Posts Tagged internal controls

1. How important is it to you the dealer?
2. How important is it to your managers and staff?
3. How important is it to people who want to take advantage of you and your business?
4. How important should it be?

Above are four questions that every automobile dealership, large or small, publicly owned or private, single dealership or member of a group of dealerships, even mega dealerships, should be working on, hard and fast, to find answers for. The fate of the entire automobile retail industry may depend on how serious today’s Automobile Dealers perceive the whole issue of security to be. We should be able to learn from the mistakes and shortcomings of others. Let’s take the airline industry as an example. In that industry there was a recognized need for security that had been established over a long period of time resulting from incidences of people taking advantage of low or non-existent security measures. The industry responded, raising the level of security by implementing security checks of people boarding aircraft as well as their baggage and cargo. However, it was common knowledge that security levels were not uniform throughout the industry and that common knowledge was taken advantage of with disastrous results, which we are all well aware of.

Today, automobile dealerships are large business operations, not unlike the airlines, with hundreds of employees selling millions of dollars worth of product every year. The pressure is on to perform, meet goals, maintain growth and stay competitive. Often times, for upper level management, the business of operating an automobile dealership is more involved with dealings with the factory, the banks, the insurance industry, state and local regulatory agencies and a host of other business related distractions than it is with the business of selling cars and trucks. The thousands of Dealer Principals who operate their own stores either have to allocate a disproportionate percentage of their time and energy to administrative tasks or delegate those responsibilities to various managers.

Regardless of your particular situation, in the day-to-day business of doing business, important issues, which do not have near term deadlines, tend to be left off from meeting agendas in deference of more pressing matters. This is normal. We all understand that time in meetings is precious; the critical issues are dealt with, while items considered to be less critical are deferred to subsequent meetings, or given to committees to evaluate and report on later. From experience we also know that this committee work often remains uncompleted from meeting to meeting. Committee members usually have other responsibilities, which of necessity take priority, and they only work on committee matters when time permits. The truth is that if you have not actually taken the issue of dealership security and assigned a high priority to it, you will likely never actually deal with it. The sheer scope and complexity of the matter virtually guarantees that. The result will likely be an ineffectual, uncoordinated collection of antiquated equipment, practices, policies and procedures, which will leave you and your business virtually unprotected.

In today’s world of shady business practices, color coded terrorism threat level indicators and federally mandated security measures for some industries, the issue of security in, of and around your dealership should now be very close to the top of your list of priorities. In virtually all of the dealer interviews I have read recently when the dealer is asked to what he/she attributes the success of their business, the response is:

• Dealing honestly with their customers and employees.
• Up-to-date training for sales and management personnel.
• Attention to business practices and procedures.

We all know that it is of paramount importance to deal honestly with our customers and employees. No business will survive for very long if they do not follow this advice. Most dealers have come to the realization that a well trained sales and management team will make more sales than untrained uncoordinated salespeople and managers. However, some dealers have not yet come to the conclusion that they need to up-date and in some cases change or improve some or all of their old business practices and procedures. They are still attempting to operate their dealership the same way they did it 10, 20 or more years ago. We all know that ‘the times they are a changin,’and we have to change with them or we’ll be left behind.

One of the changes all dealers need to be making today is a serious revision of the security systems, practices and procedures used in and around the dealership. Dealers actually need to encourage each other to take these steps, for the good of the automobile retail industry as a whole. The cost of taking the initiative and implementing adequate security systems and procedures to protect all aspects of the business, while not insignificant, is likely not as high as would be the cost of complying with some form of federally mandated security requirements. Just ask any airline executive. Such federal mandates would likely be the result if the assets of an automobile dealership were utilized in some sort of incident like what we saw in Oklahoma or more recently in New York, Pennsylvania and at the Pentagon.

Decisions to make the kinds of commitments to security systems, practices and procedures that will be required to keep your dealership and it’s assets safe, secure and profitable will not happen by accident. You will have to be proactive, ‘take the bull by the horns’! Make it happen!

So, the answers to the four questions regarding how important security in and around the dealership should be:

1. For you the dealer; Top priority. Urgent.
2. For your personnel and management; High priority. Very important for the continued success of the dealership.
3. The level of security at your dealership is the most important factor in their planning and decision making in so far as your dealership is concerned.
4. There is probably nothing more important that you can do today, for the future of your dealership and the automobile retail industry, than to make certain that you have done everything within your power to ascertain that you have adequate security systems, practices and procedures in place and functioning.