Financial KPIs Body Shop Flashcards
Labor GP Goal
45%+ BC
Parts GP Goal
35% goal BC
Paint and Materials GP goal?
11% BC
10%+ total sales. If they average less than 10% sales in any quarter, your estimators need some more training.
Overall GP Goal, Why?
45%+ BC
You need to be in the low forties to have enough for sufficient retained earnings to strengthen the business. Top shops at 45%+ fender bender
Total Overhead/Expenses Goal
40% or less Ben Clymer’s
35% max fender bender, 28-32% top performing shops
Net profit Goal
10%+
Gross Sales goal, all stores total
$1.4M per month gross sales
Rent as a % of sales goal
5% unless you own the building.
AR as a percent of sales goals per fender bender
2% over 15 days BC
3-5% 30 days per Fender Bender
How do you target/forecast scheduling?
- Revenue Goal divided by average RO at that shop = car count needed.
- Divide needed car count by number of working days, gives you cars needed per day to meet revenue goals.
Example: if an average RO is $3K, and the goal is $400K, you’d need 133 cars. If there are 21 working days, then 133/21=6.3 or 6 cars per day
How to plan a discount offer?
discount only the labor rate, only up to 60% GP or better.
If the billable rate is $50/hour and the techs labor rate is $20/hour, then there is no room for a discount because that is 60% GP. 20/50=40% cost or 60% GP.
if the billable rate is $55 and techs make $20, you can use the $5 spread for a discount/referral fee
Cycle Time/ Touch Time Goal DRP
9/4
Cycle time/ Touch Time goal overall
11/3
revenue goals by shop
Riv & MV: $400
Y: $250
Per fender bender survey, the KPI most essential to profitability across the board was
paint hours per RO, should be above 10 on average
CSI goal
95%
What leads to high AR per Jason?
7 thoughts
- estimate or photos are not current
- check in process
- issue contacting insurance
- delivering cars after closing invoice previous month
- not on top of paperwork
- improper teardown, too many supplements
- getting POs late from dealers
if your not using the space for parts, you can use it for: ___________
production.
Techs should get all of their parts: ____________
at one time on a part cart so they don’t have to forage for them, productivity loss when they forage.
why is touch time more important than cycle time?
cycle time is too dependent on vehicle mix, job type and job time. Touch time is a true reflection of how productive your team is.
what do low touch times generally mean?
You’re wasting valuable labor resources.
what 8 expenses are built into overhead?
Wages Advertising and Marketing Professional Fees Computers Office materials Building Rent Utilities and Telephones Shop vehicles
What are 3 pieces of Paint GP?
Materials
Hours
Labor Hours/Repair
EBITDA is also known as
Earnings before insurance, taxes, depreciation and amortization.
subtract all expenses except interest, taxes, depreciation, and amortization from net incomeAKA: Operating profit
