Billed Hours, Then Car Count. The right order of analysis

Across the country everyone talks about needing more car count in their business and the shops that say this are already are doing $500,000 to 700,000 per year in annual business or even more. In my Management classes when further analysis of invoices takes place we find that shops are averaging 1.6 to 1.8 billed hours per invoice on basic consumer maintenance, 2.1 to 2.4 billed hours on diesel work, 3.0 to 3.5 billed hours on mid duty vehicles and 7.0 to 8.5 on heavy duty work. Do your own analysis and compare.

The numbers get skewed because shop owners don't break out their mix of work coming in the bays, so when all invoices are combined and averaged they see 2.8 to 3.2 hours as an average and conclude they are doing a great job but things are still slow. They conclude they need more vehicles in the bays. I respectfully disagree.

When the math is completed the average shop in Canada requires only .5 to 1.0 more vehicles per day over what they currently have coming through the door IF they were managing their clients vehicles professionally. The facts are the industry is not breaking out the right measurement of its business and the current internal procedures and processes are not addressing the true problem.

Consider that basic consumer vehicle maintenance should average a minimum of 2.0 to 2.5, diesel work 3.0 to 3.5, mid-duty 4.0 to 6.0 and heavy duty work should average 10.0 to 12.0 hours per invoice. If a shop has a mix of work, break it out and measure it accurately. It is imperative as Professionals, to ensure that the current business is being managed correctly first before we go after any new business.

Once the internal processes and measurement are accurate, then a shop can determine exactly how many more vehicles are required per day in the shop based on the facts of their business. It is a mathematical calculation and measurement. Just saying "we need more" is not accurate....exactly how much more based on the facts of our business is the right question to determine.

We must ensure we grow the business in such a way that our current clients receive a consistent experience each time they receive services from us so they won't feel they are not a value to the business or the business does not care about them as much "as they used to".

Slow down and do the math of your business first so you can determine exactly what is right for your shop. I believe you will discover some "diamonds in the rough" that have been overlooked instead of increasing the shop and client stress levels with assumptions.