Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.
Issue link: https://idoi.epubxp.com/i/177021
MaNageMEnt (continued from page 44) Let's look at replacing installation and service vehicles. If all or most of the feld trucks are over fve years old, most likely replacement is an important consideration, especially given today's low or no interest rates. Most importantly, how does the public, your potential customers, perceive the quality or professionalism of your frm? Well-lettered installation and service vehicles not only act as moving bill boards, but also give credence to the quality and professionalism of the dealership. The opposite is true if the trucks are old, worn out and unattractive. The cost of replacing old feld vehicles is not just the immediate out-of-pocket cost, but more importantly, what the old tired vehicles say about the dealership, especially if high margin retroft business opportunities are lost. The dealership's image is important. You do not want potential customers to fail to contact your frm for a new door believing that the poor condition of the company vehicles portends a less than successful frm. Finally, assigning a new installation or service vehicle to a deserving employee creates good corporate morale. One could argue that the out-of-pocket cost for a new vehicle represents a slight savings for the company compared to constantly repairing old tired vehicles. Old vehicles most likely are paid off. New vehicles, depending on the cash position of the frm, most likely will require a monthly payment. This payment will vary depending on if there is a trade-in or if there is a down payment. While new vehicles typically get better mileage than old vehicles, by the time new vehicles are loaded up with racks, boxes and tools, actual vehicle mileage might only increase 10 to 15%. Still this is an incentive given current fuel prices. The major consideration is the repair costs of old vehicles that will be eliminated or at least covered by warranty for a new vehicle. A new transmission can cost $2,500 and a new engine can cost from $4,000 to $7,500. These repairs can seriously disrupt the bottom line and reduce productivity (sales) while the vehicle is in the shop. The pain of a monthly payment for a new vehicle can quickly be forgotten compared to the cost and disruption caused by an untimely major repair to an old truck. The cost of tires is the same for new and old vehicles. While insurance on a new vehicle may be slightly higher than on an old vehicle, the difference is minor. Depreciation is non-cash expenditure and if not considered in this discussion. While every situation varies based on the current cost of repairs and the analysis of better mileage, the fnal part of a decision to upgrade vehicles might vary well depend on enhancing the image of the dealership as a thriving highly regarded business. Marketing is critical today as retroft sales dominate the garage door market. This writer is familiar with two men who purchased a down and out door frm from a very tired owner. While the dealership has much 46 International Door & Operator Industry™ to be fxed, the feet of installation/service vehicles was a disaster. All of the vehicles were at least 10 years old. Some had cracked windshields and all had body damage and bald tires. A decision was immediately made to replace all seven (7) vehicles at one time. The new vehicles were not allowed on the street until they were completely lettered. The excited installers insisted on working through a weekend to letter the vehicles. On Monday, the proud employees hit the road with the new feet. The telephone rang off the wall with customers who immediately noticed the new look. Owners need to understand the bunker mentality they necessarily created during the last fve to seven years as they have downsized to survive the recession needs to be rethought to capture newly available sales. With better times ahead, and higher margin retroft sales representing the majority of both the residential and commercial business, now is very likely the time to ramp up capital expenditures for rolling stock, new equipment, computer systems and new showrooms. Good marketing defnitely includes developing a profession image and carefully structured capital expenditures will enhance the dealership's image. Finally, as older owners contemplate an exit strategy, a new buyer for the frm will value new vehicles in a purchase offer. John E. Zoller and David H. Bowen comprise Zoller Consulting, Inc. of Wooster, Ohio. Zoller Consulting provides consultation of managerial effectiveness and fnancial performance of construction related businesses. They also offer customized seminars and training sessions. In addition, Zoller Consulting provides acquisition management, including fnding buyers or sellers, locating funding sources, transaction structuring, and negotiating and organizing the transition to new ownership. Contact Zoller Consulting, Inc. at 330.262.8500 or John@zollerconsultinginc.com.