Manage the Numbers
During the annual 2017 FenderBender Management Conference, Adam Grant, owner of Xtreme Collision Center, talked about understanding your shop’s numbers and how to reward high production. Tracking KPIs is a simple way to make profit goals week by week. And if the shop doesn’t reach that goal, the shop can start fresh with the breakeven and add the shortage back in.
Grant outlines the top three income streams for a collision repair shop: labor, parts and paint materials, and sublet. When the shop has high production from these numbers, the owner should always announce UP-Stats and embrace, reward and make reaching the goal a big deal.
1) Measure stats weekly.
There are four categories that should be monitored weekly for a shop. Measure the shop’s sales, completed jobs, income and production. Production is measured by all the hours your techs have completed.
2) Know your income stream.
A shop should always use a 50/50 split when figuring sales goals. This means there is 50 percent labor and 50 percent parts/paints and materials and sublet. For example, a $1 million shop should be $500,000 in labor sales and $500,000 in parts sales.
3) Acknowledge highs and lows.
Say, “Great job, keep it up.” but also ask yourself “How did we get there?” If sales are low, notify your marketing team that they need to promote and call customers asking why they didn’t stick with the job. If income is low then make a written plan on how to grind collections and call on old supplements and payments. If income is high then pay off your old bills. If production is low then meet with staff member not producing minimum numbers. If production is high, reward staff with treats like lunches and announce the stats.
The 2018 FenderBender Management Conference will be held Sept. 17–19 at the Westin Lombard near Chicago for its third year in a row. The event features in-depth workshops and networking opportunities. Stay tuned for future announcements and speaker lineup.
To view all the sessions, including Adam’s FenderBender Talk on understanding shop numbers, visit fbmc2017.fenderbenderconference.com.