Bob Clements International President Sara Hey said the only acceptable reason for dealers to open a new rooftop is that they are ready.
Hey said the first thing any dealer should do when considering adding a new location is take a deep breath. She said dealers need to remove emotion from the decision and look at the decision logically.
“We are not going to open up a new location because of ego, or because our manufacturer said they are going to put somebody else there if we do not do it,” Hey said, “because if we step into opening a new location before we are ready, it is the fastest way to bankrupt our business.”
Bob Clements International walks dealers through a detailed process in evaluating their readiness to expand. Hey, speaking at the RVDA Convention/Expo, said in some situations, expanding an existing rooftop might be a better choice. Expansion could include adding to the current building or moving to an entirely new location.
Investing in additional sales technology—including websites, social media and AI—is another avenue to consider if dealers’ main expansion goal is to increase revenue.
“We have to envision our website as another dealership location for us,” Hey said. “Are you treating your website that way? Are you treating it as another location of your dealership that is engaging customers and walking them through the buying experience?”
After working through the initial thought process, dealers intent on opening a new location have other questions to answer. Hey said the key question is whether the owner can walk away from the current store for six weeks during peak season.
“Can you do that and have it operate as if you are still there?” she asked. “If the answer is ‘No,’ then you are not ready to open another location.”
Hey said the most difficult transitions are going from one location to two or two locations to three. Subsequent expansions are never as difficult, Hey said, because an expansion process has been established by then.
Hey said owners who are deeply involved in sales, accounting, administration or any other facet of the business need to appoint people to handle those roles. She said owners need to empower managers at the existing location to run the dealership day to day. The responsibilities include sharing financial information with managers and enabling managers to oversee employees.
Hey said owners who are not willing to turn over day-to-day duties might not be ready to expand.
“Delegation is a key piece of opening up additional locations,” Hey said. “When we are able to take things off of our plates and put them on other people’s plates, that is how we are able to grow the business.”
She said if managers perform 80% as well as the owner, the owner has to accept the performance. Otherwise, she said, the owner will end up doing everything themselves.
Owners must consider whether there is a market for a new location. If the new rooftop is going to pull customers from the existing location, Hey said expansion might be a bad idea. She said dealers also need to consider the brands they can carry at a new location.
Hey said financing a new location is key. She cited a dealership that expanded from one location to four in nine months and miscalculated the company’s ability to finance new inventory.
“There was so little on the lots, customers said it looked like they were not in business anymore,” Hey said. “The perception was that if they came to your dealership, you were not going to have what they wanted.”
Hey said she is an avid cheerleader for expansion as long as growth is done strategically.
“It is not worth losing your current location,” she said, “over the fact that you want to add additional ones.”
