Incorporating routines into your schedule can help you manage your business more effectively.
It’s the first of the month, the time, every month, that I work through a series of practices that I believe have helped me to create a successful carshare business. Some folks prefer to manage their businesses day to day, taking care of things as they arise, without much thought about what’s a little further down the road. If that works for you, great. But I believe that approach makes it easier to overlook critical checkpoints along the way.
Here are the top five things I’ve built into my monthly routine, that get my attention the first day of the month, every month.
I complete my monthly financial report.
The purple bars on your earnings graph are exciting to watch as they grow throughout the month. By the time we reach the 30th or 31st, we are tempted to look at those bars and base our entire perception about the financial health of our business on what we see. But those bars do not tell the whole story.
The only number that reveals how financially healthy your business really is, is the bottom line of your monthly P&L, after you’ve accounted for all operating expenses, including asset depreciation. Each month, it’s critical to set aside time to build out your profit and loss statement so that you make the most informed financial decisions for your business throughout the upcoming month.
I research and record the book value of each vehicle.
Depreciation is one of the numbers that hosts tend to ignore when it comes to completing their monthly financials. But it’s a real number, and it matters. There are a couple of ways to determine your vehicle’s depreciation (or, in years like 2021, appreciation).
You can use a “rule of thumb” calculation, such as a general percentage of depreciation per year, or per mile. Or, you can research the actual cash value each month and note the difference from the previous month. I believe the latter to be the most accurate. General “rule of thumb” calculations don’t always hold true. For instance, if you think your vehicle depreciated by 15% in 2021, because a website told you that’s about the amount vehicles depreciate each year, you’d be pleasantly surprised to know that your vehicle actually, most likely, gained value in 2021, instead of losing it. Depreciation is a living number that is dependent upon location and real world market conditions.
To discover your vehicle’s depreciation over each 30 day period, simply go to Kelly Blue Book, enter the pertinent data, including current mileage, and look at the private party value. Compare it to last month, and that is your monthly depreciation or appreciation.
I measure my tire tread depth.
Turo requires that you maintain a minimum tread depth of 4/32 on every tire, on every vehicle, to be in compliance with their vehicle quality requirements, and to keep your protection plan in force. If your vehicle is involved in an accident while on a trip, and it’s discovered that tread depth contributed to the accident (blowout, traction, braking, etc.), your coverage could be voided, placing all damage and injury liability on you.
The first of each month is a good time to just perform this routine maintenance check. If a tire is below 4/32, get it replaced today. If they are close to that mark, go ahead and block a day off of your availability calendar this month to get it done.
I block off my calendar for upcoming oil changes and other regular maintenance.
This has probably happened to you. I know it has to me. A vehicle is due for an oil change, but it’s out on a trip. I think to myself, I’ll get it done when the car returns. But then someone else books a trip back to back with the one that’s ending, leaving me no time to get the maintenance done. No problem, I’ll just do it after that next trip. Then another booking. And before you know it, your vehicle is nearly 2,000 miles past time for that oil change.
On the first of the month, just check every vehicle to determine which will need maintenance in the new month and discipline yourself to, right then, block some time off your availability calendar to get it done so the vehicle can’t be booked.
I set my holiday pricing for upcoming holidays.
I’m writing this on August 1st. Today is the day to make sure that my Labor Day pricing is right where I want it to be as people are going to begin booking their Labor Day trips now. If you’ll build into your first-day-of-the-month routine the task of setting holiday pricing for ever holiday coming up in the next 30-45 days, you’ll be ahead of the pricing game, less likely to have guests book your vehicles at your lower, regular daily rates.
Business success is found in the mastery of the details.
Building routine into your business practices, and your own personal discipline as a business owner is going to help you master the details that often get overlooked, of pushed to a future time thus never actually being done until a crisis forces their completion.