I provide all my clients with what’s called a KPI Tracker. While initially daunting to look at, in reality it provides them a very useful tool to track critical numbers each day at close. My clients love it, use it, and swear by it. I am told it takes less than five-minutes to fill out each day. This document stays loaded up in the cloud. When they fill it in each day, I receive immediate notification. What both the shop owner and I are looking for are anomalies that occurred that specific day. This could be a number that is either too good to be true, such as labor cost that day at an 88 percent GPM, or really bad, like 18 percent GPM. In either case, it raises an immediate red flag and warrants further investigation.
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What’s really cool about this KPI Tracker (which again, you could design if you know a little about MS Excel), is that your annual goals you filled in a previous exercise push through into your daily targets, and also show you the variance to that target. Reach out to me, and I’ll be happy to assist you in better understanding this tool.
Your KPI Tracker
Your KPI Tracker should include the following, looked at daily, weekly, monthly, quarterly and annually:
· Car count
· MTD car count
· Daily gross sales
· Average repair order
· Sales to target
· Variance to target
· MTD variance to target
· Labor sales, costs and GPM
· Parts sales, costs and GPM
· Sublet sales, costs and GPM
o Variance to targeted benchmarks
o MTD variance to targeted benchmarks
· Tire sales, costs and GPM
· Shop supplies, sales costs and GPM
· Any other relevant data, such as number of oil changes, alignments, etc.
· Hazmat sales
· Total billable hours production
· Average billable hours production by RO
I preach a mantra that I’m certain you’ve heard before: “If you can measure it, you can manage it.” Parental discretion advised here: only measure what you can and should, so that you can make adjustments in the various activities that these numbers are derived from.
Example: Tracking billable Hours/RO production
There is an industry benchmark for this, and quite frankly, as of this writing, it varies greatly. However, depending on the type work your shop produces, suffice to say you should be over 1.5 billable hrs./RO. Now, if you do nothing but quick lube type oil changes, that number will be MUCH lower. Examine this for yourself and find out what your number is.
The bottom line to all this:
· Know your numbers (meaning what activities they are derived from)
· Know what is acceptable (is a 50% close ratio for a Service Consultant acceptable?)
· Know what changes need to be made to bring your numbers more in line with where they should be.
|Working days this year||252|
|Daily sales goal||$5,556|
|Parts % of total sales — 59%||$3,278|
|Sublet % of total sales — 1%||$56|
|Labor % of total sales — 38%||$2,111|
|Tires % of total sales — 1%||$56|
|Other % of total sales — 1%||$56|
|Cars per day||6|
The financial composite – where all this info ends up
A good financial composite will allow you to compile all this data. Visit MotorAge.com/FinancialComposite to see an example. Ours also supplies all of the benchmarks, and immediately tells you where you stand in comparison. NOTE: the significant problem with either this financial composite, or your own properly formatted P&L, is that it is a snap-shot of what has already taken place!
In our presentations throughout the U.S. and Canada, we share a video about the value of time. Within this video is mention of Olympic athletes. In their world, the difference between first and second place is measured in milliseconds! And we both know they ALL had coaches to help them to achieve that level of success. There are many great coaches out here – seek them out, pick their brain, find out if you have a good fit, and pull the trigger.
So, doesn’t it stand to reason that you, with all your years of experience and knowledge, just might need someone to assist you? Okay, I said it. That was my plug for our company. Yet there is one critical element that separates us from the others: we care very deeply about helping you to have a better quality of life through this thing called automotive service and repair!
Please reach out to us with any questions you may have.