Automotive & HD Business Management Articles.
Bob Greenwood. March 26, 2014. ( over 4 years ago ) 690 views
Our national semi-annual survey across Canada as of December 31, 2013 is still showing that the average shop in Canada is only billing 1.4 hours per R/O. This number should be a minimum of 2.0 to 2.5 billed hours per R/O for a shop working on basic consumer vehicles. This clearly shows the work the AUTOCARE industry is missing.
Do some basic math. The minimum shortage of billed hours is .6 when you are trying to achieve the minimum 2.0 target. If a shop is charging $98 per hour for maintenance service, the shop is missing $58.80 in labour per invoice. If the shop completes 250 invoices (R/O’s) per month, then $58.80 x 250 = $14,700 in labour alone. I haven’t even taken into account the additional parts gross profit that would take place with the increased productivity. That is $14,700 lost labour which is also lost NET profit per month!! That translates into $176,400 per year. OK, you are not that good and you only achieve half that number; you still changed your life!!!
It’s time to learn how to achieve the right productivity in your shop based on your clientele; get off the “Sales” thinking—that’s from the old aftermarket industry business model. The new model demands the understanding of billed hours and how they are properly achieved. I’ll give you a hint: it starts with professional, accountable vehicle inspections. Ninety-five percent of the industry has not learned that yet!