Over the past 5 years, there has been nothing steady when it comes to the business levels for dealers selling outdoor power equipment (OPE) They’ve witnessed a swing in annual revenues of 31% on average between 2012-2016 ($3.32 million vs. $4.34 million). But this wasn’t the worst of it. Between 2013-2015 alone, total revenues, on average, fluctuated by more than half ($2.85 million vs. $4.34 million).
This data is from the United Equipment Dealers Assn.’s (UEDA) Cost of Doing Business Study. The study presents composite income statements and balance sheets in addition to averages for key financial performance ratios. The study provides valuable “insider” data, direct from dealers that you can use to gauge your dealership’s own performance.
To help you get the most from these numbers during this busy season, our team (Jeff Lazewski, Joanne Volkert, Michelle Drewek and myself) will be breaking down the study into a series of “Measuring Up” quick-read articles.
And, to make sure we’re all clear on how the metrics are defined, please refer to and download these definitions here:
This document outlines the formulas behind key financial measurements and is a good document to share with your entire management team.
The first chapter in the series examines OPE dealers’ revenue mix (new wholegoods; used wholegoods; parts & accessories; service; rental & other); how that has changed over the last 5 years; and the influences on those changes. One takeaway of particular interest is that sales of technical services seem to hold solid potential for increasing OPE dealers’ bottom line.
Chapter 1 also provides baselines from Rex Collins, head of the Dealership Industry Group at HBK CPAs & Consultants, regarding what would be considered a healthy level when it comes to revenue mix.
Stay tuned. We’ll analyze expenses and gross margins next!
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