area that will mean more business for certain lines of equipment? Was last year a great year because of external forces like weather that pushed you to sell more? The questions are endless, but making sure you gather the facts before making future moves is important. If you never really review your past, then how can you make good decisions for the future? One question you always need to be asking yourself is: Am I carrying the right lines of equipment? I favor carrying only three to four equipment lines, including one handheld line. If you have more than that, I bet there is one line that you sell very little of, and in fact, steer buyers away from it, because it is not your favorite. You want your lines to complement each other and not compete head to head as much as possible.

#3 Large parts restocking orders

The discounts make it worth ordering parts in large quantities from manufacturers, but you really need to conduct a good physical inventory before you place this type of order. I favor rolling physical inventories, where you schedule certain manufacturers in specific months and spread it out throughout the year. If you wait until the end of the year, it becomes a much larger issue and sometimes more arduous than it needs to be. By the end of September, I would hope that at least 75 percent of your parts inventory would be completed. Obviously, if you have software that tracks your sales dollars and numbers of each individual part’s sales, it can make a big difference. But, making sure that the numbers in the system match what is on the shelves is important. Discrepancies can occur, and you need to really know what is there, so you don’t end up ordering things you don’t need.

Here are some things that I like to look at and I think would help you conduct your review:

Equipment Sales and Part Sales

* Dollar sales by product line
* Unit sales by product line
* Gross margin percentage by product line
* Average dollar sale per unit by product line by the end of September


* Physical and computer inventory done in at least 75 percent of lines

I haven’t really addressed the service department in this article, but obviously the parts that you order need to include the needs of this department. Here are a few things I like to look at, and comparing this year versus last year at the same time and the current month versus last year’s same month in these categories helps you know whether you are growing or not.


* Labor sales
* Percentage of labor cost (labor cost/labor sales). Goal: 33 percent or less.
* Billable labor hours (labor sales/labor rate). Goal: 100 percent.
* Service parts sales. Goal: Should be around 80 cents of every labor dollar you produce for each repair.

My goal with these articles is to help you see the opportunities for the future by making sure you are looking at the present to make good decisions. Remember: There are great ways to take the information gathered and apply it to help your business. I can only list a few in this article, but know the list is endless. Reviewing your business at any given time is worth it!

1504_OPE_FS_Profit Center Series-Part III-Service2_author-Jeff Sheets-webJeff Sheets is the founder and owner of OPE Consulting Services. Whether a business is thriving or struggling to survive, Sheets’ rich experience in both the corporate and not-for-profit sectors allows him to partner with business owners to customize unique strategies for their needs. For the past nine years, he has worked extensively with hundreds of outdoor power equipment dealers to create best practices in business structure, personnel management and financial profitability. For more information, he may be contacted at or (816) 260-5430. You can also follow him on Twitter @opeconsult, connect with him on LinkedIn, and visit his website at


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