As an independent auto repair shop owner, the ultimate goal is to achieve true business success while maintaining an outstanding work/life balance. If you can accomplish that goal, you’ll end up with a business you’re proud to own and the ability to take time off without worrying about your shop.
To do that, you need to closely monitor all the numbers linked to your auto repair shop’s performance. The numbers don’t lie, after all. In fact, they can actually reveal the truth about how to turn things around and start pushing your company to the next level.
Ready to see how that works? Here’s a look at how to track and measure the performance of your auto shop so that you can secure the win now and in the future.
Why Track and Measure Your Key Metrics
When it comes to the health of your business, you can only keep things on track if you know precisely how you’re doing. Perhaps more importantly, an honest assessment of where you’re at can reveal critical areas to improve, giving you the ability to correct your course on the fly.
So, you really cannot afford to take your eyes off the numbers and just sail through each day unaware. Fortunately, it’s easy to track and measure the key metrics for your auto repair shop once you get into the habit.
Tracking is the first step, of course. If you don’t track, you cannot measure. Plan to take a look at the metrics on a daily, weekly, and monthly basis. Then, use your findings to take action whenever the results don’t meet your expectations.
How to Watch the Numbers and Achieve Success
Effectively tracking and measuring the numbers for your auto repair shop demand a top-to-bottom approach. You want to start with daily measurements to get a handle on where you’re at. Then, add weekly and monthly checkups that allow you to stay on top of things throughout the year. Here’s how that might look.
Daily
Your shop management system, or point-of-sale system, is the go-to spot for your shop’s key performance indicators or KPIs. The system offers a real-time look at how things are going, so reserve time each day to dig into the details.
But before you do all that, take a moment to confirm that your income statement matches what’s in the shop management system. Although it won’t be a perfect match, your gross profits shouldn’t be off by more than 2% overall. This is especially important if you have your service advisors on an incentive-based payment plan.
Once everything is in order, use your POS system to explore everything from your sales figures and cost of goods sold to the average estimate size and closing ratio. Look beyond the big picture, too, by examining every ticket individually. Compare the profitability analysis to your preferred threshold and change things as needed if you’re not already meeting your goals.
Want to truly push your shop to the next level? Encourage your service writers to join you in exploring the KPIs on a daily basis. The insights will help them get a feel for their baseline and push their performance to the next level.
Weekly
Each week, go on an even deeper dive by looking at the three following areas.
Income Statement
Your income statement shows exactly where money is coming into your shop and where it’s going. By taking the time to look it over, you can see how to curb your spending and exactly when you need to work harder to boost your car counts, average estimates, and closing ratios.
Pro Tip: Never exceed a week on your income statement. If you’re falling behind, directly link your POS system to your accounting software for real-time updates.
Scorecard for Success
The Scorecard for Success is an effective motivational tool for auto repair techs, service advisors, and shop owners. When you implement this scorecard at your shop, you give your team the tools they need to succeed.
Don’t just leave it to your employees to look it over, though. Block off time each week to review each team member’s performance and help them plan where to improve their efforts.
Tech Productivity
Tech productivity is often overlooked, but it’s an important metric that reflects your team’s ability to work together to achieve shop goals. To get this metric working for you, track each tech’s hours worked and hours billed each day. At the end of the week, add it all up.
Share the results daily by posting them in the breakroom or other private areas. Consider holding a weekly meeting to review the productivity results as a team and even hand out incentives if you want to go that route. Save time in the end to gather feedback and troubleshoot problem areas to ensure better results the following week.
Monthly
Pour over your auto repair shop’s bank account at the end of each month. Ideally, you’ll hold about 25% of your net profits in that account, giving you the financial flexibility needed to keep your shop moving forward.
For example, if your shop makes a net profit of $1 million per year, you should have $250,000 as your bottom line. However, the amount held in the account should not include your annual pay. It would be best if you were taking checks to the tune of $60,000 to $90,000 a year so you have financial flexibility in your personal life, too.
Need Help with Tracking and Measuring Your Shop Performance?
AutoFix Auto Shop Coaching is always here if you need help implementing these tips. As your automotive business coach, Chris Cotton can help you track and measure your shop performance daily, weekly, and monthly. Every step of the way, you’ll gain insights on how to best establish the habits needed to achieve outstanding business success and take control of your life.
If you’re ready to start, schedule your auto shop coaching appointment with a call to (940) 400-1008. Don’t have time to make the call? That’s perfectly okay! Just fill out our callback request form, and we’ll get right back to you.
