Rely on goals, not wishes

Jan. 20, 2015
You can’t just wish something will happen to change your business for the better. You need to create an action plan to make business improvements come true.

Quite often when I’m working with a shop as a consultant, I will ask the shop owner about their goals for the coming year. They’ll often say they are going to increase sales or improve their cycle time. So I’ll ask them what they will be doing differently to make that happen. They often will say something like, “Well, our cycle time is so high that we keep getting poor CSI scores, so we’re just going to improve it.” Or, “Our expenses have risen so much so we’re just going to do more in sales next year.”

But, folks, just because you say something is going to happen doesn’t mean it will. “We’re just going to…” isn’t a goal. It’s a wish. You can’t just speak something into existence. That’s just a wish something will happen rather than a plan to make it happen. A goal is when you actually have a written action plan on how to accomplish it.

That action plan answers the who-what- when-why-and-how questions. What are you going to do? How are you going to do it? Who will be involved? Why are you going to do it?

Let’s take shop owner “Susan” who wants to increase her sales by $200,000 a year to $2.2 million next year. Susan and I sat down and built an action plan for how she is going to accomplish her goal.

One step, she decided, is to get an extra hour of labor on every job. At 75 jobs a month and a $50 per hour labor rate, that would add $3,750 per month (or $45,000 a year) to her shop’s annual revenue.

So how is she going to get that extra labor hour per-job? The first Thursday of each month, she decided, she will have a meeting with her blueprinting and sales staff to go over two or three items that could be included on estimates to train her staff to include and negotiate for those items.

Think about that plan: It lays out what is going to happen, who is involved, and why, when and how they are doing it. That’s a goal, not just a wish.

But that only gets Susan $45,000 of the added $200,000 increase she wants in sales next year. So the other part of her action plan is to improve her shop’s closing ratio.

Right now the shop has a 60 percent closing ratio. That means it is writing about $277,000 in estimates every month, but only capturing about $166,000 (60 percent) of that potential work each month.

Susan set a goal of improving that closing ratio to 65 percent. That would mean the shop’s sales would rise to $180,000 per month (65 percent of $277,000) without needing to get a single additional customer through the door for an estimate.

How will she accomplish that goal? First, she is going to work with her paint company to bring in some after-hours sales training for her team. And every estimate for a job not immediately scheduled by the customer will be put into a bin; her customer service rep will be trained to call each of those customers the next day with a script Susan and her team develop to help get that job scheduled. If unsuccessful, that estimate will move into another bin for another follow-up call a day later, etc.

The added labor hour per estimate will generate an additional $45,000 in revenue next year. The improved closing ratio will generate an additional $160,000 in revenue. That meets Susan’s goal to hit $2.2 million next year, and it’s not just a wish. She has an action plan for how to accomplish it, with specifics about what will be done, who will do it, and how and when. She will explain the “why” to everyone involved, because that improves buy-in and follow-through.

A couple last thoughts about wishes versus goals: Always put the plan in writing. Keep it to a manageable 3-5 action items. And delegate but don’t abdicate; get others involved, but don’t just dump it on them. Make sure they understand the why, how and when, and then monitor for follow-through.

You can just hope your wishes come true. Or you can make your goals happen. Take charge of your destiny with an action plan.

Subscribe to ABRN and receive articles like this every month…absolutely free! Click here to subscribe.

About the Author

Mike Anderson

Mike Anderson, a former shop owner, operates, a training and consulting firm. He's also a facilitator for DuPont Performance Services' Business Council 20-groups.

Sponsored Recommendations

Best Body Shop and the 360-Degree-Concept

Spanesi ‘360-Degree-Concept’ Enables Kansas Body Shop to Complete High-Quality Repairs

How Fender Bender Operator of the Year, Morrow Collision Center, Achieves Their Spot-On Measurements

Learn how Fender Bender Operator of the Year, Morrison Collision Center, equipped their new collision facility with “sleek and modern” equipment and tools from Spanesi Americas...

ADAS Applications: What They Are & What They Do

Learn how ADAS utilizes sensors such as radar, sonar, lidar and cameras to perceive the world around the vehicle, and either provide critical information to the driver or take...

Banking on Bigger Profits with a Heavy-Duty Truck Paint Booth

The addition of a heavy-duty paint booth for oversized trucks & vehicles can open the door to new or expanded service opportunities.