LOOK AT YOUR BUSINESS THROUGH CRITICAL EYES

Last issue, we discussed long-term problems that are occurring on both sides of the automobile. These include customer apathy, the higher complexity and lower service requirements of today’s cars, and the fact that cars, customers, and employees have changed, but too many repair shop owners and managers have not.

So, how do you fix the business? It starts with you! Look at your business through critical eyes. Better yet, hire someone to be very honest with you about it all! Grow in knowledge with fresh ideas and a strong will to try new things. Read books and take classes at the local adult school or community college. Attend the local chamber of commerce and service clubs, find someone successful, and pick their brain.

Clean out the attic in your brain and accept new and different thoughts. Look at your business differently, advertise, join community events, and make your business the automotive hot spot! Solve problems for customers, educate them, and establish your business as the authority on car repair. Very important: become a leader of your business and lead by example.

Write down your vision of where your business should be one year from now; five years; 10 years, and include an exit plan. Describe what the perfect staff is. Decide your goals for the year (and make them ones that are reachable… challenging, but reachable). Determine yearly, monthly, and daily sales goals, monthly car count, average repair order goals, and gross profit goals. Your true aim should be handling fewer cars at a higher average ticket. Determine what needs to change to reach these plans. Do you have the correct staff, and in the correct positions? Do you have the correct customers? (That is a tough one because of our personal attachment with some, but it must be done and without emotion.)

Financial foundation: Understand what the important numbers are in your business. Confirm that your hourly rate is correct for your overhead. Measure everything. Think of the numbers as the score of the game of business (you must keep score to know who’s winning). Confirm that you have the information to make good decisions. Update your technology to manage your business; embrace the management software that allows you to manage your business with the least amount of time invested.

Employees: Establish goals for every position. For the service advisor, that means daily sales goals, gross profit goals, and average repair order goals. For techs, production goals and hours billed to the customers. Develop job descriptions for each position - even for owner - and share your expectations with each employee, including full-shop goals. Educate your employees about the business; share some of the numbers and make sure they understand why you need the goals met. Each position should have a minimum number of training hours per quarter (if you’re not learning, you’re going backwards!).

Marketing: Market in three phases, including for service reminders and recommended work, to keep your name in front of current customers, and to attract new customers (customers leave for lots of reasons, so the task of attracting new customers must be forever ongoing).

Customers: Study the demographics of your customer. Can you upgrade - newer cars, higher average income, etc.? Determine what your customer really wants from you. Remember that true customer service is not what you think is needed, but rather what the customer desires.

Win your battle through change - it’s the only way, but will keep you motivated! Act like it’s your first day in business. Many businesses failed to evolve through change and are gone forever. Good luck

HOW TO GET AWAY

For too many business owners today, the idea of jumping ship and heading out the door for a week’s vacation is unheard of. After all, there’s a business to run and that’s already a full-time job and a half! Somebody’s got to make sure the cars go out, the money comes in, the bills get paid, and the uniform man gets handled along with the plumber, the oil distributor, and the tool guy, too! So, how can it be possible to drop everything and take some time off?

Let’s take a peek at your true circumstance and make some evaluations. Do you wish you could take more serious time off? Can you trust your employees to do the job you need done? Do they work well together and with customers? Are they dependable and loyal? Are they self motivated and do they work through directives and tasks executed through the strategies of a self-directed team?

For owners with shops operating through a self-directed team, taking time off on a moment’s notice is a reality enjoyed more often than you’d think. For those driven to bless every move made in your business every day, however, here’s the good news and bad: The good news is that, sure enough, with you at the helm, business stands a good chance of moving right along the way you’d like. The bad news is that, in your zeal to master it all yourself, you’ve exchanged that victory for the chance to bask in the sun with the special people in your life - the personal time so desperately important in maintaining a healthy attitude today.

Is the idea of taking time off for a personal life truly unrealistic? Here it is in a nutshell: Self-directed team operations can be as much a reality in your shop as they are in shops just like yours. Your business is not unique - neither are your circumstances with it, problems and all. The difference is that others have taken the time to make the conversion that you haven’t. Maybe it’s time you did.

Consider transferring your responsibilities as a self-driven business operator to a strong self-directed team instead. Act on the following:

1) Most employees, even those who enjoy working independently, want to believe that they are part of a team working toward common goals. They need reassurance that they are valued members of a team.

2) Employees want to feel you are thinking of their welfare. They want to know you care about what’s going on in your own business, right along with what’s going on in their personal and professional lives. You must acknowledge the positive with as much zeal as you notice the negative in employees’ contributions.

3) Team members want to feel employers listen to them. They like being a part of your business and feel ignored when you don’t listen to and act on their recommendations. Poor communication is the number one problem in employee / employer relationships. Employees are the biggest part of your business and it’s wise to listen to what your business is saying.

4) Team members want to feel special, not easily replaceable. They each want to feel like they are your best choice for what they do for you, and that takes complimenting their performance often and sincerely.

5) Team members want to be informed about your business. Inadequate or lack of communication about business expectations affects productivity too greatly to not inform employees about what’s going on.

6) Team members want to work for an employer who works efficiently and confidently. The character and performance employers display either inspire the actions of employees or discourage them. As team members experience the positive in you, they will easier take the action needed to be successful inside of business goals.

Although there is a continuous process of refining team strategies and performance to gain what the business needs, to seriously consider the reality of a self-directed team in operation is my biggest recommendation to increase odds to succeed.

SUCCESSION PLANNING

This month we are going to task about something that makes most of us very uncomfortable… What happens to our business when something bad happens? Anytime we bring this subject up most people tune us out, because we have never given any thought to the idea that we may not going to be in business tomorrow. Part of what makes us Automotive Business owners is the personality type that we are invincible. Succession planning is something we all need to have discussed, and have a plan in place; otherwise we can burden the business and our family with debt, uncertainty and fear.

What is succession planning? The dictionary defines succession as; “the act or process of following in order or sequence.” In most cases small business owners are so concerned and involved with running the business they never get to plan for the future. In our opinion succession planning needs to be a high priority, because without a succession plan the future of the business is not defined. What areas does the succession plan help us in?

• Preparing for loss of leadership.

• Responsible planning for the future.

• Leadership development of the younger generation.

• Smooth transition of control

In most cases we have not planned the future of our business; In fact we don’t give a thought to our exit plan. We work very hard for 20 or 30 years and then in the last year or two of our careers we decide what to do with the business. We have never spoken to our family (spouse, children) about what happens to the business when we retire or if we have illness or death. We need to have a succession plan for these reasons;

• Planning the future direction of the business.

• Provide a training plan for future leaders.

• Ensure business continuity.

• Reduce tax liability.

• Provide peace of mine for your family and employees.

• Security for your family.

The facts are… we as an industry are aging and have not realized it. Consider this; the average shop owner is 53 years old, and has been in business an average of 28 years. We have spent no time planning for the future and some cases we are in poor health. Long days, short nights, high stress levels and poor eating habits have made us the poster children for heart disease and strokes. And because we live and breathe only our business, we have spent zero time planning for the future; in fact we don’t plan next week much less twenty years into the future. Our biggest potential failure is that we keep all of the business information in our head, and when this happens, if we can’t function, the business can’t function.

Some interesting facts about family small businesses…

Only 30% of family businesses survive to the second generation, and of this 30%, only half make it to the third generation.

A lot of small business owners think the sale of their business will finance their business retirement, but in most cases the business has not been staffed or structured correctly to allow for a profitable sale. One thing to keep in mind is that if you are the main point of contact to the customer and you go to sell your business, it could bring half of what it is worth. If you have a team in place and they are the main point of contact your business is more valuable. Part of a good succession plan is an exit strategy for you that is planned and not based on a major negative event.

How do I start this succession plan? As we have talked about in other seminars and articles you need a Team of professional to provide guidance in many areas. We feel we need to have a relationship with these professionals.

Accountant

Attorney (a business attorney and a succession planning attorney)

Financial Advisor

Insurance expert

Business Coach / Consultant

Now, when I talk about a relationship with these professionals, I mean we want them to be familiar with you and your business. It’s never a good idea to wait until you need one of these professionals to hire them. Interview for these positions until you find someone you’re comfortable with, and then check their references until you find the right fit for you. Once you have your professionals located, put them on retainer, or build a working relationship, so that they can jump into action as/if needed.

After you have your professionals in place, the next step is to review and assess your current employees. Identify the strengths and weakness of each employee, and understand that not every weakness means they shouldn’t be there! . Ultimately, the end result is that you are looking do develop the Team so that we feel comfortable leaving our business. If you do not have the crew now, this needs to become a priority! Once the Team is in place we need to develop processes and procedures for the day-to-day shop operations.

We need to have enough processes and procedures that will allow the Team to run the business profitably, and without you! We have seen many shops struggle to survive because the shop could not function with the owner sick or worse, out of the picture all together. Your also business needs an operational manual, a step by step manual of how to perform each job in the business. Now do we need to spell out what direction the toilet paper should roll out in this manual, well maybe, that depends on the quality of the employees you have!

Having regular meetings with your staff is an important step to having a Team that has the knowledge to make sure the business survives. These meeting should include such things as an overview of what is currently happening within the business, where the facility is on the company goals, etc. Some of these meeting should also be used to develop an emergency operation plan as well as “what if” contingencies.

Next we need to developed leadership in our employees. You want a group of decision makers as employees, not followers, and then you need to empower them to make decisions. What is empowering your employees? Simply allowing your employees to make decisions based on their experience, AND the policies & procedures for your facility. Empowering your employees also means that you aren’t micro-managing them, which in theory means you have more time for working in instead of on your business.

We also need to cross train all of the employees to be able to cover all positions in the company, even if only basically and temporarily. Remember that cross training should make your life easier in the long run as it allows you to fill a temporary position from within.

What else should you do? Get all you legal issues handled. These should include but are certainly not limited to, a properly set up, living will or trust that is set up and funded correctly. Then there is the insurance required, be sure you and the agent of your choice have your insurance coverage set up correctly, and you have all the coverage you need! Failure to have the right insurance will cost you more in the long run in most cases than you’ll save going with the least expensive insurance.

You also need to have a date for you to exit the business. Don’t get mad, you don’t have to leave, just have a plan in place so your business is ready for you to leave. There are four basic ideas for an exit plan;

• Retain ownership and manage control

• Retain ownership, but not manage control

• Sell it and hope for the best. Most repair shops are sold and the seller carries at least part of the loan. In many cases they end up with the shop back in 3 to 5 years.

• Close the shop

By being prepared, empowering your employees, making sure your business is covered, and plan on selling will protect not only your investment, but also help protect your family and the businesses extended family!

Succession Planning is available as a recorded Webinar on our web site www.esiseminars.com. We have 17 1 hour long Webinars that cover all aspects of repair shop management available. Many of the Webinars come with other resources such as spreadsheets and sample documents to help you improve your business and profitability of your shop.

THE ENEMY WITHIN

We are spending a lot of time discussing within the industry this challenging time with COVID-19. Fear is running rampant. The industry is spending a lot of time on what we need to do and what we need not do. These discussions recently reignited a thought I've had for some time. The industry has struggled with it for many years, but it is more apparent than ever today. We are fighting with The Enemy Within.

I field many phone calls from repair shops of all kinds and sizes; A significant worry is the competition. "The Outside Enemy," what I call your competition. Every shop looks for the edge, that "something" that nobody else has or is doing. And if they find that "it," they want to keep it top-secret. The thing that makes them different, to stand out from the rest of the shops in town. If the truth is known, none of us are all that different, and there are very few top-secret things that you can do that no one else has already tried or will be trying. These shops are so concerned about The Outside Enemy; that they are blind to the damaging effect caused by The Enemy Within.

Just what is The Enemy Within, you ask? This Enemy is with you every single day, 24 hours a day, seven days a week! It is you. To find this Enemy, look in the mirror, and you will find that he or she is staring you right in the eyes. It's also your employees, your vendors, and yes, even your customers. Primarily it is you. Being conservative, I would say 90% of all the shop owners we come across are the most significant detriment to their own business. These shop owners are focused on the wrong thing, they are burnt out or complacent, or a combination of all. And they are focused on fixing cars, not running a business. They don't know the numbers of their own business; in fact, many of them are losing tens of thousands of dollars and don't even realize it. They have the wrong employees working for them. In many cases, they may know this but decide not to act on it because dealing with employees is difficult. These same shop owners set no expectations and hold no one accountable, including themselves.

These shop owners beat their vendors up for price and buy cheap components because they think they are saving their customers money. In the long run, these shop owners cost themselves more time and money. These shop owners advertise low prices instead of value and fail to attract a great customer who will pay a fair price, want outstanding service, and a great warranty. But they're worried about the competition which unfortunately is also doing the same thing they are in 99% of the cases, want to be different from your competition? Pay attention to your business!

More than one shop owner has told me they won't send their employees to training. Why? They are afraid their employees will share one of their secrets, find another job, or open a shop, and become their competitor. Hearing this, I have a tough time, not laughing. It helps me understand why they're not successful. These shop owners don't train their employees to be better, and they don't want them to grow as professionals. The owners don't treat their employees as professionals or even humans. These are the owners that don't implement new ideas because they are so focused on fixing the car. Or because change is difficult and scares them. I get it. They are good at fixing things, and that's where they are the most comfortable. Then they got this entrepreneurial seizure,  acquired a repair shop and have not had a paycheck for the last 20 years; these owners spend tens of thousands of dollars on technical training and technical equipment. They don't even have an adequate phone system or shop management system that allows us to track the numbers; to keep the Score that would tell us if they can afford the equipment which was just purchased. I hate to break this to you, but if you would understand your business thoroughly, and I mean, Understand The Numbers of Your Business. If you hire the correct staff, set expectations, and hold yourself and your team accountable. If you would take a paycheck just like your employees, and worry about fixing your business rather than worrying about what everybody else in the automotive repair industry is doing, you would be more successful. I'm always amazed when shops that are barely surviving have an owner who advises other repair shops. Let's fix The Enemy Within ourselves first! 

 Let's change your attitude about business, and let's find your passion again—this same passion you had when you opened your shop. Let's stop making this an automotive repair shop that we own as a hobby and make it a for-profit business. Stop advertising prices and begin selling value. At every get-together, I hear people complain about price shoppers, and yet as shop owners, they turn around and price shop their own suppliers. In turn, the suppliers then provide us with lower quality parts that cause more comebacks, their warranty rate increases, which ends up costing them more money. In turn, they get mad at the parts suppliers. When you buy quality parts, mark them up correctly, provide a great warranty, and stop worrying about the repair cost, the rest will fall into place. Most of your customers don't come to you because of the price; they come to you because they trust you and have an excellent reputation. Every day, shop owners damage our reputations by trying to compete on price. And then get angry at their customers because they make cost an issue.

 Make sure your staff is productive, helpful, and passionate about this industry. Those of you who have attended my classes know that I talk about attitude—a lot. I genuinely believe each day that I decide the kind of day I'm going to have, good or bad—it is my choice. It doesn't matter what is going on in the world or my life. It is all about my attitude. Be intentional, make a choice every morning, get passionate about your business, and find the good things that are happening around you every day. Worry first about fixing The Enemy Within you and then within your employees before worrying about the other shops in town. 

In 2018, there were 276.1 million registered vehicles in the United States. This number tells me there are plenty of cars for every repair shop. The owner and manager's job is to find the right customers. These are the customers who want your level of service, your quality of repairs, and your auto repair philosophy. The Enemy Within is costing you far more than your competition is. Spend your time, effort, and yes, money on fixing The Enemy Within. The External Enemy will take care of itself.

All of us at ESI hope you and your family are safe. We are here to help you in any way we can. This pandemic will pass, and we will be busier than ever. Now is the time to get your house in order. There are quality employees out there looking for jobs right now. Start replacing your weakest links, correct the deficiencies in your business, and advertise like crazy. We are going to be busy again soon. 

With a lifetime of hands-on, real-world auto repair shop experience of teaching and coaching in the business, each member of our team at ESi Educational Seminars Institute is here to serve you. Whether you are looking for social media marketing help or a business coach in the automotive industry with the knowledge and experience to help you rekindle your passion, turn to the experts at ESi. We pride ourselves in helping you gain control of your business and require no contract for our services. Call us at 866-526-3039 or schedule an appointment today, and we will help reconnect you with your why, your passion, and help you turn a profit.