Weathering The Storm During The Coronavirus
As the US adjusts to combat the coronavirus, officials are placing restrictions on population movement in an effort to stop the spread of the virus. Many busineses are temporarily closed and most people are self-isolating in their homes, only choosing to leave for essential trips. Understandably getting out to buy a used car isn't high on the priority list for most at the moment and even those in need of a vehicle will be hesitant to buy with all the current volatility in the economy.
The stringent measures in place are designed to halt the spread of the virus as quickly as possible so that lives can be saved, and everyday life can resume sooner. When that does happen people will return to their routines and they will start shopping again, so it's imperative that dealers do what they can to ensure that they are there to meet that need in the coming weeks.
Independent dealers of all sizes will likely experience a drop in sales over the coming weeks which will put a strain on their cash flow, making it hard to meet payroll or pay creditors. It's advisable to have the unpleasant discussions with partners and employees about how to navigate the disruption to cashflow; some might elect to take personal time or agree to deferred wages. Reach out to creditors early to address the situation before you are in default, so that you can agree to a plan toegther that will allow you to remain in business.
Do the same thing with your floorplanner; most OEM floorplanners are providing relief for their franchise dealers so the industry is already taking steps to assist. Conatct your independent floorplanner before you fall behind to discuss options, request forbearance and establish a plan. Units on the lot will invariably age out beyond your contracted dates, so halting the interest payments due will make a big difference while you tread water during the disruption but also when you do sell them once the crisis has ended.
The federal government is working to rapidly sign a third stimulus bill that would include $300 billion in bridge loans for small businesses to help them navigate the slowing economy. Once this bill passes, take the time to read and understand it to determine your eligibility so that you can quickly take advantage. Dealers should also check to see if their state or local government is providing aid that they can take advantage of. Chicago, for example, has already launched a $100 million fund to assist small businesses.
Lastly, make sure to actively reach out to your customers via your websites and social media platforms so that they know you're still there to meet their needs during these trying times. Providing a stable and uninterrupted service will build customer confidence and loyatly in your business for years to come. Try to use this opportunity improve the things you can control.