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PROFIT MATTERS
HOW DO YOUR NUMBERS LINE UP? | BY CHRIS CHUBBY FREDERICK
Happyness: Dont believe anyone that I would like to share with you how my them do it. Motivated by my financial
tells you you cant do something. financial coach made me focus on making coach, I told them to implement every-
money. You see, I sleep with her. One thing today and walk the dead wood out
The model morning I awoke to When are we going of the building but if it didnt work, I
If you look at the 30 percent profit to retire? Youre 57, and many of your would shoot them one by one until I
model, you will see the best practice profit friends have already retired. So whats would net what I needed.
model that a few shop owners have been the plan? The next month, youll never guess
able to achieve. It is certainly not normal. I began to explain my plan, but my nose what the loser had done? Thats right,
Typical net profit ran from 1 to 5 percent evidently began to grow because she made much to my surprise we posted a perfect
on the 3,000 profit and loss statements we an L with her fingers and called me a 30 percent net profit. This was not my
reviewed in 2006. Loser. She must have learned that from greatest leadership performance, but what
So what makes these owners more suc- the grandkids. When she repeated it a lesson I learned. Focus on the money. I
cessful? The answer is their ability to spin several times, I knew then she was not am not telling you this to impress you but
all the plates in the air simultaneously. The
plate for today is the net profit model and
most of those that can achieve best prac- I have never seen a business that could not be
tices are close to these numbers. re-engineered to net between 20 and 30 percent
In order to succeed at this model, all
you have to do is hold 53 percent gross
if the owner was committed to change.
profit on your parts pool. Maintain at least buying it. She told me to go to work and to impress upon you that most of us dont
90 percent shop productivity with a labor save the world. While I was driving to make the money we deserve because it is
rate adequate enough to carry the techs work I put in a Tony Robbins tape I had only important to us when we need
benefit loads. Stabilize car count daily for a listened to for years so I could hear him money, not for driving our profits and
great relationship based selling service tell me, once again, that if you are not dreams home.
manager and dont spend over 25 percent making the kind of money you need to be If you grew up in a family like mine
of your sales on expenses. happy, you are just not focusing on it. that taught you money isnt everything
It can and is being done on occasion in Bull! I had been focusing, but nothing and it does not grow on trees, it will be
every city in the United States and Cana- seemed to be happening. challenging for you not to see money as
da. So why not your shop? In the months potentially evil. A healthy bottom line will
ahead we will explore every detail and give A Big Surprise make you, your family and your associates
you implementation strategies to change When I got to work I called my senior much happier. Maybe more than a 30 per-
your business model. I have never seen a managers in for a meeting. I asked them cent net operating profit is greedy, so give
business that could not be re-engineered why we didnt net 20 to 30 percent the money to your favorite charity and
to net between 20 and 30 percent if the because we had many clients that had begin to help others with your good for-
owner wanted to change and was com- accomplished it. They said the difference tune, but money is not the root of all evil.
mitted to hang in there. was the clients listened and changed and I My associates and I live by a mission of
only listened. They driving profits and dreams home to shop
went on to say I had owners, so enjoy the journey. And please,
30% NET lots of buddies that buckle up.
PROFIT MODEL needed to go, fees that
SALES = 100% needed to be raised
CHRIS CHUBBY FREDERICK is CEO and
PARTS = 18.5% and several other president of the Automotive Training Institute.
TECHS = 20% LOADED changes concerning Contact Chubby at cfrederick@autotraining.net..