Efficiency Calculator

Determining Your Efficiency Rate 11700 Total number of Hours that were charged to all customers in the period * 52 # of weeks in period 5 Number of Techs including Porter/Detailer 45 Actual Clock Hours (9hrs/day @5 days) 225 RO Hours per week 45 RO Hours per tech 100 Efficiency * If your shop uses ABS as its management system, you can get this figure from Total RO Hours From ABS Report Closed RO by PC Efficiency Study: AOL & Salary.com Survey shows that the average worker wastes 2.09 hours per day. -Jeanne Sahadi Power Slacking on the Job 7/7/05 That is a 75% efficiency Rating CALCULATIONS RETURN TO CALCULATORSales 1,000,000 Enter Actual Sales for the Period Overhead 500,000 Enter Actual Overhead for the Period Number of Months in Period 12 Enter the Number of Months in the Period GP% 40.0% Enter the Gross Profit that you achieve on your Sales Labor as % of sales 45.0% Divide Total Labor Sales by Actual Sales # of Techs 5 Enter the Number of Technicians (including Detailers/Porters) # of Hours in a week 45 Enter the Number of Hours that a Technician Works in 1 Week Desired NP% 8.0% What is your Desired Net Profit Percentage? Efficiency 100.0% If you do not know your Rate of Efficiency CLICK HERE Average Monthly Sales 83,333 This Represents the Average Monthly Sales Average Monthly Overhead 41,667 This Represents the Average Monthly Overhead Number of Hours available 968 This Represents the Average Number of Hours Available to Bill per Month GP$ 400,000 Desired NP$ 6667 This is the Average Net Profit per Month 67.45 FREQUENTLY ASKED QUESTIONS -CLICK HERE CALCULATIONS OBTAIN THESE FIGURES FROM THE INDIVIDUAL WHO PRODUCES YOUR MONTHLY STATEMENTS The Labor Rate Necessary is: Note: All labor rate information is based solely on individual shop data. It is not being collected or compared. It is intended as a tool to aid in the determination of the labor rate necessary to meet the financial requirements of each individual shop. 8:20 AM 1/30/2008LABOR RATE CALCULATOR FAQ -INSTRUCTIONS What will this calculator do for me? This calculator is intended as a tool to help individual shops determine the labor rate that would be necessary in order to meet certain financial goals that have been determined by the decision-makers of the shop. Doesn’t this violate anti-trust regulations? No. This is an educational tool. No one is requiring or requesting any of the information you used to determine either your financial goals or the rate that you ultimately decide to charge at your shop. This calculator will simply help you determine how changes in your business or expectations will affect the labor rate that you charge. I used the calculator, but I must have done something wrong because the rate is significantly higher than the prevailing competitive price in my area. Can this be right? You may be surprised at the rate that is generated. Keep in mind that your profit goals and rate of efficiency have a major effect on your business. If any number was entered incorrectly, it was probably this one. How do I determine my labor efficiency? An efficiency calculator is included with the program. To access the efficiency calculator, look on the lower left corner of your computer screen. Each worksheet is labeled according to the calculator that can be found on that sheet. Select the “Determining Efficiency” worksheet and follow the instructions on the sheet. When you have completed the worksheet, transfer the appropriate efficiency rate to the labor rate calculator worksheet. How do I fill out the calculator? The calculator is made up of two sections. The top section with the yellow background is the section where you will enter the actual information for your shop. Brief instructions about what information to enter can be found on the right side of the page. The bottom section with the blue background is the section where calculations are made based on formulas that have been entered in the program. This is the section where you will find the labor rate that would be necessary in order to achieve the financial goals that you have specified based on the labor information that you entered. How often should I use the calculator? You can use the calculator as often as you like. However, if you are using the calculator to make decisions about your business, the numbers entered should be based on at least one fiscal quarter (three months) of data. Once I get the labor rate, what do I do with it? What you do with the information is entirely up to you. This educational tool is intended to help shops better understand how changes in particular financial markers would affect the business. It can only help you determine what rate you should charge based on the financial goals you are trying to meet and the financial constraints you are working under. I don’t usually deal with the numbers. Where do I get all of this information? You can always hand the calculator off to the person responsible for bookkeeping at your shop or your accountant. Most information can be found in the Income Statement. LABOR RATE CALCULATOR FAQ -INSTRUCTIONS RETURN TO CALCULATOR RETURN TO CALCULATOR RETURN TO CALCULATOR RETURN TO CALCULATOR