With a New Year comes the chance to restart and refresh. Resolutions in place, everyone is determined to have their best year yet. Whether you’ve decided to spend more time in the gym, stick to a new diet or promise to spend less time on your phone, these New Year’s resolutions don’t tend to make it much past February 1.
While another year ending doesn’t magically resolve shortcomings of the past, it does provide the opportunity to reevaluate your approach, learn from past mistakes, and see what needs to be changed.
Three leaders in the industry shared five action items they think will help prepare your shop for the New Year.
Evaluate Your Inventory
“The New Year gives you a chance to reset your numbers,” says Lenny Saucier, director of retail training at Fullspeed Automotive. “As a business you're looking at the end of the year, all the numbers are in. What did we do right? What did we do wrong? What needs to be cleaned up?”
The first thing to clean up is your inventory. As the year closes out, look at your final inventory numbers, taking special note of what hasn’t sold. By sending unused items back to the vendor, you not only gain that capital, but you are clearing up shelf space to make room for something new.
“Having a group of items on the shelf that don't move it's just like taking money out of your wallet and putting it on the shelf,” says Saucier. “I have this shelf to make me more money, and if I don't do that, then I'm just wasting that money sitting on there. Removing old stock increases your cash flow.”
Revisit Your Vendors
The new year can also be a time to examine those who supply inventory and services.
“We make sure we're partnering up with the right vendor in terms of pricing support, logistics, you know, types of products they offer,” says Eric Galindo, owner of Oil Change Express in San Antonio. “There's been a lot of changes in our industry in the last five or six years. There used to be hundreds and hundreds of independents now there's maybe a handful of six big companies throughout the U.S. When we’re looking at vendors, we’re making sure we have a solid partnership.”
Who you choose to work with can be a huge determining factor in your shop’s success. Partnering with quality vendors who align with your shops standards of service can create an equally beneficial partnership.
“For us price is important, but it's really about service attentiveness and making sure we're getting our products on time,” says Galindo. “Logistics pricing and support is really what we look at, you know, we try to stay with the same products. We’re very selective of who the distributors are to make sure we have a great relationship.”
As prices continue to inflate, revisiting who you are partnering with and checking competitors to make sure you are making the best decision for your business is a process that should take place multiple times throughout the year.
“Ten years ago, you would see a price increase maybe once a year maybe now it's every two months just depending on who you're doing business with,” says Galindo. “We don't like to jump from distributor to distributor. We like to stay faithful, but we typically check in multiple times during the year to make sure we have the right support.”
Be Selective with your Services
Shelf space is a valuable asset, but so is your time. Take a moment to evaluate what your most valuable services are and what services you need to limit.
“Look at your services and start reviewing your goals and expected profit margins in these areas,” says Saucier. “This a good time to start looking at your actual service items as far as the costs incurred and the retail price. This will give you a pretty good chance to price shop.”
Focusing on successful services can help you determine what strategies made them successful and how you can apply that to other services or areas in your business that are struggling.
“Ask yourself, what were the areas that you've really focused in on that that were successful,” says Saucier. “Look at what you did to change those numbers from last year and take that and bring it over to another service, or another part of your business that is struggling.”
Make Sure You Have the Right Staff
Pete Frey, former Take 5 Oil Change president and current shop owner, says his first step in the new year is to ensure staff members are in the right roles.
“Should I simply focus harder on my training aspects?” Frey says. “Am I giving them my expectations frequently enough and following up so that it's just not like a ship without a rudder?”
Make sure your staff aligns with your shop’s values and that you have the right number of staff to support the volume of your shop.
“We overstaff just a little bit so we can upgrade,” says Galindo. “We make sure we have the right people on the team that believe in what we're trying to do. We want the right number of staff so we can do a quick service.”
In order to maintain this level of service for his customers, Galindo recommends overstaffing. By starting new hires in their slow season, he can avoid potential crises that may come along if an employee gets sick or is unable to work. To make up for this added cost, he provides incentives to motivate more sales in the shop.
“We want to make sure we're doing the best we can in terms of speed for our customers,” he says. “As long as they're making sales, I think extra bonuses and extra income will pay for the extra hours and manpower that we have.”
Check in on Your KPIs
Frey focuses on aspects of his business that he can control, the biggest aspect being his shop’s performance. Working alongside his best employees, he examines his weakest KPI to see where there is room for improvement. Frey also gives his team an opportunity to evaluate where these shortcomings originate from.
“Ask questions like, ‘Why are we struggling with this particular KPI? Is it cost, are we too expensive? Are we not educating the customer? Is it just simply a presentation? Is it our timing?’” says Frey. “I'm going to see how we can improve our weakest KPI and turn it into our strongest KPI.”
“It’s a numbers game on January 1st,” says Saucier. “It's not about feelings. Feelings won’t get you very far past January 3rd. The numbers show you what you actually did and give you the ability to move forward.”
Oil changes are one of the most frequent services a customer needs. While this used to be a service needed every 3,000 to 4,000 miles, new vehicles are able to go 6,000 to 8,000 miles before needing to be serviced. This along with increased competition can put a strain on your business.
“You have to be better than the rest,” says Frey. “Your experience has to be better than the rest. That's how you survive. Price matters, but sometimes price is hard to control especially in a world we live in. That's a battle that everybody who's in the oil change business is going to fight this year. I see that as a challenge.”