As consolidation continues in the retail automotive segment, family-owned dealerships face increasing pressure to up their operating game. One crucial aspect of remaining competitive is ensuring that your dealership has a professional business approach without losing that family-owned ambiance, says Champ Rawls, business succession planner at The Rawls Group.
“It is essential to promote your dealership as a local family-owned business while also incorporating the formalities of successful dealers and public companies,” he tells WardsAuto.
Family-owned dealerships have well-known local names and reputations, Rawls says, and that is something to hang on to.
“Double down on the ‘family,’” he says. “It is a cliché, but do everything possible to promote the family business.”
That doesn’t mean forgetting the professional business aspect, however, Rawls cautions.
The thing The Rawls Group sees family-owned dealerships struggle most with is what Rawls calls “being mom-and-poppy.” Retail automotive is not a mom-and-pop business anymore, he says.
If a dealership can professionalize, it can better monetize its family-owned strengths, Rawls says.
Some elements of a professional dealership are:
- A mission statement to which you adhere.
- Professional job descriptions.
- Performance metrics.
- Strategic planning for expansion.
An essential step in professionalization is developing a mission statement that encapsulates the dealership’s fundamental values.
“The most successful groups we work with have a mission and a goal, and they work toward it every day,” he says.
Developing job descriptions is crucial to professionalizing a dealership’s operations. If a family-owned dealership’s business is doing well, job descriptions may not seem important, Rawls says.
“When you have multiple family members being there, the formality can become less important because you are getting the job done,” he says.
But lack of formal job descriptions can lead to nepotism, inconsistent enforcement of policies and toxic family and business interactions, Rawls warns. That can hurt business and drive away talent.
Dealerships also need to develop performance metrics to measure the success of their employees.
“How are your people supposed to know they are doing well if there are no performance metrics?” Rawls says.
Succession is always a central topic with family-owned dealerships. Job descriptions and performance metrics can help determine if a family member is a suitable successor to take over the dealership.
Just because someone is a great salesperson doesn’t mean they are a great manager, Rawls says, and one of the biggest challenges family-owned dealerships face is promoting people into roles they aren’t ready for. “We believe very strongly in successor curriculums being very laid out,” including the steps a potential successor needs to achieve before moving into the next role, Rawls says.
“Hard work and ambition can get you a long way,” he says, “But leadership and management is a different skill set.”
Professionalizing the Expansion Process
For families that want to acquire more dealerships, strategic planning is a “big feature of professionalization,” Rawls says.
Asking hard questions, including what a dealership excels at and its weaknesses, allows a family to develop a “buy box,” he says. That buy box helps determine what brand or brands fit a family’s plan, how much they can afford to pay, location, and other key items.
It creates focus, Rawls says, and allows his clients to “stop wasting your time on all these bright shiny objects.”
“That is professionalizing the process,” he says. “What we like about putting (a strategy plan) on paper is, you start controlling the process. You give that piece of paper to the broker or banker and say, ‘This is what I need.’”
Savannah Simms is director of marketing and business development at Simms Automotive, a new dealership group founded by her father, Adam, in northern California.
Before assuming her current position, she was general manager of Volvo Palo Alto and McLaren San Francisco.
Simms, who calls her father by his first name when doing business, agrees that family dealerships need to professionalize their operations.
“You are not coming to the mom-and-pop shop, you are coming to the experts in the industry,” she says.
The Simms group has a loose definition of what “family” includes.
"We are creating a way for our partners to be family,” she tells WardsAuto. “We believe there is enough for everyone. It is not going to be just us.”
