Growing Numbers of RV Dealers and Park Owners Are Finding That They can Significantly Improve Their Business Management Skills by Joining "20 Groups" Set Up by KOA, Spader Business Management Inc.and the National Association of RV Parks and Campgrounds

BY JEFF CRIDER
PHOTOS BY STEVEN WIDOFF

In the big picture, looking beyond the shortterm fluctuations in the business cycles, the general prospects for the recreational vehicle business look good, as Baby Boomers enter their prime RVbuying years. Having said that, there are plenty of small business owners - especially recreational vehicle dealers and RV park and campground operators - who could probably use some help in coping with these growth years ahead.

Managing cash flows, maintaining consistent margins, planning capital improvements - it all requires some serious critical thinking for most small business owners.

And it never hurts to get some friendly advice and peer support.

The 20 Group concept came from the automotive industry

Fortunately, growing numbers of dealers and park owners are finding that they can significantly improve their business management skills by joining "20 Groups" organized by private companies such as Spader Business Management Inc.of Sioux Falls, S.D., and industry trade groups like the National Association of RV Parks and Campgrounds (ARVC).

The 20 Group concept came from the automotive industry, which found that it could improve the performance of its dealers by having them meet with other dealers to discuss their financial performance, line item by line item. An outside CPA firm would compile each dealer's financial statements and organize them into a format so that the numbers could be readily analyzed by the group. Dealers could then study the averaged numbers and discuss strategies to improve their financial performance.

Groups were limited to 20 members, none of them from the same competitive geographic locale, because larger groups were considered to be unwieldy - ergo the name "20 Groups."

Some dealers and campground operators tell RV Business that joining a 20 Group is the single best thing that anyone can do to improve their business acumen and (re)build their business confidence.Many are reminded in the process that no businessman or woman is an island, so to speak."When you first enter the group, you realize that you're not the only one fighting the battles," said Merv See, owner of Guarantee RV Centre Inc.in Calgary, Alberta, Canada.

Indeed, any of the myriad challenges of running a business, from managing cash flow to handling employees and planning for growth and expansion, affect RV dealers and campground proprietors alike.The successful ones, however, constantly seek answers to their problems and work to improve every aspect of their businesses.

In this article, RV Business takes a closer look at how RV dealers and campground operators are using 20 Groups to strengthen their commercial enterprises and improve their profitability during what is arguably one of the more interesting periods of time in which to be in the recreational vehicle sector.

Dealers Share Info and Friendship For the Betterment of all Involved

Steve Casement thought he was doing a pretty good job as owner of Steve Casey's Recreational Sales Inc. in Denver, CO until he joined a 20 Group managed by Spader Business Management.

The dealer groups that Spader has been organizing for more than 25 years are comprised of dealers who meet with each other for two to three days at a time, two to four times a year, and analyze each other's financial performance - in detail.

Dealers in this case can also benchmark their performances against those of retailers outside their specific 20 Group by examining the lineitem averages that Spader has compiled from other 20 Groups across the country. The numbers are then used as a basis for discussion in which dealers and Spader's instructors offer ideas on how best to improve one's performance in every financial category.

"Before I joined a 20 Group, I thought I was doing pretty well," Casement told RV Business. "But after joining one and comparing myself to the group, it really opened my eyes."

Indeed, even when times are good, dealers often don't monitor their businesses as closely as they should, as Spader President John Spader is quick to point out."Most dealers don't know how to budget and project cash flow," he said. "They don't even have a baseline or a rough idea in a lot of cases."

This, of course, is compounded by the seasonal nature of the RV business in many locations across the country, a fact that prompts many retailers typically to operate in the red three to five months of the year. Is that acceptable in Spader's view? No, but it happens, he confides, when dealers don't adequately project cash flow and save enough money from the peak season to carry them through the slower months. And this can have a compounding effect because tight cash flow can lead to poor business decisions.

Even plentiful cash flow can lead to problems if it's not properly managed, 20 Group members have told their peers. For example, growing sales volume may encourage some dealers to buy too much inventory or expand too quickly, while not paying sufficient attention to margins. Rapid retail success can also prompt dealers to make poor personnel decisions. "Keeping their people happy, keeping them motivated, that's one of the top issues," Spader said.

Many dealers, however, don't even have appropriate job descriptions for their employees, which is a theme that often surfaces during the giveandtake of 20 Group sessions. Without those, retailers can't possibly measure performance of their employees.

To make matters worse, many dealers have an outright aversion to personnel management.

"Ask the question in a group of dealers: "How many of you enjoy and look forward to your annual reviews with your employees?' You don't see a hand come up," Spader said. "Very rarely, once and awhile, you get one hand to come up. Then ask, How many of you hate it with a passion?' And they just about jump out of their seats. They don't know how to do it. It's not in their system. But on the flip side, ask their employees, and they can't wait for it. What the employees want most and look forward to the most the owner/manager hates the most. That doesn't'make for a good connection."

Why the disconnect?

"A lot of it is that a lot of dealer managers simply weren't trained," Spader said, "just like a lot of them weren't trained in financials. There's a lot of dealers that don't understand a financial statement. If there's a loss, they hate it. But they don't understand it, and they don't know what they should be doing."

But dealers who participate in 20 Groups have an opportunity to tackle these issues head on so that they can improve their performance.

"When you get in a group, you find out what you don't know," said Ray Bunney, owner of R 'N R RV Center Inc. in Liberty Lake, Wash., near Spokane. "If Spader sees something in our numbers or they think you're doing something wrong, you'll get hammered. But they will make you a better business person."

So how do 20 Groups work?

"In the first meeting, it's more for everyone to get on the same page," Spader said. "All of our members come to a dayandahalf orientation, whether they join an existing group or whether it's a new kickoff. We cover the bylaws. We help them get their financials in a standardized format so that they can compare their data. We also give them software that they can use for submitting their numbers."

Providing detailed financial data is the critical first step for any 20 Group member because it enables the group's members to sort fact from fiction. "When you don't have numbers to back your story, there's a lot of cocktail talk that creeps in," Spader said. "People will start saying how great things are going, how great the market is and that they're just tearing the market up. Then, somebody will open the book and look at the numbers and say, Yeah, your sales may be high, but your margins stink and you're not making any money on it.'"

Spader's advice: Pay attention to dealers who don't brag about their performance. "A lot of times," he said, "the dealers that are doing the best don't say a word. They're the ones with all the answers."

In 20 Group meetings, agendas are developed to tackle troublesome financial issues so that dealers can work together with Spader's instructors to develop effective solutions.

Each 20 Group has a chair and cochair who set up an agenda with input from Spader, who, for his part, may have identified several specific areas of concern that need to be addressed in the meeting based on his review of the data. While dealers set the agenda, Spader's instructors, including John and his father, Duane, a nationally recognized RV and marine dealer authority who started hosting 20 Groups in the late 1970s, often lead discussions and facilitate discussion. "20 Group members get a monthly 70or 80page report from Spader with literally thousands of line items to compare against one another," John Spader said. "In our meetings, you really zero in on the high performers. When you're going into issues, you find out who's making it work better than everybody else. Then you deconstruct. What are they doing? In the room, the facilitator will guide it and a lot of times other dealers jump in or we'll take the top three or four of the top dealers and have them make a presentation. Then we may find that one dealer's margins are three or four points higher than the rest in motorhomes. So then we ask that dealer, what are you doing in the sales process? How are you doing that?"

These discussions, which Spader hosts just about every week somewhere in the U.S., enable the company to identify the best and brightest ideas, along with strategies that help dealers improve their operations. "We're seeing a lot of new strategies out there about how to improve margins, how to raise margins," Spader said.

And because Spader also manages 20 Groups for other businesses, including the marine, powersport and motorcoach industries, the company has the ability to share a broad range of business management insights and experiences with RV dealers. "We now have 20 Groups in 10 different industries," Spader said. "There's a lot of outsidetheindustrybox thinking that Spader can bring to the table."

Moreover, John Spader added, if the answer to specific questions lies within the group, his company's job is to facilitate the discussion in a way that helps 20 Group members learn from one another. "But a lot of times," he said, "we can bring answers or new ways of doing things because of our ability to look across 10 different industries. They're all in different stages of evolution."

Many dealers say they are inspired not only by the 20 Group discussions, but by real life examples of success provided by dealers in their groups.

"When you see people carrying less inventory and selling just as much as you are, that gets your attention real fast," said Casement, adding that inventory management is one area of his business he has greatly improved as a result of his involvement with a Spader 20 Group.

"More is not better," Casement explains. "You need to carry the right inventory. You need to have enough to make the consumer feel like they have a decent selection. You need to find that balance between having enough to satisfy your customers' needs and proper inventory controls."

How does a dealer achieve this?

By watching the turns more closely on individual models, Casement said, and making more calls to the manufacturer. In short, it requires more management, and having the willingness to have business priorities override personal relationships.

This may also require dealers to face some hard questions. "If you have product that isn't turning, you get rid of it rather than hanging on to product because you like the people at the factory," said Bunney of R 'N R RV Center. "The 20 Group will force you to justify your position. If you want to keep a product that doesn't turn because you like the factory, they will question that."

Similarly, Bunney said, 20 Groups provide dealers with an opportunity to assess the performance of various manufacturers on warranty claims. "It allows you to compare notes with people on factory programs," Bunney said."You can learn about the strength of a factory or if they aren't paying their warranty claims on time. Sometimes you think the problem is only your problem. We can diagnose whether it's an internal problem (on our end) or external (involving the factory)."

But while 20 Group members learn nuggets of information like this, they also set goals for themselves to which their colleagues hold them. "Say you want to lower your inventory," Casement said, "and maybe you decide to lower it by $1.5 million with the group's consent. Then, at the next meeting, they'll fine you if you don't make a concerted effort to deliver."

Such prodding, done in the right spirit, is a good thing.

"We all need a little discipline in our lives, and it's good to have goals to reach for," Casement said.

Meanwhile, Bruce Cooper, a past president of California RVDA who owns Village RV Inc. in Roseville, Calif., says Spader's 20 Groups have helped him with every Groups have helped him with every aspect of his business. "Our profitability is significantly better," he said."Our margins are better. Our expenses are lower."

Jeff Crowder, president of Crowder RV Center in Johnson City, Tenn., some 100 miles east of Knoxville, believes 20 Groups can also help dealers improve their marketing skills. "On the last day of a 20 Group meeting,"he says, "we have to bring our best ideas to the group and, often, it's marketing issues because what has worked well for one dealership often can be repeated elsewhere in the country."

Of course, not every dealer will achieve the same results with every aspect of their business.

"We're not cookiecutter zombies out there where everybody ends up with the same numbers,"Cooper said."At the end of the day, if you're not doing it in labor management, you've got to make it up someplace else.All you're really trying to do is make a living.And as long as you end up taking in more than you spend, it's fine.But Spader teaches you the basic guidelines of how you get there."

The groups'members, in the process, share useful market intelligence, which can help dealers assess the strength of the economy and its effect on their own business.

Casement's 20 Group, for example, includes RV dealers from Denver, Colo.;Burlington, Wis.;Huntsville, Ala.; Detroit, Mich.;Cleveland, Ohio;Omaha, Neb.and Irvine, Calif.Such diversity sometimes gives participants a chance to see economic trends before they occur in their own markets. "You'll see one part of the country doing OK and another part struggling,"said Casement, adding that such information is very valuable to business operators who are constantly trying to get a handle on the health of their local, regional and national economy.

ARVC Park Operators Take a Similar FactSharing Approach to 20 Groups

Ron Gilbert had 25 years of experience in accounting, including 10 as chief financial officer for a privately owned construction company, before he and his wife, Ann, purchased the 300site Drummer Boy Camping Resort in Gettysburg, Pa.

Gilbert, however, was smart enough to know that a quarter century of experience in financial management was no guarantee that he could be successful in the campground business. "We didn't have prior experience owning a campground,"he said."We weren't even campers!"

But the Gilberts quickly untangled the knots of campground management by joining a 20 Group administered by the National Association of RV Parks and Campgrounds (ARVC), which first introduced the 20 Group concept to the campground sector nearly 20 years ago. Park operators who are members of these groups pay ARVC a onetime setup fee of $150 plus an annual administrative fee of $350.They shoulder their own travel costs.

In a similar approach to the dealerships' involvement with Spader, ARVC 20 Groups are comprised of noncompeting campgrounds, usually from distinct geographic areas. The group elects two members of the group to serve as cochairs, who then work with their members to determine meeting times and locations and the agendas for each meeting.Members of ARVC 20 Groups typically meet two or three times a year, but are in touch with each other by phone and email much more often than that because they find they can help each other with their businesses throughout the year.

The Gilberts joined a 20 Group after they attended an ARVC seminar on the topic, and, now, Gilbert said it's the single best business decision he's made since he and his wife purchased their campground 17 years ago.

"You pay to belong to the group, but the networking and sharing of information that is within the group is extraordinary,"said Gilbert, who talked about the merits of 20 Group membership during a seminar with three other 20 Group members at last winter's annual ARVC InSites Convention & Expo in Austin, Texas.

Indeed, Gilbert said being in a 20 Group is like having a board of directors.Only in this case, your fellow 20 Group members are other campground owners who can provide you with immediate advice on any challenge facing your business.

It was Gilbert's fellow 20 Group members, in fact, who helped him devise a threephase plan to improve and grow his campground, which is five minutes away from the historic Civil War battlegrounds at Gettysburg National Military Park. The plan required him to complete several maintenance and repair projects before adding a series of new amenities, including fullservice kit cabins and a swimming pool, complete with a beach entry and adult spa, plus a new office and camp store.The next phase, implemented in 2003 and 2004, was a 375site park expansion, along with the addition of a second swimming pool and water slide.

Other park operators have similar praise for ARVC's 20 Group program.

"For our business, it's the best thing that we've ever done,"observes Erv Banes, CEO of the Jellystone Park Camp Resort in Frankenmuth, Mich. "You have a resource of people that will gladly talk to you, whether you're buying a tractor or whether you're redoing your laundry or trying to figure out your laundry machines.

We've got and how much they should get,"he added."But you wonder why in the world one park is making a thousand dollars when I'm only making a hundred dollars.And then you find that somebody is charging only a quarter and somebody else is charging $3 a load.Or you find that they're all seasonal and you're not.You find reasons why your numbers are high or low so you can decide whether you're at the right point."

Tim Hopkins, manager of Cherrystone Park in Cheriton, Va., said he almost pulled out of a 20 Group, but is glad he opted to stick with it. "At first, I'll tell you, we weren't going to stay as part of the group.A lot of these older people had been in this for years and we were intimidated by that,"he said."But then it dawned on us, Hey, these people may have some answers for us.'Sharing the knowledge is great.I can't brag about it enough.It's nice just to be able about it enough.It's nice just to be able to go on the Internet.We've set ourselves up into a mass mailing system.I can shoot a question out if I've got a concern and at the end of the day I've got an answer from somebody or an idea or a suggestion.It really is great.I can't say enough about these guys."

Mitch Parker of Frontier Town Family Campground in Ocean Beach, Md., offered a similar account in his presentation to campground owners attending ARVC's 20 Group seminar in Austin."I can say the first meeting I went to paid for the next five years,"he said."It was simply a suggestion on acquiring insurance in a different fashion.Every meeting you come out with at least one idea.That, I think, is the real crux of the group."

And because campground operators typically hold meetings at member campgrounds, the hosts are able to entertain recommendations from the 20 Group members regarding specific things they can do to improve their own parks.Gilbert did just that when he served as host.The group gave him ideas he hadn't considered for placement of a new swimming pool.Gilbert was thinking about putting the new pool in an area that was relatively unobstructed, but the group members said it would be better to install it in another area near the camp store and miniature golf course."We ended up building a pool in a place I never would have considered,"he said.

While ARVC has had a 20 Group program for nearly two decades, many campgrounds are only now learning of the concept and the benefits that membership can provide for their businesses.

Billings, Mont.based Kampgrounds of America Inc.(KOA), in turn, launched its first 20 Groups about three years ago.And today, about 34 of KOA's 450plus parks are involved, meeting twice a year, according to Lorne Armer, KOA's assistant vice president of finance.

KOA organizes its 20 Group sessions free of charge for its franchisees because it recognizes the benefits of such an investment.As part of the process, participating parks are provided with detailed analyses not only of their financial performance, but of their scores on KOA's annual Kamper Satisfaction Surveys."In the spring we analyze last year's numbers.Then in the fall, we develop business plans,"Armer said, adding that campground operators can then work with each other to improve their financial performance, as well as their levels of guest satisfaction.

"What (our franchisees) are telling us is that (our 20 Group meetings) are the best spent time that they can ever imagine away from their campground,"Armer said."They come from these meetings saying, I'm spending more money in these categories than I should be.'"

The campground operators hosting KOA's 20 Groups also get a chance to have their peers critique every aspect of their park."This isn't a 10 minute walkthrough,"says Armer."It's three hours.They'll go out in small groups, and the next day they'll come back with the owner in the room and they'll let them have it.We've found that is very useful."

Indeed, one 20 Group participant completely overhauled his bathrooms after seeing the grilling that a host park encountered following a walkthrough of his park.

Efforts are Made to Ensure that Only Compatible People Placed in Groups

It's important to note that the RV dealers and campground operators with whom we've spoken find 20 Groups to be valuable in themselves because of the networking aspects and personal ties that members establish with one another.Indeed, while 20 Group meetings obviously provide dealers with a wealth of information, the meetings also provide participating dealers with a chance to network with other dealers who can help them with a variety of business challenges throughout the year, either by providing advice through phone calls or by sharing email messages to the group."As you spend more time in it,"Casement said, "you become a real team together. You help each other.It's a real support group."

"You really have 19 other consultants in your group, and you can call any of them at any time to get helpful information on how to resolve problems,"said See of Guarantee RV Centre Inc.in Calgary.

Debbie Brunoforte, owner of Little Dealer Little Prices, which has three Arizona locations in Mesa, Phoenix and North Phoenix, has similar praise for the networking that takes place."If a situation arises, you have 19 very knowledgeable people that you can call at an instant and get advice," she told RV Business. "Chances are, whatever situation you're dealing with, one of those 19 people have been through it, and they're willing to share their experience so you don't make the same mistake that they've made."

Moreover, Brunoforte said, 20 Groups provide dealers with an important professional contact they may not otherwise have."Oftentimes,"she said, "the owner of a dealership does not have anyone to talk to or anyone to go to unless they're in a 20 Group." Brunoforte, for her part, constantly advises new RV dealers to get involved in 20 Groups as soon as possible."I have talked to many dealers through the years, and I tell them the very best advice I can give anyone is to join a 20 Group."

Campground operators have similar perspectives."Once you start sharing financial information,"said Gilbert of Drummer Boy Camping Resort, "the next thing you know there's a bonding and a sense of family.I give the highest endorsement to this program."

RV dealers interested in participating in 20 Groups may contact Spader Business Management at (800) 7723377 or visit the company's website at www.spader.com.John Spader said dealers will be asked to fill out extensive forms to pinpoint their business needs and objectives.The Spader Companies then work to place them with a group that matches their interests.For example, some dealers want to be placed with others that are striving for high growth, while others may want to be with dealers who are taking a more conservative approach.Spader, in this sense, works like a matchmaker, making sure that it places dealers in groups that will be helpful to them.

This approach benefits dealers.

"If you're a dealership that's wanting to grow, you don't want to get in with a group of guys that are semiretired,"Bunney said."Or if you're not wanting to grow real aggressively, you don't want to get in with an aggressive group."

Sometimes, Bunney added, dealers don't know themselves which group they should join.In those cases, Spader helps them make a selection, although, over time, they may discover they need to move to yet another group.

Each 20 Groups'members, however, also have rights in this process and must agree to vote in each new member.And, again, every effort is made to ensure that participants are not potential competitors because of the sensitive nature of the information that will be exchanged.

Gilbert and other private park operators, for their part, say it's best for new campground owners to attend ARVC's Annual Certified Park Operator program at Ogelbay before joining a 20 Group.That way, they can give as much information as they receive from other campground operators. For more information about ARVC's 20 Group program, contact Karen Mason at (800) 395-2267.

Reprinted with Permission from RVBusiness

Celebrating 30 Years Helping Businesses Become More Successful

After 30 years helping businesses change to become more successful, Spader Business Management continues to offer its trademark Total Management I workshop and 20 Groups to thousands of businesses in ten different industries every month. This fall, the company plans to launch a whole new level of training with its Total Management II workshop.

Spader Business Management, an I-NEDA Recommended Provider, got its start when Duane Spader opened a mobile home and RV dealership in Brookings, SD. The business was relocated in 1971 to its current location in Sioux Falls, SD, where it survived high gas prices in the 1970s through Spader's growing understanding of key management principles.

During that time, Spader served as president of the National Recreation Vehicle Dealers Association. He gave short talks on what he had learned while operating his business. Demand for his talks eventually grew to the point where he had to start charging for his presentations. Duane Spader, the trainer, was born.

"My father's vision was probably 25 years ahead of his time," reflected John Spader, president of sales & marketing. "He always dreamed of doing this (Total Management II workshop) and it's been very fulfilling - both for myself and the whole organization - to be able to carry out a vision he started out with over 25 years ago."

TOTAL MANAGEMENT WORKSHOPS

The company's Total Management I workshop has served as the foundation of Spader Business Management for 25 years. This training program focuses on the financial side of the business (how to have more time and make more money), while the new Total Management II workshop will cover the people side of the business (how to develop and sustain a high performing culture and people, leading to a solid and stable business).

Todd Barker of Barker Implement and Motor Co., Inc., Lenox, Iowa, attended a pilot Total Management II Workshop. "It's a really neat training program. It helps you expand the people side of the business and get people to march to the same drum."

"In today's world of faster change, bigger businesses, and merging store cultures and owners, the people side has become a much bigger piece of business management," stated Spader, who stressed that as any industry matures, the organizations get bigger, competition grows fiercer and margins get tighter. "The farm equipment industry is not only consolidating, it's shrinking. This puts a lot more pressure on dealerships. One key way to differentiate yourself is with the people side of your business."

Spader also encourages business owners to focus on the vision, mission statement and values of their businesses. "Most people are merging right now or buying stores out of a strategy issue - not coming from the right end. They need to stop and ask themselves, why am I in business other than to make money?" stressed Spader. "They also need to ask, if I can't make one or two stores run well, what makes me think I can run five or six stores where it gets a lot tougher and more complex?" he added. "That, in my personal opinion, is one of the biggest problems affecting farm equipment dealerships right now."

MANAGING FORWARD

Spader went on to explain that problems in a business are usually caused by one of four things: culture, people, process or strategy. He stressed the importance of developing a strong culture in your business first.

"Most small businesses - farm equipment dealers in particular - tend to start with a strategy, develop a process to follow that, get people to follow the process, and then get a culture by default. It should be just the opposite," emphasized Spader. "You should start with the culture you want instead. Find the right people. If you get the right people in the right job, they'll make a process better than any entrepreneur could come up with. Your culture should not change. It's your anchor."

Spader Business Management has partnered with Dr. Michael O'Connor, an internationally recognized expert in people management, for nearly 30 years. Many of O'Connor's concepts, including "Managing Forward," are utilized in Spader Business Management's training programs.

"If an organization wants to position itself for continuing long-term success and maximize the performance of its workforce, its priorities should be arranged culture first, followed by people, then processes, and finally strategy. A strong culture and great people are the core around which efficient and effective processes, systems and strategies revolve," explained O'Connor in his article titled, "Managing Forward: A Model for Total Business Success." Following is a brief excerpt from his article detailing these areas:

Culture - There are two different cultures: The "expressed" culture (the way things are supposed to be) and the "actual" culture (the way things really are). According to O'Connor, in order for a strong culture to develop, an organization's core values must be clear, management must believe in them, and these values must be continuously communicated.

People - A culture cannot exist without people and it's people who create continued on page 9 The Retailer (I-NEDA) continued from page 8 and maintain the vibrant work environment that allows the proper processes and strategies to emerge and grow. O'Connor feels that since dedicated, capable performers tend to produce excellent processes and strategies, the organization that wants to get ahead and stay ahead should take care of its culture and people first, then focus on processes and strategy.

Processes - Before a successful strategy can be successfully implemented, certain central processes - and the people responsible for them - must already be in place. "What superior processes deliver in the long run are greater reliability and efficiency, in the form of less waste," he stressed.

Strategy - While culture and people are internally controllable, a company's strategy is how it chooses to focus its culture, people and processes - in the form of products, services and initiatives - in response to the outside world. "No matter how good an idea or product is, inept execution will almost certainly doom it to extinction, so it doesn't make sense to make an organization's strategies and processes a higher priority than its culture and people," concluded O'Connor.

20 Groups

Spader Business Management's 20 Groups have remained a popular aspect of the company's training program for 30 years. The theme of 20 Groups is to share ideas, trends and successes. "That's what 20 Groups are all about - helping one another achieve greater success," said Spader with pride. "I can't tell you how many owners I've had say, `for the first time in my life I can just unload anything. It's the only place I can go and unload and people truly understand not only where I'm at, but help me determine what I need to do in order to move forward.'"

"While the effort and expense of participating in a 20 Group is considerable, there are times during each meeting when the light comes on about a strategic issue, a philosophy of operation, a process or approach, that makes the participation more than worthwhile," emphasized Russ Stigge of Bennington Equipment, Inc., Bennington, Neb. Stigge has been a 20 Group member for nine years. "We have taken back processes and ideas from the group to every department of our dealership."

Dick Samuelson agreed. "I would highly recommend Spader Business Management. Otherwise, I wouldn't have stayed with it for nearly 15 years," praised Samuelson of Samuelson Equipment Company, Hastings, Neb. "The opening at our 20 Group always starts with `How's Business?' It really gives you a feel for trends that are happening in other areas of the country."

"We really wanted to get in a group where we could share numbers and really look at management practices," added Barker. "20 Group is exactly what we were looking for. We always come away with things we can utilize at our dealership. Each member brings a unique aspect to the group." Throughout the year, Barker will call members who are doing something well and ask for their suggestions on how to implement a similar process at his business.

For example, this summer Barker plans to implement a process to more closely monitor the images his stores are putting out. "It's tough to maintain a clean retail environment in the equipment business," he explained. "However, one of our 20 Group members has developed a monthly process that seems to work well. We're going to take that process, tweak it a little bit, and implement it at our business."

Spader concluded, "A lot of trainers don't understand the principles they are training. They know it works, but they don't know why. At Spader, our training gets into why it does or does not work. Why are we doing it? What needs to be done? How are we doing it? All of our training starts from that foundation and then goes on to developing systems.

We get to look inside thousands of businesses within 10 different industries every month. Our training takes out of the high performers what they're doing and mapping it. For example, when someone comes to us who's been in business five years or more, we're not going to tell them anything they don't already know in their gut, but we're going to give them a system that's trainable, repeatable, clear, understandable and, most importantly, in writing. Our training helps them switch from owner-directed and owner-driven, to owner-directed and employee-driven."

"If you are not in a management group activity of some kind, you need to ask yourself why," concluded Stigge. "Are you ashamed to show someone your operating statement or explain why your philosophy of doing something doesn't appear to be working? Remember, there are dealers out there who are a lot smarter than you are. If you are lucky enough to have them in your group, you will receive huge rewards that will benefit every part of your dealership."

Barker agreed. "Anybody trying to grow their business and wanting to stay in for the long haul should look into a 20 Group with Spader. You need to take advantage of resources like this, because you've got to continue to sharpen the saw."

After 30 years helping businesses change to become more successful, Spader Business Management continues to offer its trademark Total Management I workshop and 20 Groups to thousands of businesses in ten different industries every month. This fall, the company plans to launch a whole new level of training with its Total Management II workshop, fulfilling Duane's vision and dream that son John, current president of the company, says "was probably 25 years ahead of its time. It's very fulfilling - both for myself and the whole organization - to be able to carry it out."

Total Management Workshops

The Total Management I workshop focuses on the financial side of the business (how to have more time and make more money), while the new Total Management II workshop will cover the people side of the business (how to develop and sustain a high performing culture and people-"getting people to march to the same drum," and leading a solid and stable business.)

In today's world of faster change, bigger businesses, and merging store cultures and owners, the people side had become a much bigger piece of business management. And it must be stressed that as any industry matures, the organizations get bigger, competition grows fiercer and margins get tighter. This puts a lot more pressure on dealerships. One key way to differentiate yourself is with the people side of your business.

Business owners also need to focus on the vision, mission statement and values of their business-to ask themselves, "Why am I in business other than to make money?"

Managing Forward

Problems in a business are usually caused by one of four things: culture, people, processes or strategy. It is important to develop a strong culture in your business first. Most small businesses tend to start with a strategy, develop a process and follow that, get people to follow the process, and then get a culture by default. I should be just the opposite. You should start with the culture you want instead. Find the right people. If you get the right people with the right jobs, they'll make a process better than any entrepreneur could come up with. Your culture should not change. It's your anchor.

In its 30 year partnership with Dr. Michael O'Connor, an internationally recognized expert in people management, Spader has incorporated many powerful people-oriented concepts, including "Managing Forward," into it's training programs.

20 Groups

Spader's 20 Groups have remained a critical tool for better dealership management for 30 years. The theme of 20 Groups is to share ideas, trends and help one another build successes by looking closely at all aspects of participants' businesses, including strategic issues, philosophy of operation, a process of approach, the numbers and how to improve them., best management practices, and more. Ideas garnered can apply to every department of a dealership. Jack Bell of Chemo RV in Williams Lake, BC, finds that, "Spader 20 Group covers all aspects of running a successful RV Dealership in an ethical and profitable manager. It gives me a measuring tool to run our RV Dealership with comparisons from the 20 Group Dealers and other 20 Groups, and concrete tools like key ratios to monitor our margins and expenses. You can never stop learning from your peers and people in the same business that you are in."

The effort and expense of participating in a 20 Group is considerable, but value received is priceless. Some RV dealers have been attending 20 Groups for over 20 years! And they credit the group with not only saving failing businesses, but taking low-earning businesses to high profitability. Many of these dealers also repeatedly attend the Total Management Workshop.

Rod Sellers of Sellers RV in Lloydminister, SK, has been in a 20 Groups for over 20 years, and found that "the advice from the group actually saved our business in a very tough period. The exchange of all financial information was probably the hardest hurdle to overcome for me. But that is exactly what makes the group so powerful; there are no lies. You can compare all your numbers to 19 other dealers monthly, and exchange all kinds of ideas at the quarterly meetings. I have attended the 5-day workshop four or five times; it is very, very good and a lot to absorb on one try. The benefits are making more money and doing it easier, less stress, better staff retention, happier family life and having a great source of info for the long haul."

Shelly Shewchuk, owner of Recreation World RV's, Thunder Bay, ON, writes: "If it wasn't for Spader Total Management &amp Spader 20 Groups, I'm sure I would not be in business today. I have 20 mentors available to me at all times-whether it be for RV related business situations or even personal situations-someone in our group has been there and done it! And can give you a whole different slant on something. It takes the 'blinders off'-we get so entrenched within our business we forget to look at the whole picture. 20 Groups are a must for any business owner, serious about being in business!"

Derek Dobson of Leisure Time RV Center in Saint John, NB, who has also take the Total Management Workshop, says, "The Spader 20 Group has been an excellent way for me to keep abreast of the ever-changing landscape of the RV Industry across the country. It has become an excellent monthly benchmarking tool for our whole dealership and we look forward each month to see how we rack up against similar-sized dealerships."

Content for this article was derived from a conversation with John Spader of Spader Business Management.

It's no secret that when it comes to the pre-owned market, there's one thing that boat dealers aren't doing capitalizing on the many opportunities that are available. Now that doesn't stand for every dealer. Some dealers out there today are taking advantage of the pre-owned market and are making money. For those who aren't, though, there are many reasons why.

For starters, the pre-owned boat market is like a spider web. There are many different aspects to the market that can affect each other. The pre-owned segment is often tied to the turnover of new boats and the high debt-to-equity ratio of dealers, which means less cash flow and can stretch dealers financially. Most dealers lack processes and systems to deal with pre-owned product from the trade-in valuation through the sale and they lack a support system in the wholesaling market.

Also, many dealers carry a great fear of venturing into the pre-owned boat arena. Some of them suffered through a bad preowned experience and have clamped down, deciding to avoid the market altogether.

Despite all of those things, however, there are plenty of incredible opportunities for dealers to capitalize on the preowned boat market. The first key to turning pre-owned boats into a profitable venture is having sound systems in place to create a consistently successful process. Toss in some diligent homework and a sound appraisal system on the front of the pre-owned process, and dealers can quickly capitalize on additional sales and stronger margins.

One of the first steps to take in creating a process is to figure out what margins you need to make in the pre-owned sector. You must determine this after you understand how new and pre-owned boat margins differ. On the average, margins for pre-owned boats should run a minimum of 3 to 5 percent higher than the margins for similar new models. And don't forget that those margins must take into account any additional expenses you'll generate in the service department through extraordinary rigging or reconditioning.

There are a number of reasons that dealers can use to justify the need for increased margins. First, there is not another product exactly like the pre-owned boat on your lot anywhere else in the country. You have the only one. Second, you don't have the manufacturer's warranty backing the product, so you will be the one putting the money into repairing it. Finally, successful pre-owned dealers require better management and more management of the pre-owned process in order to succeed. Part of being successful means making the proper margins.

So, if you're not getting more for the preowned product you're selling, then you're not doing the proper job in trading for it. In other words, you're "buying" it for too much. And that's a skill level deficiency that causes many dealers to shy away from this market. They know how to negotiate with a manufacturer for a price, but they don't know how to negotiate with a customer to buy it right.

Begin the trade-in process with the understanding that two transactions take place with trade-ins. When you process a trade-in transaction, you're not only selling a unit, you're buying a unit. Often, dealers focus on only the selling aspect of the trade-in process. Dealers need to separate the two parts and make sure to analyze each transaction. Sell emotionally and buy rationally.

The worst thing you can do is trade for too many used boats and pay too much money for them. This could have significant financial repercussions if you're not careful. You have to make a good management commitment to develop the processes to manage all aspects of the sale from the buying to the selling to the policy work, or it can put you out of business really quickly.

With this mindset in place and your target margins in mind, the most valuable tool you can use to analyze a trade is an appraisal form. These forms can be created by and customized for your dealership. When you create yours, build in room for grading the overall condition of the boat, engine, accessories and trailer. Consult with an appraisal guide, determine a starting price and keep a score sheet as you find positives and negatives of the product. In addition to this list of the pros and cons, take into account such things as your target market and how the trade-in fits with your product offerings. You should also be able to estimate a resale value, keeping your target margins in mind. This should help you best determine the price you can offer for the purchase of the trade.

Once in your possession, you should also have a sound system in place to follow pre-owned boats thru to resale. Many dealers keep a waiting list of customers who are looking for specific types of boats and are able to turn newly acquired boats quickly. You should also establish a systematic procedure to move each newly acquired boat through your dealership, from the time it arrives on the lot until it is sold. Too often, pre-owned boats aren't inspected properly on the front end of the transaction, and one of two things can happen: the boat is already in good resale condition and the service department puts too much time and money into it; or the initial inspection fails to recognize that it's not in good shape, and more resources than expected are necessary to get it ready to sell. Either way, you lose because your margins shrink, so it's important to have a process in place to ensure your time and money are allocated most efficiently.

One final reason dealers don't get into the pre-owned market is because they believe you can't get floor plan on the used product. Indeed, the No. 1 reason some dealers can't get it is because the banker sees that they don't have the proper management systems to manage it, so they don't want to loan them the money. If you manage your preowned business properly, you commit to the banker that your inventory turns will be higher and your gross margins will be higher, and the banker feels better about giving you pre-owned floor plan. On a new unit, they have other reference sources to help them determine the value. On pre-owned floor plan, it's all about trusting the dealer and the value he assigns to the boat. So the banker says, "no" when they see management deficiencies; and they say, "yes" when they see management superiority.

Pre-owned sales have become a significant source of revenue for many big-ticket industries. There is no reason why this shouldn't be the case for marine dealers, too. In order to best capitalize on this market, marine dealers need to focus on increasing new unit turn ratios to increase cash or pre-owned flooring availability. Clearly understand the need for higher margins on preowned boats and develop better systems and processes in managing your pre-owned inventories.