At this point of the year, you have a pretty good idea how the numbers are going to pan out. This year has had its challenges for the automotive industry, but your fixed operations departments have weathered the storm well.

If you’re a typical dealership, you’ve had a 40 percent churn in your service advisors this year, and you’ve had to focus on retaining your technicians. Domestic and import dealers alike have had Takata airbag recalls to deal with, not to mention the supply issues associated with that. You’ve fared well despite the increasing trend towards dealership service department abandonment.

Your doc tells the story of 2016. You can identify your huge wins and your major battles by looking through each line. And while every store is a little different, one common theme will resound as you shift your focus to next year: you will be expected to do more.

Celebrate Victories While You Can

Take a moment to reflect on your 2016. Your team has made it through some seemingly impossible times; days that you thought would never end. You’ve had times when you were on top of the mountain too, and those are the moments you want to remember.

Along with your team, make time to celebrate your victories. Head out for a team dinner or host a small party where work isn’t your only topic. It’s important to remember the winning moments, because come January 1st, the slate gets wiped clean.

Set Your Targets

If your 2016 included an increase over the previous year’s numbers, great job! But be aware of one thing: you’ll be expected to do more in 2017. Your parts department may have experienced the largest year-over-year increase in the store’s history, achieving well above your forecast. That now sets your bar even higher, and you’ll have to outdo yourself next year. Your service team might have blown the 2015 GP out of the water, raking in tens of thousands more that hits the bottom line. Fantastic, now set your sights a little higher.

You’ll be expected to set your 2017 forecast higher, and that might seem impossible, especially if you had a blockbuster year. But you can do it, and you know it. You can squeeze a modest increase because, as you look at the doc, you can see areas that need improvement.

Where is Money Hiding?

No two stores are alike. An import store may struggle with one thing while a domestic dealership dominates in the category. Your location or your staff can affect how your dealership operates. That means the increases you’re expecting in 2017 will probably come from different places. Here are a few places to analyze, because you might be leaving money on the table.

Discounting

There’s a number of reasons that discounting can happen, but a bunch of reasons it shouldn’t. When your staff discounts parts or labor – even removing shop supplies from an invoice – it takes directly from your net. Keep a close eye on any discounting that happens in your department. It might be totally legit, or it could be being abused. Keep your staff accountable for discounting and you could see your profit margin increase.

Sales per RO

You can only raise your labor rate so high, but there are ways to increase your RO sales, even just a bit. Shop your dealership’s services among the other dealers nearby. You may find you’re selling yourself short on certain things. A dollar here and there, and you’ve managed to bump your net up without needing to sell more.

On the other hand, you might need to increase average sales per work order. Review ROs daily to determine if sales opportunities have been missed. Use it as a teaching experience for your staff.

Warranty Rate Increase

Your warranty rate will never match your CP hourly rate, and you’ve come to accept that. But is it where it should be or are you due for an increase? Applying for your warranty rate increase is a time-consuming, frustrating practice in most cases, but it can be rewarding. Especially with highly-technical vehicles that take hours longer to repair, you want to get the most from your warranty time.

Set aside time to audit your warranty labor rate. That might take several hours or days in itself because it’s never easy getting more money from your manufacturer. It may be well worth it.

Whatever your department’s weakness might be, set achievable and realistic goals for improvement. It will never be perfect, but we can strive for as close to perfection as possible, right?