Do you run your shop or does it run you? I spend many hours in collision repair businesses and unfortunately what I see is usually the latter. The collision repair businesses that are really getting it done these days take a systematic approach to success. Today’s article focuses on how successful shops own their days, their months, and financial future through the use of a simple daily system.
Why is it that so many collision repairers wait until the last few days of the month to take notice of whether or not they are on track to reach their monthly sales goal? Usually they are way behind where they want to be and out comes the bull whip! Guess who suffers now? That’s right. Everybody! The employees have to work extra hours under pressure and the customers often have to deal with the quality issues that ensue. Much of this nonsense can be alleviated by adopting a different mindset that focuses on what I like to call “WIN”, or, “What’s Important Now?”
WIN gets the team to focus on making the right plays, every day, whether it’s July 1st or July 25th. The overarching idea is to design your future and purposefully go out and get it! A simple method I like to use involves:
- 1. Knowing what you wan
- 2. Making a game pla
- 3. Measuring the progress and making adjustments every day. When you follow these three steps you WIN!
Step One: Knowing What You Want
Set up an achievable budget or sales forecast for your company that will positively push your people, but is still realistic. This step is crucial and sets the stage for you retaining control of your company. I like to do this by taking the daily sales capacity average and multiplying it by the number of working days in the month. I then do this for all the remaining months of the year.
Monthly goal = Daily Sales Capacity (What my shop is capable of producing each day) X number of working days in the month.
Ex. $5,000 X 21 days = $105,000 Monthly Sales
Step Two: Making a Game Plan
So, based on our sample month, you are projecting $105,000 as your goal, which means that EVERY DAY your crew needs to produce $5,000. I repeat, EVERY DAY, including the first day of the month, and the second day of the month and so on. Far too many shops close ROs and book sales for cars that are not delivered, or in some cases aren’t even completed, in order to “make the month.” This is a mistake and contributes to the problem of starting the next month in the hole.
Prior to the beginning of each month, you must think about how your month will play out just like you are making a game plan for a football game. Ask yourself questions such as, “Is anyone going to be on vacation this month?” When things like employee vacations are a factor, make plans in advance on how you will stay on track. You can’t possibly know how everything will play out in the future, but you can at least make a plan and do your best to stick to it.
Step Three: Measure the Progress and Make Adjustments
Each day it is very important to know your numbers and share them with your team. You must know every day what your sales are compared to where they should be in order to hit the monthly goal. With our sample month, if it is the third day of the month and the actual sales are
$10,000 and the goal for day three is $15,000 (3 days X $5,000) you now know you are tracking
$5,000 below target.
If the reason you are below your target is production related, you now need to make adjustments to get caught up. The way I would approach this situation is by addressing the staff during the morning production meeting and asking the guys to put in a couple extra hours to get us back on track. If the problem is related to sales coming to the door, then you obviously need to address the problem by figuring out how to get some more work coming in quickly.
Either way, it is a lot easier to make small adjustments early in the month, than waiting until there are only a few days left to make your miraculous recovery!
The important take-away here is that you have got to know your numbers every day in order to make the course corrections that will keep you on target towards success. If you are using a computer management system, keeping track is very simple. You can run a vehicles delivered report every morning (be sure to not include sales tax).