The Numbers Don’t Lie:
Just Be Sure You Measure Right
By Terry Keller, AAM
The numbers tell the true story if we measured right at the start.
If any principle of management is true and valuable, it’s this: The numbers don’t lie!
No matter how much we embellish, compensate or justify things in our own minds to make ourselves feel better as shop owners, the numbers will never lie.
“If we didn’t do so many oil changes the average ticket and tech efficiency would have been where it should be.” Sound familiar?
“If that rack hadn’t blown up I would have made a profit this month.” Have you said this, too?
“If it wasn’t for this recession my car count would be up.” There are dozens of different ways of saying these things. I know, because I’ve said them myself at one point or another.
If you think about it, I’m sure you could name several things you use as excuses many times each month and each year to explain away your bad numbers and profits, couldn’t you? Believe me, I’m speaking from experience! Nobody seems completely immune.
In fact, the more intelligent a shop owner is and the more they’re capable of analyzing their numbers, the more prone they are to justify or explain away a bad number.
Why is that?
Why are we not willing to just take responsibility for that poor performance and finally do something about it? Why does every business owner or manager fall prey to this kind of self-deception and deflection to one degree or another at one time or another?
How to Start Believing the Numbers
The only real solution to the self-deception, deflection and lies is found in this principle: If I accept full responsibility for something, then I am empowered to change it.
Of course, the opposite is also true. If I perceive I am not responsible for something – or if it seems beyond my control, or that it “just happened” to me or my business – then I am powerless to change it. I am a victim with no hope of change or improvement. Yes, there are things beyond our control. Yes, the economy is a mess and unemployment rates are still high. Someday in the future, it might be interest rates or lending restrictions or employment laws. But the real question becomes, why become paralyzed by things we can’t control?
Why not spend your energy and take responsibility for all the things you can control like fixing your numbers and increasing your profits? When shop owners decide that some of their numbers cannot improve, they might as well close the doors. That attitude is doomed to failure – especially in this economy!
What Can You Do?
Where can you start if you’re ready to start believing the numbers? Where should you be in regard to targets, measurement and improvement (or sustenance) day-in and day-out? I could spend 20 articles talking about all of the numbers your shop should be measuring and why! However, the following numbers are a good start for any shop owner who is ready to start trusting that the numbers don’t lie.
Average Repair Order: The trick is to let the numbers tell the truth. You can’t cherry pick! If your average repair order excludes the tiny jobs like emissions inspections and oil changes, it’s not really your true average repair order. If you’re not measuring accurately, you won’t know where you truly stand.
Car Count: Just like your average repair order, your true car count must include all cars! If you exclude cars because they bring down your average, you’re not getting a true picture of your numbers.
Each Gross Profit Category Percentage: Parts, labor, towing, tires and more. Each of these gross profit categories needs to be fixed in a different way, and you need to know where you stand before you can make adjustments to fix them. This also includes total gross profit percentage.
Average Daily Sales: What is your daily shop sales average? What are your service writers and technicians selling per day? These numbers can help you understand who is pulling their weight in the shop. They can also help you understand how your shop is doing day-to-day so you don’t have to wait until the end of the month to see how you did.
Billed Hours: How many hours are your technicians billing per ticket? Per day? This number is important for understanding how thorough their inspections are (and your service writer’s ability to sell service), as well as determining technician efficiency – the number of hours they’re billing for each hour they work.
These should be measured for the shop, for each service writer, and for each technician and general service technician. The numbers on their own are only half the story, though. To get a true picture, you should be graphing these numbers on a weekly, monthly and yearly basis.
(When you do this, you’ll be amazed at how easily you can detect problems in your employees’ work or home lives. Even if you can’t detect something is wrong when you speak with them, you’ll be able to easily see a drop-off in production. The numbers don’t lie!)
Even better than a simple line graph, though, is a graph that lets you compare your service writers to each other. The same goes for the techs. You’ll know pretty quickly who your true superstars are, and who isn’t committed to following your policies and procedures.
Finally, one of the most important things you can do for your shop is to be able to compare your shop’s, service writers’ and technicians’ numbers to the best shops in the country (that are similar to yours in size, market, services, etc.). The worst thing in the world is to go to all of the effort to set up tracking and to understand your data … and then to compare your numbers to other shops that are struggling or failing just like you are (or that are completely different than your shop!).
Why You Should Compare Yourself to the Best
The definition of a winner is someone who consistently beats the competition. But there’s a reason why professional teams aren’t continually playing amateur teams. It may make them a winner, but it doesn’t make them a champion. For the same reason, it’s of no use to compare your shop to tiny, failing shops in a market that is nothing like your own.
No, the true definition of a champion is someone who consistently wins against the best teams!
Are you lying to yourself? Do you truly want to change and become a champion? Then you must empower yourself and your shop to win by measuring the right numbers the right way and then committing to improve them. No matter what outside forces may throw your way, you still have the ability to survive and grow in this (or any) economy. But you have to believe that the numbers don’t lie!
Good luck...and go win!
Editor's Note: This article is one of several management articles that will be contributed to AutoInc. this year by Automotive Management Institute (AMI) instructors. In 2012, AMI's knowledgeable instructors will continue covering a variety of topics designed to educate and train today's service and repair professional in AutoInc. To learn more about AMI, its courses and instructors, visit www.AMIonline.org. AMI administers the distinguished Accredited Automotive Manager (AAM) program.
Terry Keller, AAM, is the owner of Keller Bros. Auto Repair in Littleton, Colo., rated the No. 1 repair shop in the nation by CarQuest. In 2009, Keller Bros. was the winner of the Colorado Ethics in Business Award, and was a BBB Torch Award Top-3 Finalist in 2009 and 2010. Keller is also the CEO of Auto Profit Masters and the creator of the RPM ToolKit™ training and accountability software. If you’d like more information on how Keller and Keller Bros. measure their numbers, he can be reached at email@example.com, (866) 520-3030, or online at www.KellerBros.com, www.Auto ProfitMasters.com and www.RPMToolKit.com.