Like many other businesses today, getting the profits you need is a challenging undertaking for most diesel repair shop owners. The multitude of factors and variables involved in running a repair shop can make it difficult to hit the profit numbers required to not only sustain, but to grow the business.
Many owners make the mistake of focusing on increasing sales when they begin to see their revenue slipping. While this is an important long-term strategy, it almost never solves the problem in the short-term. A better approach is to take a good look at all the areas of the repair shop that you can improve on to help increase your profits.
In a diesel repair shop, there are essentially four factors that directly impact profits. These factors are: Efficiency; Labor; Parts; and Overhead. By analyzing these factors closely, you will most likely discover some things you can do to lessen their impact on your profits. We will review each of these factors individually. In this article, we will discuss how improving your shop’s efficiency can have a positive impact on your profits.
The Efficiency Factor:
It is estimated that as much as 80% of the time associated with a typical repair job is non-billable. This means that there is a huge opportunity to increase your shop profits through efficiency improvements. The more efficient your technicians are, the faster they will complete their work, allowing them to do more work, making your shop more money.
Making your employees more efficient doesn’t mean making them work harder. It means providing them with the necessary tools, resources and processes to do their work more effectively. This requires putting in the time to thoroughly review your current workflow processes. Analyze every aspect of the process to identify the things that can be improved upon. Look for time wasters and ask questions. Are the necessary tools well organized and easily accessible? Are there any communication gaps? Is there too much paper work involved? Who’s waiting on whom? Can tasks be re-assigned to even out the workload? Making workflow improvements will not only make your employees more productive, it will relieve them of the frustrations caused by the inefficiencies, thus boosting their morale and making their work more enjoyable.
Take a good look at how your processes overlap multiple departments. Your processes are only as good as the weakest link in the chain. Does everyone involved in the process give it the high degree of respect and importance it deserves? Do they all follow it with the same amount of enthusiasm and urgency? Do they fully understand the ramifications of not following the process? Depending on their experience, getting all your employees to view the importance of the processes from your perspective may require some mentoring and coaching on your part.
It is important to include your employees in the process analysis. They implement the processes every day, so they will have valuable input on how to improve them.
To learn more about how to increase your profits, CLICK HERE to download our FREE White Paper: How to Maximize Your Diesel Repair Shop Profits.