The Power of Margin

We hear a lot about KPIs (Key Performance Indicators), Net Operating Income, bay and specialist efficiency, sales, and productivity are among other critical, manageable metrics that account for a profitable business.

I also want to shine a strong light on the power of margin. Yes, the profit margin on parts and labor. Simply put, the price we charge determines our margin. The math we set up in our management system determines our selling prices, but in many cases, the margin isn’t correct between your accounting system and your SMS. Your SMS has innovative tools that can help you be competitive and profitable. Hunt Demarest covered this in depth in his Episode 93 HERE.

Once we learn that our margin determines how much we pay our people, and what we spend on tools/equipment, marketing, benefits, facilities, and amenities, and with smart cost controls, it creates our profit.

Simply stated, the top performers know we pay bills with gross margin dollars. The more we have, the more we can do and the more profit we generate to help invest in the business and to reward ownership for their hard work and investment.