A detailed forecast and a sound business plan help you attain the highest available level of profit in 2004.

So, it's time to gather your management staff, review 2003, discuss possible changes, and begin 2004 forecasting.

It's essential to involve your management team and make the forecast theirs. Obviously a full buy-in and a commitment from them enhance your chances for a successful.

As I've recommended many times, take your team to an off-site location. It's sometimes tempting to gather at the dealership. Resist that temptation. Going off site does two things:

1. It allows participants to totally concentrate on the task at hand. 2. It shows that this meeting is important, not routine.

Be realistic, as you approach the year. If “internal things” are going to be different, ask why and what specific steps are being taken to make them different.

External items, the economy for example, are things we can't control, but must deal with.

An advanced look at economic indicators for 2004 is something you, the dealer, should do and then factor it into your overall plan. With the likelihood of a general rebounding of the economy, as most economists predict, the year certainly has potential.

During your discussions, have your managers identify five areas by department in which they can control and improve upon in 2004.

These key success criteria are where the team will be held accountable.

Examples for your variable managers might include such areas as proper staffing levels, staff turnover and sales personnel productivity.

Examples for your fixed managers might be service advisor productivity and facility utilization. It is important to be reminded of established industry accepted best practices and include these in all discussions relating to performance goals.

At the end of your meeting, all participants should agree on a plan of action and be ready to attack 2004 with enthusiasm.

To assist you in preparing your forecast, the chart covers dealer benchmarks from the NCM client database:

In closing, as a reminder, November is the month to include a letter with your payable checks advising your vendors the dealership is creating its approved vendor list for 2004. Ask vendors for a list of services they wish to provide and the price for each.

In the letter to your vendors, make the notation that the bidding process will be based on price and level of service. The vendor who best fits your needs will be awarded the dealership's business for the coming year. This works.

If you have any questions regarding the forecast process or benchmarks, please feel free to e-mail me.

Good selling!

Tony Noland (tnoland@ncm20.com) is the president and CEO of NCM Associates, Inc.

Benchmark Their Numbers Compared to Yours

Category Domestic Regular Import Highline Import My Dealership
Productivity — Gross Per Employee Avg Mo $7,468.00 $8,723.00 $12,298.00 $
Productive Employee % Total Employees 55.3% 57.4% 51.1% %
Gross PNVR Excluding F&I $1,799.00 $1,649.00 $4,174.00 $
Net F&I Pre-Compensation PNVR $796 $772 $819 $
Gross PUVR Excluding F&I $1,770.00 $1,597.00 $2,449.00 $
Net F&I Pre-Compensation PUVR $710 $757 $805 $
Advertising As % Retail Gross New 12.8% 10.7% 6.0% %
Advertising As % Retail Gross Used 13.8% 14.0% 11.7% %
Floor Plan Int. (Net)- As % N/V Retail Gross -3.7% -1.7% -3.0% %
Total Expense as % Total N/V Gross 80.4% 73.1% 54.4% %
Total Expense as % Total U/V Gross 76.5% 78.8% 83.2% %
Total Expense as % Total Parts Gross 57.0% 68.1% 55.8% %
Total Expense as % Total Service Gross 84.3% 75.2% 76.2% %
Total Expense as % Total Body Gross 92.4% 83.5% 90.5% %