Handouts/Subsidies: Not the Answer to Your Business

Automotive & HD Business Management Articles.
Bob Greenwood. February 14, 2013. ( over 8 years ago ) 1,546 views

Handouts and subsidies run rampant within our aftermarket industry, which in turn has developed a culture of weak Business Management Practices. The shop owner looks to his/her Jobber for “freebie toys and trinkets” and subsidies on items ranging from equipment to training to computer hardware and software programs. The Jobber turns to their WD and screams, “Help, give me more because I’m drowning”, and the WD turns to the Manufacturer and states “We’ve decided to run “this program” this year and your share is…”

What are we doing? What have we done?

Your business must be capable of standing on its own merit, and if it can’t, then learn how to manage your business because that’s your job!

Using “threats” to other levels of the industry, that in essence is saying, “if you want my business then you better pay up” only invokes COST to that level of the industry and prohibits them from earning the proper net profits required to improve aftermarket quality, aftermarket service, grow their business and achieve the right ROI.

Everyone should do the math! If you took 1% (one percent) of your total business revenue and used that money to educate your customers/clients, targeted those funds for internal business education matters, or for continuously developing quality staff, our entire industry sector would move forward at an incredible rate. That’s a “huge” amount of money. Instead, our industry is forced to throw away more than that trying to “pay up” to sustain current business. This is NOT the definition of “developing win/win business relationships”.

Consider that over the next number of years, global pressures will surface further as an issue in the pricing of aftermarket commodities. This is and will force margins at every level of our industry down. This, in turn, will affect the net income of your business! It’s at our doorstep now. Waiting until this reality is knocking down the front door and then trying to address it at that time is not the answer. It will be too late.

Consider standing out from the crowd. Be distinctly different. The next time you hear, or see, a peer shop owner, or Jobber, or WD, or Manufacturer spending money for items that do not focus on the development and support of the Best Business Practices for your business, their business and our industry sector that assists in moving all of us forward, point it out to them and tell them “start leading instead of following—the cost of your actions and decisions are hurting your business, my business and our industry”. Then stand back and watch them glare at you as if to say “where are you coming from?”

This won’t be an easy culture to change, however, if we don’t seriously think about where your business and our sector of the industry will be 5 years from today, and ACT upon it, then business and personal lifestyles are going to be dramatically affected. We all must work together to change these attitudes and learn to focus on the important issues affecting the very bottom line of business. Subsidies and handouts are not the way to go. The consequence of this Business Practice is just too overwhelming to be ignored anymore.

Bob Greenwood

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Bob Greenwood
Surrey, British Columbia, Canada
Sue Hitchon
AAEC / AED Brantford
Brantford, Ontario, Canada