Momentum or Misses? 5 Ways to Gauge Your Dealership’s Midyear Health

June marks the halfway point of the calendar year—a natural inflection point for heavy equipment dealerships. It’s the time when leaders pause, assess, and ask: “Do we have momentum—or are we starting to stall?”

Your gut may already be giving you signals. But your profit and loss (P&L) statement can confirm—or challenge—those instincts. It’s more than a report; it’s a reflection of how well your leadership, operations, and strategy are aligned.  It’s also an indicator of what your local market is trending at the mid-point. 

When reviewed intentionally, your P&L doesn’t just show past performance—it reveals your path forward.  Remember, your financials reveal what has already happened, but that is the first step in planning how to adjust your sails. 

Why Midyear Is a Critical Checkpoint

Most dealerships look to the year-end numbers to determine success. When business leaders look at their numbers, they ask themselves this question: How are we comparing with last year, and how are we comparing with our budget or plan?  However, waiting until December to evaluate progress often means you’ve missed the opportunity to make meaningful changes that've an impact.

June, however, offers the gift of time. There's still runway to adjust, refocus, and make adjustments into the second half of the year. If you’re willing to study your P&L with a leadership lens, you’ll uncover the areas that need your attention most and align your teams around the opportunities. 

Your P&L Is a Leadership Tool—Not Just a Financial Statement

A well-read P&L tells you far more than just revenue and expenses. It gives insight into:

• The efficiency of your operations

• The performance of each department inside your dealership. 

• The effectiveness of your pricing strategy

• Where resources are being underutilized or overextended

• Whether the business is scaling or straining
  

When viewed consistently and analytically, the P&L becomes one of the most valuable tools for leading a dealership forward.

Five Areas of Your P&L to Examine at Midyear

To get the most out of this midyear review, here are five key areas to focus on:

1. Gross Margin Health: Are You Preserving Value?

Start by examining gross margin across your core departments—whole goods, parts, and service. Look at the trends:

• Are margins holding steady, growing, or eroding?

• Has pricing paced the increase in your cost?

• Are discounting practices and marketing programs driving sales or costing margin?
  

When gross margin shrinks quietly, it often signals deeper issues in pricing discipline, vendor management and order programs, or your team behavior. Your P&L helps identify which department or process is affecting the bottom line.

2. Labor Recovery & Efficiency: Is Your Service Department Performing?

Your P&L should reflect both the revenue potential and operational efficiency of your shop. If your labor gross margin has slipped, it could be due to:

• Labor performance

• Inadequate technician training and turnover

• Job delays caused by parts availability

• Rework or unrecovered warranty

• Hiding labor in non-revenue accounts like training, building and vehicle maintenance

Service profitability depends on high recovery and low rework. If this number doesn’t align with expectations, the P&L is the first place to start asking why. Remember, service usually has the highest gross profit in your dealership, but is also coupled with the highest expense load.

3. Expense Creep: Are Costs Quietly Rising?

One of the most dangerous trends midyear is gradual, unmonitored expense growth. Your P&L will reveal:

• Administrative burden or payroll creep

• Marketing expenses

• Unused or underused technology subscriptions or services

• Unplanned overtime becoming the standard

If your operating expenses are trending upward without a matching increase in output or revenue, it’s time to determine whether those costs are needs or wants. 

4. Inventory Turns: Are You Managing Your Assets Effectively?

Your P&L reflects the impact of aged inventory, even if the units themselves are on your balance sheet. Look for:

• Interest expenses tied to your floor plans and lines of credit.

• Margin compression from aged units sold below target margins driving down margin

• Inventory write

Evaluating whole goods and parts inventory health is critical midyear. If the P&L shows stress, the underlying cause might be slow-moving assets that aren’t being actively managed. Inventory corrections are a long-term challenge.  Getting rid of that old parasitic or overvalued equipment are key in a recovery. 

5. Department-Level Profitability: Who’s Carrying the Load?

One department may be subsidizing others—and that’s not always sustainable. A strong sales department, for example, can hide profitability gaps in service or parts. Many of your assets in these departments walk around on 2 feet.  Ensuring everyone carries the water is crucial. 

 Your P&L can show:

• Which departments consistently contribute to net income

• Which areas are underperforming or overstaffed

• Whether your structure is balanced or relying too heavily on one profit center

Use this insight to reset expectations and resource planning across the organization. It is hard to maximize profitability and asset management if each department isn’t carrying its own water.  

Momentum Comes from Clarity

Midyear is not the time to coast. It’s the time to lead with purpose. Whether your dealership is pacing ahead of plan or experiencing a slowdown, the first step is to get clear on what the numbers are telling you versus hoping they improve. 

Momentum doesn’t happen by accident. It’s created by leaders who make time to evaluate, adapt, realign the team, and execute while there’s still time to change the outcome.