Updated: Apr 9
In a time of economic uncertainty, when the world undergoes through supply chain constraints and high inflation, it is important for businesses to maintain a sustainable growth model. What does this mean?
The typical growth cycle entails that businesses leverage certain assets to obtain credit and continue to finance their expansion. This principle may apply to many different industries, including auto dealerships, rental enterprises, and more. A sustainable business model will maintain a healthy balance between a level of debt that is payable through operational revenue streams. Auto dealerships may finance the acquisition of their inventory in hopes that they will be able to sell the vehicle in time and at a profit, to not only be able to pay back their financing costs but also keep the lights on.
When auto dealerships and rental enterprises decide to outsource any of their daily operations, they are able to set strict budgets and compute less volatile forecasts for monthly, quarterly, and annual cycles. By levering third-party services, they avoid business ownership dilution, minimize operational expenses and overhead, reduce their risk of financial liability, and most importantly, are able to keep more money in their pockets and avoid taking on more debt to finance their inventory purchases.
“Outsourcing auto reconditioning operations through third-party services can save dealerships and rental enterprises thousands? Yes. However, it is important to note that outsourcing is only a viable option when the benefits outweigh the risks to the business. ”
The advantages of outsourcing include:
Relatively lower operating costs (no labor, no overhead) help a business save money in comparison to running their own operations.
Automation eliminates many physical and clerical tasks which decrease the demands on human resources, resulting in less work for employees which allows them to spend more time with family and friends, and return to work with a higher willingness to help you scale your business.
The company can focus more on what it does best: selling vehicles and renting them, which is ultimately beneficial to the consumer and their bottom line.
Reduced liability; Outsourcing allows businesses to reduce their overall liability for the operations of daily activities, which can help keep a business afloat during tough economic times.
Flexibility; The terms of the agreement may be able to be adapted as the business needs change.
Institutions must leverage 3rd party services to mitigate risks, adjust to changing financial models, and invest in long-term growth. When evaluating an outside entity to handle your operations, ensure that the cost is lower than what you are currently paying; otherwise it will not be sustainable over the long term.
Outsourcing operations can only be successful if risk mitigation strategies have been implemented. Drevago Detailiting Blockchain Solutions helps companies of all sizes mitigate risk through unique features found in our proprietary platform which generate opportunities for future growth and savings.
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