In order to build a successful tire dealership, there are a number of things you will have to do. You need clearly defined goals, a plan, and you’ll need to surround yourself with successful people – gifted techs and advisers, a great support staff, marketing professionals, business coaches, and a great accountant.

Unfortunately, many dealers don’t understand how to find the really great accountants. Worse, they don’t know what to expect from them, and they don’t know how to utilize their services.

With the changing economy and the ever-increasing taxes small business owners face in business, now more than ever you need to be working with a great accountant.

So let’s take the mystery out of the relationship to help you build a more profitable business.

Putting first things first, the overwhelming majority of dealers make two mistakes with their accountants: they use them as overpaid bookkeepers, and they think the accountant should be giving them business advice.

Unfortunately, that’s tragically wrong on both counts. The error of the first is obvious. Bookkeepers keep the books, accountants take those books and turn them into actionable data to help you direct your business.

Unless your accountant knows the key performance indicators that are important to successful dealers – or even yourself – accountants fail as advice givers. Does your accountant understand the KPIs that should be steering your business?

With rare exceptions, outside accountants don’t know your business…and you really don’t need them to be that immersed. Over the years, I’ve learned to look to accountants for help with one thing: reduce my tax liability.

So here are my recommendations to build a more profitable business:

• Make sure you are using a good accounting software program, such as QuickBooks. You’ll also need to make sure you have a well-designed chart of accounts, and a general understanding of business finance. You don’t need an accounting degree, but you should have an understanding of terms like “gross profit,” “operating expenses” and “cost of sale.”
• Know the ideal targets for your business KPIs. Which means you need to understand what a KPI is, which ones are most important – particularly among the most successful dealers in North America – and then establish the specific KPIs that you will use to steer your business. Knowing them will allow you to look at your income statement and quickly see where your shop is doing well, and where it needs to improve.
• Ensure you have a great accountant. When looking for the right person, keep two rules in mind. First, when you put out peanuts, you get monkeys. Choosing a great accountant is no different than choosing a great service tech; you get what you pay for. There is a reason the cheap accountants are cheap, and the good ones are not cheap because they produce a good return on investment.

So, where do you find the superstar accountants? You’ll find they typically represent higher income earners that need to maximize their tax savings, so the best place to start is by asking your attorney, your doctor and any other high-income earners you know for referrals.

Once you have the right accountant, commit to meeting with them at least twice a year. The first meeting should be during the first half of the year to review your shop’s year-to-date performance, project annual income, and to start the conversation about a tax strategy.

You should then meet again in the third quarter to ensure you are on track, and make any necessary adjustments.

Top notch accountants will typically help you save a lot of money, and will ensure you are in compliance with all relative tax laws. The low-priced accountants? Just like hiring the low-priced technicians, more often than not they will cost you an absolute fortune.