The Shop Management Show, AutoLeap’s new podcast, is back with part two of a recent shop finance discussion.
What shop margins and KPIs should you focus on? How can you proactively analyze your shop finances to improve performance?
We discussed these topics in detail with an industry expert.
Recap from episode nineteen
In episode 19 of The Shop Management Show, I was thrilled to be joined again by Chris Cotton, Owner of AutoFix Auto Shop Coaching.
Chris and I discussed:
- Managing Cost of Goods Sold (COGS) and your income statement
- Establishing benchmarks for your key KPIs and shop margins
- Improving shop performance through finance analysis
Let’s cover some key takeaways!
Healthy benchmarks for your shop margins
Regarding your shop’s margins, Chris recommends tracking and measuring everything. Consider the big picture and how every aspect of your shop’s operations influence these margins, from writing up tickets to estimates. Monitor these details proactively and adjust your shop processes as needed.
Specifically, Chris recommends the following benchmarks for your shop’s margins:
Getting your shop finances on track
Chris hears some push back on the suggestion of raising labor rates and increasing parts margins. But that advice will often benefit shops the most and deliver the strongest return on investment.
If your shop is struggling in this area, Chris outlines several ways you can adjust. Take a low parts margin. If your parts margin isn’t correct, plug a parts matrix into your shop management software. Stop ordering parts you don’t need. Return unused parts you already received.
Ultimately, it all boils down to optimizing the processes and procedures in your business.
Closing thoughts
Download this episode today for more expert insights to optimize your shop finances.
Subscribe to the Shop Management Show today! The podcast is available on Apple Podcasts, Spotify and most popular streaming services.
