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The 80/20 Rule Works for Top Performers
2013-02-15 18:16:52| AutomotiveDigest.com - Automotive Industry News
The 80/20 Rule originated in 1906 from an Italian economist named Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the population. After seeing the same ratio in other situations, Pareto then came to the conclusion that for many events about 80% of the effects come from 20% of the causes. So what does the rule have to do with Fixed Operations? How about net profit? NADA Management Guides show that a properly-managed Service Department should maintain a net profit of at least 20% of gross profit, which means that 80% of gross profit is consumed by expenses the 80/20 Rule! Chances are, if youre managing a Service operation with a 20% net-to-gross, youre most likely a member of the top 20% list for top-performing managers in our industry. Don Reed, CEO of DealerPro, gives insight into the 80/20 Rule for auto dealerships that will help your dealership reach into the Top 20% Club. Be sure to read more!The Article The 80/20 Rule Works for Top Performers appeared first on Automotive Digest.
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Category:Automotive