Pub. 2 2012 Issue 2

9 W hile NADA tells car dealers to upgrade their facilities to increase profits and bo- nuses, common business sense indicates that spending money on the facility means that costs may have to be cut in other areas of the business. Some businesses make cuts to bolster their profit margins or retain market share, while other businesses seek to remain economically viable. It is always prudent to analyze spending. But too often dealerships cut costs haphazardly or across the board, often damaging a company’s long-term foun- dation. There is no silver bullet to controlling business costs, and paradoxically, sometimes to save money or improve profits you will need to spend money. The key to determining if a cost can be justified is to ask a simple question. Will this expenditure return more money than I have invested? If you can say yes to this question, than it is a wise investment and should not be part of your cutbacks. When considering the return on your investment don’t forget to factor in the  way to success — continued on page 10 You Can’t Cut Your Way to Success BY KURT A. KARLSON , PRESIDENT, ILLINOIS AUTO GROUP Cost cutting is often the strategy chosen for a dealership that is trying to weather economic downturns or higher costs required from manufacturers.