At this very moment, we’re deep in the final quarter of 2022, staring straight at the new year coming our way. As the future comes into focus, it’s time to look back at the last 12 months and reflect on the performance of your auto repair shop.
While doing that, ask yourself:
- Did you accomplish what you set out to do?
- Did your employees achieve their own career goals?
- How did the year go—and what fell through the cracks and why?
The answers to those questions can lead to even more wins in 2023, so take a moment and be honest with yourself. After that, it’s time to neatly button up 2022 while creating the foundation for success in the coming year.
Ready to get started on your year-end evaluation journey? Here’s what to do before 2022 ends.
1. Meet with Staff Members to Set Expectations
Your reflections are a great starting point for improving your auto repair shop’s performance in 2023. But it would be best if you also heard from your sales staff, technicians, and other key players.
Set up a meeting to gather their feedback about your operations and learn about their current career goals. Use that information to decide how to take your shop to the next level.
You must communicate your plans to your team to set the tone and expectations. If you fail to do so, you won’t have a goal line to push toward with your team. Get it right, and your shop culture will benefit greatly.
2. Create an Action Plan for Next Year’s Goals
With your plan in mind, write down each goal and outline your strategy for making it happen. Your action plan will guide you on all the steps needed to make great things happen for your auto repair shop. Keep it simple yet well-defined by creating a bullet point list under each goal.
3. Complete Your Employees’ Year-End Evaluations
Have you already completed your employees’ year-end evaluations? If not, you only have a few weeks to get that done.
Get ready for the performance review by looking at your employees’ key metrics, like:
- Productivity rate
- Sales figures
- Training participation
Also, consider how each person complements the team and follows your set policies and procedures. With that info, you can go into each review meeting with the knowledge you need to give appropriate pay raises for a job well done.
4. Reflect on the Ideal Team Makeup for Your Shop
While reflecting on the performance of each employee, you’re sure to come across at least one person who doesn’t meet expectations. Or perhaps you have hired someone you don’t truly need on your team.
Either way, you need to let them go. Don’t keep them on the team or carry them into the new year just to make yourself feel better. Sit them down, explain the situation, and wish them the best in all their future endeavors.
5. Do a Labor Rate Analysis and Adjust Your Rates
When was the last time you did a labor rate analysis? If you haven’t looked at your rates in the past six months, it’s likely more than time to do so.
As inflation squeezes your auto shop, raising your labor rate is the right way to ensure you can keep things going. Remember to adjust your parts matrix rate for inflation as well, ensuring you have the funds to support your shop to grow and thrive.
6. Evaluate Your Handbooks and Other Materials
You need to evaluate all your handbooks and other internal materials yearly to keep them up to date. Items to go over include:
- Job descriptions
- Employee handbook
- Training programs
- Policies and procedures (including your time-off policy)
7. Review Your Auto Repair Shop Tax Plan
Your last quarterly tax payment will come due soon. Are you up to date? Or are you otherwise following effective tax planning procedures from your accountant?
If not, you need to meet with your tax professional and get things straight before the year ends. Take the time to set yourself up for 2023 and beyond, too, so you don’t run into problems with the IRS.
8. Make Sure That You’re in Full Compliance
Staying in compliance can feel tricky, mainly because the rules differ for each business structure and location. But it’s well worth taking the time to get right.
Consequences for non-compliance include:
- Delays in your business expansion to new areas
- Revocation of limited liability for piercing the corporate veil
- Late fees and other serious charges
Worst-case scenario, the state could end up closing your LLC or corporation for non-compliance. So, take these steps each year to avoid all those consequences.
Review Your Business Structure
Your business structure is everything when it comes to protecting yourself from liability, getting the right tax breaks, and so much more. Give yourself time to review your current structure with your accountant and see if a different one might offer more benefits.
File All Your Paperwork
You’ll likely need to complete your annual registration report if your business is an LLC or corporation. You may also need to amend your articles of incorporation if you made any significant changes to your auto repair shop, such as:
- Company name and address
- Purpose of business
- New board members
- Management format
- Number of stock shares offered
You will also need to complete your annual board meeting if you haven’t done so yet this year.
Record Excellent Minutes
During the board meeting, be sure to take excellent minutes for your records. Since they act as legal documents, you need to make sure to include all the following items:
- Date, time, and location of the meeting
- Who attended and any absent members
- Agenda items with a brief description of each
- Details of all discussions
- Voting results
End your minutes with the time that the meeting adjourned. Approve the minutes according to your bylaws and then have the secretary sign the document. File the minutes in a safe place for at least seven years.
Renew Licenses and Permits
Did you know that you’re much more likely to get audited by the state than the IRS? So, don’t skimp when renewing your state licenses and permits.
Depending on your auto repair shop setup, you may want to renew your permits for your:
- Parking lot
- Security alarm
Any environmental permits you need to run your business should also get updated.
Check Federal Requirements
Beyond filing taxes and complying with ACA rules, you likely don’t need to file any docs with the federal government. But that doesn’t mean you don’t need to stay in compliance.
There are many federal compliance areas to pay attention to, such as copyright law, workplace health and safety, and ADA. You even need to make your website ADA-compliant by adding accessibility tools to your design.
Closing Up Shop? Compliance Still Matters
If you find yourself needing to close up shop, compliance still matters, especially if you have a partnership, LLC, or corporation. You will need to follow a structured dissolution process and settle all your financial obligations, like:
- Vendor invoices
- Payroll tax
- Sales tax
Notify your customers, vendors, and the IRS about your plans to close your auto repair shop.
Need Support with Your Year-End Tasks? Get Auto Repair Shop Coaching
Need help with evaluating your end-of-year performance? Just reach out to your automotive business coach, Chris Cotton, with a call to (940) 400-1008.
At AutoFix Auto Shop Coaching, we focus on helping shop owners set and reach their goals to keep their businesses thriving year after year. When you get auto repair shop coaching, you’ll have all the guidance, insights, and support you need to overcome the challenges and achieve all your key goals.