Business Maintenance for Peak Performance: Internal Analysis Will Rev Up Your Business, Part 2 -

Business Maintenance for Peak Performance: Internal Analysis Will Rev Up Your Business, Part 2

In Part 1 of this article, we discussed how shop owners should follow a routine of daily monitoring and maintenance to ensure that performance is meeting business targets. Now, we turn to monthly, quarterly and annual checks to keep your business running smoothly and profitably all year long.

By Dave Crawford
VP of Training & Program Marketing
Am-Pac/Tire Pros

In Part 1 of this article, we discussed how shop owners should follow a routine of daily monitoring and maintenance to ensure that performance is meeting business targets. Now, we turn to monthly, quarterly and annual checks to keep your business running smoothly and profitably all year long. 

Monthly and Quarterly Maintenance
There are a few things that need regular attention each month or quarter to keep your business achieving peak performance.

Review your monthly financial statements and compare them to your budget. This will help your cash flow as well as your expenses by category.

Dr. George Lucas, a senior ­associate with U.S. Learning Inc. in Memphis, says that unlike the Titanic, failing businesses do not have one massive leak. “They tend to bleed to death in something like reverse Chinese water torture. It is an ongoing dripping of cash — an organization’s lifeblood — out of the company,” Lucas explains. “The warning may be a drop in ­accounts receivable or not having enough in the account to pay current bills.”

Evaluate productivity results. You may think you are selling service, but what you are really selling is time. Many people go to time management workshops to improve their personal productivity, but you can’t manage time; you can only manage your consumption of time.
 
Everyone in your organization must view the time your shop is open as golden. How effectively are you keeping your bays ­occupied? What about your technicians’ billable hours? What is your average ticket for the month and quarter? 

Advertising, Training and Customer Followup
Review advertising plans and make adjustments as needed, always with an eye to driving traffic to your location. Most plans seem to assume that past conditions will hold, but this is rarely the case. A new competitor opens up down the street. Road construction limits access to your store. Perhaps a large local employer ­reduced or suspended operations. Any of these can reduce the impact being generated by your advertising. 

While smart, successful dealers maintain their advertising even in tough times, sometimes a revision in the approach is needed. Always attempt to track what brings customers in, and put your resources where the most impact is generated.
Plan training efforts where needed. You need to regularly assess what skills your team members need, and what each person’s level of proficiency is on each critical skill. When one person’s skills are not adequate or begin to lag, that is a coaching issue. When this deficiency becomes widespread, that is a training or development issue. 

Whether training is an in-house ­session, a public workshop or online learning, it is the easiest thing to postpone. “We’ll do it next quarter or next year. We can get by for now,” is said over and over in all types of ­organizations.

Consider that time with the highest return on investment is learning time. You can work one more hour today and that time is simply spent. When you invest time in training and learning, that one hour is multiplied a thousand-fold.

Follow up with your customers through an ongoing reminder program, thank you notes and even a monthly/quarterly e-mail newsletter. A large percentage of customers switch who they do business with based on a perception of indifference. They feel their patronage is simply not valued and if they leave no one will notice or care. Regular positive contact builds loyalty, and can root out a problem before it becomes a major issue. 

The other side of this is to collect and review customer comments. You should, at minimum, offer customers a response card to provide feedback on your products and services. You could also provide a response mechanism through your website, which can allow you to obtain more honest comments. Either way, you and your key staff all need to review these comments as they come in, take immediate action to diffuse customer complaints, and then hold regular monthly and quarterly meetings to review those comments and actions taken.

Annual Checkups
There are aspects of your business that should also be carefully evaluated on an annual basis. Near the start of a new year, you should block several hours to carefully examine several key business-building areas.

Review your strategic plan. Begin by looking at your mission statement and determining if it is still on point with your operation. Lucas advises, “The mission statement is the most stable part of your plan. It will change only when who you are, what you do and how you deliver value shifts. If you begin to offer extensive customization or some other expansion of the mix, then you would see slight modifications in your mission. If you find yourself changing your mission statement every year, you most likely do not have an appropriate one.”

Revisit your SWOT analysis. This is the portion of your plan that addresses internal Strengths and Weaknesses and external Opportunities and Threats. You will likely see several changes year to year. You may have added new lines that are popular and considered strengths. Conversely, perhaps you lost your best technician and bench depth is now a weakness.

Consider modifications in your budget. Even if you are monitoring performance to budget every month and quarter, you should take a long, hard look at the annual budget itself. Capital availability may allow for ­expanded investment in things like equipment if performance has been good, and a tightening of the belt if cash is tight. 

Advertising budget and allocation is another item that ­requires special consideration. Set your allocation based on advertising mix and rates, competitive pressures, your promotional event schedule and economic conditions. Far too many companies base next year’s budget on last year’s sales. ­Remember: sales do not cause advertising, but rather advertising causes sales. 

While most shop advertising tends to be price- or product-related, this is a good time to look at using it to elevate visibility and the image of your ­organization and to build “your brand.” This can include community involvement with auto safety presentations to civic groups, charitable activities, and ongoing customer communication tools such as newsletters and blogs.

Human resource issues should also be considered, including staffing levels, performance and compensation review, as well as establishing a learning plan for team members. The learning plan should be done with group and individual input to gain a greater commitment to these decisions.

Look at your business and determine what needs attention and what areas will help improve your profitability and growth. Maintain the ­operation of your business and it will continue to run smoothly for years to come. As we have all heard time and again, “people don’t plan to fail, they fail to plan.” 

Dave Crawford is vice president of training and program marketing for Am-Pac/Tire Pros. He previously was marketing director for American Car Care Centers. Crawford is also a contributing editor for Tire Review magazine.

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By Joe Marconi of Elite
Comebacks are a hot topic today. You need to track
all comebacks, determine the reason (tech error, part error, training issue,
other) and then calculate the true cost of the comeback.
Here are a few things to consider:
• The loss of time when performing the comeback; time that the tech can use to
perform other work and generate profit;
• The misc costs, such as overhead costs, supplies, cleaners, etc.;
• Towing costs, rental, etc.;
• Cost to morale;
• Reputation damage; and
• Reduction to your profit margin.
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inform your supplier. Sit down with suppliers on a regular basis. Don’t return defective
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everything.
Part issues are increasing. Every shop
owner I speak to is frustrated over this.
Remember, comebacks kill your bottom
line. The more comebacks you have, the more they’re killing your profits.
This article was contributed by Joe Marconi.
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