This is a continuation from Part 1 here
For years now, I have been working to improve my own shop, Evolution Dynamics, to be profitable, fun, and not require insane hours. Sadly, I learned from the school of hard knocks (i.e. made every mistake imaginable costing time and lots of money) on how to best run my business. It shouldn’t have to be this way.
To get started, I want people to look at running a business as a machine that can be finely tuned. We are all car people and most of us come from a racing background. As a competitor, we look for every edge we can get to go a little faster. The fastest people know and understand their car better than anyone else. They understand it because they are measuring it. They are taking time to know the theory and apply it to their car.
I challenge shop owners to take this same approach to how they run their business. I want you to measure things that matter and look for ways to improve how your shop runs. Like an engine, if you have a good control system for it, you can fine tune it to be more efficient and more powerful. In a service industry like this, efficiency is the name of the game. Your time is the resource and money is the output
Time = Money. Duh!
Time is Finite
There is only so much time in the day. That means you can only make so much money before you run out of time. Sadly, we all know it isn’t as easy as putting in long hours and collecting a bunch of money at the end of the week. What goes on inside the business “machine” is what defines how successful you will be. To start, let’s define what type of work we will be doing. Sounds simple, but many miss this basic activity.
For myself, I run a full service performance shop for Mitsubishi Evo’s. You could be a freelance tuner, general maintenance shop, machine shop for engines, or even something like a powder & ceramic coating shop. Anything that you exchange your time for money should be defined up front and don’t deviate from this unless you are absolutely certain you need to.
We need to break down the work we do into definable steps. Here is a chart containing a small sample of tasks I perform at my shop:
This will give you a specific breakdown of all the tasks you perform and the parts needed to complete them. Taking the initial time to do this sort of operational improvement will save you hundreds of hours over the course of a year. Having a well thought out task list means that you can quickly, easily, and repeatedly make estimates/invoices for customers.
Time and again, I see invoices from shops with items such as “Labor” and “Part” followed by a description and a price. When I ask to see a similar invoice for a different customer, the price is inevitably different. Not only does it take more time to write out the description every time, you are obviously making less money on one of the invoices. Sometime on both!
Having a front desk employee only exacerbates this problem. Generally speaking, they aren’t going to be as intimately knowledgeable about the pricing structure as you are. Give yourself and your team the tools to quickly and efficiently do the job.
Action Item #1, create a task list for your shop. Write down all of the services you normally perform and include descriptions and prices if you have them. Here is a link to the Task List I created for Evolution Dynamics. Feel free to modify the details and use it at your shop.
This concept is the core of our My Shop Assist Software, and many of the important metrics we will use to improve the shop are built off of the task list as we will see in subsequent sections of this blog.
This is a page of my task list already in MSA
Continue to Part 3 Here