Auto Service World
News   May 16, 2023   by Adam Malik

A new job title shop owners should take on

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Apart from the many hats a shop owner can wear in their business, being the ‘financial performance manager’ should be at the top of the chain, a shop coach recommended.

This position creates strategies that outline what a shop will do, the level it will perform at, how much the business will sell and how it’s going to manage, contain and control its costs, explained Bill Haas, president and owner of Haas Performance Consulting.

In simpler terms: Look at your expenses as an investment and the return you’re getting.

And to do that, you need to look at key performance indicators (KPIs), Haas observed during the seminar Shop Production and Payroll Drives Profits at the Midwest Auto Care Alliance Vision Hi-Tech Training and Expo.

“They’re numbers that you should be looking at to help you track and monitor what’s going on in the business,” he said.

And there are a number of KPIs each shop owner should be monitoring weekly that helps understand how well the business is doing. That list includes gross profit dollars per hour, labour per repair order and effective labour rate, especially highlighting the last one.

“That one number can tell you a whole lot about your store,” Haas said. “You can’t ignore effective labour rate.”

Another one is car count. But Haas put a different spin on that. Yes, he wants to know if he has enough cars; his business strategy will tell him how many cars he needs in a year, per month, per week and per day.

“But what I believe you should really be focused on is … how do you make every car count? Don’t pay attention to car count. Pay attention to: Are we making every car count? What is that opportunity so that every car counts?”

At the end of the day, the most important number is net profit. If your gross profit is only — or maybe not — covering your expenses like rent, wages and insurance, then how do you reinvest into the shop?

“I’m going to be out of business,” Haas said. “Because as soon as I can’t pay the lights or I can’t pay the insurance or I can’t pay the rent, what happens to me? I’m going to get evicted.”

He also urged every shop owner in the room to make sure they pay their taxes. You should be “loud and proud” of how much you pay in taxes to the government. It means you have a thriving business.

“Because when we are successful, we will pay taxes,” Haas said. “Don’t do anything in your business that you think will prevent you from paying taxes or minimize your tax liability.”

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