In some previous columns, I shared how a shop owner in Idaho is using a basic set of key performance indicators (KPIs) to improve his two-location collision repair business.
Now I’d like to scale the concept up by introducing (or re-introducing) you to John Gagliano. Like the shop owner in Idaho, John started using KPIs when he opened his second Collex Collision Experts location in Michigan back in 1985. He wanted a way to see how each location was doing.
“It was a manual system, but until we had that tool in place, I did not feel comfortable. I always had to be there, running between the shops,” John told me as we reconnected by phone earlier this year.
When I decided to write some columns about KPIs, I knew I needed to call John. He developed and implemented what was probably the premier system to track and improve KPIs of any business in this industry.
“I get excited about talking about this because I think this was one of the key tools for the success of our business,” John told me.
And by any measure, it was a very successful business. Collex grew to 16 locations in two states – with another five in various stages of coming under the brand – when John sold it all to The Boyd Group in 2014 for about $45 million. At that time, it marked a dramatic jump in The Boyd Group’s North American footprint (including its Gerber Collision & Glass brand here in the United States).
I asked John to talk about the role he saw KPIs having in the growth and successful sale of his business. Here are some of the fundamental take-aways for any shop owner looking to implement or improve the use of KPIs in their business.
Start at the end – and then work backwards. John said the most effective KPIs are essentially an “upside down” financial statement. Choose the number you want at the end of that statement, then work back step by step to determine what has to happen to hit that number. Keep breaking it down into smaller and smaller chunks until you are down to monthly, weekly and daily goals.
Production hours are a good place to start, he said.