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Issue link: http://read.dmtmag.com/i/120369
Jim Yount Success Dynamics © 2013 KEY POINTS: Read the chart for each technician from top to bottom. • Tech's name. It's a personal forecast and a service department forecast. • Total Payroll Hours. What is listed represents a standard 40-hour work week. Use company actual payroll hours. • Off Hours. Calculate annual number of hours for vacation, sick leave and holidays. Some have earned one-week vacation, while others have earned two or three weeks. • Tech Hours Assigned To Company. The amount of time assigned to work on company equipment, such as assembly of product for the sales department. • Hours Available To Bill. Number of hours available for billing to customers after subtracting lines 2 and 3 from payroll hours. • Forecast Billable Hours. Number of hours you expect this technician to bill to customers, based on a specific billing and performance efficiency. • Non-Revenue Hours. Acceptable level of non-productive hours for this technician. • Efficiency Rating. Efficiency ratio is number of hours billed, as they relate to number of hours available for billing. • Forecast: Labor Income. Projected dollars earned during the forecast year. • Company Total: The column on the right-hand side of the chart represents numbers added together, from left to right, by line item. Consider: Annual Forecast: Technical Service Department and Comments 1. This dealer's hourly shop labor rate is $75 per hour. 2. What is your shop's hourly labor rate? 3. Let's assume this is your forecast. If you're actually billing 4,840 hours to customers, how much difference will it make if you raise your shop labor rate by $5 per hour? 4. The answer is an additional $24,200. Multiply 4,840 hours by $5. 5. We could say, "That's an easy way to make $24,200." If you are willing to work harder by going beyond usual expectation, providing exceptional care, and solving customer problems as they arise, most customers will not challenge the total cost of service if it's superior. "Average" is not acceptable practice in this policy environment. Annual Forecast: Additional Income. If you are not charging up-to-date fees for sharpening, Environmental Protection Agency (EPA) and shop fees, you could be missing several thousand of dollars in profit. I would encourage you to work the numbers. In my part of the country where I live, we often would say, "Let's play with the numbers." Playing with the numbers is one of the major benefits of developing a Strategic Business Plan. At the lower right of the chart is: "Technical Service Department Earning Power Analysis." The well-managed, high-operatingefficiency technical service department can be a major contributor in gross profit dollars at the lowest factor of cost. This service department (featured in the chart) OUTDOOR POWER EQUIPMENT APRIL 2013 19