I have the honor and privilege of traveling this great country of ours and working with all types of BHPH dealers on a consulting, training, and 20 Group basis. I am a firm believer that we learn more from our mistakes than our successes. When I first started to put this article together, I made a list of the most prominent mistakes I see BHPH dealers make. Problem was, the list was about 1,001 mistakes long. Most if not all of which I had made as a dealer myself.

After looking over the list several times, I realized that these mistakes could all fit into one of five main categories. So here they are:

Mistake #1: Lack of a plan.

The days of running a BHPH business by the seat of your pants or intuitively are rapidly coming to an end. Today’s BHPH environment is too competitive. There are more players in the game and more on the way and to insure future success you have to plan for it. Cash flow, sales, and collections plans are the minimal requirements. Always remember a goal without a plan is a wish.

Mistake #2: Lack of the right people. 

In the long run, half an employee will cost you more than 2 employees. What I mean by this is in today’s competitive and regulatory environment, you can no longer afford to have an employee that is only performing up to half of your standards just so you won’t be shorthanded. Practice the old adage of hiring slow and firing fast. Take your time and hire the right person for what you need. And fire those that aren’t cutting it.

Mistake #3: Lack of processes.

If you think your employees know what to do and how to do it because you told them, you are sadly mistaken. What you think is being done and what is actually happening are very often two completely different things. Document as many of your processes and procedures as possible. They don’t have to cover every contingency, but need to cover the basics. With compliance more important than ever, documented processes and procedures could be your “get out of jail free card."

Mistake #4: Lack of education.

There has never been a better time to be in BHPH. I say this due to the resources available to dealers, both new and experienced, to educate them. When I got into the business, there were little to no resources to educate us on compliance or simply how we were doing compared to other dealers. Dealership Management Systems (DMS) had basic functionality at best and reporting capabilities were almost non-existent. National and state dealer associations, 20 Groups, DMS providers, and trade magazines and periodicals keep you up to date on the latest and greatest in the industry. Ignorance is no longer an excuse.

Mistake #5: Lack of technology.

Technology is the key to current and future success. I think the Internet is the root of all evil, but if you’re not using it to collect, advertise, or purchase vehicles you will get left behind. Our customers, I can assure you, cannot only spell it, but are very proficient with it. And for the lazy of us, what better way to educate ourselves on the industry? DMS and payment devices have also come a long way in recent years. It’s time to join the 21^st century.

Every dealer I have ever come in contact with has, or still is, making one if not more of these mistakes. The great thing about this industry is there are a bunch of ways to do it right. By the same token, there are quite a few ways to do it wrong. I’ve listed five that can and will cost you. It’s just a question of how much. Remember these simple tips, and it won’t cost you as much:

• A goal without a plan is a wish

• Hire slow and fire fast

• Document

• Ignorance is not an excuse

• Join the 21^st century

• Don’t be a “lacky”

Brent Carmichael, NCM’s resident expert on the Buy Here, Pay Here industry, is a frequent speaker at industry events, and serves six BHPH dealer 20 Groups as an executive conference moderator.  In addition to in-dealership consulting and training, Brent also teaches BHPH sales and collections and underwriting classes for the NCM Institute. To reach Brent about any of these services for your BHPH operation, call 800.756.2620 or email bcarmichael@ncm20.com.