Know Your Numbers: Keith Jones on Better Parking Leadership

What numbers could we be watching that maybe are masking a problem? Maybe they look good on the P&L, but they're actually covering up something that needs attention.

Yeah, good question for us all to ponder and to think about.

You know, I always look at this from maybe, say, how a hotel client or hotels look at this.

And so you have above the line numbers and you have below the line numbers.

And oftentimes those two can be talked about, maybe one in singularity about above the line numbers versus the flow through that hits bottom line numbers.

So what we can really look at is easy ones like revenue coming in.

Right.

So for every dollar that's collected at, say, a parking operation, what's the flow through on that to the bottom line? And oftentimes in our industry, for better or for worse or for good or bad, you know, we're using different mechanisms to generate above the line income, revenue, parking income,

if you will.

But how does that relate to commissions that are taken? How does that relate to how that customer is sourced? So if it's sourced outside of, you know, the parking management company, so third party aggregator, and then them taking their cut.

And in this world and what we're all operating in each one of these customer generators is taking a percentage of this parking revenue.

And you need to be aware of, okay, what's the cost to get that customer? And so is it a 1%? Is it 10%? Is it 20% that you're actually giving up in order to have that third party generator produce that customer and i.e.

that $1 parking revenue? And so it's an 80 cents on the dollar, if you will.

I think that that's really

critical

that we don't just look at numbers and go, okay, get revenue at any expense.

The other one that's really interesting that I've seen in our industry is where you have things like a lease or a revenue split that is very commonplace in our industry.

So meaning for every dollar that comes in, let's say it's an 80-20 split.

your numbers so 80 20 split where the in this case in this example the owner or parking asset manager the owner of that asset gets 80 cents on the dollar and the operator gets 20 cents and so what's happening here is we get that 20 20 cents on the dollar to then manage all all parts that operation from expenses like payroll, insurance, cleanliness, maintenance, IT security, goes on and on and on that everyone probably that's listening or watching this podcast understands.

But what we've had now is an introduction from different players that say, I tell you what, let's go to that parking owner or asset owner and say i'll give you 99 flow through like meaning 99 cents and i'll just take one percent to to manage your parking operation well if i'm the owner i go well 99 seems a lot better than 80 uh i'll take that deal that sounds great uh or anything better than 80 sounds great Now, the devil's in the details because as Ray Charles once said, nothing of nothing equals nothing.

And the fact of the matter is when someone is leaving themselves such a thin margin in order to do the operation or to cover their expenses or to actually turn the lights on said parking operation, meaning that they don't have 20% margin to handle all those expenses, manage the thing really on a well-crafted basis.

professional thing and you have a 1%, if you will, in this example, you're not going to do a very good job of managing that parking asset.

You're actually going to come in and spend about 1% of your time to just manage it within your margins, which will lead to a decrease overall volume on not just above the line revenue, but below the line revenue.

And I don't think it's been brought out enough in our industry or talked about.

really outside of maybe the parking network, amongst others, to say, is a 99% lease deal better than an 80%? And I'm a firm believer that says, no, it's oftentimes not, because then these operators are really finding other ways to make profit or margins, whether they be through fees that are not being transparent to the building or garage owner or the likes.