ladders, floor jacks, welders, brooms, saws in one location, you
get the idea. Cleaning up clutter is another maintenance item.
Throw away that pile of wood scraps next to the chop saw, sort
thru that stack of scrap sheet aluminum. And while you’re at
it, make those trips to the recycler and clear the back lot and
make it look nice and organized (remember your customers are
forming an impression of how you do business by how your shop
looks).
NEXT YEAR’S GOAL SETTING. We use
a simple calendar for measuring our progress
towards our monthly goals. Pull your service
team together and collectively set a performance
goal. Now please take note, this ONLY works if
you include the entire team, they have to buy in
and own the goals. The goals are instrumental to you achieving
your department budget. Make a commitment to the team and
provide them with the necessary support to achieve the goals.
This means providing tools, coaching, training, advertising and an
accurate tracking system. Agree on a bonus for the team when
they meet or beat the goal. For our team, everyone gets a free
paid day off. It always amazes me how hard a team will work
when they are motivated.
REVIEW OPEN WORK ORDERS AND
ESTIMATES. Hopefully you can access a
report that will identify all work orders and
estimates that were started but not completed.
Open work orders can be a dangerous thing.
What if a customer came in and requested
service, a work order had been started, and the work was
completed and the customer paid the bill? The problem is that
he paid cash and someone pocketed the cash (it has happened
to me). The work order never was closed. The other danger
lies in that there may be work started but still sitting on the lot,
but it’s so buried in the back that everyone has forgotten about
it. Sometimes there’s open work orders that are waiting on
warranty payment, that’s money that is waiting to be collected.
Now is the time to collect all that extra service revenue. Open
estimates really should be review every month, but no less than
every year. Open estimates represent opportunity, follow up and
see if you can get that job in the shop.
budget! Know what your expenses are then determine what the
labor rate will need to be in order to deliver the desired net
profit. The labor goals will be absolutely instrumental to achieving
the set budget. Shop supplies are a very real part of any service
department, you should be collecting for these. My definition of
a shop supply is: “any non-measurable consumable in the shop”.
This includes: welding gases, shop towels, spray paints, lubricants,
wire connectors, sand paper, etc. you get the idea. We have a
shop supply fee of 7% of all labor collected. This can be a very
significant amount of collected revenue at the end of the year.
SET UP OR REVIEW MENU JOBS. Now
that you have a little breathing room, now is a
great time to either set up or review flat rate
menu jobs like axle services or hitch installations.
Hopefully you have a software system that allows
you the ability to set up these repeat jobs. If you
have been properly reviewing how much time your techs take on
these jobs, you now know if you need to tweak labor allowances
and adjust pricing. If you do not use menu pricing for common
tasks, you should. Menu pricing will speed up the service writing,
allow for more upsell opportunities by adding related menu
items and will give the service department some services to
advertise. Another good idea is to have a laminated service
menu just like a restaurant menu. Leave them on the counter for
your customers to look at; it just may trigger them to ask for
additional services.
While most of these duties seem like no brainers, it amazes me
as to how few dealers and stand-alone service and parts stores
actually do these tasks on a consistent basis. While this is not
a complete list of everything that you should be doing (that
would look more like a book), it is a very good start. Many only
start doing these items when they are in trouble, sadly by then
it’s usually too late to do much good, I know because I’ve been
there. Don’t be one of those guys, start creating some good
habits so that you never have to experience bad times. One last
quote to leave you with: “Comfort is the enemy of progress”.
Use these tips and get your house in order for the next selling
season!
REVIEW THE BUDGET. Now is the time
to see if the service department needs to raise
the labor rate or increase shop supply fees.
How do you determine the labor rate that your
service department will charge? If you answered
“shop my competition”, then you NEED a
40
NATDA Magazine www.natda.org