We all know that cash flow is the lifeblood of the Buy Here Pay Here business. Without a steady stream of customer payments coming in, inventory begins to shrink, sales dry up, and the dealership withers and dies. But what is it that keeps this lifeblood flowing? It’s your data.
Without your data, how would you know which customers still owed you how much money? How would you know what you owned the vehicles in your inventory for? How would you analyze the past to improve for the future? The answer is – you wouldn’t.
Your data is gold. It is the most valuable asset of your operation. Protecting it can make the difference between success and failure for your business. But that may be easier said than done. Gene Spafford, a professor of Computer Science at Purdue University and one of the country’s leading experts on computer security said, “The only truly secure system is one that is powered off, cast in a block of concrete and sealed in a lead-lined room with armed guards.” Since that is hardly practical, let’s look at the ways we can try to protect our data and optimize our ability to keep our lots functioning if it is lost.
We all know we should be doing back-ups of our data. The question is; which is the best way to do back-ups? Let’s take a look at some of the options:
1. Don’t do back-ups
This shouldn’t even be an option but it is, unfortunately, the one still chosen by hundreds of dealers nationwide. I can’t tell you the number of dealers I have talked to who have had their computer stolen, a lightning strike wipe out the hard drive or their dealership destroyed by fire or natural disaster who had no back-ups to allow them to quickly and easily resume operations. None of us would consider not having insurance on our houses against damage or destruction but dealers choose to leave their portfolios unprotected every day. If this is you, any of the options below are better than the one you have chosen.
2. Manual back-ups
With this option, the responsibility to do back-ups is assigned to someone at your dealership and they are expected to complete it every day. There are a couple of problems with this system. First, you are depending on someone to remember to do it. It is easy to get busy and just forget or be pressed for time and decide skipping it one time won’t hurt anything.
The second problem is where you store your back-up. Some dealers leave the back-up at the dealership. I even ran across one dealer who left it plugged into the computer. Obviously, if someone breaks in and steals the computer, they’re not going to unplug your back-up and leave it for you. And if your dealership burns down, a back-up left at the store will be as worthless as the computer it came from.
The third problem is the media you use to hold your back-ups. In a manual system, data is typically backed up to a USB flash drive or ‘thumb drive’. Thumb drives are cheap and easy to come by. But there is a reason a thumb drive is so much cheaper than regular memory for the same size and capacity. They are much more susceptible to changes in temperature so, even if you take that thumb drive off site, if you leave it in your vehicle in the heat of summer or cold of winter, your data may be damaged. They are also highly vulnerable to static electricity. It doesn’t take much of a jolt to damage the data or even wipe them clean.
The fourth, and last, negative aspect of manual back-ups is that nobody checks them to confirm an accurate back-up of your data was actually produced. Again, I have heard numerous horror stories from dealers who thought they were backing up everything they needed only to find out that when they needed it most, they hadn’t been.
3. Automatic hosted off-site back-ups
Let me start off by saying there are manual off-site back-up systems available where you have to initiate the back-up of your data to a site outside of your dealership, often in the “cloud”. These systems, however, still have the first and last drawbacks outlined above – someone has to remember to do them every day and nobody is verifying the data was actually backed-up. Automatic back-ups hosted off site by a reputable company will overcome both of those drawbacks. The back-ups occur at a pre-scheduled time every day and, typically, verification is a part of the back-up process. The cost of this type of service has come down over the years and is now quite inexpensive. Our back-up service, for example is $300 per year. A $300 insurance policy to safeguard thousands or even millions of dollars of income is well worth the investment.
You insure your inventory, you insure your dealership itself and you provide insurance for your employees. All these seem like normal costs of doing business although the hope is you will never have to use any of them. Doesn’t it make sense to insure the one thing that makes all the others possible – your data and the stream of cash flow that it represents?