A Billion Here and a Billion There...
March, 2002Gazillionare Bunker Hunt was quoted as saying, "A billion here and a billion there, and pretty soon we are talking real money." Well, "real" money in our business may not be billions, but it's certainly thousands.
I was chatting with another old dog in the "bidness" the other day, and we were discussing the ways garages lose revenue. As we compared notes, we found that the exotic thefts where someone puts a bug in the software or manipulates the payroll were few and far between.
It's the ordinary stuff, the little errors and problems we find audit after audit, garage after garage. Consider the following:
If you issue 100 tickets, and you get 90 back, there should be 10 cars in the garage. If there aren't then you need to find out why.
Take a day's tickets and rate them manually. They should be rated properly. If the cashier gives a person staying an hour and five minutes a charge for an hour, you have just lost the next rate increment, either to the patron, or the cashier.
Even if you have a machine-readable computerized system rate a couple of tickets in each rate band. Who says the system is set up properly, or frankly, works at all?
If you have 150 monthlies, then there should be 150 cards turned on, no more, no less. Run a card list and compare it to your invoicing.
What about simple procedures. Can the cashier sign a ticket and allow a person out for "free." You'd be surprised at how many places where that is allowed to happen.
What kind of a grace period is allowed? Is it a turn-around grace or a continuous grace? The difference can cost you up to 30 percent in lost revenue from your non-maximum tickets.
Take a look at the management statement and get hard copies of the invoices that are charged to the location. Shocking what can be charged to garage A and delivered to garage B.
Check the time on the entry ticket dispenser and on the time clock or exit cashier terminal. If they are off, even a couple of minutes, the loss of revenue can be severe.
Read your leases with your tenants. Be sure that the garage operation has adhered to the spirit and law of the leases.
That's a good short list -- now for some real world examples.
I audited a garage last year in the deep south. Great food, good music, poor management. On the first day I audited, I counted the stack of issued tickets. There were 215 machine-issued tickets, of which 117 were signed "monthly parker, forgot card, no charge." They were signed by the cashier.
When I asked why the manager, at a minimum, couldn't sign the tickets, I was told that the parkers were very high rollers and they couldn't be held up. (No offense, but I don't believe anyone moves that fast on a summer day in that state.) The daily maximum rate at this site was only $5, but even at that the potential loss was $130K a year.
I asked one manager at another location how often he checked the time clocks (entry and exit). He told me that he did it religiously every Friday when he came to work. Since it happened to be Friday and about 6 p.m., I asked if we could check them now. He said sure. The entry clock was 3 minutes behind the exit clock. After 10 hours. The drift after five days would be 30 minutes.
By the way, I caught this problem on one system when I noticed that one ticket actually left before it came in.
I found one computerized system that had been upgraded about two months previously. When the rate structure was programmed into the system, the person doing so set the rates for a "continuous" rather than turn-around rate. This knocked six minutes off every ticket before it computed the rate. (A turn-around rate allows only the first six minutes to be deducted, then rates the ticket from the seventh minute on.)
Our audit determined that the owner had lost more than $40,000 in those two months, just on tickets that were mis-rated by the improperly programmed computer.
You get the idea.
Got my back scratched the other day. Talked to someone who read my column and considered it gospel. He said that he was preparing to bring his parking operation "in house." He figured he could run his garages as well as an operator.
I wasn't sure this was the best idea in the world. I told him he should talk to his operator and determine all the things that they do and the economies of scale he gets because of the operator's size and expertise.
Simply having a supply of personnel ready if someone is sick or on vacation can be invaluable. Having someone to handle problems and issues and take responsibility for them with the parker can save many headaches. Operators often bring marketing strategies to the party, as well as experienced management.
I told him he might be better off to keep his operator and perform functions 1 through 9 above.
See you next month around the kibble bowl.