Owning a business is no small venture. It requires sacrifice, hard work and dedication. The majority of your time is spent growing and maintaining your business and you are most likely sacrificing time with family and friends. With everything you put into it, you want to make sure you are also reaping the benefits of the long days and countless hours.
Your profits are most likely at the forefront of your mind and maybe also the biggest of your concerns. Generating a healthy profit is completely attainable if you aren’t already there and it takes some small tweaks to make a BIG impact.
Here are some simple ways you can begin changing your business to maximize and/or increase profits today:
Manage your paint materials and expenses – Connect with your painters to get on the same page when it comes to material consumption and expenses. Look at how much your are currently spending and where you can cut-back.
Manage your labour and parts gross profit – This is another exercise is analyzing your financials to ensure there is no over-spending taking place. Getting your team on-board with this will help immensely so be sure to integrate them in the conversation.
Ensure that your expenses are below 30% of your total sales – When looking at your financials, you should not be spending more than 30% of your total sales. If you are, then you know that cutbacks are essential.
Ensure monthly financial reports are generated to examine where money is made VS. spent and look for areas of improvement – Practice looking at your financial reports on a monthly basis to stay on track. Even if you have made the necessary changes to see a healthier profit in your business, they need to be monitored every month. It doesn’t take long to slip into old habits.
Negotiate the best discounts on parts – Speak with your parts supplier to discuss discounts. Look at your current consumption and discuss how you can maximize the opportunity for lower prices or rebates.
Engage staff with controlling consumption of materials – If your consumption is high, then engage your staff to come up with a strategy of how you can all work together to decrease the amount of materials you are using each month. This requires a team approach to be effective so look to connect with them on strategies and solutions.
Ensure effective estimating practices to maximize vehicle repair – Implementing best-practices for estimating is essential to maximize vehicle repair. Work with your estimators to put guidelines in place that will ensure everyone is working towards the same goal.
Aim for a gross profit of 45% and a net profit of 15% – If you are close to hitting these goals then you are on the right track. However, if you are still far-off, begin implementing these 8 steps listed above and you will see the numbers begin to line up for you.
These 8 steps are simple ways to open up opportunities for increased profits in your business TODAY.
If you are interested in learning more about Simplicity and our processes, click HERE and fill out the form. We will be happy to connect with you to help!