Bob’s Business Development
ACCOUNTABILITY OF STAFF & MANAGEMENT – DO THE REAL MATH
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By Bob Greenwood AMAM
N THE PAST, BY THE AFTERNOON OF OUR 1-DAY BUSINESS DEVELOPM E NT C L ASS, THE STUDENTS WERE REALLY GETTING THEIR HEADS INTO THE NUMBERS OF THEIR BUSINESS. It was great to see the participation and interest, so I thought I would go another step further and look at some real costs in a shop that most owners never consider or have calculated. Many shop owners have a tendency to look at the business operating expenses
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and consume their time with that topic as a main cost reduction plan to increase their bottom line. The fact is most business expenses today in operating a professional service shop are either noncontrollable or common-sense expenses. We go through this in detail in our longer Management courses. We fail to acknowledge that Management must also be ac-
countable to the business and make better use of his/her time. It is Management’s responsibility to go after the real problems in the business instead of nickel diming the business to death with expenses thinking it will save the business and bottom line in the long run. Nothing could be further from the truth. That been said, I think it is time to actually look at the most serious problem in every service shop business, namely, what unproductive staff really cost the business and calculate that cost as a true bottom-line loss. For example: If a technician is averaging 5.5 billed hours per day but is being paid for 8 then that means 2.5 hours per day are a real cost to the business. If you are paying the person $25 per hour, then $25 times 2.5 = $62.50 per day times 20 days per month = $1,250 per month plus average shop payroll burden = $1,500.00
