"Forecasting Service Net" - #1 Calendar Utilization

There are seven things you control that directly influence your Service bottom line.

1. Calendar Utilization
2. Daily Clock Hours
3. Number of Technicians
4. Proficiency
5. Effective Labor Rate
6. Gross Retention Rate
7. Expenses

​This first installment deals with Calendar Utilization. In its simplest form calendar utilization is the difference between the number of workdays that are available in any given month compared to the number of days the technicians actually show up for work. There are many good reasons why technicians don't show up for work.  We send them to school, they earn vacation, there are holidays to celebrate and they get sick.  All these need to be measured and anticipated if you're going to forecast net profit potential and make adjustments to improve it.

Why is it important? Especially in a cyclical business like the boat or power sports industry, it is important because you need to be able to make decisions about hiring, scheduling and shifting optional days off to match your varying work load. 

I was recently talking with a store owner who told me that at the end of their busy season her service manager used valuable technician time to do extensive work on a boat they had already brought in for winter storage and would have on site for months.  Customers who only needed a small repair to keep boating were put off (lost business). Customers who already had their boats scheduled were delayed (lost trust and loyalty). Work needed to keep techs productive in the winter was no longer available (lost revenue).  Consistently having technicians available to match customer demand is the foundation you need to make money and loyal advocates. 

This year there are 22 weekdays in December.  Because Christmas day is on a Sunday, you could theoretically work all 22 days. 22 days x 6 technicians = 132 work days. If they all show up for work every one of those days your calendar utilization would will be 100%.  You may decide to give everyone Friday off to spend at home getting ready for Christmas morning. They will work 126 days and your calendar utilization is now 95%.  You may be slow between the Holidays and your are considering letting 2 technicians take off the entire week between Christmas & New Years to be with their families that live far away.  Your team will work 116 days or 88% utilization.   

Plug these numbers into the “Forecast” tab of the Numbers Worksheet and you will see that the difference in NET profit between 100% utilization and 88% is about $7000.  Anticipating this before your month begins lays the groundwork you need to make other decisions that impact your profitability.  When tracking it in the “Daily Input” tab start by identifying the available work days in the top row for each technician.  Each day when you insert the number of jobs they work on the spreadsheet will calculate your calendar utilization in the “Daily Performance” tab. 

​Next:  Controllable #2 - Daily Clock Hours.