International Door & Operator Industry

SEP-OCT 2012

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.

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MANAGEMENT The Dealer-FIT Debate ...Clarifying the Value It has been said the annual IDA Dealer- FIT Survey is for large companies and not the everyday dealer. I have heard large dealers express concern that the data is only relevant if there is a signifi cant number of like-sized dealers included in the survey. Another dealer shared that there is too much data included, rendering the results confusing and of no value to their organization. They suggest that having the survey contain specifi c data that pertains to only their company's size and volume would reduce the confusion. And so it goes. Let me tell you about our company and how we use IDA Dealer-FIT, and perhaps help clarify the value it provides. When John Zoller and I purchased the Overhead Door Company of Lexington in 1995, we implemented an annual "Business Planning Session." This exercise began as a three to four day process with some preliminary work starting a couple of weeks in advance of the session. We would do a company wide survey, have those surveys compiled in a summary and then take two or three more days to hammer out a plan. We would review the previous year's performance, the surveys, the budget, and discuss the upcoming year's forecast, and then make an action plan to attain our newly developed goals. A couple of well-placed industry members told me that less than 15% of their customers do an annual planning session. I was surprised at this revelation. It may, in part, answer the question of why more dealers do not participate in Dealer-FIT. I have found the data from the survey extremely helpful in develop- ing a meaningful business plan. Let's face it, planning is much about numbers and Dealer-FIT is loaded with those numbers. Not only does the survey provide us the opportunity to see our specifi c "Group" data, but we can look back and ahead to see how well we transitioned from an old group to a new group and what may be required to ascend to the next level (group). There is even a worksheet to see just exactly how our company is performing to the average (Mean) in our group. This can unmask much about what is going well and what needs attention. For example, one area that we were able to identify growth potential was service. We looked into the Dealer-FIT numbers and saw that companies that were our approximate size had large portions of service. With this information we decided that we were missing an opportunity. We formulated a plan and refocused our company to gain more service work. Using the Dealer-FIT benchmark we identifi ed an under served market that we had ignored. There are other ways to come to the same conclusion that we did, but I don't believe there is a simpler and faster way to spot areas that your company ex- cels or perhaps under performs. The real question is: Are you willing to be honest with yourself about how you rank against other garage door dealers? Years ago, I was studying the old style survey and noted that we had just entered the next group. It was a group that looked to be diffi cult. It had the lowest gross margin and a low percentage of net income. Expenses were going to be higher with the addition of people and equipment, and it was going to take By Bill Gibson, IDA President-elect some serious cash fl ow to get through this group. The prospect of getting to that next level, given the size of our market, was going to take a couple of years or more. I questioned if I really wanted to struggle to get to another level and for what purpose. It appeared we would have to work harder, with more risk and for much less profi t. I called my partner for advice and his advice was to keep growing the business with a close eye on the numbers. By doing so, this should enable us to continue to keep our sup- pliers happy, our market share growing and strengthen our long term plans. It would be an interesting business planning session for certain. With the new IDA Dealer-FIT Survey, there is an abundance of information to guide the development of a business plan. Here is just a brief list of useful compari- sons between garage door dealers that Dealer-FIT offers: Is my company as profi table as the industry norm? This is a very important question and one that can lead you in many directions. It may be the realiza- tion that you are not as profi table as you could be or the realization that you are very profi table. Compensation: are my payroll expenses similar to the industry? This can again lead you into different directions. This could explain why your competitors keep stealing your employees, or why you never seem to win a competitive bid. Margin: there is no greater measure of how effi cient your company operates than margin. This number represents how Continued on page 38 36 International Door & Operator Industryâ„¢

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