Ready for your jaw to drop!
A year ago, I had a client that was done with his business. He was struggling hard. He bought a mechanic shop with the intention of hiring staff to run it and when he was able to retire from his job, he had four years left, he would work in his business. However, the business was struggling to pay the bills, make payroll, and lots more. He came to me as a last effort to either find out what needs to change, if he can change it, or just sell it.
After having a few sessions and some digging, one of the biggest issues was his payroll. It was a little over 50% and no one was going out networking to promote the business. He had placed everyone, five employees, on salaries instead of by the hour. In some businesses salary is fine, however for this business it was draining it. With business not being steady this was a huge concern. He liked everyone working there and wanted to make sure they stayed and was happy. It was important to him that he kept that team and was not going to change the pay.
So, where did we start? First we started job costing. That was a game changer. He had no idea how to job cost and what was the purpose of doing so. After working together for three days job costing, he started to see where some of the issues were. They were not estimating correctly. That was one challenge we resolved quickly. Second, we worked with the office manager to go out into the community to promote the business and joined a networking group. We also worked out a new service that within the city limits, they would go get the client’s vehicle, repair it, and return it, without the client having to miss work or leave their home.
This did not fix all the issues with his business, but it was a great start. He began to see what needed work and his mindset of selling the business had shifted. It took a year to make many more changes, but he is much happier, and payroll is now down to 35%.
