byby Brooke Samples, presidentBrooke Samples, presidentProfit Blueprints, LLCProfit Blueprints, LLC

Benchmarks & Key PerformanceBenchmarks & Key PerformanceIndicators...Indicators...

Profit Management Tools for EveryProfit Management Tools for EveryManager!Manager!

Over the course of her career, today’s presenter, BrookeSamples, has analyzed over 15,000 Dealership financial

statements. Over the past 15 years, Brooke Samples hascoached and motivated hundreds of Dealership Managers inall departments across North America. Using her monthlyfinancial analysis - Profit Blueprints - she compares Dealers’financial statements to key Benchmarks. She then uses herprevious dealership experience, plus feedback from 15 yearsof Coaching & Consulting her Clients, to help Managers utilizeover 150 Action Plans.

By implementing customized processes, her clients reachtheir full Net Profit potential. She’s proven that with goodpeople, consistent training, the right plans, and a little good-natured "nudging“; her Dealership clients become verysuccessful.

In 2012 & 2013 she worked with VW University, training theirpeople to understand the opportunities hidden in theirdealerships’ financial statements. Before becoming aConsultant, she worked in Dealerships in a variety of uppermanagement positions. She expanded her automotiveknowledge while working for Lloyd Schiller’s Dealer ServiceCorporation and later as part of NCM Associates.

Your Presenter,

Brooke SamplesPresident

Profit Blueprints,LLC

profitblueprints@gmail.com

1.866.316.7418

BENCHMARKS

BENCHMARKS

KEYKEY

PERFORMANCE/

PERFORMANCE/

SuccessSuccess

Indicators

Indicators

TARGETSTARGETS

GRADES

GOALS

Standards

You Can Measure Anything!

Where Do They Come From?Where Do They Come From?

ExternalBenchmarks

Factory DataFactory DataPeer PerformancePeer Performance20 Group Composites20 Group Composites

NADANADAConsultantsConsultantsAccountantsAccountants

InternalBenchmarks

YourYour TrendsTrendsYourYour Dealer GroupDealer Group

Goals Needed to ReachGoals Needed to ReachBudgetBudget

ProgressProgress

You Need Both to BeYour Best!

Benchmarking is UsedBenchmarking is Usedto Measure Performanceto Measure Performance

of a Specific Indicatorof a Specific Indicator

1)1) Determine Gaps in PerformanceDetermine Gaps in Performance

2)2) Plans to Improve PerformancePlans to Improve Performance

3)3) Measure Impact of Changing aMeasure Impact of Changing aProcessProcess

4)4) Rally Employees to Meet GoalsRally Employees to Meet Goals

5)5) Detect FraudDetect Fraud

6)6) ForecastingForecasting

Dealership A Dealership B

Average Customer Pay Repair Orders 1313 666

Average Customer Labor Sales $126,167 $102,731

Average Customer Gross Profit $87,819 $76,782

Gross Profit % 69.61% 74.74%

Labor Sales Per Repair Order $96.1 $154.2

Posted Labor Rate $100 $100

Billed Hours Per Repair Order 0.96 1.54

Dealership A 2013 Variance 2014

Customer Pay Repair Orders 1284 29 1313

Customer Labor Sales $104,209 $21,958 $126,167Customer Gross Profit $72,828 $14,991 $87,819Labor Sales Per Repair Order $81.15 $14.90 $96.06

Dealership B 2013 Variance 2014

Customer Pay Repair Orders 754 -88 666

Customer Labor Sales $103,341 -$610 $102,731

Customer Gross Profit $77,105 -$323 $76,782

Labor Sales Per Repair Order $137.01 $17.17 $154.18

Dealership A 2013 Variance 2014

Customer Pay Repair Orders 1284 29 1313

Customer Labor Sales $104,209 $21,958 $126,167Customer Gross Profit $72,828 $14,991 $87,819Labor Sales Per Repair Order $81.15 $14.90 $96.06

Dealership B 2013 Variance 2014

Customer Pay Repair Orders 754 -88 666

Customer Labor Sales $103,341 -$610 $102,731

Customer Gross Profit $77,105 -$323 $76,782

Labor Sales Per Repair Order $137.01 $17.17 $154.18

Wrong InterpretationWrong Interpretation

of the Numbers!of the Numbers!

Not Looking atNot Looking at

thethe BIG Picture!BIG Picture!Fixating onFixating on

One NumberOne Number

Lose SalesLose Sales –– New & UsedNew & Used

Aged InventoryAged Inventory

Spiffs to SellSpiffs to Sell

Older InventoryOlder Inventory

Benchmark of $2,000 perBenchmark of $2,000 per

Used Vehicle RetailedUsed Vehicle Retailed

Poor MPIProcess

Training

Pricing

Franchise/Location

Techs on Vacation

BEST,Bettergood

Options

Hours Per Repair OrderHours Per Repair Order

Failure toFailure to ““Dig DeeperDig Deeper””

Advisor A Advisor B

# RO Written/Month 280 275

Labor Sales $44,800 $33,000Average Labor/RO $160.00 $120.00Billed Hours Per RO 1.6 1.2

Average Mileage 84,139 41,231

Failure toFailure to ““Dig DeeperDig Deeper””

Advisor A Advisor B

# RO Written/Month 280 275

Labor Sales $44,800 $33,000Average Labor/RO $160.00 $120.00Billed Hours Per RO 1.6 1.2

Average Mileage 84,139 41,231

Manipulation of NumbersManipulation of Numbers

Sales Closing RatiosSales Closing Ratios

-- Stop Tracking Every UpStop Tracking Every Up

Hours per Repair OrderHours per Repair Order

-- Hide from New Car CustomersHide from New Car Customers

-- Flushes for EVERYONE!Flushes for EVERYONE!

SALES April May June July

Paint & Materials Sales $11,527 $11,967 $8,949 $10,793

Gross Profit $7,643 $5,124 $5,243 $8,216

Percent (Target = 45%+) 66.31% 42.82% 58.59% 76.12%

Materials GP Less Other Supplies - "Net" ($4,330) ($394) $3,212 $6,836

"Net"/ % Mat. Sales (Target = 30%+) -37.56% -3.29% 61.26% 63.34%

ASSETS April May June July

Paint & Body Materials Inventory $5,412 $8,321 $13,685 $11,295

Paint & Materials C.O.S. $3,884 $6,843 $3,706 $2,577

Paint/Material Inventory as a % of C.O.S. 139.34% 121.60% 369.27% 438.30%

Manipulation of NumbersManipulation of Numbers

MayMay React Too QuicklyReact Too Quickly

Personnel ExpensePersonnel Expense

-- Change Pay PlansChange Pay Plans

-- Fire Good EmployeesFire Good Employees

Determining GapsDetermining Gaps

In PerformanceIn Performance Could ResultCould Result……•• Wrong InterpretationsWrong Interpretations

•• Not Looking atNot Looking at the Big Picturethe Big Picture

•• Not Looking for Root CausesNot Looking for Root Causes

•• Manipulation of Numbers & ResultsManipulation of Numbers & Results

•• Make Unnecessary ChangesMake Unnecessary Changes

Determining GapsDetermining Gapsin Performancein Performance

There are ThousandsThere are Thousandsof Numbers to Measureof Numbers to Measure

Compare Your NumbersCompare Your Numbersto Benchmark Numbersto Benchmark Numbers

PRIMARY SUCCESSPRIMARY SUCCESS

INDICATORSINDICATORS

vs.vs.

secondary success indicatorssecondary success indicators

NEW ** USED SERVICE PARTS BODY SHOP

GM* & Imports Net Profit to Gross Profit > 10% > 20% > 25% > 45% > 15%

Ford

Chrysler

Selling Gross /Department

Net to Gross Profit> 55% > 55% > 57% > 60% > 50%

* Without Parts Transfer

** Add any Misc. Income attributed to Dept.

Expense Control

AssetManagement

New & Used Accounts Rec. + CIT < 25% (One Week)

Service Warranty Receiveables < 30%

Service & BS Work in Process <5% / <10% (GL Account/Labor Cost of Sale)

Body Shop Net Materials > 30%

S, P, BS Accounts Receivables < 100% (% of External Customer Sales)

Active (ADP) Normal (R&R) > 70%

Aged Inventory < 3% (Over 12 Months)

(P&M Gross Profit - Supplies

Exp) as a % P&M Sales

(Compared to Warranty Labor &

Parts Sales)

(ADP: MGR, R&R: 2213)Parts Inventory

DepartmentGrowth

Success Indicators

New Vehicle More Units Sold than Last Year

Used Vehicle More Units Sold than Last Year

Service More Customer Repair Orders Than Last Year

Body Shop Increase in DRPs

CustomerRetention

Customer Labor Sales (Include ServiceContracts) Compared to Warranty Sales

>_____ Domestic Ratio Target

> _____ Import Ratio Target

> _____ Highline Target

CustomerHappiness

Customer Satisfaction = 90%+

of Factory Best Score

Facility Utilization

Labor G.P. per Stall (Labor G.P. per Stall (ALLALL Stalls)Stalls)

Service: $8,500+ / MonthService: $8,500+ / Month

Body Shop: $4,250+ / MonthBody Shop: $4,250+ / Month

New Vehicle DepartmentNew Vehicle Department

ManufacturerManufacturer’’s Planning Potentials Planning Potential ––

How Do You Compare?How Do You Compare?

1) Determine Gaps in Performance

2)2) Plans to Improve PerformancePlans to Improve Performance

3)3) Rally Employees to Meet GoalsRally Employees to Meet Goals4)4) Detect FraudDetect Fraud5)5) ForecastingForecasting6)6) Measure Impact of ChangingMeasure Impact of Changing

a Processa Process

GM & Imports C B A

New Vehicle * <5% 5%- 15% >15%

Used Vehicle <5% 5%- 15% >15%

Service <5% 5%- 15% >15%

Parts <15% 15%- 35% >35%

Body Shop <5% 5% - 10% >10%

Ford and Chrysler C B A

New Vehicle * <30% 30%- 45% >45%

Used Vehicle <30% 30%- 45% >45%

Service <30% 30%- 45% >45%

Parts <35% 35%- 50% >50%

Body Shop <25% 25%- 40% >40%

* Add any Misc. Income attributed to New Vehicle

If % is C onPrevious Chart

If % is B onPrevious

Chart

If % is A onPrevious

Chart

For Vehicle Sales

Examine Gross Profit perUnit, Finance Penetration,

Closing Ratios

For Service, Parts, BS

Examine Gross Profit %,Sales per CustomerVisit, Staff Efficiencies

Isolate Expense Accountsto That Can be Changed.

Work on Actions toReduce Expenses

Compare ControllableExpenses to Top

Performers Looking ForExcess Expenses

Compare Yield perCustomer Visit and Staff

Efficiencies

Look For Ways to GrowYour Business!

Secondary Benchmarks - CExamine Expenses

Personnel

• Pay Plans

•Staffing

Advertising

Floor Plan

Delivery

Policy

Shop Supplies

Secondary Benchmarks - B

Sales Department

Yield per Customer VisitYield per Customer Visit

• Gross Profits per Unit

• Finance Penetrations

• Closing Ratios

• Sales Per Employee

Service, Parts, Body Shop

Yield per Customer VisitYield per Customer Visit

• Gross Profits % Retained

• Sales per Repair Order

• Body Shop Closing Ratios

• Gross Per Employee

Secondary BenchmarksDealer’s Edge Webinar

Sales Department

Fine Tune Your VehicleFine Tune Your VehicleSales Departments to SpotSales Departments to Spot

WeaknessesWeaknesses

June 2012

Service, Parts, Body Shop

Fixed Operations: ReadingFixed Operations: ReadingYour Statement Like a ProYour Statement Like a Pro

April 2013

1) Determine Gaps in Performance

2)2) Plans to Improve PerformancePlans to Improve Performance3)3) Measure Impact of Changing aMeasure Impact of Changing a

ProcessProcess4)4) Rally Employees to Meet GoalsRally Employees to Meet Goals5)5) Detect FraudDetect Fraud6)6) ForecastingForecasting

““Two years from nowTwo years from now

your business will beyour business will be

EXACTLY the sameEXACTLY the same””

WouldWould youyou be happy?be happy?

So why do weSo why do wefear change?fear change?

Change isChange is uncomfortable &uncomfortable &HARDHARD

TheThe ““price for Improvementprice for Improvement””

isis discomfort & hard workdiscomfort & hard work

Focus on 1 to 2 Opportunitiesat a time

• Easiest and Quickest

• Biggest Return

on Your Time Investment

• Most Pressing Problem(s)

Set a TargetSet a Target –– Gauge ResultsGauge ResultsExternal

Benchmarks

20 Group Composites20 Group CompositesFactory DataFactory Data

NADANADAConsultantsConsultantsAccountantsAccountants

InternalBenchmarks

YourYour TrendsTrendsYourYour Dealer GroupDealer Group

Goals Needed to Reach:Goals Needed to Reach:•• BudgetBudget

•• ProgressProgress

1) Determine Gaps in Performance

2)2) Plans to Improve PerformancePlans to Improve Performance3)3) Measure Impact of ChangingMeasure Impact of Changing

a Processa Process4)4) Rally Employees to Meet GoalsRally Employees to Meet Goals5)5) Detect FraudDetect Fraud6)6) ForecastingForecasting

We Need To Find New Ways To Motivate the Employees

Isn’t NOT firingthem enough?

Rally the Employees to Help ReachRally the Employees to Help Reachthe Department and Dealershipthe Department and Dealership GoalsGoals

Something the EmployeeSomething the Employee CanCan ImproveImprove

Bonuses and Incentives to DepartmentBonuses and Incentives to Departmentand Dealership Goalsand Dealership Goals

Boost PerformanceBoost Performance◦◦ Line Items per Repair OrderLine Items per Repair Order

◦◦ Units sold in the First Week of the MonthUnits sold in the First Week of the Month

1) Determine Gaps in Performance

2)2) Plans to Improve PerformancePlans to Improve Performance

3)3) Measure Impact of ChangingMeasure Impact of Changinga Processa Process

4)4) Rally Employees to Meet GoalsRally Employees to Meet Goals5)5) Detect FraudDetect Fraud -- April 2014April 20146)6) ForecastingForecasting –– November 2013November 2013

20 12 201 3 2 014 vs. 2014

Ave rage Ave rage 2013 YTD Avg. January February

Numbe r of Custom er Pa y R epair Orders 391 428 23 45 1 457 47 9

Custom er Labor Sa les $66,31 2 $69,58 6 $2,228 $71,814 $7 2,5 76 $ 74,782

Gross Profit $49,12 2 $49,59 0 $1,599 $51,189 $5 1,9 20 $ 52,196

Pe rcent (Targe t = 73 %+) 74.08% 71.26% 0 .02% 71.28 % 71.54% 69.80 %

Labor Sales per Repair O rder $169 .6 0 $161 .6 5 ($ 2.42) $159.23 $1 58.81 $ 135.24

Pa rts Sales per Repa ir Orde r $234 .7 2 $205 .5 5 $7 .20 $212.75 $2 15.48 $ 173.37

Avg Billed Flat Rate Hours per CP R .O . (Target = 2.0+) 1.88 1.62 -0.02 1.59 1.59 1 .5 6

Labor & Par ts Gross Profit $ per Customer Repair Order $216 .2 5 $188 .0 1 $2 .27 $190.28 $1 90.81 $ 177.45

CUSTOMER RETEN TION

Custom er Labor Sa le To Wa rranty Labor Sales (Target = 4.0+) 2.50 3.01 0.31 3.32 3.21 2 .8 7896 33.126 9 61 406.885 $99,386 175 130.1999 8391 7.84086

SERVICE FACILITY UTILIZATION

Numbe r of Servic e Bays 3 0 30 0 30 3 0 30GROSS PROFIT PER SERVICE BAY $5,155 $6,294 $714 $7,00 8 $7,294 $6,911

FACILITY PO TENTIAL SERVICE GROSS PROFIT AT 85% $287,479 $294,789 $1 1,105 $305 ,8 94 $ 294,789 $286,20 2ACTUA L SERVICE GR OSS PROFIT $154,657 $201,820 $8,407 $210 ,2 27 $ 218,820 $207,33 5SERVICE FACILITY UTILIZATION @ 8 5% 53 .8 % 68 .5 % 0.3% 68.7% 7 4.2 % 72.4%

Additional Gross Profit if at 85 % Facility Utilization $132,822 $92,96 9 $2,698 $95,666 $7 5,9 69 $ 78,867

Annualized Additional Gross Profit $1,593 ,86 0 $1,115,62 6 $32,372 $1 ,14 7,998 $ 911,626 $946,40 9

Build DOCs to analyze most accounts which may includea comparison to budget, prior months and “same month –prior year” to identify significant variations

January February March April

Customer Labor Sales $35,742 $37,864 $28,633 $35,708Gross Profit $25,959 $26,342 $18,997 $23,411

Percent (Goal) 72.63% 69.57% 66.35% 65.56%

EXAMPLE

74%

Build DOCs to Analyze Most Accounts

& Include a Comparison to Previous Months

January February March April

Company Vehicle Expense $3,572 $2,937 $2,602 $3,411Office Supplies and Expenses $1,757 $1,663 $1,894 $1,312Other Supplies $5,572 $4,654 $8,129 $5,222

Use Conditional Formatting to Sort Through All The Numbers

Spend less time worrying aboutSpend less time worrying aboutwhere your numbers comparewhere your numbers compareto others in the industryto others in the industry……

……AndAnd MOREMORE time workingtime working

on improving the process thaton improving the process thatwill improve your numbers overwill improve your numbers overLast Year and Last Month.Last Year and Last Month.

Spend Your Time BeingSpend Your Time Being THETHE BEST!BEST!

Your Dealership is Unique!Your Dealership is Unique!

Understand the NumbersUnderstand the NumbersBeforeBefore You Leap Into Action!You Leap Into Action!

Brooke Samples, President

Profit Blueprints,LLC

Profitblueprints@gmail.com

1.866.316.7418

www.blueprintforprofits.com

Net Profit Improvement

Dealership-Proven Plans for

Profit Blueprints, LLCProfit Blueprints, LLC

TS S

Ready to dig deeper than just comparing your numbers to benchmarks? Send us your most

recent financial statement, plus your December 2013 financial statement with complete

confidentiality, and we’ll do a complete analysis of any department for only $150!

What you’ll receive:

Conference Call to Review the Analysis and Observations

Complete Department Analysis 2013 compared to 2014 ytd

Profit Blueprints Analysis comparing your performance to High-Performing Targets

Performance Indicators for Sales, Expenses, Assets, Employees

One Written Action Plan specifically selected for your unique opportunities

If you’d like a complete analysis of your Dealership’s Department, just multiply the number of

departments by $150. Your analysis will feature “ssmmaarrtt ccoolloorrss” which highlights areas of

opportunity to focus on, one written Action Plan for each department and up to three

conference calls to discuss the best Plans to increase your Net Profits.

For your analysis please complete this form, send to the address below and include with it:

Your most recent financial statement

December 2013 financial statement

Payment

Department to analyze ______________________ (or All)

Dealership Contact Name/Position: ______________________________________

Contact Phone Number: ________________________________________________

Contact Email Address: _________________________________________________

Dealership Name: _____________________________________________________

Send to:

Brooke SamplesProfit Blueprints, LLC18101 128th TrailJupiter, FL 33478www.blueprintforprofits.com

If you have any question, please call Brooke Samples at 877.316.7418 or send an email toprofitblueprints@gmail.com.

PROFITBLUEPRINTS

Dealership-Proven Plans forNet Prof i t Im prov em ent