Week 2 of Series 1: The 5 Essential Reports To Run Your Business

I have to admit I love looking at data and trying to pick the fly sh*& out of the pepper. There is nothing more satisfying than identifying how you can grab a few more points. However, running your business is more than just diving into reports to squeeze a few more dollars out, it's about building a machine that can grow, prosper and fulfill your vision.

Before I share with you my top 5 reports to run your business, I first must predicate it with a warning. In order to be able to use fewer reports you have to have a pretty deep understanding of your company data, and how it flows into your reports. You will need to perform a few audits to validate the numbers to ensure that the information that you are looking at is ready to translate into something actionable. Keep in mind, these reports will tell you a story of two tales: 1) whatever you are doing, do more of it, or 2) whatever you are doing, do something different because it's not working. It either works or it doesn't, right?

Just in case you missed the first two posts in this series:

Plan, Predict, and Perform…A new blog series to drive Value and Per...

Here they are:

1) Organize Your Financial Statements: 4S Your Balance Sheet

2) See How Easily You Can Clean Up Your P&L

 

By following the steps in the first week's segment you are well on your way to having clean reporting, and it is uber critical to have clean numbers. Remember, you are making financial decisions.

Here are my recommended reports:

1) Gross Sales Report: This is pretty obvious and I don't think there needs to be a lot of explaining. Here are few things to look at: 1) Look at your trend line for a rolling 12 months and YTD. It should be upward, if not WHY? and 2) Look at prior year to see how you compare. Is there anything that seems off or does it seem typical. Always be asking questions.

2) Gross Profit Report: Gross profit maximization is absolutley critical, and is the foundation for how money will flow in and out of your business. A business should be able to predict their overall gross profit margin with a 98% accuracy. If your number is off, then you have a leak somewhere. I recommend reviewing your GP report every week, and filter the report based on your revenue categories. Labor, parts, material etc... I also recommend reviewing your GP by customer as well. You will be surprised to find that are are certain people that you probably don't want to do business with. Sometimes, less is more.

3)  Net Earnings: Lets face it, it's all about what you make when the dust settles.  One word of caution, I would advise you look at this number after debt service is calculated in. A business can be profitable and go broke at the same time, make sure you are looking at the real bottom line.

4) Statement of Cash FLow: I recommned looking at this mid-month and month end, it will give you sense of how well you are managing your recievables, payables and debt obligations. Cash flow can solve any problem, so keep a real good eye on this. I tell my clients that their A/R should not exceed 10 days, unless you have extended credit terms to your customers and have factored in those terms in your pricing to carry their debt. Something to consider.

5) Speed of Repair: I don't like sounding like a broken record, but speed matters. People have a better experience with your sompany the faster they get their car back, plus you make more money and free up space for a new job. If your not producing 3.5 hrs/day or better your competition is. I would make this report visable to your entire team, and make it clear how to move the number.

There is 1 more report that I would recommend, but I would guess that for most people it would be hard to get the data. It is a report that tracks your true customer experience rating. The only way to know if your are really making a connection with your customers is if they are referring friends and family. How do you know? You ask every customer that comes in the door or calls you: 'How they came to visit your shop,' and track it. If your management system can do that great, if not, do it on a spreadsheet. You are only concerned how many customers are referring other people as a percentage of your customer base. This number should be trending upward, if it is not, then do something differnet. If your customers aren't telling someone about you, you need to get them talking. Word of mouth markeing is the holy grail.

Good luck and thanks for tuning in...

Bill

P.S.

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