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Monday, 31 August 2020 18:23

5 Numbers You Need to Know Every Day

Written by Dave Luehr

Index

During a time of economic uncertainty, it is more important than ever for small business owners to understand their financial key performance indicators and use these KPI’s to make proactive adjustments to remain profitable.

In the collision industry, far too many shop owners do not have a grasp on the financial side of their business. Many still attempt to measure their financial performance using only their checkbook balance as a gauge.

 

The modern collision repair business environment is becoming dominated by businesspeople---people who understand business as much or more than vehicle repair. The most successful of these businesspeople can tell you, at nearly any moment, precisely where their company stands relative to their financial goals.

 

Shop owners who refuse to become educated about the financial matters of their business, in my opinion, do so at their own peril.

 

Fortunately, for those willing to learn new business skills, it’s not as difficult as one may believe to put basic financial metrics in place which will allow them to take a proactive financial stance in their business operations. In fact, to get you started, I will provide some basic financial metrics to look at daily.

 

Before we dive in, it’s important to mention some foundational knowledge for shop owners and managers: understanding financial break-even and knowing how to create a basic budget. A budget is simply a projected financial statement that provides the shop with clarity on revenue and expense requirements.

 

1. Month-to-Date Revenue vs. Goal

 

Once a shop leader knows their yearly and monthly revenue goals (top-line sales), the best way to achieve them is by proactively knowing each day exactly where the company is at that point of the month financially compared to where they should be.


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