Editorial

Is Your Business as Profitable  as it Can Be?  

      Don Magary, Editor

Creating a successful business that will endure the multitude of changes taking place in our industry should be in the forefront of every business person's mind nowadays. Interesting statement in light of a business climate where RV sales continue to soar, and there doesn't seem to be an end in sight for the crest of prosperity we are riding. The economy is strong and the long-awaited baby boomer is entering our primary demographic marketing group. In spite of all these positive signs, the marketplace is probably more competitive than it has ever been. So creating a successful business is not necessarily a slam-dunk. When all is said and done, the definition of a successful business is a profitable business.

RV dealers especially need to ponder the question, "Am I as profitable as I could be?" Or maybe more to the point, "Am I as profitable as I should be?" In our cover story about Carefree of Colorado, I thought it especially poignant when Tom Faludy observed that he believes the industry as whole has lost its confidence in its sales ability. That has created a market place where even though the brand names on the sides of the RVs may be different, RVs as a whole have become relatively homogeneous. RV manufacturers that are motivated by hitting a certain price point may not be as creative in their RV designs as they need to be. Assuming that the RV buyer today is primarily motivated by price may not be an accurate analysis of the RV buyer's need or desire. If that weren't true, why do so may RV buyers roll out of the dealership and end up at Camping World adding all the accessories they wanted in the first place?

Last month I talked to a Missouri dealer who was considering expanding his business, but he was unsure as to what his path should be. Yes, his business is good and he believes it could be better. But to reach the next level, he believes he needs to add sales and service personnel -- and that's what is troubling him. He feels there is a risk in creating more expenses for his business, and since several dealers in that region have gone under in the past year, he is reluctant to gamble too much.

When I asked him if he knew why these dealers went out of business he said, not all of them but certainly he knew why the dealer in the next town over failed. Why? He was selling too low and giving too much on trade-ins. He simply wasn't profitable, but didn't realize it until it was too late. That insight came from buyers coming in and showing him this dealer's deal and asking him if he could top it. He couldn't and told them so. But today he has to service the failed dealer's products and resents it since he believes he was cheated out of making the original sale.

So even today, in these the best of times, creating a successful business is not as simple as it might appear. Business is wrought with complexities and there are many possible pitfalls for the uninformed. All business owners must stay abreast of our changing business climate and educate themselves on the latest techniques in business management.

Wouldn't it be great if there were classes that specialized in managing a successful RV business -- classes that would accommodate an RV dealer's demanding schedule? And it would also be nice to be able to sit down with your peers and pick their brains about how they see this changing climate and what they are doing to assure success.

I come bearing good news. There is such a forum and it is within reach of every dealer in North America. It's the Recreation Vehicle Dealers Association (RVDA) annual convention and exposition that is taking place next month in Minneapolis.

RV News believes there is no better resource for RV dealers to learn the latest management techniques for running a successful RV dealership than the outstanding programs that RVDA puts together every year. While the educational programs are well attended from dealerships around the country, it always amazes us that more dealers don't take advantage of this opportunity -- and no, you don't have to be a member of RVDA to participate. Using the rough estimate that there are 3,500 RV dealerships in the U.S., less than one-third show up for his event. Too many dealers are wasting an opportunity.

We further observe that the aggregate sales for those that do attend probably make up more than 80 percent of the total sales of RVs and accessories annually. I must ask: Is it because successful dealers go to the convention and receive education or are they successful because they go to the convention and take advantage of the education opportunities? Interesting question.

So in reality I suppose this message is only for those 2,400 dealers who decided to stay home and go it alone without benefit of education. I know education may sound boring, but I want to ask you a question. Would you be more comfortable with a doctor that graduated from medical school and never learned anything new after that or one that made sure that he or she was continually learning more and staying abreast of the latest breakthroughs in diagnoses, cures and treatment of diseases? The answer of course is obvious. If you want to be fair to your customer as well as yourself and your business, I urge you to call RVDA and make arrangements to attend next month's program in Minneapolis.

And yes, you may be doing just fine and can probably find a dozen or more reasons to put if off, but I contend that you will learn things that will make you more successful, more profitable and a better resource for your customers if you do go to Minneapolis.

The RV business is changing and you can only compete long-term if you prepare yourself to make these changes opportunities for success.

RVN