I recently read an article titled “Put Away the Crystal Ball” by Tony Noland in Ward’s Dealer Business. I’m sure many of you, like me, are involved in planning, forecasting, and budgeting for 2010. This time of year really makes me wish for a big crystal ball that will give me the magical answers on how to run my business next year. Unfortunately, that crystal ball doesn’t exist and, as Tony Noland put it, “We have to plan based on historical information, know factors and sound business judgments.”
Of course we want to be optimistic in our plan but it’s also important to be realistic. According to Noland, “we want to believe next year will be better and business will be great. But we have to ask, will it be different and if so, why?” The bottom line is we have to plan based on realistic historical data.
Many people view budgeting and forecasting as more of an art than a science but with the right data you can make assumptions based on historical and empirical data. With the right software, dealers have a plethora of tools at their disposal that enable them to look back as far as needed to help make logical and calculated decisions for the future So in just a few clicks you can look back at your historical data and build a solid and logical plan for the future.
DealerTrack DMS offers some great tools for financial analysis. Click here to read our “Tip of the Week” about DealerTrack Dealer Management System’s financial analysis and how budgets can be tracked and forecasted.
You can read the full Ward’s Dealer Business article by clicking here. Let me know what you think. Tell us what you’re doing to plan for next year. What does your crystal ball say; will we see a substantial increase in the auto industry next year? Your thoughts and comments are always appreciated.
