Multi Profit Centers Increase Your Profitability by Taking Control Of The Hidden Costs Michael Benmosche, CIC Mang Insurance Agency Originally published in Modern Car Care Magazine WATCH NOW - Explore Venture Capital

Impacting profits at car wash, lube, convenience store and detailing operations is a full time business. What is often overlooked are two key ingredients that help build that profit margin: a sound risk management approach, complete with safety strategies, and appropriate insurance coverage. Both are critical components that will drive sales and control costs for multi profit centers.

Think of your business as the dashboard of a car. If you reference the exhibit, all profits are impacted by four areas: Accident Prevention, Customer Liability, Policy coverages, Customer Satisfaction. Whatever you can do to control and eliminate these exposures, customer satisfaction increase and sales increase and costs are controlled. Think of the four dashboard indicators as you drive down the road. If these areas are controlled, then you will be operating at the proper rpm’s, with the appropriate speed to get to your destination: profits. If one of these items are not attend to, the lights will flash or worse yet, stay illuminated. That means trouble. Sales are reduced, profits tumble!

One of these indicator lights is affected by the insurance plan that protects you from financial disaster. The following are some steps to consider that should be part of the process in selecting the program that is right for your business:

1. Identify your exposure to loss. List the specific operations in your business that could be held liable in the event of a lawsuit. Whether you are a corporation, LLC, partnership, or an individual, each entity must be addressed. Include a list of all real property that could be damaged or stolen.
2. Determine what you can afford to lose. How much self-insurance can you assume without a major impact on profits.
3. Protect yourself with a risk management/risk transfer plan. Investigate various methods of reducing your chances of loss with a sound management plan. Some examples would be developing a safety management plan, drug free workplace program, management accountability plan, etc. As far as risk transfer is concerned, an example would be the use of a hold harmless agreement.
4. Insure the remainder. Keep in mind when you select an insurance plan, there are many different policies to choose from and its not one size fits all. It’s often more important to see what is excluded than to look at what’s covered. We have included a list of items that are usually excluded and can be added on request. This is not all-inclusive but will provide a sample of some of the most common coverage’s to consider.
5. Insurance is the last resort. Keep in mind that the idea of insurance is to pay for the catastrophe losses. It was not intended to be a maintenance policy. To protect the availability and the cost, it is incumbent on each operator to determine when a claim is appropriate. (continued on next page ...)