Why should I consider retaining a consultant? Since founding Prosperity Plus Management Consulting, Inc. in July, 2001, I have been asked this question countless times. When looking at this question there are three key things to focus on; why consulting, what to look for in a consulting company and what success has the company had.
There are several reasons to consider consulting. First and foremost is to increase profitability. Whether retaining a consulting company or hiring an employee you’re looking for a return on your investment. The money you spend on either must lead to increased profits that exceed the price paid.
The second reason to consider consulting is that it provides an exterior viewpoint to your business. Have you ever noticed how easy it is to solve someone else’s problems? It’s hard to see what needs to be done when you’re knee deep in the everyday issues that a business owner faces. A good consultant can maintain that outside view and more easily diagnose what needs to be done.
Similar to this outside viewpoint a good consultant adds a level of accountability to the dealership owner. When one of our clients decides to undertake a plan we follow through with them to make sure it actually happens. This keeps the owner focused much the same way an employee’s focus is maintained by a manager. Let’s face it, even the best dealer executives can get distracted and off course.
Finally, most dealership owners came up through the industry in either sales or service. In these cases they tend to have a good understanding within their area of expertise, yet struggle with areas in which they are inexperienced. Prosperity Plus offers formalized tools that assist owners and managers in running all aspects of the dealership. No other consulting group offers the breadth of the tools available through the Hubbard Management System®.
Now that we’ve covered the basic reasons for consulting let’s consider what to look for in a consulting group. First it’s important to know what you’re looking to accomplish. That can be as broad as increased profits or as specific as starting an MPS strategy. With this in mind the process of choosing a consulting company is similar to choosing something like an accountant or a key employee. You’ll want to take a close look at the company’s experience and reputation. How long has the firm been around? What do other dealers, industry associations and industry opinion leaders have to say about them?
Ask around. You’ll want to know EXACTLY what results they have created with other dealers. If you have specific goals in mind find out who has achieved these goals. You should request references of past or current clients and take the time to speak with them. Create a list of questions you want to ask and get them all answered.
The bottom line is that a successful relationship between a dealership and a consulting group is built. You don’t know for sure if you have a good match until you’ve begun. In 2004 Prosperity Plus launched an introductory program, called the Dealership Analysis, designed to help dealer owners understand what‘s holding their dealership back and how we can help improve results. To touch on a couple of examples, after completing the analysis a dealership owner on the West Coast realized he waslosing money in the service department and needed to make some changes to accounting practices. Prosperity Plus was retained to implement a series of programs. The first step was to clearly identify the responsibilities of every employee and make sure they understood them. From there we implemented a plan to bolster the service revenue, another to increase the activity level in the sales department and one more to provide full visibility to the key performance indicators throughout the dealership.
These programs resulted in the dealership doubling their net income within 1 year and replacing an ineffective CFO with a much more qualified candidate. In another example, a dealership in the East did the analysis and an ongoing consulting program. In this case we identified the need for additional managers as the dealer owner was trying to manage 15 people on his own. We showed the dealer owner what these managers should be doing, helped recruit them, created incentive based compensation plans and helped train them. As a result this dealership went from a position where the company was losing money to being profitable while reducing the tremendous overload of the owner. The profitability was so strong that the dealer owner was able to realize his exit strategy. The business was recently sold for just over 100% of their annual revenue. Prosperity Plus represented the dealer throughout the business sales as well.
The common threads in all successful engagements are a good fit between consultant and dealership, a clearly understood game plan and diligent follow through on both sides. When these are in place the results can be amazing and the return on investment can be huge.
Jim Kahrs is the President and Founder of Prosperity Plus Management Consulting, Inc.
If you have any questions please don’t hesitate to call 631-782-7762 or email.