Optimize Personal Performance To Maximize Professional Profits

I was looking back over the past 10 years since my first article appeared in the May 2008 Engine Builder issue and noticed a trend. Much of what I write about has to do with performance. Not speed or high performance, but something that might resemble personal performance. While we really have no power to change trends, fads, the actions of others or really that much in this world, we can change ourselves, if we choose to. We choose to when we see a benefit that can be achieved at a reasonable cost, monetarily and in a reasonable time period. And since we’re all in business, time is money.

Are you making enough money? Are you addressing the needs of your family and your business? Are you responsible for what is going on in your business or are you blaming others, the weather or your horoscope?

I don’t know about you, but there’s never enough for me. Our businesses may only be able to produce so much. Have you measured your shop efficiency? This formula might help – (Number of operating hours in a month) x (number of employees) x (shop rate ($) = 100% efficiency. Now take your real monthly billing and divide by the 100% number. This will give you your percentage of efficiency.

Have you timed a job moving through the shop? Are you billing those hours or minutes times your shop rate to achieve your price for that service? This is another simple test and many a shop owner or manager may be surprised to learn how much they lose on many jobs. This is also a good tool to see if you’re making or losing money on your employees.

Personal performance and high performing businesses come hand and hand, especially if solid direction is coming from the owner or lead. I once asked if you had a business plan and suggested if not, that it would be worth your time to produce one. This plan or blueprint for what your business can be a vital tool on you path for peak performance.

If you don’t have a dream, how can you make your dreams come true? If you don’t have a plan, what route will you take? Yes, we can wander around in the dark and as long as we head in the right direction a majority of the time, we’ll get to where we want to go, eventually. But with a plan we can skip all the unnecessary steps and head in the right direction, at least most of the time. 

Time is something we all have a shortage of so heading on a straight course is profitable. Yes, developing a business plan is time consuming and it’s easy to find many excuses for not allowing the time, but this is time that will be made up, if used properly. Don’t forget that with today’s business software, the majority of the work is already done for you.

Are you familiar with the acronym SWOT? Strengths, Weaknesses, Opportunities and Threats. Starting with a general overview of what you want the business to be, these four topics will be the road map of your business plan. Does asking the question give you pause? 

What is working and what is not?

What needs to be changed?

What makes profit and what needs to be eliminated?

Additionally, what are you billing an hour and what do you need to keep the business open?

Do you know the going rate in your area for the the major jobs you do?

Is it time to launch a new business right there between your shop walls?

These are the types of questions you’ll need to answer to produce a good working business plan.

Some time back, I introduced the idea of changing your business from a good business to a great one. If you’re driven to succeed to this level, you need to consider these three questions: What are you deeply passionate about? What drives your economic engine? What can you be the best in the world at? The answers can help you focus on the direction you wish to take your business.

Once you have a road map and biz-plan, you can address other key points, including your parts strategy. Maybe set up a progressive price schedule and know what’s going on and be competitive by doing some shopping yourself. Don’t get caught up in loss leader pricing and don’t feel you have to be as cheap or cheaper. You just need to be competitive and in control with your customers.

If you only get the labor, do you point out to the customer that you sell parts as well? Do you charge more if they show up with a block and a set of pistons? Can you talk to your customers and determine their true needs? Can you explain why you can’t work with parts you did not sell because it creates a conflict on warranty?

These points are just the tip of the iceberg. Holding your personal performance expectations high is inspirational to your employees and will ulitmately lead to more profitable performance. And profits are what we do this for.  ν