What is Your Strongest Credential?

The dictionary defines a credential as, “anything that provides the basis for confidence, belief, credit, etc.”  In business, we use credentials as a shortcut in persuading customers or partners to trust us enough to do business with us. The credentials, “MD”, “PhD”, and “JD” convey that the holders have mastered the knowledge required to obtain them, and that alone can give a client confidence in their abilities. Technical certifications, diplomas, testimonials, accolades, licenses and franchises are also in this broad category of credentials.

Whether you have letters following your name or not, everyone has credentials. What are the ones you choose to share in your business? In other words, what qualification, achievement, personal quality, or aspect of your background do you use to indicate that you are suitable for business?

A credential, plain and simple, promotes trust and confidence. It can be anything. For detailers or cosmetic repair technicians, their best credential could be before and after photos of their work, a mechanic may have ASE certification or OEM endorsements. Dealers have their own designations, like 20-group or association membership. Your years in business alone is as valid a credential as any to elicit confidence and overcome doubt. 

Think about your other credentials, too. When I was shopping for a car, I noticed the salesman had pictures of his wife and 3 children on his desk. He didn’t remark about the photo, and neither did I, but when he described the safety features of the car I was considering, knowing that he had children made him more credible to me when discussing safety. For all I know, it might have been a stock photo that came with the frame, but in that moment, it was his credential – the connection point that told me he was believable.

We all have a drawer full of credentials that we might share. Climbed a mountain? You have fortitude and determination, Single parent? You’ve got organizational and time management skills. Backstage pass? You know somebody. Fly fisher? You have patience and value detail. Played sports in school? You understand the value of teamwork and shared goals. The list is as endless as our life experiences.

So when you are trying to persuade a customer or partner, reach deep into your drawer and find the right credentials for the occasion. Find the thing of yours that connects you to the other’s needs, and gives them the confidence to say yes. 

Want to learn more about AMT’s credentials? Click here.

Budgeting for a Successful Independent Dealership in 2018

2018 has just begun and the economy looks to be off to a great start. A strong jobs outlook and low unemployment means more people are driving again, and these people are replacing their cars. You may have noticed this for a while now at your dealership.

But even with this increased demand, you still have to compete with the larger dealerships. One way to get ahead is to borrow tips and ideas straight out of their playbook. As a software company who sells to auto dealerships of all sizes, we have unique access to everything from a dealer’s operations to their accounting practices. We get to see behind the scenes of dealerships all over the country, and we know what makes the best dealerships successful.

As an independent dealership, you may not have the staff or even the time to always step back and look at the big picture of your operation, but it is an important exercise nonetheless. As you prepare your goals for 2018, you can’t make smart decisions until you take a long hard look at your company financials, and yes that means setting your budget.

Performing these budgeting tasks does not have to be a chore, in fact we are making it easy for you with this tutorial. Consider this budget to be a guideline, a scorecard or a report card for how you are doing financially as a business every month. It will help you make business decisions such as when to buy more inventory or how much to spend on advertising.

Building out your budget doesn’t have to be hard or even time consuming. Many of you are already using some form of accounting program and we have created an excel spreadsheet that you can use or modify simply by clicking the download here:

Get the Spreadsheet Template


Why you need a Budget for 2018:

  1. Determine your milestones so that you recognize when you pass them. You get into a routine. You have your auction days, you are involved in the remarketing needs of your purchases, you manage your sales people, you keep an eye on the finance department. But how do you know when you are ready for a second lot, or a third, if you don’t have a plan with set milestones? A good budget will help you find those milestones.
  2. You will need to borrow money, your bank will want a plan. If you do grow to that second location you may need to increase your floor plan. Your bank is going to want to see the plan, and how you expect to make your payments. A good budget will help you execute your business plan.

Business plans require financial projections, tax schedules, depreciation schedules, staffing plans and so on. All of this will be spread out over multiple pages and you will need to keep going back and forth between pages.  I have found that the best way to start a business plan is to create a single page cheat sheet that has all the numbers in one spot. As you begin to fill in numbers in a business plan, it is helpful to have a single sheet that has all the numbers in one spot.

  1. A budget can help you make hard decisions quicker and easier. Scalable businesses are built on the backs of efficient processes. Time saving tips tricks and yes even software like our very own ReconMonitor will save you money. But how do you know when you can afford to invest in new equipment or software without being able to look at your own numbers? A budget will help with that. Your budget will help you determine whether you can afford every single business expense before making the purchase.


How to make a budget for your Independent Auto Dealership

The easiest thing is to create a Microsoft Excel spreadsheet. You can create your own or you can download our template below. On your spreadsheet include the next twelve months going from left to right in the top columns. Leave room in the first column to list out each expense.

Next, in the first column, start labeling all of your expenses. It helps to have a couple of recent bank statements handy; you will be surprised at how many little expenses that you forget.


Start with your ongoing business expenses.

The way I like to do mine is start with the bills that you know that has to be paid each month, stuff like mortgage on your buildings or rent, utilities, etc. Put every business expense you have in there. This will give you a good idea of what you need at a minimum to pay break even. Now add a row for each of those columns to tally up.

Note: We have included a column with industry average percentages pulled from the NAIDA used car industry report.

Next it’s time to start entering the employee expenses.

Begin entering values and lines for all of your employees, salaries and average commissions. Again review those bank statements and try to come up with a number for each type of expense that you have. Add a line to tally up each business expense by month.

Inventory and reconditioning expenses are next.

Like most dealerships, you probably have a good bead on what sells in your market, and what your average reconditioning costs per vehicle are. This data can be pulled whether you do all your remarketing in house or you use outside vendors. If you use outside vendors ask for their help in determining an average per vehicle figure and use that as a multiple for how many vehicles you plan to buy in a given month.


Here is where the business owner’s crystal ball comes into play.  Obviously, you can’t predict what cars will sell at exact times, but as an existing and successful dealership, you probably have your own data and formulas.

The purpose of this part of exercise is to start determining what revenue is coming in and when. If you offer repairs and service in addition to used cars, you probably have a good idea of what the revenue from the shop is each month as well.

Note: Our spreadsheet gives you the option to use a monthly average/projection, or you can enter specific cars if you want to get really accurate and track your performance.


Spreadsheet Formulas.

Next you will need to create a few formulas. First you want to create a line that totals your office overhead along with any salaries.

Subtract this number from the total sales in per month, and you have a fairly accurate idea of what revenue is left for taxes.

Next take this number and apply the following formula: =C54*(1-29%)  In is case C54 is the cell with our remaining net cash after salaries office expenses and inventory expenses.  This formula takes your net cash and subtracts 29%, which is a pretty good approximation for a small business tax burden and includes state taxes. We recommend that you speak with your tax professional to figure out what the percentage it for your specific situation. Whatever tax rate they suggest simply replace the 29 in that formula with the new number.

In the line below this, add the formula =SUM(C54)-(C55). This gives you the monthly tax payment that you will owe (even though you will pay quarterly). In this instance C54 is the net income and C55 is the tax payment.

Keep in mind this spreadsheet is designed to give you a quick and pretty accurate picture of your cash flow month by month, but it does not factor in things such as depreciations, etc.

We hope you found this to be helpful and we look forward to helping you achieve a prosperous 2018.

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What is your Resolution?

Put the power of a mobile application with years of experience in the auto reconditioning business in your corner

This time of year is a great time to re-evaluate what we do in our lives.  Whether you call them resolutions or goals, New Years brings on a feeling of renewal, of a fresh start.  Unfortunately most New Years resolutions are abandoned by February – primarily because of failing to plan for it.

Resolutions are not always easy, they involve changing a set of behaviors.  Now some just make good sense – eat better, exercise more – and have a built in motivators (your health).  Other popular goals – get organized, better work/life balance – may need some more defined set of plans to be successful.  Changing a set of behaviors is difficult, humans are creatures of habit and we do the things we have done for years for a reason.  So here are a few steps to take to make it easier.

Overcoming old habits requires three things: dissatisfaction of a current state, a vision of desired results and the first steps to move into that direction. Let’s take for instance the goal to become more organized.  Look around your office.  Are there stacks of paper?  Files of photos, either printed out or on your computer but not filed in the correct order with each inspection?  How about invoices – are there any not reconciled and accounted for?  If the answer to any of these questions was “yes” you’ve already met the first requirement in overcoming dis-organization – dissatisfaction with your current level of organization.

The next step is pretty easy – look around your office and envision what it would be like without all the clutter.  Envision no more lost, torn or stained work orders.  Imagine inspections, work orders and invoices for each car electronically organized with digital photos attached.  This organization would result in faster work order authorization, quicker turn around for invoicing and fewer outstanding invoices.  Sounds pretty good huh?

As for your first steps – look to technology to help.  Put the power of a mobile application with years of experience in the auto reconditioning business in your corner.  AutoMobile Technologies ReconPro is a quick and reliable solution to your organization needs.  It allows your business to become paper-less, increase cash flow and reduce errors – giving you a superior professional image!

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