7 tips for running a financially efficient workshop
When Capricorn’s 2021 State of the Nation asked Members about the biggest challenges they face in business, 19% said they struggled with efficiency and 54% said they still measured efficiency by their capacity to pay their accounts at month-end. So, we asked some of our team of automotive industry experts for their hacks for running an efficient business. We particularly wanted advice to help Members run more financially efficient workshops, because 20% of Members told us financial concerns were among their biggest challenges. Here’s what they said.
Start measuring your efficiency Workshop Whisperer Rachael Evans said when a workshop owner recognises they don’t have an efficient business, the number one thing they’re usually not doing is measuring efficiency.
“That’s where there’s this separation between blue-collar and white-collar thinking,” she said.
“There’s a distinct lack of recognition in the aftermarket of the fact that our workshops are essentially factories, and in those factories the product we’re producing is units of labour. “If we were a Toyota factory or a Coca-Cola bottling plant, the metrics that would come out of that factory in a day would be how many units were manufactured, what time they were manufactured in, and what waste there was. But often workshop owners don’t know even if they have the ability to track that in their software. “So, the way to start to turn that around is actually to pay attention to the things that you should be paying attention to. At any one time, I should be able to ask a business owner, what’s your shop’s proficiency today? What was it yesterday? What was it last month? And what are you tracking out for the quarter? They should be looking at those numbers so often that they don’t need to go and look at a report. They know where they’re at.” Invest in a good management tool Good management tools aren’t just for tracking your efficiency; they’re the way to unlock that efficiency. Jeff Smit, Technical
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Editor at The Automotive Technician, urges Members to invest in good workshop management tools. These tools should include: • Finance and invoicing • Rosters and time sheets • Work scheduling and technician management • Inventory management • A customer booking portal • A customer database and customer relationship management • Reporting and business intelligence.
Learn how to read financial statements
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Financial statements and financial management tools can be confusing and difficult to understand. As a business owner, you need to overcome that challenge if you want to become more efficient. Rachael recommends talking to your accountant and getting coached through how to read financial statements and reports. It’s a skill you’ll never regret learning.
