Running a Shop Finance

The Value of Measurement

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It’s no secret that many auto shop owners started out as technicians, or maybe even sweeping floors before that. They climbed the ranks through hard, hands-on work. They became experts at repairing vehicles. Where some fall short, however, is in running a sustainable and profitable business.

To do that requires far more than the ability to diagnose and repair vehicles—more than determination, motivation and hard work—though all of those things are important. We’ve whittled the general categories every shop owner must grow familiar with down to eight, which rotate in our Toolbox section: customer service, education and training, finance and operations, human resources, law, leadership, sales and marketing, and technology and tools. 

What is essential for any initiative, regardless of which of these categories it falls in, is a shop owner’s ability to analyze it and improve. When it comes down to it, there’s no way to know how successful your business is, or what things can be done better, if you’re not measuring your shop’s performance. That’s the point of this month’s main feature, “Track and Meet Your KPI Goals.

“You wouldn’t drive your car with all the gauges thrown in the trunk, would you? Or to change it up a bit, would you ever operate any piece of technical equipment without the proper gauges or measurements?” says Bob Spitz, senior vice president of business development for Management Success!, in the story.

Let me say up front that this month’s feature focuses on just two of many key performance indicators (KPIs) that shops should track. But understanding and evaluating the two here—efficiency and gross profit—can make a world of difference in your business. Keep an eye out for more KPI breakdowns in future issues and let us know which numbers you think are most critical to keep tabs on.

Jake Weyer
jweyer@ratchetandwrench.com

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