Driving with Headlights
Driving a car at night without headlights is dangerous. It’s also reckless, inconsiderate and a slew of other adjectives. You wouldn’t knowingly drive a vehicle in the dark without headlights.
The same logic should be applied to your business. Don’t expect to guide your team to the quick lube promised land without doing your market research first. Use reputable resources to guide your company down a road well lit.
Yearly, National Oil and Lube News (NOLN) asks fast oil change operators nationwide about topics that most affect the industry. NOLN then compiles the results into the Fast Lube Operators Survey. The survey presents past and present data for almost every operational metric. Categories include operations, demographics, advertising, prices, oil and equipment, sales, services, employees and filters.
“It’s imperative that we use the Operator Survey to assess where we’re at and where we’re headed. We also use it to see what the trends are and what we need to do to keep up in the industry,” said Adam Sturdivant, director of Operations for Avis Lube in Midland, Texas. “If you don’t evaluate where you’re at and where you’re headed, you’ll end up where you don’t want to be. That usually means out of business.”
When evaluating your business — whether to see where you stand in the marketplace or to understand where you have the opportunity for growth — it’s important to have an accurate idea of where you measure up with others in the industry. Doing so will give you a realistic picture of the health of your operation and some good ideas on what is and isn’t working and what’s not working with customers.
“The NOLN Operator Survey is your guide to success,” said Rick Price, owner of Hawaii-based Flagship Fast Lube. “It’s pure and simple math. If you stay within the percentages presented in the survey, you will be successful.”
While that sounds easy enough, if you’ve been in the industry for any length of time, you know it isn’t hard for goals to fall by the wayside when things get busy. Before you know it, your numbers don’t look as good as you intended and you’re digging yourself out of a hole. If you want to use the survey to its maximum effectiveness, refer to it daily.
“I live by it everyday. I watch my percentages, and I tie them to things like my point-of-sale system,” Price said.
What percentages should you be paying attention to the most?
“Things that I look at are things like payroll. What is the total payroll, what does it consist of and how is it burdened out? In the NOLN survey, it lets you know that it’s a fully burdened payroll. That’s a valuable number to have,” Price said. “Of course, I also look at cost of goods. Your cost of goods is critically important. For some of the bigger operators, the number could be a little higher, but generally, if your cost of goods is 30 to 33 percent, you’re pushing it. If you look at the survey, those cost of goods numbers are typically below that and in the mid- to high-20s.”
Having access to the national average for things like add-on services will give your business a tremendous advantage. This average is a powerful tool. Compare it against what you’re already doing and look for ways to possibly increase what you offer.