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Tori Zinger

Tori Zinger Community & Editorial Manager

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6 Things to Consider Before Increasing Car Count

It’s the goal of every business to make money - and how can we do that? By increasing gross sales. And how do we do that?“

There is more than one way to skin a cat, as they say in Georgia,” says W. Scott Wheeler, founder and president of Automotive Consultants Group, Inc. Similarly, there are many ways to increase gross sales – increasing car count is one of the most common. That said, in many instances, increasing car count works. But it’s not the only KPI worth focusing on. If you only look at car count, it could cause problems for your shop down the road, whether by overworking technicians or maxing out facility, says Wheeler. He adds that increasing car count is often viewed as a “Band-Aid for all issues” and that it’s important to ensure it’s the best way to increase your gross sales before you implement it."

“Before you go to raise car count, is that the real problem?” Wheeler asks. Again, increasing car count can be effective, but in order for it to happen you have to look at other KPIs and make sure they’re working.

There’s a misconception that increasing car count will automatically increase gross sales, Wheeler says. Some other KPIs you should assess before making the decision to increase car count include: average repair order, gross profit margins, net operating profit, productivity, and efficiency. Track these on a daily basis; it’s important to know how your shop is doing every day, says Wheeler. Wheeler himself gives clients his version of a KPI tracker in Microsoft Excel.

The first step is to identify the right car count benchmark you should be hitting consistently. Ask yourself:

  • What is your current car count?
  • What are your current gross sales?
  • What NOP are you trying to achieve?
  • What are your GPMs?

If your current numbers aren’t matching up, it might be time to evaluate what you need to work on before you resort to increasing car count. Every shop has a “sweet spot,” explains Wheeler, but they’re all different, and exact numbers for each will vary.

Wheeler suggests also considering these five factors before increasing car count:

  • Physical space. How much increased car count can your shop handle? Eventually you’ll reach your maximum capacity.
     
  • Technicians relative to car count. You need enough technicians to handle however many cars you have, or you’ll run into obvious problems. If your shop is smaller, says Wheeler, you need to know what your technicians are capable of (i.e., efficiency and productivity). If you end up with too many cars, warranties might go up as technicians may be more prone to error under pressure or if they feel too rushed. Watch your warranty numbers; if they go up, you’re pushing your facility’s limits and your technician’s capabilities, warns Wheeler.
     
  • Technician-to-service-writer ratio. Increasing car count will increase the number of phone calls coming in, so you’ll have a high demand for your service writers and technicians. According to Wheeler, a good ratio is 3 technicians to 1 service writer.
     
  • Marketing efforts. With more cars, you’ll need more business. To get more business, you may need to increase your marketing efforts. Wheeler recommends offering promotions, such as a free oil change upon referring three customers. You need to know your ROI on marketing, Wheeler says, if you’re going to do additional marketing. If you double your car count, you should in theory send out double the mailers.
     
  • Productivity. It should be at 100 percent or higher, says Wheeler. If it’s not, adding more to your car count won’t fix anything. If your shop is operating at full productivity, though, increasing car count will help. The higher the productivity, the more car count you can handle - but find out how soon until your techs are maxed out. If need be, hire an additional technician. 

Aside from increasing car count, what are some other ways you have successfully increased gross in fixed ops?

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