Avoid These 5 Dealership Construction Mistakes! - By Brent Tally

Published In F&I and Showroom - November 2019, Brent Tally

When we meet with dealers who have completed a facility remodel that failed to meet expectations, “If only …” and “I wish we would have...” are commonly heard phrases. Dealers and general managers are hardworking, smart, seasoned, and thoughtful executives, but too many have learned their facility lessons via trial and error — and they always remember the cost associated with the “error” side of the learning process.

Here are five common dealer remodel regrets and how to avoid them:

1. Rushing Into Construction: “Measure twice and cut once” should be the Hippocratic oath of construction management. The opportunity to plan and value engineer cost out of a program is considerably easier if you allocate enough time and focus to your design eight to 12 months in advance of groundbreaking.

In a recent analysis, we found that for every $1 of value engineering design changes made in the preplanning phase, a dealer can save a project $2.35 in cost overruns and delays. 

2. Underinvesting in Service Space: We have never had a dealer principal tell us they wished they’d built a bigger showroom. But we consistently hear regrets about not building enough service space.

Even if your current sales forecast does not call for a high absorption rate, design your service area with an expandable footprint so more service bays can be added at a later date. This is especially true if your brand is adding an electric vehicle line, because EVs may require a second service bay for battery work.

The best operators broaden the definition of what “service space” means. They see a future that includes a rental car facility, a collision center, and EV charging banks.

3. Failing to Separate ‘Required’ From ‘Recommended’: The image program your factory representative presents includes “need to have” and “nice to have” aspects. The main sources of contention between dealers and reps are the areas the customer and community will never see.

These are always sensitive discussions. There has to be a give and take. However, when the facility is complete, it will house your business. You should be assertive in distinguishing the factory’s wants from your dealership’s needs.

4. Inadequate Parking or Storage Space: As the volumes of new, used, commercial, rental, and trade-in units expand and contract, so should your ability to park and protect them. Finding a convenient place to safely organize your cars will make life easier. The best designed dealerships all have a secondary lot no more than half a mile away.

5. Good Facility, Bad Fit: Your workforce is your No. 1 asset. The dealerships and groups that have the highest profit levels, best service retention, and biggest impact on their community are the ones that design and invest in facilities that make employees want to come into work every day

If space and resources allow, design your work environment to incorporate extra space for employee lounges, service tech locker rooms, larger and well-appointed restrooms, and state-of-the-art training and meeting spaces. It is a war for talent and the physical environment that you build to will give your firm a competitive recruiting edge. 

With careful planning and determined execution, your next remodel will change your mindset from “If only …” to “What’s next?”

#Automotive #Construction #Facilties #TallyCM

Brent Tally is the founder and president of TallyCM, a firm that specializes in the design and construction of automotive facilities. Email him at btally@tallycm.com.