As 2024 is just around the corner, each of us needs to be asking ourselves, "Did I reach my 2023 goals?" And if not, why not? If we are going to meet our year-end goals, were they accomplished because the bar was too low, or was it because of hard work, teamwork, and ingenuity? Reflecting on 2023 as an entire team is necessary to set the stage for 2024. Otherwise, this is where we have been, and now this is where we want to go.
For the past five to six years on the first working day in January of every new year, we sit down as an entire shop and have a "State of The Shop Address." Every team member must be present during this meeting, and it usually lasts 1-1/2 to 2 hours. During this address, we present probably 15 graphs of our current statistics for the two prior years, as an example, 2023 vs 2022). Some of these graphs include hours per day, month and year; average repair order severity per month, per year; total loss fees collected for storage, admin. fees etc.; average estimate refinish hours, mechanical hours, body hours and frame hours. The car count per day, month and year, etc.
When we have this meeting, does everyone on the team fully understand every number and what it means? Well, of course not, but they at least understand that leadership does, and we don’t come to work to dance. This is serious stuff and when leadership says we need to go in a certain direction, they trust we have done our homework! During this meeting, we also review our written vacation rules, what the paid holidays are for the new year, and any changes etc.
When it comes to goal setting, the great author Napoleon Hill of the book "Think and Grow Rich" said it best: “A goal is a dream with a deadline.” We can’t just arrive in the new year without a plan or direction as to where we want to go. We are like a ship just floating aimlessly in the sea. Why would any of our team members want to follow that type of captain? I know I would be looking for a new ship (shop), that’s for sure!
As leaders, each one of us must ask ourselves what is important to our businesses and employees’ success? First and foremost, we must be profitable and be able to cashflow our business.
Let’s look at the 2023 statistics for an example shop named ABC Collision: Gross Sales: $3,500,000, Cars Repaired: 700, Average Severity: $5,000, Net Profit Dollars: $400,000, or 11.4%. One of ABC’s Collision goals for 2024 is they want to achieve $600,000 in net profit. How can ABC increase their profitability by 50% or go from $400,000 to $600,000 in 2024? In ABC’s case, increasing the average severity with estimating & negotiating training would be an easy solution. Without fixing one more car and adding just $339 to each estimate for not-included operations & necessary inspections, materials, sublet markups etc., ABC can reach their 2024 year-end profitability goal. Here is the math for 2024: 700 repaired cars x $5,339 severity = $3,737,300 or $237,300 Gross Sales increase. Without diving heavily into the math, if this goal is met, the business would reach its profitability goal and there would be approximately $37,000 for employee bonuses.
Now, back to Napoleon Hill's quote, that goals need to have deadlines. In ABC’s case, they need a checking point every day to make sure they are on track for their Dec 31, 2024, goals. This can easily be done in Excel, and I have even seen a few software programs that will track this. For the simple math here, ABC wants $3,737,300 in gross sales by year end. With on average 254 working days in a year, they need to produce $3,737,300 / 254 = $14,714 per day in gross sales.
The working days in every month vary, so the gross sales per month will vary. In ABC’s case, January 2024 has 22 working days and Feb has 21. So, the gross sales at the end of January will need to be at $14,714 x 22 = $323,708. At the end of February will need to be at $14,714 x 21 = $308,994 + Jan $323,708 = $632,702.
No matter what our business goals are for 2024, we must have a plan. If you get a chance, look up Brian Tracy’s "12 Steps to Set and Achieve Any Goal." They are powerful, and his 12th step is "Never give up."
Determination and discipline are two important ingredients to goal setting, but Dwight D. Eisenhower said it the best, “Plans are nothing; planning is everything.” The more time we spend planning for 2024, the easier the execution will be!
