There are 3 ways to increase the bottom line in a shop.
1. Increase your prices.
2. Cut your expenses.
3. Increase the volume of work being done by the shop.
One of the fastest ways to make money, when a shop tends to be very busy, is to organize the front of the operation so it can handle more work effectively.
The Service Writer starts to become overwhelmed. He starts to make little mistakes and then sometimes bigger mistakes due to the lack of control and organization. When this happens, the shop starts to become less efficient.
He then starts to spread his overwhelm to the production people. Technicians start making silly and costly mistakes. Things are forgotten. The small mistakes creates comebacks and this adds to the confusion and the overwhelm and spreads back to the already overwhelmed Service Writer.
When a Service Writer gets into overwhelm and things start to get chaotic, most Service Writers will begin to stop the flow of business. They begin to not push to get customers into the shop as soon as possible. They start pushing work away. They tell the customer that they are super busy and can’t handle it for a couple of days or next week or occasionally for a week or two.
When this happens, they don’t realize that they are killing their future and losing good customers. The difference between being super busy and slow is not that much on a per day basis. It only takes about 2 or 3 more cars a day to make a shop super busy. So it doesn’t take much of pushing work into the future to start to slow a shop down.
The other missing piece on this is when you put a good customer off for 3 or 4 days or a week. Occasionally, they will decide to take it somewhere else to get it fixed because your shop is too busy. Sometimes, those customers will like the new shop better and you have lost a good customer and you don’t even know it.
Normally, within about 2 to 3 weeks, things have slowed down. The shop doesn’t realize that it is partly responsible for creating this problem. They are not aware of what is happening, so they continue to let things slide until the shop is dead slow. At that point, the owner now is screaming for more business.
So the shop starts another cycle of boom or bust.
At Management Success! we have watched this happen repeatedly to our clients. One of our Service Advisors will call a shop about doing the Controlling The Front Workshop and the owner of the shop will say “Man, we are swamped and can’t do it now. Call me in a month.”
The Service Advisor will call again in about a month and the owner of the shop will say, “It has quieted down and I want to think about it. Call me in another month.” The Service Advisor calls in another month and the owner says that they have no business and they want our help with marketing, because they need customers.
The owner of the shop doesn’t realize that one of the fastest ways to improve the bottom line is by organizing the front part of the operation. When the owner and the Service Writer are trained on the basics of controlling the front operation, it means big numbers on the bottom line.
Example: Shop A: The owner and the Service Writer are not trained and the shop tends to max out at about $10,000 a week in volume. After doing the Controlling the Front Workshop, Shop A can easily handle $15,000 week and seem slow. Also, Shop A will not tend to have this constant pattern of boom or bust.
So are you tired of this boom or bust pattern? Are you tired of chasing the business? Are you tired of going through periods of craziness followed by periods of boredom? If you get into a condition where the shop is so busy that you can’t handle it, that shop needs to have both the owner and the Service Writer do the Controlling the Front Workshop. But it is only money, yours!