The choices we make in life define who we are, business is no different. Making the right choices can be difficult, the more complex the choice, the more complex the decision.
Sitting at a blackjack table, you will often succumb to the banter of one player who seems to know it all. They provide you with advice, and after a succession of bad losses you will no doubt begin to listen. You may walk away from the table a winner, but more likely, you leave empty handed. A smart player will follow the lead of the player with the most chips on the table. An even smarter player doesn’t gamble, but where is the fun in that!
Look around at the industry and see for yourself who has the most chips on the table. The likes of groups like Woods, CARS, ReCar, CCR, & Manheim Fowles have all invested a great deal of money and resources into building and expanding their network of facilities. They rely on us to provide them with the right information so that they in turn can make the right business decisions.
Our system provides you with realistic approaches to increasing profitability. These approaches have been applied in various levels to hundreds of shops in Australia and New Zealand, and have proven themselves time and time again.
The following is a guide to the most common profit improvements that have been attained by our clients. Use this as an indicator to the potential impact on profitability in your business.
Note: Models are based on a business with a turnover of $2 mil, with 7 workshop staff.
Approach #1: Motivating Staff
- Recognition of worker efforts, whether it be monetary or otherwise can provide the necessary incentive for your workers to work faster and more efficiently. This in turn leads to an increase in production for the same hours worked. WebTRIM clients will often notice an immediate increase of 5% in worker efficiencies, and have been known to increase by up to 25% or more. Impact of increased efficiency levels are as follows.
| Basic +5% increase
| Moderate +8% increase
| Advanced +12% increase
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| +$62,700 pa
| +$100,320 pa
| +$150,480 pa
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Approach #2: Scheduling
- This approach can have a major impact on your profitability. It is long understood that in a standard 7.6 hour day, a worker will be productive for roughly 6 hours. This variance is primarily caused by having to ask what their next task is, moving vehicles into place, waiting on other workers, and so on. Scheduling reduces this ‘down time’ significantly. The worker will know what vehicle is to be worked on next, knows that it will be available, and to further reduce idle time, should be moved into place by the supervisor so that it can be started immediately. A typical saving of 45 minutes a day (ie. 0.75 hours) can be saved, if not more. The following shows the impact of reducing down time per work.
| Basic +15mins
| Moderate +30mins
| Advanced +60mins
|
|
|
| +$35,658 pa
| +$71,323 pa
| +$142,625 pa
|
Approach #3: Booking-In Jobs
- An ability to accurately predict upcoming work flows not only allows you to book your facilities’ capacity to its fullest, but will help determine when you need to start replacing rather then repairing. It may be that you do not have much labour capacity available on a particular day, and can not afford the time to repair any more vehicles. Having this knowledge, you can preemptively change the method of repair on a couple of vehicles and squeeze in a few extra jobs into production.
| Basic +1 Jobs p/week
| Moderate +3 Jobs p/week
| Advanced +5 Jobs p/week
|
|
|
| +$33,740pa
| +$101,217 pa
| +$168,696 pa
|
Approach #4: Increasing Parts Margins
- Knowing the achieved industry parts margins may highlight suppliers that are not giving you the margins you deserve. This information will help you with leveraging increased margins from your suppliers, or at least help you to understand where your margins are in comparison to the industry. And yes, this can be narrowed to your region! Negotiating and updating parts prices based on this information can increase parts profit anywhere from 1% to 5%.
| Basic +1% Margin
| Moderate +3% Margin
| Advanced +5% Margin
|
|
|
| +$7,200 pa
| +$21,600 pa
| +$36,000 pa
|
Approach #5: Adjusting Work Provider Volumes
- As discussed earlier, WebTRIM provides all the information you need to make decisions about your work providers. One such piece of information is how profitable each of your work providers are. You have a limited set of resources and must utilise each to their full potential. Freeing up resources by culling your poorest performing work providers, provides an opportunity to increase volumes with the more profitable work providers. This may seem like an obvious solution, but without the right tools and information in place, you can’t be certain as to where your resources are best allocated. Typically, you should be able to remove the bottom 15% of work providers by making slight volume increases to your top work providers.
| Basic +10% Change
| Moderate +15% Change
| Advanced +20% Change
|
|
|
| +$32,154 pa
| +$48,231 pa
| +$64,308 pa
|
Total Potential Profit Increase
- The above mentioned areas of improvement are only a sample of how you can effectively use WebTRIM to increase the profitability in your business. Based on the above results, an average $2 mil business with 7 workshop staff are capable of increasing profits by the following amounts.
| Basic Profit Increase
| Moderate Profit Increase
| Advanced Profit Increase
|
|
| +$171,452 pa
| +$342,691 pa
| +$411,629 pa
|
Best of all, there are no catches, additional charges, progress payments based on improvement, or any such ‘hidden’ expenses. We are a proven and reliable system, working with Australian and New Zealand repairers for over 10 years. WebTRIM is genuinely focused on improving the profitability of repair facilities, the better our reputation in the marketplace - the more satisfied clients we have; it’s as simple as that!
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