Automotive & HD Business Management Articles.
Bob Greenwood. January 28, 2015. ( over 6 years ago ) 1,836 views
Operating a retail automotive service shop is the hardest and most complex retail business to operate today. The detail for execution that’s required and measuring the daily key performance numbers that allow for the right management decisions to be made on an on-going basis is absolutely incredible. When it’s executed right, the shop’s very profitable after a professional owner’s wage is paid out along with above average wage levels for staff and the business still averages at least a 35% ROI. Unfortunately, the average shop across Canada is only averaging a 7 – 7.5% ROI, or in other words they bought themselves a job with very high liability exposure.
Why does this happen?
Too many owners insist on doing everything themselves and keep the business financial details from key staff members. “It’s confidential” is the answer I hear. I really have to disagree here. I’ve been in so many shops where the key people have no clue what their average billed hours are per invoice (or why it’s important) or what does shop site efficiency mean and what do those number combinations tell us about shop performance? These are just two examples out of the 10 important numbers all key staff members should know and understand.
Keeping key staff in the dark is the biggest mistake an owner can make today. When key staff are brought into the “inner circle of the business” and learn and understand the business, it’s amazing how they want to get behind things and make things work. They are prepared to take responsibility and be accountable. They WANT to contribute.
Of course this is a big topic as well, but probably the real question FIRST you need to answer honestly is, ‘do you believe in and trust your staff’? Well if not, why were they hired?
If no key staff members are in your inner circle, this drives more ridiculous stress to the owner. Why don’t you change that?