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PBAQuickTips

Extent of the Service Opportunity to Franchise Dealers

Of the $350B Service business in NA, franchise Dealers only capture 27% of it. So, in this Quick Tip, Andy Church asks what are you doing to increase your service opportunity?
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Department Expenses % GP

In order to maximize your Dealership or Department profitability you must control your expenses.  As a guide you should try and contain your total expenses to a maximum of 85% of your Gross Profit (GP).  The 85% breaks down like this:

  • Selling Expenses – Max 20% of GP
  • Employment Expenses – Max 40% of GP
  • Semi-Fixed Expenses – Max 10% of GP
  • Fixed Expenses – Max 15% of GP

If you want to know more, expense control is covered in the Operations & Profit Maximization Course.  Click here to check it out…

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Must Know KPI’s

There are 14 KPI’s that you should use to manage your daily operations.  Get these 14 KPI’s right and maximizing performance and profitability will become a lot easier.

Following are the 14 KPI’s and the target results you should be working to achieve:

  • Return on Sales (ROS) % (3.5%)
  • Aftersales Absorption (75%)
  • PO to NV Ratio (1:1)
  • Total Selling Expenses % GP (20%)
  • NV & PO Sales / Sales Person (120)
  • PO Inventory Turn [days] (45)
  • Return on PO Investment (80%)
  • Overall Efficiency (115%)
  • Labor GP % (76%-80%)
  • Total Service Expenses % GP (85%)
  • Retail Hours / RO (2.0)
  • Total Parts Expenses % GP (30%)
  • Parts GP % (30%)
  • Parts Stock Turn (8-10)

If you need help understanding your KPI’s, give our team of ProFit Optimizers a call on (772) 240-8566 or email optimizers@profitbyaction.com

Discover how Profit by Action is the right solution for your Automotive Dealership

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