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The ROI Guide

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How to Measure ROI for any Business Expense
From training to marketing to equipment purchases, develop a system where ROI is always top-of-mind.

“What possible use could I have for that?”

That was the question poised by a young, promising technician leaving Casey’s Independent Auto. This employee, who accepted a job at a competing facility, did not see the need to punch the clock on each and every job—something the shop’s owner, Casey McGowan, required of his eight technicians.

And after thinking about it, McGowan realized the disconnect: The technician saw clock-punching as needless and inconvenient; the shop owner saw it as essential for calculating his ROI on equipment, training and the technician himself.

To prove the importance of tracking a return on his employees’ time, McGowan painted a picture for the technician: Say, on the first day of your new job, you have three repair orders totaling three hours each. But the next day, you have three jobs totaling two hours each, earning you significantly less money. Maybe it was a slow day at the shop—or maybe, just maybe, you didn’t have right scan tool for the job; or the shop’s equipment was out of order; or you didn’t have proper training.

But if ROI is not being tracked for that scan tool, or that equipment, or that training, how would you ever know?

McGowan realized he had failed to explain why he tracks hours so closely; why service advisors receive a weekly CRM audit; why KPIs and profit margins are recorded diligently in spreadsheets. McGowan tracks productivity, efficiency and gross profit margins on labor not because he’s a micromanager—it’s because there’s a return on every investment at his $2.5 million Vancouver, Wash., shop.

McGowan says you can trace the ROI on every single business expense; you just need a lateral system in place that tracks both your relationship with customers and the performance of your employees. Here’s how you can do just that.

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