In The Bay: Quarterly planning

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Over the past several months, I’ve had the opportunity to speak and interact with hundreds of shop owners on the topic of annual financial planning. I told them that a financial plan is easier to make than they might think. And to make it even more painless, we put a free financial plan spreadsheet on our website. You can download it here. One of the keys to good quarterly planning is to create over-arching annual goals.

Annual Goals

As part of your annual planning process, you’ll want to set one to three goals—no more than three—for your shop for the year. Here are some examples:

  • Grow monthly labor revenue from $80,000 to $110,000 by 12/31
  • Increase technician efficiency from 77% to 90% by 12/31
  • Decrease parts cost as a percentage of revenue from 28% to 24% by 12/31
  • Increase the number of full-time technicians from four to seven by 12/31

Notice that each of these goals are expressed in terms of “From X to Y by date.” Framing your goals like this helps force you to only set S.M.A.R.T. goals, which are Specific, Measurable, Attainable, Relevant, and Time-bound. This makes it very easy to tell at the end of the year if you achieved a goal or not.

An annual financial plan can make all the difference in driving performance at the shop. Not only does it set the tone for the year, it lays the groundwork for shorter-term goals. That’s what I’d like to talk about now.

Quarterly Goals

There’s something about human nature that causes us to get off-track from our goals about every 90 days. So I highly recommend that every quarter, you take a day, go offsite, and evaluate how you’re doing against your annual goals.

In his book Traction, Gino Wickman lays out the essential components of a quarterly planning session. The following is condensed from Wickman’s book:

  1. Segue: Each person attending shares what is working and not working in the shop; their best business and personal news in the last 90 days; and their expectations for the day.
  2. Review Previous Quarter: Go over all of your numbers and your goals from the previous quarter. For each goal, simply state “done” or “not done.” For any goals that are “not done,” either roll it into next quarter’s goals, or—if it’s 95% complete—add it to your shop’s To-Do List (basically a list of things that need to be done in the next seven to 14 days).
  3. Review the Shop’s “Traction” Organizer: This is a collection of the shop’s one-, three-, and five-year goals; the shop’s core values; and other important items. I highly recommend getting and reading Wickman’s book for more on this.
  4. Establish Next Quarter’s Goals: List everything that must get done in the quarter to keep the shop on track for hitting the annual goals. Then go through the list and keep, kill, or combine until you are left with only one to three. Remember, these should cascade up to the annual goals.
  5. Tackle Key Issues: During the meeting, issues will come up that may get the discussion off track. You may also bring issues into the meeting. Add these to an issues list along the way so that you can discuss and resolve them at this point in the meeting.
  6. Next Steps and Conclude: Make sure everyone is clear on the goals and next steps.hen have everyone share their feedback on the meeting, whether their expectations were met or not, and their rating on the meeting from one to 10.

Doing planning like this every 90 days is a really good way to chunk out your annual goals in nice, clean three-month increments.

Next Steps

With your goals set, put some common-sense incentives in place to encourage the team to help achieve them. For example, if your goal is to increase technician efficiency, consider implementing an efficiency bonus for the technicians, and maybe an overall shop efficiency bonus for the staff who support the techs (i.e. sales, service, parts, and office staff).

Whether you’re running a commercial repair shop or any other business, the regular cadence of annual and quarterly planning will have a tremendous, positive impact on your operation. It also gives you a much greater sense of control and peace of mind as you tackle your annual goals in smaller, quarterly pieces. In my next article, I will go into how to run efficient weekly meetings that will keep the shop on target for reaching these quarterly goals.

Jacob Findlay

About Jacob Findlay

Jacob Findlay is the CEO and co-founder of Fullbay. Five years ago, he made the leap from healthcare to truck repair. He wanted to take the best ideas from the electronic medical records world and apply them to heavy-duty repair. In other words, build a medical record for trucks. Today Fullbay is the number one fleet repair platform in North America. Jacob is a CPA licensed in Arizona, has a Master's degree in Accounting, a cellist, a so-so surfer, and the father of eight children.

Jacob Findlay on LinkedIn

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