While you were busy doing your holiday shopping and wrapping gifts, hopefully you were also taking the time to wrap up your business for the year too. Just like you create a list for all of your holiday projects, I create a list of all the things that need to be done to efficiently close out the year and get ready for success in the new year.
Co-owning three collision repair locations with my brother for many years in Denver — CARSTAR Ideal Northglenn, CARSTAR Ideal Arvada and CARSTAR Ideal Littleton — I’ve had an opportunity to learn what to do and how not to procrastinate when it comes to closing out the year.
Tracking Your Metrics
Speaking of procrastination, if you haven’t been tracking your performance and following your business’ metrics all year, now is the time to start. Hopefully you made it your New Year’s resolution to get your business organized: Set a budget and your performance goals, create your metrics and a system to track them, and evaluate against them every week, every month and every quarter to stay on track.
With my team, I closely track our performance all year long so, as the year draws to a close, I can look back on how our facilities performed financially and see how we did against our key performance indicators (KPIs) and customer service index (CSI) scores. Not only does this help us identify what we need to do to close our books on the previous year, but it also helps determine opportunities for growth and improvement in the year ahead.
Here are a few steps we take for a comprehensive wrap-up:
- We actually start our year-end wrap-up process at the beginning of November. I work closely with my accounting staff at each store to make sure they’re on top of all receivables and payables. We also make sure that the accounting system is clean with no errors. I’m adamant that all parts credits are collected before year-end as well. My accounting team knows that my goal is to have all of our stores’ financial reports ready to go to our accountant for tax purposes no later than Feb. 15, 2023, so the planning starts before we ever hit December.
- It’s important to assess the operating expense increases you incurred throughout the year so that you can prepare for the budget changes needed in the coming year. We’ve experienced large increases in our operating costs over the past two years, and it’s important to know what percentage increases you’re seeing in order to plan accordingly going into the new year. This allows us to create an accurate budget when moving into 2023.
- We have team meetings at each of our stores to discuss our wins and losses. We look back to see what our biggest areas of improvement need to be, and we build a plan to drive those changes in the coming year. It’s important to do this as a team so everyone is invested in the plans for improvement.
- I mentioned the importance of having a budget. If you do not have one, it’s truly time to start. We prepare a budget each year for each location. This allows me to know my operating costs and establish our breakeven performance for each store. This is an essential piece needed in order to set goals for your staff for the upcoming year.
- Set goals for the new year. We work on our sales and growth goals for the year ahead. We also pick our three lowest-performing areas to improve. We evaluate our staff, determine our staffing needs and adjust accordingly.
At times, it’s hard to step out of the whirlwind and chaos of everyday life in a busy collision repair facility. But stopping daily work to work “on” your business instead of “in” your business is essential in order to deliver change in the new year.
By wrapping up your business in a tidy bow, you can turn your attention to toasting the new year. Happy new year from our CARSTAR family!