Page 34 - Australian Paint & Panel Magazine May-June 2019
P. 34

34
Business Matters
PAINT&PANEL MAY / JUNE 2019
I
run.
ALL SYSTEMS GO
OUTDATED COMPUTERS AND SOFTWARE WILL LEAD TO OFFICE INEFFICIENCY AND SMALLER PROFITS SAYS STEVE O'BRIEN FROM IBODYSHOP.
T’S A WELL-KNOWN FACT THAT A
shop’s financial success is de- pendent on how well the office is No matter how efficient the shop floor is, you cannot achieve com- mensurate profit levels unless the office
runs smoothly.
But what does it mean to “run smooth-
ly”? The term is far too simplistic to de- scribe the real effort required. Constant downward pressure on repair costs, ev- er-increasing input costs, and resistance to change have resulted in consistently declining profit levels. And this requires urgent management attention.
Let’s look at two areas where improve- ments can be made:
Running an office smoothly has cer- tainly become harder and more costly due to the escalation of admin duties over the last 5 to 10 years.
The typical solution is to employ more staff and/or work longer hours, while re- taining current practices. This is a cost- ly solution that would never be tolerated on the shop floor where the latest and greatest technology would be fully in- vestigated and implemented.
But in the office, I often hear: “We’ve been using our software/systems for 20/30
years – we’re happy”. Imagine using the same booth, welder or spray gun for 20 or 30 years. Productivity and efficiency would be appall- ing and the quality sub-standard.
Yet it seems okay for the office to be ex- cessively busy, use outdated equipment, faded keyboards and last-century software – it’s like using 20 blokes and a chain to straighten a chassis and wondering why you can’t make money.
The same shop floor attitude to efficiency and productivity should be applied to the of- fice. As the saying goes “you don’t know what you don’t know”. You might be run- ning the most efficient, cost-effective office in Australia or you might be wasting tens of thousands of dollars. You’ll never know un- less you investigate.
Allocate some time to check out the lat- est hardware, software and systems on the market, and put aside that fear of change. Let IT systems do the hack work while your staff focuses on customers – where the real money can be made.
COST OF INPUTS
COMPARED TO SALES
I often ask shop owners: “Can you print a Profit and Loss Report, and do you know how much is in the bank?” If the answer is: “I’ll ask so and so”, I know we have a problem.
It’s much tougher running a successful body shop today compared to 20 years ago. As I tell repairers time and time again, it’s a fine line between profit and loss. With profit levels constantly under threat, stay- ing on top of your numbers is critical.
So, what does “staying on top of your numbers” mean? Your accounting data doesn’t lie – through analysis, bad trends can quickly be identified before they be- come entrenched or terminal. With expens- es reasonably static, eg rent, telephone, in- surance etc, a shop’s financial performance is determined by the ratio between sales


































































































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