The rapid industry change that is taking place is challenging even the best of shop entrepreneurs. However, when a responsible shop owner understands his or her own responsibilities to the business, and then executes with a focused discipline, the shop steadily moves forward in many positive ways.
The shops that are thriving in the years 2015 to 2020 will be the ones whose owners are able to sift through sometimes overwhelming volumes of information, identify possible damaging threats to the business they find in that information, and devise strategies that turn those threats into true opportunities for growth and profitability to the business.
Here are the key points to understand for the next few years in shop management.
- Identify key outside issues affecting your company: What are the serious issues affecting your company today and/or in the near future? Review such things as the overall inside culture of the business (Is it positive and does the team have everyone’s back to ensure total client satisfaction?); the quantity and quality of the personnel in the business; equipment needs and equipment expectations moving forward; inventory requirements by measuring an inventory “turn/earn” index; facility requirements required for best results over the next 5 years; and finance and the stability of the finances within the business. Define these issues in detail, as it will require an exact approach to ensure the company can pass on by anything that might “broadside” the business and slow it down or stop it from developing in a positive manner.
- Measure the key trends of your business and industry: Monitor daily the important KPIs that actually tell you what is going on in the business and where a concentrated effort must take place to improve the shop. These include:
- Number of maintenance invoices closed today compared to daily, weekly and monthly objective
- Total maintenance dollar labor sales billed today compared to daily, weekly and monthly objectives
- Total dollar value of maintenance deferred work today compared to daily, weekly and monthly objectives
- Total number of vehicle inspections completed today compared to daily, weekly and monthly objectives
- Total shop billed hours today compared to daily, weekly and monthly objective
- Average billed hours per invoice, R/O, compared to daily, weekly and monthly objective
- Determine the impact on your company: Gather all your answers and analysis each situation mathematically. Today there is a math formula for best financial return for literally every corner of the shop. Do the math. Follow the math, not your emotions.
- Analyze the threats and opportunities: What would be the consequences to the business if a threat actually occurred? Again, do the math to understand how much the hit would affect the profitability or security of the business. Where do you see new opportunities? Write them out in detail then calculate what investments would be required to embrace the opportunities and what the financial return would be to the business. Always seek wherever possible a minimum of a 35% return on any investment into the shop. This balances risk and reward mathematically.
- Develop a plan to shore up weaknesses and achieve a competitive enhanced value advantage: Do not ignore any weaknesses within the business. Delegate where possible for someone to take on the task of fixing the weakness and reporting back to you the solution found with results now obtained in a proper time frame. That is called “accountability.” In the vehicle shop service business it is all about quality and service, which when executed properly in the right format, allows for value to be perceived by the client.
I’m hoping now you are starting to understand why I say ownership of a business is a specific position in the business with a great deal of responsibility. You affect people’s lives and it is one of the most important positions to understand today.
Are you caught in the trap of working in the business or have you now moved to working on the business that is required for survival and future prosperity? Enrol in the business courses that teach you the above information if you are not sure. No one can afford to guess or roll the dice in this new and exciting aftermarket we are now in. The stakes are high but so too are the rewards to be embraced.
