With meaningful targets, regular reporting and consistent corrective action.
A relaxed attitude to reporting and team management is all very well when you’re riding the crest of a wave. But NOW is the time to tighten up on the way your business operates to increase your profit, so that when you need to find another £10k pa to stop your best tech from leaving it’s a straightforward decision rather than all-out (how am I gonna afford that) panic. So what’s the first step?
Step 1: Set meaningful targets
Now, there are a bunch of targets you could set, but therein lies the problem. If you set too many then you may well not achieve any of them. With that in mind, it’s a case of priorities and a laser-like focus on what’s really important.
It very much depends on the context of where you’re at in the development of your garage, but here’s our starter:
- Customer satisfaction
- Your wages/remuneration
- Net profit
- Gross profit
- Average invoice value/profit
- Product and service ratios
- Jobs per day/week
- Productive efficiency
- Quotes/conversion ratios
- Customer churn rate
- Customer acquisition rate
- Customer lifetime value
As I said there are many more that are crucial for the success of your garage but having a focus on that list will certainly get you headed in the right direction.
So you’ve completed some analysis and made accurate predictions. Now what?
Step 2: Time to get cracking on those reports.
Your reports need to be precise. They need to show you useful data. You’d be surprised to see how many businesses like yours either report on nothing or spend too much time and effort on meaningless reporting.
If you’re focusing on the wrong stuff, you might as well be opening the bonnet to fix a flat tyre… It gets you nowhere.
That’s not how to run your garage. But what software do you use? And this is where it gets interesting.
Our team help A LOT of garage owners on Accelerator build reports that give them the insight they need to see what’s not performing, but more than that, we help the team in those garages make that change happen. How do we know it’s happened? The report of course! Oh, and happy garage owner 🙂
Anyway back to the software…
There’s never been a better time to start reporting and it doesn’t matter whether you’re looking to get started on accounting, marketing, sales or productivity reporting there’s a cost-effective solution to the essential data you need to make your garage a success. Here are a few of our favourites.
There are of course many choices to ensure that you have enough of the RIGHT enquiries, you’re converting them, completing the work in the right time, with the predicted profitability but we find that those listed above (the Auto iQ ones being solutions that we’ve developed specifically for garage owners) are the go-to products to help you make rapid improvements with your business. But there’s a question…
Step 3: How often should you be reporting?
Simple. Daily, weekly, monthly and yearly
Here’s what to report on daily
Now, this isn’t rocket science 🙂 And, reporting doesn’t mean that you get a bunch of people to sit around a table for an hour with a PowerPoint presentation. In fact, this is the EXACT opposite of that!
This is a meeting (best had standing) at the end of the day between your front of house manager (or whoever owns your gross profit target) and your workshop manager as they own the productivity targets and the owner/manager of the garage.
The conversation goes a little something like this…
Owner/Manager - “How did we do on the gross profit target today?”
FOHM - “Garage Hive reported we missed it by £1100”
Owner/Manager - “Why was that?”
FOHM - “We have £500’s worth of WIP (work in progress on the Transit as that job was 12 hours that’ll be finished tomorrow and the ECU is on backorder for the Passat”
Owner/Manager - “When was the ECU ordered?”
FOHM - “Today - I know we’ve known about this for a month but the service advisor forgot to order it. I’ve trained the advisor now though and they’ll be on the ball for next time”
Get the idea? Of course you do. And, carrying this out daily gives you the opportunity to make changes daily. That’s over 230 opportunities to analyse and change the actions of your team a year, 218 more opportunities than reporting monthly!
So why report weekly and monthly?
Micro (daily) analysis allows you to deliver a consistent message to your team, enables daily training, and builds momentum. Ultimately you’re reinforcing new habits on the fly and tweak as you go. It’s very powerful. But it won’t show you the BIG picture and whether you’re going to hit that new profit target and this is why we require macro analysis.
Macro analysis is important as you’ll see the result of your cumulative daily changes over a longer period, a great example of this is your average invoice value/profit. Helping your customers buy more from you on the day is a fundamental element that will quite simply transform your business and AIV/P will naturally increase if your front of house and workshop teams are taking the right daily actions. Reporting on Average Invoice Value/Profit and looking at a monthly trend will show you that your team are taking the right (or wrong) actions consistently at which point you can give them a rather large pat on the back or dig a little deeper into that data, change your strategy or re-train where required.
What else should you report on monthly?
Well, the dozen metrics mentioned previously is a great place to start and here’s why.
A successful and highly profitable garage business is pretty straightforward. You just need to remember the Auto iQ 11 C’s…
By this point, you’re possibly thinking “what’s correct for my garage”. There really is no “one size fits all” answer but we’re here to help within that should you need to talk it through.
OK, so you’re probably on board with “if I measure it I can change it” and you may well even be used to measuring a whole bunch of workshop metrics. But here’s the thing. If you really wanted to increase the profitability and security of your garage you need to have a tight grip on marketing and sales!
We find that EVERY garage we’ve worked with so far benefits from this top tip!
You MUST measure Sales and Marketing!
Leads generated vs Leads converted.
A business without marketing and sales isn’t a business at all (check out our Sales Blog for more information). It’s essential to have fresh leads coming in each week. Valuable leads. You know the ones…..premium marques requiring premium work. Not just any old customer who walks through the door.
The ‘correct’ customers
Who they are, what they do, how they found you and how much they spend with you. It’s all data you need to understand the customer and their value to you. As our head of marketing regularly tells me “how else will you be able to fish where the fish are?” (that’s marketing speak for “get more of the types of customer you really want!”). Knowing if your customer is a new client, repeat business or referred lets you see where your money is coming from.
Why not start by simply asking new customers how they heard about you and tracking it? Or use a solution like Auto iQ insight to keep your marketing team accountable?
So now you have a much better understanding on what to measure. That’s great!
But…..you knew there’d be a but, didn’t you?…..having the right reports without acting on them is like having a car without being able to drive – pointless!
Step 4: Make the change
A report is only valuable if you understand what the information is telling you, coupled with patient implementation of changes that help improve performance.
As you can see, your business is stuffed without the right reports.
But don’t worry, Auto IQ is here to help.
Auto IQ provides business services exclusively for the automotive aftermarket. Businesses like yours benefit from our Accelerator program giving your garage just what it needs to thrive.
With a proven track record of driving revenue for some of the UK’s leading automotive businesses, this can be a game-changing service.
Auto IQ shows you the reports you can’t do without. And how to effectively use the data you’ve collected to accelerate the growth of your business.
Spend less time in the red and more time enjoying your business without the constant stress.
Want help setting up these reports and understanding how to use the data? Contact Auto IQ now, and let’s chat about nailing your reports & increasing your profits.
Hit the red button now or give us a call on 01604 328500