Spring 2006 issue of Horizons

INDUSTRY AUTOMOTIVE Is Your Dealership Prepared for Growth?

John Butler, CPA

When you think of the life cycle of a business, you think of the textbook example of starting as a part-time business in someone's garage - through growth, success and rapid expansion - to maturity and eventual decline. But real life is usually not that easy; especially in the automotive industry. Successful dealerships never just start in someone's garage. They start with capital for facilities and franchises, they need smart energetic leaders, they need product to sell and they need customers to buy. All are formidable challenges for businesses at any stage in their life cycle but they are particularly challenging for dealerships because long-term commitments are required and may be undone by short-term changes in the fortunes of their manufacturers, fads or the economy.

for every business. Everyone knows that it's only a question of when, but it's hard to feel and act on that when business is good. There has been a lot of press about domestic man- ufacturers’ troubles lately, but dealers with successful franchises should take note. They too will have their turn someday. When times are good it's easy to say yes to more inventory, facility improvement projects or acquisitions. The key is to make these short-term decisions with the long-term in mind. Every dealership, no matter its manufacturer, is now strug- gling with long-term changes in its Service and Used Vehicle departments, advertising, hiring and retaining good employ- ees, and containing overhead costs. The best managed deal- erships have a diverse team of advisors from inside and out- side the dealership that give advice and challenge dealers with new ideas. Questions? Contact John Butler, Partner-in-Charge, Automotive Services Group 314-290-3333 john.butler@rubinbrown.com

What is certain is that there will be good times and bad times

25 • spring 2006 issue