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Jared Hamilton
From: Jared Hamilton
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Jason Unrau

Jason Unrau Freelance Contributor

Exclusive Blog Posts

Using Images in Your Walkaround

Using Images in Your Walkaround

    Here's a quick tip you can use in your walkaround that can increase your sales performance TODAY.  Your sales process does…

Want Happy Service Advisors? Give Them the Pay Plan They Want

Want Happy Service Advisors? Give Them the Pay Plan They Want

You learn a lot about yourself in the service drive. You quickly find out if you’re truly an extrovert or an introvert-in-disguise, you discover if y…

Recession Proofing Your Dealership

Recession Proofing Your Dealership

Right now, there’s all sorts of talk and murmurings about a coming recession. If you weren’t in business ten years ago, then you might not real…

What's the Deal With Split Deals?

What's the Deal With Split Deals?

We have all had one time or another where we had to split a deal. Splitting that deal, however, was often easier said than done. Once we had an agreem…

Top Reasons to Avoid the Island Mentality When it Comes to Meetings

Top Reasons to Avoid the Island Mentality When it Comes to Meetings

Week after week we have the same meeting at the dealership. That is the GM sitting down with each department manager to review where they are at, projectio…

You Have to Plan for Growth…But How Much?

A look back on the past eleven months is going to put you in one of three categories.

  • You’re right on pace to finish 2018 on target, and you’re breathing a sigh of relief.
  • You’re behind, a little or a lot, and panic is setting in.
  • You’re ahead of your 2018 target with a full month to go. You’re full of confidence.

There’s no coasting to the finish line. But as you’re building targets and goals for the coming year, there’s no easy way to plan milestones and goals. It seems like whatever number you pick is arbitrary, doesn’t it?

The Same Target Won’t Cut It

And here’s the thing: whether you’re finishing ahead of target, behind target, or hit a bullseye this year, you can’t use the same goals as you did this year. Certainly, you can’t trim back on your figures either. There’s a dealer principal and a general manager that will scrutinize your budget and make no mistake. They expect growth.

That goes for everyone, whether it’s a service manager, sales manager, parts department manager, or otherwise. You’re meant to improve upon the previous year. And to be blunt, if you’re a department manager and you aren’t striving to blow last year’s numbers out of the water, are you the right person for the job?

You should always be looking to do more. You’re managing someone else’s money. It reminds me of a parable in the Good Book, the Parable of the Talents. A master entrusts his money to three of his servants while he’s away. While two invest the master’s money and grow it, one simply hides it to keep it safe. When the master returns, he is incredibly displeased with the servant who didn’t increase his earnings.

The same is true for dealership management. As a manager, you’re a caretaker or middleman for someone else’s cash; their source of income. It’s job to grow this revenue stream from year to year. But what’s a reasonable goal?

From the Eyes of an Employee

As a service advisor, I was never very happy to learn about the new year’s targets. That’s especially true for years that were so good, it was an anomaly. I recall one year where the service department alone experienced between 7 and 8 percent NET above target, and on a predicted 3-percent growth. That’s a double-digit increase year over year. And when the new targets were unveiled, there was another 3 percent or so expected the following year.

The flip side are years that were less than stellar. When you don’t meet your expectations and the following year still predicts growth, it can cause frustration – a rift between management and employees for setting unrealistic targets.

In an employee’s eyes, there need to be two things before the new targets are revealed. Managers should first address the year’s successes or shortcomings with the team. A dinner reward or small token of appreciation over the holidays does the trick. And secondly, there should be a plan in place for how to achieve the expected growth. A real, honest strategy on how it’s going to happen.

So, How Much Do You Project for Growth?

I'd suggest a good rule of thumb is three percent. Unless there’s a significant reason that it can’t be done, or if there’s a reason that you’re going to do more than that, plan for a three percent increase. If you’ve met your target in 2018 or came in under, that’s three percent more than your 2018 target. If you exceeded your targets in 2018, that’s three percent more than your actuals.

And that’s when the tough stuff really starts. Now you have to strategize for growth and put your plan into action. You’re the right person for the job, aren’t you? Then you’ll find a way to get it done.

 

R. J. James

LOL... Like your comments in the "From the Eyes of an Employee".  As an employee, I used to call some of Management's Next Year Targets a "SWAG" (Silly Wild Ass Guess).

When I became a Manager, I tried to validate my Next Year Targets by comparing: (1) Our Current Year's Results to Regional and National Results; (2) How we were Trending (the Current 90 year over year performance); (3) The Growth Predictions of National Economic Analyst; and (4) Did we have a Significant Under Performance Period (personnel shortage, down equipment, extreme weather interruptions).

After all that analysis the REAL WORK started... Road-Mapping (Setting the Monthly Plan of Action for how we would accomplish Next Year's Target).

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