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 Setting
Your Goals
by Bob Cooper, The
Success Tool Company
One of the most amazing lessons that I learned
many years ago coming back on an airplane was the power of setting
goals. I realized it is what truly makes the successful people successful.
Most people are afraid to set goals, and I label these fears "Elephant
Chains". When you learn to break these "Elephant Chains"
you will unleash the success that is within you! Here's an example
from Elite Europe!
"When I first started working with Bob
Cooper, I learned that the simple task of setting company goals
increased my company's sales and profitability. Here is what I learned.
By deciding to set a company goal for lets
say monthly sales, we are making ourselves concentrate on improving
our business instead of just working for it. We have to look at
our production costs, i.e. parts and direct labor costs, we also
need to know what our overhead costs are.
Let me go through this process with you and
I guarantee that if you give goal setting a try within your business,
you will not only increase your sales but you will also have found
the key to your company's continued growth in the future.
The goal period that I start with in my company
is for yearly sales. This can then be broken down into monthly,
weekly and then into daily goals. The long term goal is the target
but the daily, weekly and monthly goals are the steps along the
way that allow you to have small successes as you stride towards
your target thus keeping you and your team focused and on track.
You must give your employees as many opportunities to 'win' as possible.
First, you need to know the cost of direct
labor for the month. This is the real cost, including tax, insurance,
retirement and vacations, of all staff whose job it is to produce
your product whether it be transmissions, services or repairs.
Secondly, you need the total cost to the company
of all of the parts that were used during the month to produce your
product or service. This may well be a different figure to the cost
of parts purchased, as some parts may have already been in stock
while others may have been purchased and put into stock.
Now by adding your cost of labor and your cost
of parts together, then taking this figure away from the month's
sales you will have your gross profit figure. As an example in a
company with $20,000 in sales, a cost of labor of $6,000 and a cost
of parts at $5,000, the gross profit will be $9,000 or 45%.
If you take our example, sales of $20,000,
divide this by the total number of invoices that you have produced
during the month, let's use 67, this gives us the average invoice
value of around $300. Note: This figure is a very important one
and can be used in a number of different exercises when working
on your company's finances!
The last piece of the information jigsaw that
we need is the cost of the month's overhead. This must include every
cost to your business with the exception of direct labor and parts
costs. In our example let us say that our overhead cost us $8,000
per month.
You now know that your overhead is $8,000 and
your gross profit margin is 45% so you must sell $17,800 per month
to break even. You also know that if you invoice 60 jobs at an average
invoice value of $300, you will break even.
So you then decide what profit you are looking
for, let's say approximately $1,000 per month after wages and all
costs. Using the information that you have collated you know that
if you increase your sales by $2,200 or 7 extra jobs you will reach
this figure.
Now you need to produce a monthly goal sheet
for 67 cars/invoices counting down to zero. If you do 67 cars at
an average invoice value of $300 you will sell $20,000 at a gross
profit margin of 45% giving you a gross profit of $9,045. Take away
your overhead cost of $8,000 and you are left with a net profit
of $1,045.
If you leave your goal like this, you have
only one opportunity in the month for your employees to feel good
about themselves and their achievements, so you must split this
down into a weekly goal sheet of 18 cars per week then, because
you are looking for as many 'wins' as possible you would further
break this down to a daily goal sheet, showing four cars, three
cars, two cars, and one car in descending order. Now you can achieve
your goal on a daily basis as well as weekly and monthly.
You need to tell your employees what you are
doing and the goal sheets need to be placed in a prominent position
for every employee to see. Every time an invoice is completed or
a car finished, you need to cross through that number on the sheet
and when the days car count is achieved, put a big YES through the
day, week or month.
If you get your people involved and enthused
with this, you will find, as I did, that they will make that little
bit of extra effort to achieve your company goals, the benefit to
you is increased productivity and in many cases a far happier workforce,
because they know what is expected of them and are kept informed
of their progress.
Once the goals are set, they soon become accepted.
When the goals are being achieved most of the time, they can be
increased along with the offer of a bonus or some other incentive,
for the increased turnover and profit.
Why not give goal setting a try. You can only
WIN! I know I did!"
About the
Author
Bob Cooper
has functioned as a business developer, an owner and an operator
of some of the most successful auto repair shops in the North America.
Bob's
company, Elite Business Services provides management consulting
to the industry and offers shop management information and "Success
Tools™" on his website at www.elitebusinessservices.com.
Bob's Shop Management Knowledgebase of over 100 articles, "Ask
the Experts" service, and exclusive product discounts are all
available in the Mitchell 1 Premier Club.
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