REPAIR SHOP MANAGEMENT: HOW TO KEEP SCORE AND KNOW IF YOU ARE WINNING
By David Rogers
If any principle of management is true and valuable, it’s this…
The Numbers Don’t Lie!
There are many issues and problems every business owner, CEO and manager has to confront when analyzing sales, production and profitability:
- Is the data accurate?
- Is it current and up to date today?
- Are the right things being measured?
- Am I using the right comparative benchmarks and standards for my type of business?
- Am I drawing the right conclusions from my numbers?
- Has my team employed and sustained corrective solutions as needed?
- If all of the above has been implemented, where is the cash?
There is also another very prevalent problem many of us have when we read our numbers: we embellish, compensate, or justify things in our own minds to make us feel better. We say or think things such as:
- “If we didn’t do so many oil changes the average ticket and tech efficiency would have been where it should be” or,
- “If that rack hadn’t blown up I would have made a profit this month” or,
- “If it wasn’t for this recession my car count would be up” …and dozens of others!
If you think about it, you could name several things you use as excuses many times a year, or a month to explain away your bad numbers and profits, couldn’t you? Speaking from experience, I know I have! It’s been interesting as I notice this characteristic in our clients. The more intelligent a shop owner is, and the more they’re capable of analyzing their numbers, the more prone they are to justify or explain away a bad number.
Why it that?
Why are they not willing to just take responsibility for that poor performance and finally do something about it? It is impossible to address all of the reasons and the personal issues behind them here…but every business owner or manager falls prey to this kind of self-deception and deflection to one degree or another, at one time or another.
Understanding the following principle and recalling it often has been a helpful remedy for me and for the most successful shop owners I have coached:
Conversely, if I perceive I am not responsible for something if it seems beyond my control or it just happened to me or my business, then I am powerless, I am a victim with no hope of change or improvement.
We all certainly acknowledge there are things beyond our control in the economy such as the unemployment rate or interest rates, etc., but why become paralyzed by things we can’t control? Why not spend your energy and take responsibility for all the things you CAN control like fixing your numbers and your profits? When shop owners decide that some of their numbers cannot improve they might as well close the doors. That attitude is doomed to failure – especially in this economy!
What can you do?
What should you be measuring and improving or sustaining at the right level each week and each month?
Here are THE most important ones:
- Jobs Written per RO (recommendations per ticket)
- Closing Ratio (Jobs Written / Jobs Authorized or Done per ticket)
- Average Repair Order
- Car Count
- Each Gross Profit category percentage
- Total Gross Profit percentage
- Parts to Labor Ratio
- Billed Hours
- Average Daily Sales
- Technician Efficiency
These should be measured for the shop, for each service writer, and for each technician and general service technician. Then this data must be arrayed in a line graph comparing week to week, month to month, and year to year. You must also have the capability to compare the service writers within your shop to each other… the same goes for the techs. Then you must have the ability to compare all of this data to the best shops in the country that are similar to your shop.
The worst thing in the world is to go to all the effort to set up tracking and to understand your data and then be told to compare your numbers to other shops who are struggling or failing just like you are…or to shops that are much different than yours! Why would anyone with any intelligence teach you to do that? Why would you buy into that?
The definition of a winner is to consistently beat the competition. You can go too far in the other direction though. It’s no more useful to compare your shop to tiny, failing shops in a market that is nothing like your own. After all, would you consider it a worthwhile win if the Boston Celtics beat your old high school team?
The true definition of a champion is someone who consistently wins against the BEST teams!
Are you lying to yourself? Do you truly want to change and become a champion? If so you must tap into resources and training that will empower you to do just that. When you get to the point you want to know the truth, just remember, THE NUMBERS DON’T LIE!
If you want to know more about how I measure my shop and what I am doing to make this process available to my fellow shop owners, contact my guys at at 1-866-520-3030 or click here to use the APM Contact Us page!