International Door & Operator Industry

JAN-FEB 2018

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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28 International Door & Operator Industry™ MANAGEMENT Chart #2 indicates a strong warning sign for the dealership owner. While the gross profit goal for commercial installation sales is .24 or 24%, gross margin and commercial sales are seriously dropping. Action is needed to determine the reasons for loss of sales over the last year (quarter over quarter) and a nearly 5-point drop in gross profit. Is the market sliding or is there a marketing or other competitive issue? Chart #3 shows marked improvement for residential service sales. Sales in the last year (quarter over quarter) grew over 8% while gross margin rose from .5375 to exceed the goal of 56%. Use data to quickly determine if there are signs the economy is sliding. Likewise, use data to quickly determine if your competitive advantage is eroding. Telltale signs include employee productivity declines (sales, office and field employees). Address employee productivity declines quickly. Finally, analysis of sales and margin by sales segment delineates profitable lines from less profitable segments, allowing the owner to chart the best course if an economic slowdown becomes eminent. Be vigilant! CHART 2: Commercial Installation Sales – Margin Goal .24 (24%) This Month Last Month This Month (Last Year) Last 3 Months Last 3 Months (Last year) Sales $64,700 $61,400 $71,300 $185,740 $231,210 Material 39,470 37,760 42,140 114,210 132,945 Labor 11,900 11,175 12,260 33,810 39,995 Freight 800 730 990 2,235 2,660 Cost of Goods Sold (COGS) $52,170 $49,665 $55,390 $150,255 $175,600 Gross Margin ($) $12,550 $11,735 $15,910 $35,485 $55,610 Gross Margin % .1937 .1911 .2231 .1910 .2405 CHART 3: Residential Service Sales – Margin Goal .56 (56%) This Month Last Month This Month (Last Year) Last 3 Months Last 3 Months (Last year) Sales $50,875 $52,140 $44,370 $152,975 $141,110 Material 9,870 10,325 8,960 29,935 28,505 Labor 11,750 12,140 10,740 35,850 35,700 Freight 360 390 305 1,085 1,060 Cost of Goods Sold (COGS) $21,980 $22,855 $20,005 $66,870 $65,265 Gross Margin ($) $28,895 $29,285 $24,365 $86,105 $75,845 Gross Margin % .5680 .5612 .5449 .5629 .5375 John E. Zoller and David H. Bowen comprise Zoller Consulting, Inc. of Wooster, Ohio. Zoller Consulting provides consultation of managerial effectiveness and financial performance of construction related businesses. They also offer customized seminars and training sessions. In addition, Zoller Consulting provides acquisition management, including finding buyers or sellers, locating funding sources, transaction structuring, and negotiating and organizing the transition to new ownership. Contact Zoller Consulting, Inc. at 330.262.8500 or John@ zollerconsultinginc.com. Continued from page 27 "Be Vigilant! ...use data to quickly determine if your competitive advantage is eroding."

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