ROWING TOGETHER - WE'RE ALL IN THE SAME BOAT

Let's work together to get to safer shores.


By now most shop owners and jobbers must have recognized that the business environment has changed dramatically. In this economic crisis, it's time to put aside petty differences and learn to work together for our mutual benefit.

More now than ever, a shop requires a competent jobber who knows how an auto service facility must be operated and measured in order to ensure that it is profitable. At the same time, a jobber needs to sell parts in sufficient volume, and with timely payment, to shops who understand how to move their businesses forward.

Each has a clear responsibility to ensure the success of their own operation.

Jobbers:

Jobbers must slow down and recognize who their shop clients are, and how to enhance those businesses.

Defining a shop client is pretty straight forward these days. A client is one who calls them first whenever they need parts. A client is one that pays their account in full each month. A client is one with whose owner and staff the jobber has a positive business relationship. A client is one whose owner understand the reciprocal nature of their relationship, and the importance of working together in these trying times

Jobbers must ask their clients "How can I help you in your business?" In most cases the first answer should be "Get me the right part fast." This means the jobber has to stock properly to ensure the inventory is on hand for the shop.

Jobbers must stop dealing with shop owners whose first and only question is, "Can I get a cheaper price?" It's time to recognize those shops are most likely under severe financial stress. Those shop owners don't get it. Those owners believe the important money is made through better parts pricing, not through shop productivity. Those owners don't know the important numbers in the business nor how they're measured, nor what they mean to the bottom line.

Jobbers must adjust their internal business processes to address the unique challenges of today's economic reality. They need to keep these cash-strapped shops on a very tight leash. When monthly bills are not paid, they need to move instantly from monthly billing to weekly billing. This is the new reality. Cash is king. If weekly payment is missed, then instant COD status must be implemented. The jobber needs the cash to survive as margins are becoming tighter each year and operating expenses rising. One shop going down can wipe out the profitability of a jobber for months or even a year. No jobber can survive with losses month over month. Jobbers are not banks. It also must be recognized that "no sale is worth making if it cannot be collected." Too many jobbers are focused on sales for the sake of making a sale, rather than using good business common sense.

Jobbers must also work with shops to seek out the right technical and business training required. Training must be paid in full by the shops. Subsidizing training courses on behalf of a shop in order to earn their parts business just doesn't cut it these days. It's the same as marketing your business on price. You attract only price-conscience people. Training courses take time and effort to put together. That should be recognized as the jobber's contribution to the relationship. The shop owner must recognize training represents an investment in the business. And they needn't be worried about getting poor value for their money. The best courses will always come with a money-back guarantee by the instructor.

Jobbers must aggressively move to reformat their businesses, addressing the above issues with shop owners in order to get through 2010.

Shop Owners:

It's critical that a shop culture is developed that creates a "team environment" operating on behalf of the shop's clients. The new economic reality is made clear when people in your market area are being laid off. Cash dries up and uncertainty settles into the marketplace. But the vehicles are still moving out there - though perhaps racking up fewer kilometers. Every employee must take their responsibility seriously and pull their weight. Shop management must communicate clearly to all staff, address the concerns that are out there, and explain how the shop will move forward in challenging times. If the staff are left in the dark, don't expect cooperation.

Shops don't "sell" to the customer any more. The shop is "hired" by the customer for advice and counsel on how to keep the vehicle reliable and safe. This is the professional level the better shops have now moved to. Given this new fact, the average sales per invoice may turn out to be lower this year than over the past two years. This is not necessarily a bad thing. This gives the shop the opportunity to secure the trust, confidence, and loyalty of their customers. It does, however, involve an adjustment in front-counter processes and measurements.

Above all, shops must be measured properly these days in order to track the changing environment and react appropriately. Some key metrics that must be monitored closely include:

- Total gross profit dollars required each day to break even
- Average billed hours per invoice
- Average billed hours per month compared to previous year
- Total site efficiency measured against total shop potential
- Balance sheet measurement
- Net income per invoice (per transaction).

These must be clearly measured daily, weekly, and monthly to ensure the business is still healthy and is successfully adjusting to the current economic reality. This is management's responsibility to establish these procedures.

Work with your jobber to ensure a win-win strategy is put into place. Progressive shops know very well the stress and bottom-line damage that can be done when a good jobber is lost because they were dealing with incompetent shops.

It's time to sit down with your first-call supplier and communicate your concerns about the next 12 months, and your ideas on how the relationship can be improved. What are you looking for from your jobber? Don't focus on price. Focus on the value your jobber can deliver. Obviously you want a fair price from your supplier, but enhanced value will add thousands of dollars to your bottom line in the course of a year. This relationship will reduce shop stress, which in turn allows the shop to focus on the customers coming through the door and turning them into loyal profitable clients.

No doubt 2009 through to spring 2010 will be additional time of transition for many shops and jobbers. It will continue to be a huge year for change. It will be a year where shop owners and jobbers will redefine how they go to market and what value they can add to the equation. The old thinking that a shop owner or jobber can discount themselves back into prosperity does not work. Do the math.

Opportunity is staring at us right now. The sharpest business owners will recognize this and reap the rewards.

I firmly believe the aftermarket is finally coming into a more professional way of conducting itself. We can thank this changing economic climate for waking us all up.

The Holiday Season is Upon Us

The Holiday Season is the time when I like to reflect upon the past year and review the business and personal accomplishments that were achieved. In this reflection, the most important prerequisite is to remember, and think of, the people involved that help make those accomplishments come to fruition.

Your participation with AAEC over the past year, through being a subscriber to our website, utilizing our business coaching services, supporting us by participating in our semi-annual marketplace statistics, updating yourself through our Business Development Courses, or just verbally applauding our company's Aftermarket industry vision, deserves a very sincere "Thank You".

It is people like you within our industry that gives our company the drive, the energy, the motivation, the desire to continue to do our part. I believe deeply that we all aspire to make the Independent sector a place where one can enjoy a professional, profitable business, an above average lifestyle, coupled with a career where you can look back and be proud of the contribution you made to your part of the world.

I want to pass on my heartfelt "Best Wishes" to you and your Family for the Holiday Season.

Please take the precious time we all set aside and truly enjoy the Holidays in the way that means most to you. May 2010 be a Healthy, Prosperous and Special year for you in which your personal goals are fulfilled.

AIA PROVES THEIR R2R INTENT

AIA Canada must be congratulated for remaining focused on the important criteria an Independent shop requires in the R2R agreement in order to move their business forward, rather than giving into so-called ridicule by a naive industry sector.

AIA Canada has always stated that any agreement (legislated or voluntary) must provide full access to engine calibration in the definition of Data Stream Information. The voluntary agreement agreed to by other parties did not clearly state this that gave the agreement teeth. Without this complete access every Independent shop would not legally be able to flash a vehicle computer. The shop would then lose consumer confidence and become a "lessor standard" within the automotive industry. This would create tremendous consumer inconvenience as well as jeopardize the future of the Independent sector.

AIA went back to the vehicle manufacturers with their lawyers in hand. A clear definition has now been worked out and agreed to.

AIA stated: "This willingness to provide important clarifications on the intent of the agreement signifies to us that the car companies are demonstrating good faith and a real desire to have an agreement that is clearly articulated and defined before it comes into effect in May 2010. Furthermore, a degree of commitment by the vehicle manufacturers, who have provided personal letters signed by their CEO's to the Minister, affords us with both confidence in their sincerity and an avenue to apply consequence for any none compliance. That is why we are now prepared to become a party to the agreement. Our participation in this agreement as a signing party will secure our involvement in the task forces and sub-committee working groups that will be established to ensure that the agreement is effectively implemented across the full spectrum of our industry."

Thank you AIA Canada for your Professionalism!!

And most of all, thank you to all the people volunteering their time to AIA for their unwavering dedication to our Aftermarket in Canada.

RIGHT TO REPAIR VOLUNTARY AGREEMENT HAS SO MANY FLAWS

Follow the link to the actual voluntary agreement and please read the detail.

I am not a lawyer by any means but as a laymen reads this...........This is not right.

Our sector must move forward on an EQUAL playing field.

Consider the following FEW..... FACTS:

Section I Definitions

Definition "Data Stream Information" - "does not include engine calibration related information"......excuse me.....This is what right to repair was all about!! In the USA "Title 40 Clean Air Act" covers access to calibration.

Definition "Motor Vehicle" - "designed for transporting persons or property on public roads" ..........continuing on "is sold only to commercial fleets" ......continuing on "or offered solely and exclusively for lease"........then it is not deemed as a motor vehicle for purposes of CASIS.........this is critical in definition as many shops deal in fleets........

"Service Information" ..........an whole escape section!!! (in my opinion)

"Service Information Source"......"as determined by the OEM in its sole discretion" provides an absolute out.

Section II CASIS

B (1) - "provided that Service Information, Tool information or OEM Tools need not be in the same medium as for Authorized dealers, nor the OEM itself, provided it is by reasonably equivalent means". Talk to your USA counterparts and discuss HOW the various OEM websites have been configured and what TIME it takes to find any information. All websites must have the same configuration and navigation capabilities OR you will be on a website for a "long time" just to navigate as to where the information is.

B (3) and where is CASIS information request time defined?

C (2) and how long will this take? With no target date what is the intensity to get it done?

Section III

1(c) HUGE........notice the words "is not entitled to claim or represent themselves as “Factory trained or as knowledgeable or as capable as Authorized dealers or Authorized dealers staff or make any similar claims that depict or suggest that the Service Provider has been officially qualified, certified or recognized by the OEM to perform the repair or service of the OEM motor vehicles except with the express written of the OEM"...........excuse me........are we opening ourselves to being "inferior" in the knowledge department which will lead to disclaiming and removing "we are licensed to work on" Truly...who thought of and..... OK'd this?

1(d) another HUGE......"Service information, training information, indirect information, Tool information and/or OEM Tools are provided without any warranty or guarantee"..........now think about that........what are we prepared to pay for........could this be a possible out to "misinform" the aftermarket so "They" will be perceived as the only alternative. I respectfully submit that today ALL aftermarket companies give a money back guarantee on "information" it supplies to its customer/client/data base.........what is wrong with this picture?

Section IV "C"

2....... 5 or 10 business days is a credibility "killer" with the consumer.....I'm sorry but this is a joke in today's "Information" world......this does not cut it!!

7......totally unacceptable......think of a shop dealing one on one with a client....

Section "D"

1 (b) "Solely determined by each individual OEM".......the consequences are huge for dissatisfaction in front of the independent client explaining "WHY" something can not be done.

Section III "D"

2 (g) read it for yourself.........really?? How do you explain to the client "we are incapable of providing you an answer to your problem?"

These are but a few of the immediate issues before us........they are NOT all inclusive.

It is time for our sector o get behind a NATIONAL issue represented by a NATIONAL BODY representing EVERY level of the Aftermarket. Don't stand on the sidelines.............get involved!!

SOME AFTERMARKET BRANDS WILL LOSE SALES
AND CREDIBILITY AGAIN THIS FALL

It appears another cycle has started again.

Over the past ten years it has been discussed many times however it seems the industry is determined to do it their way with the quick fix method. They then will blame the poor quarterly sales and profits on something else instead of squarely on Management.

I am talking about aftermarket parts pricing as well as part function.

There are Aftermarket Brands that continue to fail to take their time to do their homework as they are not pricing themselves against OE parts. When a shop is loyal to their chosen supplier as well as a manufacturing Brand, and makes that first and only call to their jobber to purchase an aftermarket part to then find out, after the fact (the hard way), that the OE part from the dealership retails for less than his aftermarket actual part cost, all trust and credibility is destroyed between the Brand and the shop owner. The Jobber is caught in the middle of this storm as they continue to lose sales to the OE arena.

Shop owners will now start taking additional time to check OE cost for key parts because they don't want their clients to be over charged and potentially lose the customer/client over the price of a part. Trustworthy client relationships are critical today and especially during challenging economic times. The better shop owners are always looking out for their client's best interest.

How could our industry fall off the wagon so easily?

Now we are also starting to hear, once again, that the Aftermarket part function is not up to standard. Why are Name Brands sourcing parts off-shore without monitoring quality in favor of perceived quick profits to then have the part fail time and time again?

The aftermarket must continue to have a strong dialogue in regards to these issues and manufacturers must insert the disciplines to ensure they excel with their Brand. Let's face it, cutting corners for the quick fix today is costing everyone money, time and credibility in the long run. During these different economic times, quality, fair pricing and top level service is so necessary to maintain the shop and consumer's confidence and trust.

Let's keep the dialogue open.

AUGUST IS AN IMPORTANT MONTH FOR RENEWAL

As easy as it is to remain in holiday mode during the month of August, business owners should use this month to review all business processes within their operation to make sure the shop is primed and ready for the Fall service season.

Consider completing the following reviews and discussions with all staff members:

Initial Facility Image
- Is the facility clean and organized outside and inside? Review your processes to ensure the facility remains this way even during hectic days.
- Does the facility send a perception to the consumer that we are a professional organization? Consider that you are a mini dealership but with the Independent touch.
- Is the facility appealing to women clientele? (ask for honest feedback)
- Does the client waiting area contain current educational material and is it visually appealing, including the smell of fresh air?
- Is wireless internet connection available in the shop?

Front Counter Procedures
- Is the process of how clients are professionally greeted and acknowledged in place with a friendly voice and smile behind the counter?
- Is the vehicle service history always being reviewed and discussed with the client?
- Do you manage the vehicle on behalf of the client based on the clients use and expectations of their vehicle?
- Are all manufacturer recommended servicing being reviewed and discussed with the client?
- Are future appointment time frames being booked before the client leaves?

Back Shop
- Are clear and precise communications in place between the front counter and the technician?
- Are written vehicle inspections being completed by the technician and reported to the front counter on every vehicle?
- Is all maintenance and diagnostic time being captured and documented properly?

Office
- Are average billed hours per invoice being calculated daily and weekly and reported to all staff?
- Are billed hour goals being set for the day and week for the front counter and with each technician?
- Is the total shop efficiency being calculated weekly, compared to objective and reported to all staff?

Review what up to date courses are required in terms of technical and business training. Search the marketplace as to where the courses are being held and register the shop. There is a good possibility out of town travel will be required. Plan now to ensure training opportunities are not missed. Remember you are in the knowledge business.

These are not all the issues to be addressed however theses few items play an important role to ensure the shops bottom-line profitability is moving forward. August can be a month of internal renewal for the shop, so use it wisely. Make sure your business processes are in place and working seamlessly. It will be time and effort well spent.

"I Should'a , I Could'a, I Would'a"

These 20/20 hindsight expressions have ruined many businesses.

Today's business operations must have a Management capability and style that is focused on a tested and a definitive path that creates business net income along with future growth and security.

I find that too many shop owners are not willing to admit that they really don't know the detailed required to resolving shop issues affecting business outcome. Their attitude, actions and approach to issues confirms that. Their own ego, and in many cases their own insecurities, get in the way. It is later that they realized they were in error, too embarrassed to ask in the first place and they repeat the 20/20 hindsight expressions.

Today's shop business is complex and very detailed. No one really does know it all and therefore it is important to have key business resources to draw upon for continuous input and advice. Today's modern and successful shop owners have the contacts to seek out the right solution for a given problem. It is impossible to be an island and be successful in this day and age.

As a shop owner, consider your depth of skill and resource relationships that you have nurtured and where you have the ability to draw upon at the right time. Keep these relationships strong and never take them for granted.

Consider developing a coaching and mentor relationship as well. I have found the businesses today that have this in place are always above average in their business performance in every category. There has to be merit to this process or it would not continue year over year.

20/20 hindsight is not the way to move forward. A continuous knowledge and support structure in place throughout your business followed with confident execution will bring you the results you are looking for.

If you are unclear about how to create this environment, I would be happy to take your call to discuss and clarify it for you......1-800-267-5497.

WATCH FOR THE NEW NEIGHBOUR ON THE BLOCK

The changes within the industry have been dramatic within the past 60 days. The Chapter 11 filings of both Chrysler and General Motors in the USA will change the automotive landscape forever.

It is imperative that every Independent shop keep their eyes and ears open to see which new car dealerships will be closing within their area. This is an opportunity to secure new business however, the shops marketplace profile has to be clearly focused on competency and professional execution in front of the new potential client.

What I find interesting is that some dealerships will disappear entirely, however others will go through a metamorphosis conversion into an all makes and models independent service centre. This transition will not be easy for them but it will also bring some serious issues to the entire aftermarket.

Consider that the branded dealership mentality is completely different from Independent shop mentality. These dealership owners still think like branded dealerships. They measure their business through cost accounting methodology and have not been exposed to management accounting measurement. They live for flat rate processes and the general attitude that comes with that type of thinking rather than securing and building a competent technical team through managed productivity and professional income stability as a key component to the profitability of the shop. They are, in general, weak at building one on one client relationships as compared to the true Independent shop. They have a focus on selling customer service packages rather than discover what the individual really needs and then manage their vehicle accordingly. They watch sales volume going through the service bays. They are more focused on an activity based business over a productivity based business. They sell a customer rather than counsel a client.

This is not to say all dealerships that convert will be like that as I have met some excellent owners in the past and I certainly welcome them and their entrepreneurship to the Independent sector. They will be good for us as they raise the bar in the marketplace.

The others however are my concern as they set the example once again in front of the consumer but now in the Independent arena and as a consumer perceived representative of our sector. Are they open to that re-learning attitude or will they hang on to their dealership attitudes? Time will tell.

Independent shops should welcome the better dealership conversions and build a professional relationship with them as you have with your peers. It will be good for the Independent shop and good for the Dealership, but most important, good for the consumer in experiencing professional service levels and the overall image of the Independent sector.

The Independent sector can move forward in this crisis but it will take everyone rowing together to capture the opportunities in front of us.

DON'T WASTE THIS CRISIS

The next 24 months will be the most important months of your shop's business life.

This year is not like any other in the history of our industry. This is not a time to accept the traditional Aftermarket summer shut down as we can not afford to lose any time. It is moving that fast.

With the demise of the "D-3" and the closing of dealerships, the Aftermarket shops and jobbers must aggressively get their Professional act together. We can not afford to take the summer off as the traditional excuse for inertia. The clock is ticking. The opportunity to greatly enhance marketplace image and attract new clients that traditionally used the OE dealers is here and now.

It is all about the client's experience!

Shop Business Management must be revamped and relearned as it is so critical today. Issues such as to how to protect core competencies while building shop bottomline profitability, discover and how to align your business resources, how to build collaborative business relationships, rethinking your business model to maximize marketplace penetration, how to leverage your market position, how to create and measure a professional shop team, what it takes to develop and how to measure client loyalty must all be addressed now, not sometime in the future. It will be too late.

DON'T WASTE THIS CRISIS.......

Investment In Training & Development Must Be Sustained

Opportunity is knocking at the front door for every Automotive Service Shop. Is your shop taking advantage of it?

I am writing this article just after attending the "Lindertech North" technical training weekend in Toronto. I always like to drop into this event and listen to technicians and their issues. It seems the "elite technicians" of Canada show up for this conference each year and I really value their opinion.

I was amazed how many technicians were expressing to me this year about the shops in their area that were not taking Technical and Business training seriously enough and they were not investing in high-end equipment required to do the job right. They were telling me "these guys run a break down and repair shop and just don't get it Bob; they talk about everything as a cost and will not invest into their future; they have an excuse for everything. What do I do because their lack of professionalism reflects on our sector and marketplace which my shop is obviously part of?"

The answer I shared with each person was "Only you are responsible for the results that come out of your shop. No one else is. Today it is all about the "experience" the customer/client has while the vehicle is in the shop. You can not control what other shop owners do, only consistently send the message to them that they must get engaged with the new reality. If they so choose to not do that, then make sure your own back yard is in order at all times. Always set the example for others to follow."

I know the frustration that is out there from the better techs and shop owners. These "other guys" who "play mechanic" will always be there. In the past I have used the term "cockroaches" well it still seems to apply. They just don't go away. They are a nuisance to deal with. Interestingly have you ever noticed that these poorly run shops are fortunate to have a spouse who works outside the business because the business can not provide enough income to look after the family and provide a great lifestyle? These shop owners buy themselves a job, and a lousy one at that, and they think they are running a business. These shop owners are contributing to the problem for our sector, certainly not providing or being part of the solution.

I encourage the better automotive shop owners and technicians to keep pressing hard in your market that competency and professionalism is everything today. Keep blasting the message. Who cares if they criticize you for always pushing competency and professionalism? What are they pushing? Complacency and mediocrity? Keep the talk up too with automotive parts suppliers and Associations that they also must apply pressure on the weaker shops. We are all in this together. Our actions and results collectively set the image for the consumer. If more and more shops keep raising the bar, the consumer will see the difference and more importantly "experience" the difference. I think at this time in our Aftermarket history this is the best we can do. It would be nice to have accreditation standards to open up a shop in the first place but I think that will be for the next generation to tackle. The best we can do is through setting the best example at all times and never let our guard down.

Business and technical training must be an on-going investment in the automotive service and repair industry. Budgets must be set in place each year to ensure competency is sustained. Dates must be set aside and times booked to attend the necessary functions. No training today is a one time visit. Constant revisiting is a necessity. The reality is that in many cases over-night travel will be required to attend the right course to obtain the right knowledge. I know many shop owners that have sent their technicians to the USA for important training because it was not available in Canada. There never is any compromise. The technicians can easily be gone for 4 or 5 days on some of these courses. I know many shop owners that have traveled great distances to enroll themselves in the necessary courses that provides the management solutions that need to be addressed. This is the level of thinking and professionalism that is required today.

To give you an example, shop management should now be planning for a minimum of 100 hours of technical training per year per technician. That is what it will take to stay up with current technology. Automotive management should also set side at least 10 days a year for up-dated management training and development as many different issues and topics must be revisited.

Equipment must be constantly reviewed and examined to ensure the right equipment is in place allowing for the right diagnosis and therefore providing the right solution. Short-cuts due to a lack of proper equipment does not serve the consumer professionally and should not be tolerated by professional automotive technicians.

Perhaps many who are reading this article may perceive that I am pushing the bubble and stirring up the waters. Well what is wrong with that? Discussions must now start to become intense as too many people have been sitting on the sidelines watching the show and neglecting their responsibility to their business and ultimately to the consumer.

Let's talk this issue up because incredible opportunity is here today for the Aftermarket to take back market share by developing trustworthy relationships with the other consumers who have been dealing with the OE Dealerships. To retain their trust and loyalty, the Aftermarket must be very competent with each visit the consumer has with us.

Let's fully commit to getting focused now and really start making a difference. We can do it!! And deep inside, I know you want to do it. Take one step at a time and start to make the next 365 days a real adventure in your business.

Billed Hours, Then Car Count. The right order of analysis

Across the country everyone talks about needing more car count in their business and the shops that say this are already are doing $500,000 to 700,000 per year in annual business or even more. In my Management classes when further analysis of invoices takes place we find that shops are averaging 1.6 to 1.8 billed hours per invoice on basic consumer maintenance, 2.1 to 2.4 billed hours on diesel work, 3.0 to 3.5 billed hours on mid duty vehicles and 7.0 to 8.5 on heavy duty work. Do your own analysis and compare.

The numbers get skewed because shop owners don't break out their mix of work coming in the bays, so when all invoices are combined and averaged they see 2.8 to 3.2 hours as an average and conclude they are doing a great job but things are still slow. They conclude they need more vehicles in the bays. I respectfully disagree.

When the math is completed the average shop in Canada requires only .5 to 1.0 more vehicles per day over what they currently have coming through the door IF they were managing their clients vehicles professionally. The facts are the industry is not breaking out the right measurement of its business and the current internal procedures and processes are not addressing the true problem.

Consider that basic consumer vehicle maintenance should average a minimum of 2.0 to 2.5, diesel work 3.0 to 3.5, mid-duty 4.0 to 6.0 and heavy duty work should average 10.0 to 12.0 hours per invoice. If a shop has a mix of work, break it out and measure it accurately. It is imperative as Professionals, to ensure that the current business is being managed correctly first before we go after any new business.

Once the internal processes and measurement are accurate, then a shop can determine exactly how many more vehicles are required per day in the shop based on the facts of their business. It is a mathematical calculation and measurement. Just saying "we need more" is not accurate....exactly how much more based on the facts of our business is the right question to determine.

We must ensure we grow the business in such a way that our current clients receive a consistent experience each time they receive services from us so they won't feel they are not a value to the business or the business does not care about them as much "as they used to".

Slow down and do the math of your business first so you can determine exactly what is right for your shop. I believe you will discover some "diamonds in the rough" that have been overlooked instead of increasing the shop and client stress levels with assumptions.

Right to Repair 2009

http://www.aaec.ca/newsite/pdf/Right-to-Repair_2009.pdf

FEEL LIKE YOU ARE WORKING HARDER? YOU MIGHT BE WORKING SMARTER!

The negative news all around us today certainly takes its toll on not only the consumer but also shop management and employees.

Consider that tough economic times actually means potential good times for the aftermarket, however, business processes must be adjusted to reap the rewards. Have you had this in-depth discussion with the staff?

Realistically, two words must now be communicated to the client on a regular basis during 2009. They are "reliability" and "safety". The customer/client may feel nervous about their job security and therefore reluctant to get things done on their vehicle this year and into 2010. As an automotive professional, you know that is not the right solution they should embrace.
Over the past 5 years the best shops have made the transition to the maintenance side and management of the vehicle on behalf of the client. Times have changed for the client and the shop must now also adjust again to stay in the game. An example question to explore would be "Do you know each clients situation and outlook for the year ahead for themselves?" You must know that detail because when they feel uncertain about their income security, they will even neglect preventative maintenance items. This is reality today.

To stay on top and carry out your professional duties on behalf of the customer/client you must spend more time with each person. Consider this example of a transaction. "John, based on how you use the vehicle and your expectations with it, the vehicle requires $850 of work to maintain it according to the manufacture specifications and maximize the life of the investment; however, to ensure the vehicle is reliable and safe for you, we must get this $250 done today and here is why. (You explain fully). I will work with you over the months ahead to get the balance of the work required done to ensure the vehicle stays up to standards which in turn achieves your long term expectations."

This approach takes into consideration the client’s situation, builds a solid trust and confidence relationship with the client and points out your professionalism that reliability and safety are the most important points today. It will also make you feel you are working so much harder for each transaction as time spent with the client has increased just to get the basic requirements done. This is not a bad thing, in fact, it is smart because you are building and extending the long-term relationship prospects with each client. Take a good close look at how the front counter is dealing with each customer and client. Are you clearly displaying to the customer/client that you are in this for the long run with them? Or are you trying to slam each transaction and get the most from them because you lack the confidence that the relationship of trust is not in place? Consider that clients will judge your business character and culture this year as never before. Management and staff must get on with the responsibility and learn how to transition the business and understand the new realities of this economy; an economy that opens the door to opportunity for the shops and Jobbers "that get it".

Employer Burden Frozen at 2008 Levels. Labour multiples remain the same

The "Employer Burden" is the additional cost to the employee's basic wages. They are legislated by Federal and Provincial Governments across Canada. The total average burden is the same for 2009. We can hold the formula's for establishing labour rates at the 2008 levels.

EFFECTIVE JANUARY 1, 2009:

VACATION PAY 4.00%

CANADA PENSION PLAN: 4.95%
Pensionable Earnings up $1,400 to Maximum CPP Deduction per Employee

EMPLOYMENT INSURANCE: 2.42%
Maximum EI Deduction per Employee $732.00 (2.9% Increase)

STATUTORY HOLIDAYS: (9) 3.56%
Add .40 for each additional paid day off

WORKPLACE SAFETY & INSUR. (Auto Repair): 3.39%
Same as 2008 (Review Individual Pier Rating)

Total Employer Burden: 18.32% (Same as 2008)

Notes:

- The 9 Statutory Holidays are: New Years Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day (Each Province has variables on this)

- Do not forget to add any additional benefits you may provide such as Group Insurance, Enhanced Vacation Pay, Tool Allowance, and Registered Pension Plan etc.

- Separate payroll to identify the appropriate employees for auto repairs, gasoline, and office administration for Workplace Safety (Workers Compensation) Insurance Board purposes

- Stop deducting CPP and EI when the employee has reached the maximum contribution limit for the year

- As a rule of thumb use 27% as the burden multiplier to include Group Insurance and additional benefits paid/covered by the shop for employees.