This is a topic that has been ignored for years by shop owners within the Aftermarket, however as business grows tougher and the business becomes more complicated, many shop owners are thinking "how do I get out, and what will I get for this?"
You are not alone.
With the average shop owner now being well into their 50's and some into their 60's this question is now being asked over and over. The unfortunate part is, these shop owners are now addressing this very important question "at the last minute" looking for their silver bullet answer. Very typical of the Aftermarket indeed. What a shame.
The following points are only guidelines to focus the thinking process in the right direction, but they must be thought out, fully discussed and addressed properly in great detail. You may not like the answers or process, but this is reality.
First, recognize that no business can be sold at your desired price if it is not creating the right sustained profitability that justifies your asking price. By this I mean it must be able to pay a "professional owner/manager" wage, show a decent net income after tax for the effort, investment and stress required, coupled with the fact the business must be able to pay out of current business earnings the "debt payment" required to buy the owner out.
Stumped already?
It means that this "Succession" is not a slam dunk. It means proper planning must take place and it would be wise to get your head around a 4 to 7 year process to make it happen. I have always counselled my clients to think 5 to 7 years of defined strategic work to put things into place for them to realize their financial dreams.
Consider the following:
- if family is taking over the business, then a "culture" of business understanding must be put in place. "Culture"? This means developing a business principle of embracing "excellence" ....to be the very best at whatever we do.....must be the natural way to think and plan. Attending industry specific business courses enthusiastically and wanting to take these courses on an on-going basis becomes a natural discipline. A complete "self discipline" must be learned and instilled to implement the necessary proven business strategies from these courses to ensure the business is profitable and can sustain "on-going" profitability.
- family members (if more than 1) must "mature" to recognize that there is no gift here, this is business, and one family member will be the "final decision maker" in order for the business to succeed. A President/CEO will develop from the family members and all family members must openly accept and support this. Jealousy can not prevail in a successful family business succession plan.
Laziness, lack of self discipline to implement and jealousy are the main three reasons why second and third generations fail in a family business.
- if internal ownership (staff) is going to take place to buy the business, then absolute and complete business training must be on-going, instilled and planned. Also, procedures for open access and discussion to all comprehensive business decisions must be put into place. Are you prepared to bring this person or people into "the full inner circle" of the business, opening the books to reality, admitting to your past mistakes and recognizing your faults but also recognizing present successes, strengths and what you have learned? Again the focus must be on "sustained" bottom-line profitability in order to provide for every circumstance. This means all business processes, measurement and analysis procedures must be open for review.
- if you are planning to go to the open market to sell your business, which is the most difficult, bottom-line profitability coupled with Return on Investment analysis must be recognized. What makes your business so special? All emotion is gone in this analysis. The math MUST be proven!! The pure math does not lie and it becomes the door opener or it could be the door closer. Once the math is reviewed and enticing, then you are talking and reviewing personnel (all staff) issues, equipment issues, inventory issues, facility issues (lease or purchase) and how all this will come together. Be prepared for a lot of discussion, analysis and negotiation. Hire the talent that is required to represent/work with you in these analysis and to guide you with these discussions.
There is no slam dunk to this topic.
This is but the tip of the ice burg in this discussion but I hope you can see by this short BLOG that a lot of planning must be put into place and the business must be revamped for a successful succession to proceed. Plan now and make the investment required to ensure that YOU, the current owner, has a great business to sell in order for you to realize your blood, your sweat and your tears you have put into this business you built ..........oh yes, did I fail to mention one thing?.....NOW the REAL work begins!!!!!
Thursday, December 16, 2010
Thursday, November 18, 2010
Want to Change Your Business Outcome? Change The Shop Owners Image!!
Shop owners are not paying attention to the detail of their business. It still is the same old thing expecting different results.
Some owners will not like this but it has to be pointed out.
I have noticed a common trait among my clients. They made the change which gave them the desire to work "ON" their business instead of "IN" their business. The results have been absolutely amazing and has reflected so positively on the shop culture, and the bottom line performance of their business.
Ready?????..........read carefully
Change your clothing style! Dress for Success!!
No more ball caps or hats of any nature.
No more T-shirts. Wear a light colored dress shirt and wearing a tie is a great touch but optional.
Clean shaved every day. All beards neatly trimmed.
Take the coveralls and smocks off and wear a sports jacket.
No more jeans. Dress slacks only. Washable dress slacks can be purchased these days.
Get rid of the work boots and move to dress shoes. Believe it or not this makes you feel totally different which in turn you conduct yourself differently.
What will this change do?
First: It will give you a whole different self image when you look at yourself in the mirror in the morning. And let's be honest here... self image has a lot to do with business success execution.
Second: You are the owner. You do not work in the bays. You greet, meet and work with clients. You plan and discuss business issues with the staff. You manage the business by being up front. You deal with the business suppliers and other business professional relationships such as the banker, accountant, lawyer, insurance and other peer professionals within the industry. You MANAGE the business.
Third: The shop attitude begins to change as a more professional image challenges the rest of the staff to stay clean and conduct themselves in a more professional manner. "No one wants to put dirt or grease on the bosses clothing".
Fourth: The clientele notice and develop a higher respect for the owner and the shop in general. The overall image of the shop becomes elevated.
Professionalism is in the detail of execution. Take a very close look at exactly WHAT you, the owner, are projecting.
Some owners will not like this but it has to be pointed out.
I have noticed a common trait among my clients. They made the change which gave them the desire to work "ON" their business instead of "IN" their business. The results have been absolutely amazing and has reflected so positively on the shop culture, and the bottom line performance of their business.
Ready?????..........read carefully
Change your clothing style! Dress for Success!!
No more ball caps or hats of any nature.
No more T-shirts. Wear a light colored dress shirt and wearing a tie is a great touch but optional.
Clean shaved every day. All beards neatly trimmed.
Take the coveralls and smocks off and wear a sports jacket.
No more jeans. Dress slacks only. Washable dress slacks can be purchased these days.
Get rid of the work boots and move to dress shoes. Believe it or not this makes you feel totally different which in turn you conduct yourself differently.
What will this change do?
First: It will give you a whole different self image when you look at yourself in the mirror in the morning. And let's be honest here... self image has a lot to do with business success execution.
Second: You are the owner. You do not work in the bays. You greet, meet and work with clients. You plan and discuss business issues with the staff. You manage the business by being up front. You deal with the business suppliers and other business professional relationships such as the banker, accountant, lawyer, insurance and other peer professionals within the industry. You MANAGE the business.
Third: The shop attitude begins to change as a more professional image challenges the rest of the staff to stay clean and conduct themselves in a more professional manner. "No one wants to put dirt or grease on the bosses clothing".
Fourth: The clientele notice and develop a higher respect for the owner and the shop in general. The overall image of the shop becomes elevated.
Professionalism is in the detail of execution. Take a very close look at exactly WHAT you, the owner, are projecting.
Tuesday, November 16, 2010
Are Your Business Dots Connecting?
A shop operator opens the doors with visions in his or her head thinking this is just the beginning of their dream and the best is yet to come. They are very grateful for the opportunity given to them but at the same time scared of the unknown. They approach each day with optimism and a positive attitude that lights a spark with anyone they come in contact with.
The first year is an amazing learning curve but it is part of the process and is accepted.
The second year is now in comparison to the first and they see progress but there is still much to learn and understand.
The third year sees a big step as additional staff come on board and technical training classes are continued updating the shop to vehicle reality.
The fourth year starts to play a little havoc with cash flow because income tax issues have come into play stronger than first understood and new reinvestment is also now required to stay up with technology.
The fifth year starts to see a serious wearing down of management as they now are seeking some serious vacation time because the energy consumed over the first four years to make this work right has totally drained their "batteries" and the little enthusiasm that is left is like a slight flick of a lighter. Cynicism starts to settle in.
The six year experiences staff retention issues as cash is tight, lack of time off, family issues are definitely becoming more prominent which all play on managements attitude and outlook of the day to day shop tasks. That clustered attitude is picked up by the staff and the shop's overall environment becomes more negative with each passing month.
The seventh year settles in with the thought "this is not what I signed up for, I'm not enjoying it any more, its just too tough to make a living. I've bought myself a lousy job. Now what am I going to do? These dots are not connecting at all the way I thought they would."
Sound familiar?
In some shops, this scenario can play out within the first 4 years, but is this the normal route a shop business must go down today to get on the path to be successful?
The definite answer is "No"
WHAT HAPPENED HERE?
The first mistake was a lack of understanding by management as to the complexity of this business they were entering. Management should have taken the proper courses BEFORE they opened the doors. This statement also holds true for any son or daughter planning to take over the Family business. From there, a proper business plan should be addressed and the right people and the right companies that are going to be involved with the business should have been interviewed/selected. The shop procedures and business measurement guidelines should have been established.
The second mistake is that the industry NEVER came to him up front, stuck to their guns and simply said "If your going to play in this game you must learn the rules." Get through these classes BEFORE we do business together because the fact is, if you don't succeed, we don't succeed.
Consider that the aftermarket sector is so hungry for sales, they don't even take the time to really "qualify" their new prospects. Someone has opened these new business doors...who gets him first with the best price and ropes him in wins? This format says its all about the supplier, never about the shop owner. They seemingly act like vultures swarming around the potential prey.
Now before I get some nasty responses, I'm not running down all parts suppliers. I know some unbelievable companies across North America that bend over backwards to help their customer base because those suppliers and shop owners get it. My concern is about the shop and jobber owners who don't get it. They are affecting the credibility and profitability of our Aftermarket industry.
Consider that running a automotive service shop today is a true "Profession". The "Trade day" mentality is over. Licensed technicians who open a shop today must understand that to run a profitable business they must move into a Management role which means they must be up front building consumer and business relationships as well as taking the right time to nurture and develop a professional shop culture. They can not be under the car at the same time and accomplish those objectives....it doesn't work that way anymore.
This is a very complex business today and "Shop Business Acumen" should be sought out before the doors are opened. If they don't take the various industry business courses first, then financial failure can be a real possibility. That is not fair to the family who must support the shop owner and it's not fair to the staff that take a risk and join the business.
Management has an incredible responsibility today. Let's not neglect it or take anything for granted.
The first year is an amazing learning curve but it is part of the process and is accepted.
The second year is now in comparison to the first and they see progress but there is still much to learn and understand.
The third year sees a big step as additional staff come on board and technical training classes are continued updating the shop to vehicle reality.
The fourth year starts to play a little havoc with cash flow because income tax issues have come into play stronger than first understood and new reinvestment is also now required to stay up with technology.
The fifth year starts to see a serious wearing down of management as they now are seeking some serious vacation time because the energy consumed over the first four years to make this work right has totally drained their "batteries" and the little enthusiasm that is left is like a slight flick of a lighter. Cynicism starts to settle in.
The six year experiences staff retention issues as cash is tight, lack of time off, family issues are definitely becoming more prominent which all play on managements attitude and outlook of the day to day shop tasks. That clustered attitude is picked up by the staff and the shop's overall environment becomes more negative with each passing month.
The seventh year settles in with the thought "this is not what I signed up for, I'm not enjoying it any more, its just too tough to make a living. I've bought myself a lousy job. Now what am I going to do? These dots are not connecting at all the way I thought they would."
Sound familiar?
In some shops, this scenario can play out within the first 4 years, but is this the normal route a shop business must go down today to get on the path to be successful?
The definite answer is "No"
WHAT HAPPENED HERE?
The first mistake was a lack of understanding by management as to the complexity of this business they were entering. Management should have taken the proper courses BEFORE they opened the doors. This statement also holds true for any son or daughter planning to take over the Family business. From there, a proper business plan should be addressed and the right people and the right companies that are going to be involved with the business should have been interviewed/selected. The shop procedures and business measurement guidelines should have been established.
The second mistake is that the industry NEVER came to him up front, stuck to their guns and simply said "If your going to play in this game you must learn the rules." Get through these classes BEFORE we do business together because the fact is, if you don't succeed, we don't succeed.
Consider that the aftermarket sector is so hungry for sales, they don't even take the time to really "qualify" their new prospects. Someone has opened these new business doors...who gets him first with the best price and ropes him in wins? This format says its all about the supplier, never about the shop owner. They seemingly act like vultures swarming around the potential prey.
Now before I get some nasty responses, I'm not running down all parts suppliers. I know some unbelievable companies across North America that bend over backwards to help their customer base because those suppliers and shop owners get it. My concern is about the shop and jobber owners who don't get it. They are affecting the credibility and profitability of our Aftermarket industry.
Consider that running a automotive service shop today is a true "Profession". The "Trade day" mentality is over. Licensed technicians who open a shop today must understand that to run a profitable business they must move into a Management role which means they must be up front building consumer and business relationships as well as taking the right time to nurture and develop a professional shop culture. They can not be under the car at the same time and accomplish those objectives....it doesn't work that way anymore.
This is a very complex business today and "Shop Business Acumen" should be sought out before the doors are opened. If they don't take the various industry business courses first, then financial failure can be a real possibility. That is not fair to the family who must support the shop owner and it's not fair to the staff that take a risk and join the business.
Management has an incredible responsibility today. Let's not neglect it or take anything for granted.
Wednesday, October 27, 2010
Industry Jobbers Must Get Involved
Last week I had the opportunity to attend the Automotive Industry Association's Industry Forum in Toronto. The venue was excellent. The agenda was excellent. The topics covered by the speakers were very pertinent.
Manufacturers were present. Warehouse Distributors were present. Jobbers were but a handful which lead to a weak turnout of Service Shop owners.
It is frustrating to watch AIA Canada make such a strong effort to bring the right information to the Aftermarket, yet they are not supported by the "division" that can truly carry the message and be the catalyst to make the change required in the Aftermarket industry.
Consider this: The Jobber can deliver the message of such an event to every shop they deal with and invite them to register and participate with them. It should be a mission to get as many of their customer base to participate in such an event because specific "education" is invaluable. Better yet, the Jobber could bring their top 10 shop clients to such an event as their guests. The opportunity to build relationships at such a function is so huge as you would have the opportunity to discuss each message delivered by the chosen speakers that the Jobber and shop owners attend together.
Why is this not happening? There are a few reasons and let me be perfectly clear, not all Jobbers fit this mold but unfortunately just too many do.
1). Lack of Respect for their customer base. Those Jobbers talk about their "Installers". Buy using that word alone proves these Jobbers don't even understand what their customer base does today. They talk down about their shop customers because they do not have solid business relationships in place that builds a "client" relationship. The Owner of the Jobber business does not even get out to meet and THANK his customers for their business. "That is the sales reps job". WOW.
It's time to challenge every Jobber to three questions: A) List 5 positive things as to why your Jobber business is great in these different economic times? and B) Do the top 10 shops in your market area make your business absolute first call? If not, WHY not? C) Do you know how to mathematically calculate the potential Aftermarket parts purchase volume from each shop you sell to and are you capturing 85% of that potential? If not, WHY not?
See if you can get a clear defined answer to those three questions. The answers will tell you a lot about the "person" in charge as you watch their eyes closely as they answer such provoking questions.
2). Lack of defined purpose for their Jobber business. Perhaps it IS time to get out of business as these Jobbers have no game plan (vision) to grow their business and offer real value to their shop clients. These Jobbers define value only through price. They are as bad as many of the shop owners they sell to...they just don't get it! ....and they complain about the shop owners. It's as simple as this...you market on price, you attract price focused people.....you market and educate on true value and you attract value focused people. Everyone is selling today to the exact people they went after. You win!!!, why are you complaining?
3) These Jobbers look at every dollar going out of the business as an expense. They themselves do not understand "Investment". The fact is there are expense dollars and investment dollars. Ask these Jobbers "How much do you "Invest" into your top 30% of your clientele each year and how do you measure the return? What realistic time frame do you expect to see a return? Most Jobbers with the wrong mindset want instant gratification (that magic silver bullet) rather than look at a 20% to 25% annual return as reasonable in these times.
Jobber must get involved because they can truly make a difference. Read the article about KC Automotive in Owen Sound (Jobber of the Year) in Jobber News. They "GET IT". There are more across Canada truly trying and investing to make a difference, but are pulled down by the many Jobbers who do not participate, complain, mess up the marketplace and think only of today.
The same thing is said from the best shop owners. The best shop owners will help any peer who wants to truly move forward and they will dedicate almost unlimited time to help that individual, but the bad shops just pull them down and give the public a poor industry image.
Isn't it amazing how the two divisions of the Aftermarket parallel each other?
Food for thought.
Manufacturers were present. Warehouse Distributors were present. Jobbers were but a handful which lead to a weak turnout of Service Shop owners.
It is frustrating to watch AIA Canada make such a strong effort to bring the right information to the Aftermarket, yet they are not supported by the "division" that can truly carry the message and be the catalyst to make the change required in the Aftermarket industry.
Consider this: The Jobber can deliver the message of such an event to every shop they deal with and invite them to register and participate with them. It should be a mission to get as many of their customer base to participate in such an event because specific "education" is invaluable. Better yet, the Jobber could bring their top 10 shop clients to such an event as their guests. The opportunity to build relationships at such a function is so huge as you would have the opportunity to discuss each message delivered by the chosen speakers that the Jobber and shop owners attend together.
Why is this not happening? There are a few reasons and let me be perfectly clear, not all Jobbers fit this mold but unfortunately just too many do.
1). Lack of Respect for their customer base. Those Jobbers talk about their "Installers". Buy using that word alone proves these Jobbers don't even understand what their customer base does today. They talk down about their shop customers because they do not have solid business relationships in place that builds a "client" relationship. The Owner of the Jobber business does not even get out to meet and THANK his customers for their business. "That is the sales reps job". WOW.
It's time to challenge every Jobber to three questions: A) List 5 positive things as to why your Jobber business is great in these different economic times? and B) Do the top 10 shops in your market area make your business absolute first call? If not, WHY not? C) Do you know how to mathematically calculate the potential Aftermarket parts purchase volume from each shop you sell to and are you capturing 85% of that potential? If not, WHY not?
See if you can get a clear defined answer to those three questions. The answers will tell you a lot about the "person" in charge as you watch their eyes closely as they answer such provoking questions.
2). Lack of defined purpose for their Jobber business. Perhaps it IS time to get out of business as these Jobbers have no game plan (vision) to grow their business and offer real value to their shop clients. These Jobbers define value only through price. They are as bad as many of the shop owners they sell to...they just don't get it! ....and they complain about the shop owners. It's as simple as this...you market on price, you attract price focused people.....you market and educate on true value and you attract value focused people. Everyone is selling today to the exact people they went after. You win!!!, why are you complaining?
3) These Jobbers look at every dollar going out of the business as an expense. They themselves do not understand "Investment". The fact is there are expense dollars and investment dollars. Ask these Jobbers "How much do you "Invest" into your top 30% of your clientele each year and how do you measure the return? What realistic time frame do you expect to see a return? Most Jobbers with the wrong mindset want instant gratification (that magic silver bullet) rather than look at a 20% to 25% annual return as reasonable in these times.
Jobber must get involved because they can truly make a difference. Read the article about KC Automotive in Owen Sound (Jobber of the Year) in Jobber News. They "GET IT". There are more across Canada truly trying and investing to make a difference, but are pulled down by the many Jobbers who do not participate, complain, mess up the marketplace and think only of today.
The same thing is said from the best shop owners. The best shop owners will help any peer who wants to truly move forward and they will dedicate almost unlimited time to help that individual, but the bad shops just pull them down and give the public a poor industry image.
Isn't it amazing how the two divisions of the Aftermarket parallel each other?
Food for thought.
Tuesday, October 12, 2010
In Negative Times - Let's Make A Positive
Anyone that knows me understands I am direct and to the point person (sometimes I am often accused of being too black and white) because I believe deeply in any message I send out. I see and understand all my messages very clearly. All my messages, however, must be proven and stand the test of time.
This is a very personal message I am asking you to embrace. I have never done this before in an open forum such as the internet, but in this case it is worth every risk anyone could perceive.........this is important and very worth it. It is proven and stands the test of time.
The Aftermarket sector is one of the most genuine of the Automotive Industry. We work hard and we play hard. We have a high standard of morals wanting always to do the right thing for other people because we want to help. It is our character. We criticize many but are always prepared to compromise in order to move things forward. We demand a lot but we are prepared to give a lot. Of all the characteristics of the Aftermarket, nothing is stronger than to say "We truly are a people to people industry". We deal with people, we enjoy people, we support people, we must have people as a constant in our lives; we are the Aftermarket sector of the automotive industry.
For a number of years now, many of my students of my classes have heard me talk about "High Five for Kids". I want to talk about it again but now in the openness of the internet.
This particular charity is a unique stand alone Aftermarket initiative. High Five for Kids is a registered Foundation in Canada. Tax receipts are issued with all donations.
High Five for Kids is focused on "Kids"........only the Aftermarket could think of such a focus in such a unique way to provide happiness and environments that promote what the Aftermarket stands for......people loving and interacting respectfully with people to provide circumstances which allows people to enjoy the moment and create a positive atmosphere.
To date, through the High Five for Kids charity, monies have been raised and sent to under privileged Kids so they can access Day Camps; monies to rebuild playgrounds in small towns and villages; monies to assist in building recreational parks; and provided monies towards hospices that provide shelter and support to families that have been affected by Cancer of young children. All of these recipients (and many others) have been identified by AIA Canada Members Nationwide and H5's have become a support mechanism to those members requesting assistance to make a positive for the young ones in our world and their Families.
As a lifetime member of the Aftermarket industry (35 years) I am urging every shop owner and Jobber in Canada to commit 25 cents from every invoice/repair order they write each month to "High Five for Kids". Look we know business is tough but in tough times we, the Aftermarket, can still find the way to contribute and think of the kids. We as a sector are so drawn to them to ensure they enjoy themselves and are happy in a safe environment. Why? Because we personally can relate to every child experiencing tough times, unhappy times, unfortunate times. Many within the Aftermarket lived it and breathed it. We understand it. H5's accomplishes exactly what we have always wanted to see for Kids in our country who are in the circumstances many of us have experienced.
You can be assured that through AIA Canada 100% of your donation goes directly to this charity.........as it is a non profit Industry Association no money is drawn off the donations for administration and "other things" so many charities are known for. Everything about H5's is volunteered from members of the Aftermarket.
Please get behind this Charity and send in a monthly cheque based on 25 cents per invoice/repair order you wrote the month before payable to "High Five for Kids" c/o AIA Canada 1272 Wellington Street West, Ottawa, Canada K1Y 3A7......
I know we can always make an excuse as to "why I can't do this" but I believe there is more doers of positive things out there in the Aftermarket over the naysayers of criticism and inaction. If you ever would like to ask me any question on this charity, please call my toll free number 1-800-267-5497. If I can not answer your question, I know where to get the answer and I will get back to you. Remember, we are in the people business.
25 cents from every invoice/repair order to High Five for Kids.......a very worthy cause with very little sacrifice.......working together, the Aftermarket is an incredible sector of the Automotive industry because we do make a difference in peoples lives.
This is a very personal message I am asking you to embrace. I have never done this before in an open forum such as the internet, but in this case it is worth every risk anyone could perceive.........this is important and very worth it. It is proven and stands the test of time.
The Aftermarket sector is one of the most genuine of the Automotive Industry. We work hard and we play hard. We have a high standard of morals wanting always to do the right thing for other people because we want to help. It is our character. We criticize many but are always prepared to compromise in order to move things forward. We demand a lot but we are prepared to give a lot. Of all the characteristics of the Aftermarket, nothing is stronger than to say "We truly are a people to people industry". We deal with people, we enjoy people, we support people, we must have people as a constant in our lives; we are the Aftermarket sector of the automotive industry.
For a number of years now, many of my students of my classes have heard me talk about "High Five for Kids". I want to talk about it again but now in the openness of the internet.
This particular charity is a unique stand alone Aftermarket initiative. High Five for Kids is a registered Foundation in Canada. Tax receipts are issued with all donations.
High Five for Kids is focused on "Kids"........only the Aftermarket could think of such a focus in such a unique way to provide happiness and environments that promote what the Aftermarket stands for......people loving and interacting respectfully with people to provide circumstances which allows people to enjoy the moment and create a positive atmosphere.
To date, through the High Five for Kids charity, monies have been raised and sent to under privileged Kids so they can access Day Camps; monies to rebuild playgrounds in small towns and villages; monies to assist in building recreational parks; and provided monies towards hospices that provide shelter and support to families that have been affected by Cancer of young children. All of these recipients (and many others) have been identified by AIA Canada Members Nationwide and H5's have become a support mechanism to those members requesting assistance to make a positive for the young ones in our world and their Families.
As a lifetime member of the Aftermarket industry (35 years) I am urging every shop owner and Jobber in Canada to commit 25 cents from every invoice/repair order they write each month to "High Five for Kids". Look we know business is tough but in tough times we, the Aftermarket, can still find the way to contribute and think of the kids. We as a sector are so drawn to them to ensure they enjoy themselves and are happy in a safe environment. Why? Because we personally can relate to every child experiencing tough times, unhappy times, unfortunate times. Many within the Aftermarket lived it and breathed it. We understand it. H5's accomplishes exactly what we have always wanted to see for Kids in our country who are in the circumstances many of us have experienced.
You can be assured that through AIA Canada 100% of your donation goes directly to this charity.........as it is a non profit Industry Association no money is drawn off the donations for administration and "other things" so many charities are known for. Everything about H5's is volunteered from members of the Aftermarket.
Please get behind this Charity and send in a monthly cheque based on 25 cents per invoice/repair order you wrote the month before payable to "High Five for Kids" c/o AIA Canada 1272 Wellington Street West, Ottawa, Canada K1Y 3A7......
I know we can always make an excuse as to "why I can't do this" but I believe there is more doers of positive things out there in the Aftermarket over the naysayers of criticism and inaction. If you ever would like to ask me any question on this charity, please call my toll free number 1-800-267-5497. If I can not answer your question, I know where to get the answer and I will get back to you. Remember, we are in the people business.
25 cents from every invoice/repair order to High Five for Kids.......a very worthy cause with very little sacrifice.......working together, the Aftermarket is an incredible sector of the Automotive industry because we do make a difference in peoples lives.
Friday, October 8, 2010
Dealing with FEAR in Moving Your Business Forward
Shop owners from Coast to Coast are falling into a rut that produces an immense amount of internal fear. They have not taken the steps required to transition their business from the break down and repair model to the preventative maintenance model of doing business. Instead they hold on to the routines that seem to be familiar to them. Unfortunately those routines from the old business model do not work any more when it comes to growing the shops net income required to move their business forward.
Consider that in a previous BLOG I pointed out that many shop owners look at the better shops and to them, those better shops appear to be lucky. The definition of LUCK is "Laboring Under Correct Knowledge". These progressive shops sought out the knowledge and made the transition into the new world of automotive maintenance.
Well now it is time for shop owners to understand the term FEAR. The definition in business for this word translates into "False Evidence Appearing Real".
Too many shop owners seemingly don't believe the preventative maintenance model is the way to go, therefore they hold on to the old methods of doing business. They believe any change over to the preventative maintenance model could destroy their current customer base in terms of the work the shop does for them and of course they don't want to give those customers and that type of work up. This is not the case what so ever when the business transitions to the new model format.
The math does not lie. Consider that the vehicle technology that has been developed tells us the breakdown and repair model is now out of date. Instead of seeing customers 3 or 4 times a year, the shop will only see them once maybe twice a year on average. This will change shop profitability opportunities dramatically if not properly addressed. The vehicles are built so much better but they must be maintained. Complete vehicle maintenance is very critical today. When the newer vehicles do break down however, the client is extremely inconvenienced. We as an industry can ensure the client does not experience this inconvenience when we "Manage" their vehicle professionally with a preventative maintenance system in place within the shop. It is our professional responsibility to ensure the customer/clients vehicle is safe and reliable. Safe and Reliability management of vehicles produces substantial net income opportunities.
False Evidence (Mis-information not understanding) is misleading these shop owners and it is destroying their current business not to mention the owners self confidence.
Everyone must examine their "Fears" very carefully and understand exactly what is required to move their business forward. It really is not as scary as many people perceive. In fact it is very refreshing to have a new procedure and understanding that reduces stress, brings the shop employees together and grows the business net income.
Consider that in a previous BLOG I pointed out that many shop owners look at the better shops and to them, those better shops appear to be lucky. The definition of LUCK is "Laboring Under Correct Knowledge". These progressive shops sought out the knowledge and made the transition into the new world of automotive maintenance.
Well now it is time for shop owners to understand the term FEAR. The definition in business for this word translates into "False Evidence Appearing Real".
Too many shop owners seemingly don't believe the preventative maintenance model is the way to go, therefore they hold on to the old methods of doing business. They believe any change over to the preventative maintenance model could destroy their current customer base in terms of the work the shop does for them and of course they don't want to give those customers and that type of work up. This is not the case what so ever when the business transitions to the new model format.
The math does not lie. Consider that the vehicle technology that has been developed tells us the breakdown and repair model is now out of date. Instead of seeing customers 3 or 4 times a year, the shop will only see them once maybe twice a year on average. This will change shop profitability opportunities dramatically if not properly addressed. The vehicles are built so much better but they must be maintained. Complete vehicle maintenance is very critical today. When the newer vehicles do break down however, the client is extremely inconvenienced. We as an industry can ensure the client does not experience this inconvenience when we "Manage" their vehicle professionally with a preventative maintenance system in place within the shop. It is our professional responsibility to ensure the customer/clients vehicle is safe and reliable. Safe and Reliability management of vehicles produces substantial net income opportunities.
False Evidence (Mis-information not understanding) is misleading these shop owners and it is destroying their current business not to mention the owners self confidence.
Everyone must examine their "Fears" very carefully and understand exactly what is required to move their business forward. It really is not as scary as many people perceive. In fact it is very refreshing to have a new procedure and understanding that reduces stress, brings the shop employees together and grows the business net income.
Sunday, August 1, 2010
The Independent Sector Can and Will Make The Difference....IF.... WE... Choose to Do So...Where Do You Stand?
The Independent sector of the Automotive Aftermarket Industry time after time has been voted "consumers choice" but I believe we can do so much better to make a "dramatic" impact to the consumer and to do that we first have to acknowledge "together" that we have a lot of work to do.
Unfortunately the sector over the next five years will continue to shrink in numbers of effective outlets but that does not mean ineffectiveness of who and what we are as a total sector. The outlets that disappear would not "get on the bus" to be part of the difference that the consumer could notice and experience. As the saying goes, "You can lead a horse to water but you can not make it drink".
The Independent outlets, however, that continuously raise the bar for the consumer/client experience and retain competent staff that understand the culture of excellence, will be the ones that make the difference. Everyone involved in those shops will reap the personal and financial rewards.
I believe deeply in the Independent shop. My clients have proven time and time again they can not be beaten and they are the best in this great country. They make a huge difference to their clients. They make a sound statement for the Independent sector.
I want to carry this nationally with a unique group of shop owners but I need commitment, not rhetoric, not excuses. I need entrepreneurs who say "We can do this" and ones who believe in themselves to be the very best in their marketplace through example and have the self-discipline to execute guided structure in order to stay there.
I need shop owners who have known me over my 34 years through my various magazine articles, experienced my management courses and believe in what I have shown them.
Here is the meat of this message.......I need shop owners across this country to join me and who will accept monthly unlimited one on one council and coaching........who will make the commitment to be part of an effective confidential Focus Group concept of a maximum of 8 independent shops per group .......a Focus Group which has the monthly accountability structure and where the 8 shop owners meet 2 times per year together in a confidential environment for 2 days behind closed doors in a boardroom format to evaluate each peers business in-depth. The meeting location would require members to travel.
Where are you?? Let's do this!!
It's not "cheap" as any typical shop owner would say using typical industry language and thinking ....however, in reality, it is an investment into yourself and your business......BUT here is the good news..... I will not take you on unless I can find $75K to 100K additional gross profit per year out of your current operations. You will see the right ROI or I won't take you on.
First I can only accept people who have been through my 3 day management course in the last 2 years because only then you understand where we are going and what must now be done in the new economic reality.....so get yourself through a course this Fall....click on the blue tab on the www.aaec.ca website called "Upcoming courses". Yes you most likely will have to travel to get through a course.
Once through the class......let's talk in-depth first to ensure there is business compatibility...... then if we proceed we both will sign a mutual confidentiality agreement, I will then fax or e-mail my basic business questionnaire for you to complete and you will send me your last 4 years financial statements for a complementary business evaluation...........if I can't find the additional GP $ of which I will discuss over the phone with you as to where it is... ..it's not going to happen.
So are you ready for change and serving the consumer to the highest possible level??.......and changing your financial life.......and your personal quality of life????........or are you one of the "industry rhetoric" who simply says "what a sales job". Yes you guys are out there too, I'm very aware of that.
I will do my best for you and when we connect into my Focus Group format, I will not let you down!
Listen to the videos that are on the www.aaec.ca website. If you would like you can e-mail me at greenwood@aaec.ca
Pretty hard core message don't you think?? Are you up for it?? I am!!!
Unfortunately the sector over the next five years will continue to shrink in numbers of effective outlets but that does not mean ineffectiveness of who and what we are as a total sector. The outlets that disappear would not "get on the bus" to be part of the difference that the consumer could notice and experience. As the saying goes, "You can lead a horse to water but you can not make it drink".
The Independent outlets, however, that continuously raise the bar for the consumer/client experience and retain competent staff that understand the culture of excellence, will be the ones that make the difference. Everyone involved in those shops will reap the personal and financial rewards.
I believe deeply in the Independent shop. My clients have proven time and time again they can not be beaten and they are the best in this great country. They make a huge difference to their clients. They make a sound statement for the Independent sector.
I want to carry this nationally with a unique group of shop owners but I need commitment, not rhetoric, not excuses. I need entrepreneurs who say "We can do this" and ones who believe in themselves to be the very best in their marketplace through example and have the self-discipline to execute guided structure in order to stay there.
I need shop owners who have known me over my 34 years through my various magazine articles, experienced my management courses and believe in what I have shown them.
Here is the meat of this message.......I need shop owners across this country to join me and who will accept monthly unlimited one on one council and coaching........who will make the commitment to be part of an effective confidential Focus Group concept of a maximum of 8 independent shops per group .......a Focus Group which has the monthly accountability structure and where the 8 shop owners meet 2 times per year together in a confidential environment for 2 days behind closed doors in a boardroom format to evaluate each peers business in-depth. The meeting location would require members to travel.
Where are you?? Let's do this!!
It's not "cheap" as any typical shop owner would say using typical industry language and thinking ....however, in reality, it is an investment into yourself and your business......BUT here is the good news..... I will not take you on unless I can find $75K to 100K additional gross profit per year out of your current operations. You will see the right ROI or I won't take you on.
First I can only accept people who have been through my 3 day management course in the last 2 years because only then you understand where we are going and what must now be done in the new economic reality.....so get yourself through a course this Fall....click on the blue tab on the www.aaec.ca website called "Upcoming courses". Yes you most likely will have to travel to get through a course.
Once through the class......let's talk in-depth first to ensure there is business compatibility...... then if we proceed we both will sign a mutual confidentiality agreement, I will then fax or e-mail my basic business questionnaire for you to complete and you will send me your last 4 years financial statements for a complementary business evaluation...........if I can't find the additional GP $ of which I will discuss over the phone with you as to where it is... ..it's not going to happen.
So are you ready for change and serving the consumer to the highest possible level??.......and changing your financial life.......and your personal quality of life????........or are you one of the "industry rhetoric" who simply says "what a sales job". Yes you guys are out there too, I'm very aware of that.
I will do my best for you and when we connect into my Focus Group format, I will not let you down!
Listen to the videos that are on the www.aaec.ca website. If you would like you can e-mail me at greenwood@aaec.ca
Pretty hard core message don't you think?? Are you up for it?? I am!!!
Friday, July 23, 2010
Some Shops Just Have All the Luck
Everyone in this industry has heard it over and over from various shop owners and industry personnel...
"Boy does that guy have all the luck; look at the beautiful operation he has. What luck he must have to attract and keep that kind of staff in place. He must of been in the right place at the right time".
Is it not amazing how so many in the Aftermarket justify their circumstances? They always have an excuse seemingly for everything and especially why their shop is not in the top 3 of their community. They just can't seem to find the "luck" they need to make it happen.
A good friend of mine, Mr. Rui Martins from Nova Scotia, brought it all home for me by sharing this; "Bob, you have always said they just don't get it. You push them because you know that they can be so much better at what they do and enjoy a much higher quality of life. You see it in them so you try to slow them down and ask them to take the time to experience and learn how. Then you ask them to implement with self discipline what they were exposed to. You shared the knowledge with me and then you pushed me. Bob I got it figured out. Thank you. I now have all the right relationships in place to ensure I will have all the "luck" I need to succeed in my business and enjoy a better personal lifestyle. Bob, I Labour Under Correct Knowledge."
The nail was hit on the head. Oh it makes all the sense in the world. Working with the correct knowledge will bring all the luck anyone needs; however, consider how many are labouring with out of date knowledge required to run and manage a business in today's challenging climate. They still live in an environment which contain rules that don't work any more. They now don't believe their circumstances or quality of life can get any better. "It is what it is" being the common phrase.
I only wish that they could find the confidence from within to take a chance on him/herself. They don't need a fire under their behind to get them going, they have lost the fire in their gut that gave them desire. If they could muster up a little gut desire and take one more chance on them self, they would then discover how much luck is truly available to them..........luck that can dramatically change their business and quality of life,......... however, they must take the first step. Nothing can happen until that is achieved.
If you know anyone like that why not share this message with them and hopefully they will take a look in the mirror and embrace the meaning of LUCK.
"Boy does that guy have all the luck; look at the beautiful operation he has. What luck he must have to attract and keep that kind of staff in place. He must of been in the right place at the right time".
Is it not amazing how so many in the Aftermarket justify their circumstances? They always have an excuse seemingly for everything and especially why their shop is not in the top 3 of their community. They just can't seem to find the "luck" they need to make it happen.
A good friend of mine, Mr. Rui Martins from Nova Scotia, brought it all home for me by sharing this; "Bob, you have always said they just don't get it. You push them because you know that they can be so much better at what they do and enjoy a much higher quality of life. You see it in them so you try to slow them down and ask them to take the time to experience and learn how. Then you ask them to implement with self discipline what they were exposed to. You shared the knowledge with me and then you pushed me. Bob I got it figured out. Thank you. I now have all the right relationships in place to ensure I will have all the "luck" I need to succeed in my business and enjoy a better personal lifestyle. Bob, I Labour Under Correct Knowledge."
The nail was hit on the head. Oh it makes all the sense in the world. Working with the correct knowledge will bring all the luck anyone needs; however, consider how many are labouring with out of date knowledge required to run and manage a business in today's challenging climate. They still live in an environment which contain rules that don't work any more. They now don't believe their circumstances or quality of life can get any better. "It is what it is" being the common phrase.
I only wish that they could find the confidence from within to take a chance on him/herself. They don't need a fire under their behind to get them going, they have lost the fire in their gut that gave them desire. If they could muster up a little gut desire and take one more chance on them self, they would then discover how much luck is truly available to them..........luck that can dramatically change their business and quality of life,......... however, they must take the first step. Nothing can happen until that is achieved.
If you know anyone like that why not share this message with them and hopefully they will take a look in the mirror and embrace the meaning of LUCK.
Sunday, July 18, 2010
Continuing to Say "No" or "Not Now" is Not The Right Answer
Let's face it, the times are different than what you are accustomed to. You have been in business in excess of 10 years and you do not "trust" the industry. Let's consider the new realities:
1). Jobbers and WD's have always said they have an important message for you and they even labeled it under the topic of "Business Management" criteria. You went to their presentation on your valuable time and found out it was nothing more than a sales pitch to move more product that they sell. They even called you an "Installer", of which you are nothing close to being in this new era. You interpret, you diagnose, and you complete a detailed full service which is now customized to your clients needs. You truly are a Professional "Service Provider" in today's realities.
It's time to look for and pay attention to the better Jobbers who have invested in knowledge of your business and now understand that education,...... they now get it. They have taken the time and made the investment to "step outside of the box" and deal with the aftermarket reality and especially it's past history which created nothing but stress and mistrust between the shop owner and the parts supplier. For the supplier, times have dramatically changed and they truly realize the struggle you, as a shop owner, are in, and now, finally, understand the role they must play to ensure your business succeeds. They need you more than ever. You need a great parts supplier more than ever. They will now play a pivotal role in your business, but you also must understand that you play a pivotal role in the future of their business. They want YOU as a client of their parts business. They finally get it. It is time to secure this type of relationship and put the supplier to the test however before fingers are pointed, you too must come to the table for them as they require parts volume paid in full each month. That is their business. He/she either gets it, or he/she does not. YOU either "get it" or you do not!! I believe YOU will know on both fronts! How negative are you in your thinking?
2). Are you, the shop owner, truly the problem? Have times changed so rapidly that you have a tough time to address change yourself especially when it comes to business relationships? Today's business is all about relationships. You are in an industry where "change" is now the norm. You have to understand this and the new era of business relationships and must not bury your head in the sand. That result could end up killing you with stress which in turn affects your personal life and your business life. Change your attitude and embrace change. It isn't easy but you are not alone. You now have key opportunities where you can meet and get together with other shop owners experiencing the same reality and address the future together. Seek these opportunities out. The future is very bright, but you have to be willing to address it. You can not shoot any idea or concept down without proper due diligence. Investigate all the parameters properly. Stop "prejudging" when you have not looked at or tested the facts. Emotions are not reality. That is your past haunting you!
3). We have too many shop owners in the industry who have a huge inferiority complex. They are afraid to enter business courses or address the new reality for fear they will not understand it, OR, "feel" stupid, OR, "look" stupid in class in their mind. Any instructor who does that, take to task immediately..........as you are far from stupid.........you own a shop and you understand complex vehicle technology. That instructor is NOT professional. Get your money back. It is now time to get on with the new learning curve that must be taken BUT you as as shop owner must take the FIRST step. Procrastination is not the answer, it is only an excuse for you to embrace. Why can you go "hunting" for a week to 10 days but you won't address your business for 3 or 4 days??? Come on...admit the facts.
4). Do you feel guilty about being financially successful? I think many shop owners do as their past, since high school, beat them down so much that they can not visualize themselves earning $150K to $200K a year (in 2010 dollars) for their families income out of their business, plus a shop business bottom line, coupled with 6 to 8 weeks holidays per year. They "think" they have to "rip people off" to accomplish that standard or could never happen in my marketplace. WAKE UP.....PLEASE... this is the era of "knowledge" in the aftermarket and you have the opportunity to embrace it and enjoy the outcome as a true "Profession", BUT nothing will happen for you and your family until YOU take the plunge and embrace the change that is here and in front of us today.
Do not use the excuse "sounds great but will not fit in my market"..........stop this excuse driven reason for your circumstances..........people are people and once we address everyone with scincerity, one on one, mountains can be moved.
Please join the new reality and embrace the culture of re-learning the business over again to ensure you can change the quality of your families life and set your business up for a proper sale when it comes to the time to let it go ........it's called succession.
Want proof? Watch the video on my home page www.aaec.ca as Rob Brouwer operating in Ottawa Ontario, unscripted, discusses his experiences.
Got a question? Please do not hesitate to contact me at 1-800-267-5497. This number comes directly to me.
1). Jobbers and WD's have always said they have an important message for you and they even labeled it under the topic of "Business Management" criteria. You went to their presentation on your valuable time and found out it was nothing more than a sales pitch to move more product that they sell. They even called you an "Installer", of which you are nothing close to being in this new era. You interpret, you diagnose, and you complete a detailed full service which is now customized to your clients needs. You truly are a Professional "Service Provider" in today's realities.
It's time to look for and pay attention to the better Jobbers who have invested in knowledge of your business and now understand that education,...... they now get it. They have taken the time and made the investment to "step outside of the box" and deal with the aftermarket reality and especially it's past history which created nothing but stress and mistrust between the shop owner and the parts supplier. For the supplier, times have dramatically changed and they truly realize the struggle you, as a shop owner, are in, and now, finally, understand the role they must play to ensure your business succeeds. They need you more than ever. You need a great parts supplier more than ever. They will now play a pivotal role in your business, but you also must understand that you play a pivotal role in the future of their business. They want YOU as a client of their parts business. They finally get it. It is time to secure this type of relationship and put the supplier to the test however before fingers are pointed, you too must come to the table for them as they require parts volume paid in full each month. That is their business. He/she either gets it, or he/she does not. YOU either "get it" or you do not!! I believe YOU will know on both fronts! How negative are you in your thinking?
2). Are you, the shop owner, truly the problem? Have times changed so rapidly that you have a tough time to address change yourself especially when it comes to business relationships? Today's business is all about relationships. You are in an industry where "change" is now the norm. You have to understand this and the new era of business relationships and must not bury your head in the sand. That result could end up killing you with stress which in turn affects your personal life and your business life. Change your attitude and embrace change. It isn't easy but you are not alone. You now have key opportunities where you can meet and get together with other shop owners experiencing the same reality and address the future together. Seek these opportunities out. The future is very bright, but you have to be willing to address it. You can not shoot any idea or concept down without proper due diligence. Investigate all the parameters properly. Stop "prejudging" when you have not looked at or tested the facts. Emotions are not reality. That is your past haunting you!
3). We have too many shop owners in the industry who have a huge inferiority complex. They are afraid to enter business courses or address the new reality for fear they will not understand it, OR, "feel" stupid, OR, "look" stupid in class in their mind. Any instructor who does that, take to task immediately..........as you are far from stupid.........you own a shop and you understand complex vehicle technology. That instructor is NOT professional. Get your money back. It is now time to get on with the new learning curve that must be taken BUT you as as shop owner must take the FIRST step. Procrastination is not the answer, it is only an excuse for you to embrace. Why can you go "hunting" for a week to 10 days but you won't address your business for 3 or 4 days??? Come on...admit the facts.
4). Do you feel guilty about being financially successful? I think many shop owners do as their past, since high school, beat them down so much that they can not visualize themselves earning $150K to $200K a year (in 2010 dollars) for their families income out of their business, plus a shop business bottom line, coupled with 6 to 8 weeks holidays per year. They "think" they have to "rip people off" to accomplish that standard or could never happen in my marketplace. WAKE UP.....PLEASE... this is the era of "knowledge" in the aftermarket and you have the opportunity to embrace it and enjoy the outcome as a true "Profession", BUT nothing will happen for you and your family until YOU take the plunge and embrace the change that is here and in front of us today.
Do not use the excuse "sounds great but will not fit in my market"..........stop this excuse driven reason for your circumstances..........people are people and once we address everyone with scincerity, one on one, mountains can be moved.
Please join the new reality and embrace the culture of re-learning the business over again to ensure you can change the quality of your families life and set your business up for a proper sale when it comes to the time to let it go ........it's called succession.
Want proof? Watch the video on my home page www.aaec.ca as Rob Brouwer operating in Ottawa Ontario, unscripted, discusses his experiences.
Got a question? Please do not hesitate to contact me at 1-800-267-5497. This number comes directly to me.
Tuesday, July 6, 2010
Times Are Different...Why Are You Comparing to Last Year?
Shop owners know that things are different this year and in fact so much has changed that measuring the business results against last year or even the year before doesn't make much sense any more.
These are new and very modern times in our sector. Management must relearn the business all over again and coupled with that challenge must also instill new self disciplines to execute differently.
The next 10 years will be a journey, not a trip, as no one can even predict how this Fall and next Winter will play out. Get use to this uneasiness. The new reality is now here.
When you understand the new intricate measurement fundamentals and what is required to be executed on a daily basis today throughout the shop, your stress can come down substantially. The results will fall into place but it will be a much different time frame than what everyone was accustomed to over the past 20 years. Today the old saying concentrate on "getting back to the basics" means so much more than it did even 5 years ago. The basics have changed.
It is when Management and the staff do not understand how to deal with this reality that panic and stress come to the foreground. Everyone is trying to figure out how to redefine themselves. I see this in the Jobber business as well.
There is no silver bullet to fix your business and create instant sustainable profitability. Any one who says they have the quick fix solution does not understand the complexity of running a shop business today.
Take a good look as to where you are today. Take a good look as to where you will be 5 years from now based on your current Management methods. Are your methods proven and will they guarantee your financial future or are you saying to yourself "I hope they work, I'm just not sure"?
The solutions for a sustainable future are available to you but you must make the time, put in the effort to experience them........... and oh yes.....learn them. Seek them out and make the effort, I'm confident you will not be disappointed.
These are new and very modern times in our sector. Management must relearn the business all over again and coupled with that challenge must also instill new self disciplines to execute differently.
The next 10 years will be a journey, not a trip, as no one can even predict how this Fall and next Winter will play out. Get use to this uneasiness. The new reality is now here.
When you understand the new intricate measurement fundamentals and what is required to be executed on a daily basis today throughout the shop, your stress can come down substantially. The results will fall into place but it will be a much different time frame than what everyone was accustomed to over the past 20 years. Today the old saying concentrate on "getting back to the basics" means so much more than it did even 5 years ago. The basics have changed.
It is when Management and the staff do not understand how to deal with this reality that panic and stress come to the foreground. Everyone is trying to figure out how to redefine themselves. I see this in the Jobber business as well.
There is no silver bullet to fix your business and create instant sustainable profitability. Any one who says they have the quick fix solution does not understand the complexity of running a shop business today.
Take a good look as to where you are today. Take a good look as to where you will be 5 years from now based on your current Management methods. Are your methods proven and will they guarantee your financial future or are you saying to yourself "I hope they work, I'm just not sure"?
The solutions for a sustainable future are available to you but you must make the time, put in the effort to experience them........... and oh yes.....learn them. Seek them out and make the effort, I'm confident you will not be disappointed.
Thursday, June 3, 2010
HAVE YOU STARTED ADJUSTING TO THE NEW SERVICE REALITY?
Shop owners and Managers must adjust their business processes to address today's vehicle service realities.
Consider the higher quality of fluids and synthetics that are now being used today in all vehicles.
Consider vehicle manufacturers are now recommending 10,000, 20,000 even 30,000 kilometers between oil changes.
This means that there will be many cases where the shop sees the customer/client twice or maybe only once a year as we move forward depending on their annual driving distance and habits.
This raises a concern for 2 key vehicle issues, namely, safety and reliability.
If you have not done so, it is time to start discussions and to educate every customer/client the importance of having a thorough semi-annual vehicle inspection. The semi-annual date should be booked before the client leaves, with the shop following up within a week of the date to ensure it is still convenient for the client. If not, re-schedule.
Too many shops are not taking charge of their client base and managing their vehicle service properly. They rely on the client to remember to come back.
The fact is the consumer is too busy and has enough to look after in their own lives. The last thing most consumers think about is vehicle maintenance, in fact, vehicle maintenance has been neglected since the start of the recession. It is similar to the thought, if I'm feeling OK, there is no need to call my doctor for a check-up. The same now has happened with vehicles. They are built over all with a higher quality, so they just don't breakdown or require the frequency of service the way they used to 10 to 20 years ago. If it's running, everything is fine, why should I contact the garage for service?
As a Professional Service Provider you must understand what type of customer/client you are dealing with and what are their personal parameters in regards to servicing their vehicle? We must take the responsibility to do our best to ensure they are never compromising safety or are inconvenienced.
This opens the debate as to whether we should have mandatory annual vehicle inspections across the country and who is legally authorized to take an unsafe vehicle off the road? I am totally supportive of that concept of legislation. It is a safety issue. Some of the vehicles driving on the road today are outright dangerous. The annual date for an inspection to be completed could be on the individuals birthday; not everyone all at once by a given month as that would create chaos in a shop. This concept is urgent, however, it is for another blog as we move forward in this industry.
Review your front counter processes and your back end inspection procedures and reporting processes. Are you up to date with today's realities and your Professional responsibilities?
Consider the higher quality of fluids and synthetics that are now being used today in all vehicles.
Consider vehicle manufacturers are now recommending 10,000, 20,000 even 30,000 kilometers between oil changes.
This means that there will be many cases where the shop sees the customer/client twice or maybe only once a year as we move forward depending on their annual driving distance and habits.
This raises a concern for 2 key vehicle issues, namely, safety and reliability.
If you have not done so, it is time to start discussions and to educate every customer/client the importance of having a thorough semi-annual vehicle inspection. The semi-annual date should be booked before the client leaves, with the shop following up within a week of the date to ensure it is still convenient for the client. If not, re-schedule.
Too many shops are not taking charge of their client base and managing their vehicle service properly. They rely on the client to remember to come back.
The fact is the consumer is too busy and has enough to look after in their own lives. The last thing most consumers think about is vehicle maintenance, in fact, vehicle maintenance has been neglected since the start of the recession. It is similar to the thought, if I'm feeling OK, there is no need to call my doctor for a check-up. The same now has happened with vehicles. They are built over all with a higher quality, so they just don't breakdown or require the frequency of service the way they used to 10 to 20 years ago. If it's running, everything is fine, why should I contact the garage for service?
As a Professional Service Provider you must understand what type of customer/client you are dealing with and what are their personal parameters in regards to servicing their vehicle? We must take the responsibility to do our best to ensure they are never compromising safety or are inconvenienced.
This opens the debate as to whether we should have mandatory annual vehicle inspections across the country and who is legally authorized to take an unsafe vehicle off the road? I am totally supportive of that concept of legislation. It is a safety issue. Some of the vehicles driving on the road today are outright dangerous. The annual date for an inspection to be completed could be on the individuals birthday; not everyone all at once by a given month as that would create chaos in a shop. This concept is urgent, however, it is for another blog as we move forward in this industry.
Review your front counter processes and your back end inspection procedures and reporting processes. Are you up to date with today's realities and your Professional responsibilities?
Monday, May 31, 2010
When you're drowning, you don't say "I would be pleased if someone would have the foresight to notice me drowning and come and help me", you scream!
A quote from the late John Lennon actually nailed the Aftermarket.
Why is our independent shop sector of the Aftermarket not willing to reach out and ask for help? Why is our sector not willing to accept the hard message advice required, understand it and embrace it to really fix the problem? Why is our sector always looking for the quick fix and instant gratification? Why does our sector not understand business "investment" and the "time" factor to realize a proper return?
The independent sector of the Automotive Aftermarket must embrace reality and embrace it quickly, however, reality can leave a lot to the imagination.
We are drowning in our own lack of business literacy and savvy. Now before you scream back at me as being uncaring, insensitive, arrogant, or not having a clue what I am talking about, I submit to you, and answer this in total honesty, "Does the Independent sector of the Aftermarket industry have a culture of many inferiority complexes rolled into one?"
Consider that most shop owners have worked hard to strive to be a great technician. They have paid the total price to be on top of their profession but they did so without achieving a business education. They then have the opportunity to own their own business but they are embarrassed that they don't even understand the difference between mark-up and gross profit; shop potential means nothing to them and effective door rate is a foreign terminology. They think a Balance Sheet is for bankers and accountants. They think all the real answers lie only in their bank account balance.
The question is who did they turn to for the answers on how the business should be operated to create not only a professional personal income but a good net income to the business so it could grow and prosper? The local Jobber they got to know? The WD and their seasonal "programs"? A Manufacturing Rep?
Sorry, but they were not in the position to provide them with the right guidance or solutions they were seeking. They knew nothing about the intricate workings of a shop business.
This is not meant to be a commodity bash, it is a blunt reality check. It is not meant to insult any level, it is intended to bring abrupt awareness to our Aftermarket issues.
Consider that the Aftermarket sector is made up of 4 divisions namely a Manufacturer, a Warehouse Distributor, A Jobber and then the Service Shop level. 3/4 of the sector is in the commodity business. They make and sell parts. They need volume and a lot of cash to make their business work. They must be "busy" to make their business succeed. We need more sales, more volume, is their constant rant.
So what question do they ask when they enter your shop? Listen carefully, do your hear...."Are you busy?". WOW totally out of touch. You don't want to be busy as a shop owner, you want to be steady. They are in the commodity business BUT as a shop owner, you are in the knowledge business. You have to diagnose the vehicle problem thoroughly, explain it fully to an uninformed consumer and do that in a way to establish trust. The objective is to build a long-term relationship with the chosen clientele you want to do business with. If you are too busy you don't have the time do that.
You have to slow down and concentrate on billed hours per invoice and total shop efficiency which actually measures the effectiveness of your shop "team" working together. The solutions the industry have given to you are not focused on creating net income, they are focused on creating more activity which could be perceived as self serving. They talk to shop owners about getting more car count through the door, average sales per invoice and to be price competitive in order to keep busy. Ever noticed that you can actually sell a lot more year over year because you are busy but you are still broke! What is wrong with that equation? Patronization from the industry of how important you are as a client because of your great parts purchase volume does not pay the bills but it does feed an ego.
The vast majority of shop owners in North America need help. It is long past due that every level of the Aftermarket must learn how a service shop is to work to create net income. This would allow for the growth and tremendous opportunities ahead for the Aftermarket. The service shops are the front line troops of our industry not the bottom of the sector. We have to take the industry standard triangle and reverse it.
Think about this fact; in my 35 year career, I know of only 2 top level commodity Executives (we are talking about one who was in charge of North America for his commodity company and another one who owns a Western Canadian parts distribution business that serves three Western Canadian Provinces) that have actually sat through a complete shop business management class themselves for 3 days. Most company Executives send their staff. These Execs. did the math with the other shop owners that were attending with them. They discussed, they challenged and they interacted. They learned how a shop is measured and what needs to be done to ensure the proper NET income and return on investment is realized and how it is obtained. Their eyes were opened. They were stunned. They now saw opportunity for their own companies and its clientele. These Executives got it.
Unfortunately, one was shipped off overseas when he wanted to make "waves" (big changes) after attending this class for the company he was overseeing. His boss (or Board) did not understand. These 2 top Executives got it.......the others in our industry just don't understand or do not have the desire to understand. They are too busy. They are too close to retirement. Unfortunately it is becoming that black and white now.
So now EVERYONE at every level of the Aftermarket sector is under net income siege. I wonder why?
This is not a commodity bash article. It is a reality check that we have to learn and understand each level and what it takes to work together to ensure the Aftermarket grows and succeeds.
So for the vast majority of shop owners, it is the time to make life changing decisions. Are you going to seek out the right Business Management course that will address your specific questions? Insist on a money back guarantee so you know you are not wasting your money. Would you ask your Jobber Owner to go with you if he/she has never attended before so the two of you can learn how to work better together? Would he or she attend with you? If so, congratulations you have a winner. If not, listen carefully to their excuse. I think you will see what I am talking about.
As a modern shop owner, are you ready to accept full discussion on all business issues, listen to advice and guidance? Are you prepared for the CHANGE that we talk about but admitting it has not being embraced? Will you finally believe in yourself enough to invest in yourself and your business and stop thinking that everything is a cost to you?
"Life is what happens while you are busy making other plans."
I think it is time to make other plans so our sector can really move forward and enjoy a life instead of being strapped day in and day out to the business. No one wants to buy themselves a job.
If not, what is your solution? And oh........in your solution, prove the math with your plan to ensure NET income is created after a professional income is paid to you and you are not just creating activity to keep "busy".
Why is our independent shop sector of the Aftermarket not willing to reach out and ask for help? Why is our sector not willing to accept the hard message advice required, understand it and embrace it to really fix the problem? Why is our sector always looking for the quick fix and instant gratification? Why does our sector not understand business "investment" and the "time" factor to realize a proper return?
The independent sector of the Automotive Aftermarket must embrace reality and embrace it quickly, however, reality can leave a lot to the imagination.
We are drowning in our own lack of business literacy and savvy. Now before you scream back at me as being uncaring, insensitive, arrogant, or not having a clue what I am talking about, I submit to you, and answer this in total honesty, "Does the Independent sector of the Aftermarket industry have a culture of many inferiority complexes rolled into one?"
Consider that most shop owners have worked hard to strive to be a great technician. They have paid the total price to be on top of their profession but they did so without achieving a business education. They then have the opportunity to own their own business but they are embarrassed that they don't even understand the difference between mark-up and gross profit; shop potential means nothing to them and effective door rate is a foreign terminology. They think a Balance Sheet is for bankers and accountants. They think all the real answers lie only in their bank account balance.
The question is who did they turn to for the answers on how the business should be operated to create not only a professional personal income but a good net income to the business so it could grow and prosper? The local Jobber they got to know? The WD and their seasonal "programs"? A Manufacturing Rep?
Sorry, but they were not in the position to provide them with the right guidance or solutions they were seeking. They knew nothing about the intricate workings of a shop business.
This is not meant to be a commodity bash, it is a blunt reality check. It is not meant to insult any level, it is intended to bring abrupt awareness to our Aftermarket issues.
Consider that the Aftermarket sector is made up of 4 divisions namely a Manufacturer, a Warehouse Distributor, A Jobber and then the Service Shop level. 3/4 of the sector is in the commodity business. They make and sell parts. They need volume and a lot of cash to make their business work. They must be "busy" to make their business succeed. We need more sales, more volume, is their constant rant.
So what question do they ask when they enter your shop? Listen carefully, do your hear...."Are you busy?". WOW totally out of touch. You don't want to be busy as a shop owner, you want to be steady. They are in the commodity business BUT as a shop owner, you are in the knowledge business. You have to diagnose the vehicle problem thoroughly, explain it fully to an uninformed consumer and do that in a way to establish trust. The objective is to build a long-term relationship with the chosen clientele you want to do business with. If you are too busy you don't have the time do that.
You have to slow down and concentrate on billed hours per invoice and total shop efficiency which actually measures the effectiveness of your shop "team" working together. The solutions the industry have given to you are not focused on creating net income, they are focused on creating more activity which could be perceived as self serving. They talk to shop owners about getting more car count through the door, average sales per invoice and to be price competitive in order to keep busy. Ever noticed that you can actually sell a lot more year over year because you are busy but you are still broke! What is wrong with that equation? Patronization from the industry of how important you are as a client because of your great parts purchase volume does not pay the bills but it does feed an ego.
The vast majority of shop owners in North America need help. It is long past due that every level of the Aftermarket must learn how a service shop is to work to create net income. This would allow for the growth and tremendous opportunities ahead for the Aftermarket. The service shops are the front line troops of our industry not the bottom of the sector. We have to take the industry standard triangle and reverse it.
Think about this fact; in my 35 year career, I know of only 2 top level commodity Executives (we are talking about one who was in charge of North America for his commodity company and another one who owns a Western Canadian parts distribution business that serves three Western Canadian Provinces) that have actually sat through a complete shop business management class themselves for 3 days. Most company Executives send their staff. These Execs. did the math with the other shop owners that were attending with them. They discussed, they challenged and they interacted. They learned how a shop is measured and what needs to be done to ensure the proper NET income and return on investment is realized and how it is obtained. Their eyes were opened. They were stunned. They now saw opportunity for their own companies and its clientele. These Executives got it.
Unfortunately, one was shipped off overseas when he wanted to make "waves" (big changes) after attending this class for the company he was overseeing. His boss (or Board) did not understand. These 2 top Executives got it.......the others in our industry just don't understand or do not have the desire to understand. They are too busy. They are too close to retirement. Unfortunately it is becoming that black and white now.
So now EVERYONE at every level of the Aftermarket sector is under net income siege. I wonder why?
This is not a commodity bash article. It is a reality check that we have to learn and understand each level and what it takes to work together to ensure the Aftermarket grows and succeeds.
So for the vast majority of shop owners, it is the time to make life changing decisions. Are you going to seek out the right Business Management course that will address your specific questions? Insist on a money back guarantee so you know you are not wasting your money. Would you ask your Jobber Owner to go with you if he/she has never attended before so the two of you can learn how to work better together? Would he or she attend with you? If so, congratulations you have a winner. If not, listen carefully to their excuse. I think you will see what I am talking about.
As a modern shop owner, are you ready to accept full discussion on all business issues, listen to advice and guidance? Are you prepared for the CHANGE that we talk about but admitting it has not being embraced? Will you finally believe in yourself enough to invest in yourself and your business and stop thinking that everything is a cost to you?
"Life is what happens while you are busy making other plans."
I think it is time to make other plans so our sector can really move forward and enjoy a life instead of being strapped day in and day out to the business. No one wants to buy themselves a job.
If not, what is your solution? And oh........in your solution, prove the math with your plan to ensure NET income is created after a professional income is paid to you and you are not just creating activity to keep "busy".
Saturday, May 29, 2010
Perhaps It Is Time To Step Back And Take A Deep Breath
Let's face it, there has been a lot of stress this year so far, but, let's think this through. Are you caught up in your business as like the "Y" generation and expect instant gratification or do you truly realize the realistic time frame to get things done. This is not a cop out. The fact is staff must come "up to grade" faster than ever before, that is the "Professionalism" of our sector, but that relates to effective training on a given topic. What I am referring to is, does Management truly understand "Investment" into the business. The fact is every shop owner and every Jobber has been "taught by the industry" to think that a dollar spent is an "expense" and watch your "expenses" every day. This creates a powerful but potentially negative mind-set. No one throughout the industry has the image or reputation to be known for discussing "Investment" into the business and how it works and how do you measure it. Now think about this, it creates a huge dilemma. If a dollar spent is an expense, how do you see any dollar spent as an investment?
Instant gratification is not realistic, however the internet has taught the current generation to expect it. You see it in every child today that is under 20 years old. Has that mentality affected how you think about your business? If it has you could be heading for serious trouble.
The facts are these: To change a business culture and invoke the right processes and disciplines with this fast pace and intricacy connected and technological world will take you 2 to 3 years to fix or implement!! I'm sorry this is the reality check you need to hear. I did not say you would like a warm fuzzy message. In the Aftermarket we must "LEARN" to deal with reality and the longer you have been in this business, the harder it is, and on the other hand the shorter time you have been exposed to the full industry the more frustrated you are feeling about how things evolve.
Let's all take a deep breath and refocus. For the "older crowd" in the Wholesale side of the industry, it is time to understand "investment". We must make a large amount of investment dollars because consider how rapidly the Aftermarket sector has "evolved" in the past 5 years compared to the last 20 that you have been involved with. Make the investment and it will serve you well IF your plan is focused on the future success of your clientele.
To the retail side, it is time to catch up to the modern world BUT you must have a comprehensive plan to do so. That been said I am confident in saying 80% of the Aftermarket shops do not have a plan. This puts the Aftermarket sector in a very vulnerable position. Now what?
Shop owners MUST start thinking about the next 3 to 7 years. It is irrelevant how tight your Cash flow is today. That will be sorted out in "time" if you have a plan AND the resources focused on making it happen. Anything else or other "quick Fix" is a pipe dream. Time for a reality check. If you are not prepared to make the required investment to deal with and understand today's realities, then perhaps it truly is time for you to get out of business. This sector of the automotive industry is the most exciting but most challenging to be embraced. If you are not up for it, them may I facetiously say maybe it's time you go into the funeral home business.
Instant gratification is not realistic, however the internet has taught the current generation to expect it. You see it in every child today that is under 20 years old. Has that mentality affected how you think about your business? If it has you could be heading for serious trouble.
The facts are these: To change a business culture and invoke the right processes and disciplines with this fast pace and intricacy connected and technological world will take you 2 to 3 years to fix or implement!! I'm sorry this is the reality check you need to hear. I did not say you would like a warm fuzzy message. In the Aftermarket we must "LEARN" to deal with reality and the longer you have been in this business, the harder it is, and on the other hand the shorter time you have been exposed to the full industry the more frustrated you are feeling about how things evolve.
Let's all take a deep breath and refocus. For the "older crowd" in the Wholesale side of the industry, it is time to understand "investment". We must make a large amount of investment dollars because consider how rapidly the Aftermarket sector has "evolved" in the past 5 years compared to the last 20 that you have been involved with. Make the investment and it will serve you well IF your plan is focused on the future success of your clientele.
To the retail side, it is time to catch up to the modern world BUT you must have a comprehensive plan to do so. That been said I am confident in saying 80% of the Aftermarket shops do not have a plan. This puts the Aftermarket sector in a very vulnerable position. Now what?
Shop owners MUST start thinking about the next 3 to 7 years. It is irrelevant how tight your Cash flow is today. That will be sorted out in "time" if you have a plan AND the resources focused on making it happen. Anything else or other "quick Fix" is a pipe dream. Time for a reality check. If you are not prepared to make the required investment to deal with and understand today's realities, then perhaps it truly is time for you to get out of business. This sector of the automotive industry is the most exciting but most challenging to be embraced. If you are not up for it, them may I facetiously say maybe it's time you go into the funeral home business.
Monday, April 12, 2010
ONE MORE TIME - IS IT TIME FOR A NEW VOLUNTARY AFTERMARKET SYSTEM IN CANADA?
The traditional methods of operating a business within the Independent sector of the automotive aftermarket industry in Canada has been very simple. A person or licensed technician has the opportunity of having his/her own shop, raises the required cash and opens up for business. A person or Jobber sales representative has the opportunity to own a parts store, raises the required cash, and the doors are open for business. This is the capitalist system working at its best as one decides to take the personal risk to build a better future.
I submit that it is time to raise the question: "Is this the right method of conducting business that helps ensure the growth and success of the Independent sector of the automotive aftermarket industry in Canada?"
Consider the following variety of facts within the Canadian aftermarket industry:
1. The majority of Independent shop owners in Canada never obtained a formal business education before moving on to "pay his/her dues" to obtain his/her Automotive Service Technician license.
2. The average Jobber store owner is trying to figure out their own business and determine how to move forward when shop owners seemingly only want to squeeze parts margin out of the Jobber but Jobber business costs continue to rise.
3. The North American name plate vehicle count is dropping as Foreign name plates surge from coast to coast.
4. In the perception of Independent shop owners, aftermarket parts manufacturers have not produced appropriate quality foreign name plate parts that perform fit/form and function.
5. Dealerships are retaining their customer base away from the aftermarket segment and aftermarket shops end up supporting dealerships with aftermarket dollars by purchasing parts from them to obtain OE quality.
6. Pricing strategies of the aftermarket parts manufacturers are against other aftermarket parts manufacturers and not against dealer OE parts themselves which creates huge pricing fluctuations between OE dealer and aftermarket parts. This issue kills shop/jobber relationships and sends a tremendous amount of aftermarket money into the OE arena.
7. Independent Jobbers do not really understand the Service Providers service business and how to grow it. Independent Service Providers do not really understand the Jobbers commodity business and how to grow it yet both need each other more than ever before for their own survival.
8. The term "Profit" throughout every level of the aftermarket segment is treated as a "dirty" word as everyone is in a race to the bottom in their pricing strategies. "How low can I go and how fast can I get there?"
9. The industry thinks in terms of "Cost" and not "Profit". It is an embedded state of mind of this and past generations!
10. Warehouse Distributors and Manufacturers continue to spend millions of dollars each year on "toys/trinkets and trash" trying to lure shops to purchase their parts.
11. Manufacturers, WD's, and Jobbers are seemingly consumed with parts volume at any price in order to meet monthly and quarterly sales quotas.
12. The industries focus and support processes are focused on the "bottom-feeder/cockroach type" shops and not the "best business practices" shops; i.e. - Jobbers carry too many shop receivables that are 60/90/120 days old because these shops do not know how to run a business profitably in order to pay all bills on time when due. The Jobber, therefore, does not have the cash necessary to grow his/her store and cannot bring value to their best practices shops. WD's focus on "programs" to "buy volume" from the average Jobber and marketplace shop, which is traditionally, the weakest shops in the industry. The WD's then go back and beat up the manufacturer on price to support these "programs". Manufacturers don't listen to the best business practice shops as to their needs and future requirements and, like the WD's, have focused on toys/trinkets and trash to try to capture their business rather than fit/form and function at the right price. These, flavor of the day concepts, do not produce long term profitable results, yet no executive will ever challenge this method of doing "short-term" business in our industry, as most are near their retirement age and do not want to upset their "comfort zone".
13. The Independent shop as part of the industry lacks proper recognition from the consumer, as the Independent is "diverse" because the best of the Independents are also associated with the worst of the Independents.
14. Vehicle quality and service intervals have changed, therefore, shop processes must change. No one in the commodity business is talking about this. More bays with more equipment with a larger, relationship/education focused, client base is now becoming the necessary standard requirement "today" to secure and sustain "tomorrows" business and consumer needs. "Learn to grow the business or go home."
15. Television commercials are encouraging the layperson consumer to read the instructions on the box and change their own brake pads on their vehicle. This is a safety issue.
16. There is a tremendous need for a change in "Corporate Culture" at every level of the aftermarket industry.
17. There is a tremendous need for a change in "Communication Practices" at every level of the aftermarket industry.
Currently, in essence, the aftermarket operates with "no real accountability for their actions".
One might respond to the above statement with "this is the free enterprise system and if they are wrong they will lose money or go broke, leave it alone."
Well then, considering that response, now consider these facts:
1. We have now become and will continue to be a "knowledge based" industry as vehicle technology continues to develop.
2. Technology development means the requirement for highly skilled technicians for proper vehicle diagnosis and to secure the right safety related "prognosis". It is truly a safety issue.
3. Capital costs as well as on-going business and technical training time required for this industry are very high so it is very important to implement and obtain the right price from the consumer to support the structure required.
4. Technology development means more parts proliferation for Jobbers.
5. The consumer is more educated today, but very uninformed as to the proper vehicle maintenance processes required to maximize their vehicle's life. The Dealerships are using unethical "tactics" on the consumer to retain the aftermarket client with them.
6. Independent Shop owners and Jobbers must earn each others trust and learn to work closer together for each respective business to succeed.
7. Business "communication" must be greatly improved between each and at every level of our industry.
8. To be "Professional" in today's economy means meeting, and sustaining an "Industry Standard".
If the aftermarket sector of the industry acknowledges the above-mentioned facts and wants to achieve the right level of prosperity, then perhaps it is time for a dramatic change in focus. A change in focus that will allow the next generation to have a better chance to enjoy the elusive words, "professional prosperity".
Consider, if you will, the "system" used by Accountants, Engineers, Lawyers and even Liquor Control Boards.
These organizations "sanction" people and companies who voluntarily want to deal in that profession at that professional level. It is the law. The organizations are recognised by the Federal and Provincial Governments.
To become a Chartered Accountant he/she must obtain a certain education level, then pay his/her annual dues to their "Society" by which they are "sanctioned" to operate with outlined standards.
The same applies to Engineers and Lawyers.
To sell liquor, the Provincial LCB's across Canada "License" the premise to sell alcohol under certain conditions and "standards".
I submit it is time for the Independent sector of the automotive aftermarket to form its own "Society" that "sanctions" Independent shops and Independent Jobbers who voluntarily agree to operate their business to a higher standard. It is an issue of protecting consumer safety and obtaining/sustaining best business practices. This society must be approved and recognized by the Federal and Provincial Governments (so it has teeth). The owner who wishes to join this society must meet pre-set, established criteria. Business conduct and standard rules are set. Sustainable, on going, communication processes are put in place. Annual dues must be paid to the "Society". Accountability is now in place and it is "policed" internally as are the other "Professional Societies". When this is achieved, the focus will be on best business practices throughout the industry rather than accepting the current status quo focus of weak, unprofessional practices. WD's and manufacturers would adjust their businesses to meet the requirements of their customer, namely, the new shop owner and the new Jobber. Communication lines are clear. The aftermarket would have an incredible future. This "system" becomes the "industry standard" not just a "shop standard". The mind-set is elevated and conduct is changed. The consumer sees the difference from a sanctioned business to a non-sanctioned business as is recognised from a Chartered Accountant to a Bookkeeper. Aftermarket profitability changes for the better.
If your comment is "impossible", or sounds like a "pipe-dream", I submit that it is perhaps you who is not willing change to be accountable to his or her peers to improve the standards and image of our sector of the industry. You use the phrase "I am only accountable to my customers, my clients". I submit to you, that attitude is correct for running one business, but not running an entire industry of this complexity and magnitude.
The challenge would be great however the end result would make the task worthwhile. All issues must be brought to the table from each level of the industry and fully discussed by appointed representatives. All levels clearly agree to work together to form the structure.
Consider most of the infrastructure to such a mission is already in place through our National and Provincial Associations. Fine-tuning would have to take place, but a lot could be accomplished in five years when the "will" is there to make things happen.
Where are all the Association Executives and their Board members across the country who have the desire, focus and dedication required to move our aftermarket sector to a much higher and more accountable level which in turn would build the foundation structure for the next generation?
A new structure for a true Profession requires a new attitude approach and new thinking from an aftermarket industry entrenched in "tradition" created from a break down and repair world; a world that we must finally admit is now over in the current and next generation of vehicles.
I submit that it is time to raise the question: "Is this the right method of conducting business that helps ensure the growth and success of the Independent sector of the automotive aftermarket industry in Canada?"
Consider the following variety of facts within the Canadian aftermarket industry:
1. The majority of Independent shop owners in Canada never obtained a formal business education before moving on to "pay his/her dues" to obtain his/her Automotive Service Technician license.
2. The average Jobber store owner is trying to figure out their own business and determine how to move forward when shop owners seemingly only want to squeeze parts margin out of the Jobber but Jobber business costs continue to rise.
3. The North American name plate vehicle count is dropping as Foreign name plates surge from coast to coast.
4. In the perception of Independent shop owners, aftermarket parts manufacturers have not produced appropriate quality foreign name plate parts that perform fit/form and function.
5. Dealerships are retaining their customer base away from the aftermarket segment and aftermarket shops end up supporting dealerships with aftermarket dollars by purchasing parts from them to obtain OE quality.
6. Pricing strategies of the aftermarket parts manufacturers are against other aftermarket parts manufacturers and not against dealer OE parts themselves which creates huge pricing fluctuations between OE dealer and aftermarket parts. This issue kills shop/jobber relationships and sends a tremendous amount of aftermarket money into the OE arena.
7. Independent Jobbers do not really understand the Service Providers service business and how to grow it. Independent Service Providers do not really understand the Jobbers commodity business and how to grow it yet both need each other more than ever before for their own survival.
8. The term "Profit" throughout every level of the aftermarket segment is treated as a "dirty" word as everyone is in a race to the bottom in their pricing strategies. "How low can I go and how fast can I get there?"
9. The industry thinks in terms of "Cost" and not "Profit". It is an embedded state of mind of this and past generations!
10. Warehouse Distributors and Manufacturers continue to spend millions of dollars each year on "toys/trinkets and trash" trying to lure shops to purchase their parts.
11. Manufacturers, WD's, and Jobbers are seemingly consumed with parts volume at any price in order to meet monthly and quarterly sales quotas.
12. The industries focus and support processes are focused on the "bottom-feeder/cockroach type" shops and not the "best business practices" shops; i.e. - Jobbers carry too many shop receivables that are 60/90/120 days old because these shops do not know how to run a business profitably in order to pay all bills on time when due. The Jobber, therefore, does not have the cash necessary to grow his/her store and cannot bring value to their best practices shops. WD's focus on "programs" to "buy volume" from the average Jobber and marketplace shop, which is traditionally, the weakest shops in the industry. The WD's then go back and beat up the manufacturer on price to support these "programs". Manufacturers don't listen to the best business practice shops as to their needs and future requirements and, like the WD's, have focused on toys/trinkets and trash to try to capture their business rather than fit/form and function at the right price. These, flavor of the day concepts, do not produce long term profitable results, yet no executive will ever challenge this method of doing "short-term" business in our industry, as most are near their retirement age and do not want to upset their "comfort zone".
13. The Independent shop as part of the industry lacks proper recognition from the consumer, as the Independent is "diverse" because the best of the Independents are also associated with the worst of the Independents.
14. Vehicle quality and service intervals have changed, therefore, shop processes must change. No one in the commodity business is talking about this. More bays with more equipment with a larger, relationship/education focused, client base is now becoming the necessary standard requirement "today" to secure and sustain "tomorrows" business and consumer needs. "Learn to grow the business or go home."
15. Television commercials are encouraging the layperson consumer to read the instructions on the box and change their own brake pads on their vehicle. This is a safety issue.
16. There is a tremendous need for a change in "Corporate Culture" at every level of the aftermarket industry.
17. There is a tremendous need for a change in "Communication Practices" at every level of the aftermarket industry.
Currently, in essence, the aftermarket operates with "no real accountability for their actions".
One might respond to the above statement with "this is the free enterprise system and if they are wrong they will lose money or go broke, leave it alone."
Well then, considering that response, now consider these facts:
1. We have now become and will continue to be a "knowledge based" industry as vehicle technology continues to develop.
2. Technology development means the requirement for highly skilled technicians for proper vehicle diagnosis and to secure the right safety related "prognosis". It is truly a safety issue.
3. Capital costs as well as on-going business and technical training time required for this industry are very high so it is very important to implement and obtain the right price from the consumer to support the structure required.
4. Technology development means more parts proliferation for Jobbers.
5. The consumer is more educated today, but very uninformed as to the proper vehicle maintenance processes required to maximize their vehicle's life. The Dealerships are using unethical "tactics" on the consumer to retain the aftermarket client with them.
6. Independent Shop owners and Jobbers must earn each others trust and learn to work closer together for each respective business to succeed.
7. Business "communication" must be greatly improved between each and at every level of our industry.
8. To be "Professional" in today's economy means meeting, and sustaining an "Industry Standard".
If the aftermarket sector of the industry acknowledges the above-mentioned facts and wants to achieve the right level of prosperity, then perhaps it is time for a dramatic change in focus. A change in focus that will allow the next generation to have a better chance to enjoy the elusive words, "professional prosperity".
Consider, if you will, the "system" used by Accountants, Engineers, Lawyers and even Liquor Control Boards.
These organizations "sanction" people and companies who voluntarily want to deal in that profession at that professional level. It is the law. The organizations are recognised by the Federal and Provincial Governments.
To become a Chartered Accountant he/she must obtain a certain education level, then pay his/her annual dues to their "Society" by which they are "sanctioned" to operate with outlined standards.
The same applies to Engineers and Lawyers.
To sell liquor, the Provincial LCB's across Canada "License" the premise to sell alcohol under certain conditions and "standards".
I submit it is time for the Independent sector of the automotive aftermarket to form its own "Society" that "sanctions" Independent shops and Independent Jobbers who voluntarily agree to operate their business to a higher standard. It is an issue of protecting consumer safety and obtaining/sustaining best business practices. This society must be approved and recognized by the Federal and Provincial Governments (so it has teeth). The owner who wishes to join this society must meet pre-set, established criteria. Business conduct and standard rules are set. Sustainable, on going, communication processes are put in place. Annual dues must be paid to the "Society". Accountability is now in place and it is "policed" internally as are the other "Professional Societies". When this is achieved, the focus will be on best business practices throughout the industry rather than accepting the current status quo focus of weak, unprofessional practices. WD's and manufacturers would adjust their businesses to meet the requirements of their customer, namely, the new shop owner and the new Jobber. Communication lines are clear. The aftermarket would have an incredible future. This "system" becomes the "industry standard" not just a "shop standard". The mind-set is elevated and conduct is changed. The consumer sees the difference from a sanctioned business to a non-sanctioned business as is recognised from a Chartered Accountant to a Bookkeeper. Aftermarket profitability changes for the better.
If your comment is "impossible", or sounds like a "pipe-dream", I submit that it is perhaps you who is not willing change to be accountable to his or her peers to improve the standards and image of our sector of the industry. You use the phrase "I am only accountable to my customers, my clients". I submit to you, that attitude is correct for running one business, but not running an entire industry of this complexity and magnitude.
The challenge would be great however the end result would make the task worthwhile. All issues must be brought to the table from each level of the industry and fully discussed by appointed representatives. All levels clearly agree to work together to form the structure.
Consider most of the infrastructure to such a mission is already in place through our National and Provincial Associations. Fine-tuning would have to take place, but a lot could be accomplished in five years when the "will" is there to make things happen.
Where are all the Association Executives and their Board members across the country who have the desire, focus and dedication required to move our aftermarket sector to a much higher and more accountable level which in turn would build the foundation structure for the next generation?
A new structure for a true Profession requires a new attitude approach and new thinking from an aftermarket industry entrenched in "tradition" created from a break down and repair world; a world that we must finally admit is now over in the current and next generation of vehicles.
Saturday, March 27, 2010
Want Better Shop Management Skills - Learn to Play Golf
Only the golfers who own/manage an automotive business will really appreciate this particular BLOG and the message it truly sends.
I just came back from my annual 10 day golf outing at Pinehurst/Southern Pines North Carolina. I love that region and the overall State itself but most of all I love their golf courses. The people throughout the region are warm and beautiful and the golf courses are challenging and visually spectacular. As for my personal golf rounds this year?...let's just say my friends, once again, had an incredible amount of patience with me and my attitude towards my own golf play ..........but....the weather was great!!
Playing a round Golf is so very similar to running an automotive shop business today.
Golf is an interesting and very disciplined sport as is owning and managing an Independent automotive maintenance and repair business. You truly have to learn the right self-disciplines that must become habits in order to succeed.
Consider the similarities:
Golf tells it like it is no matter how good you may look in appearance. Many golfers look like pros in appearance with the bag, the clubs, the clothing and the shoes, but read the score card to tell you the truth. Similarly many shops may appear to look good on the outside but take a look at their true net-income after tax and ensure a professional management wage and market place rent have been factored in.
Golf is very humbling. The true golf score measurement brings you back down to earth. When you are given strokes through the handicap system it only covers up your real score. Your handicap is the smoke and mirrors show of the sport. Similarly, it is irrelevant how much your ego is telling you how great you think you are with your shop business, if you are not achieving a 35% ROI over all in the business, you are "shot down" by the real world who really know your "handicap(s)". When shop management only measures its business in total sales and sales per invoice and does not include average billed hours per invoice coupled with total shop site efficiency, their lack of net income is like having a handicap. It is not telling you the truth....you think you are running a great business....BUT...you really are not the top player you may perceive.............yet!!!!
You need to get a new skill-set together and practice them if you have the discipline to do so.
Golf has no sympathy for lack of mental discipline and physical sloppiness. You end up with a boogie,double boogie or worse on more holes than desired. Excuses are always so plentiful in golf but also very cheap. When running a shop, average billed hours per invoice starts to tell the truth about what processes and methods you really adhere to. Does your shop achieve an average 2.5 billed hours per invoice for basic consumer vehicle maintenance? If not what is wrong with your business "processes"? In golf, a consistent correct swing and "format" is critical to a great shot and your overall score. In business the right and consistent internal processes (format) to achieve the desired and sustained results takes discipline and practice.
There is no doubt about it.......Golf separates the men from the boys. In business key measurements separates the true entrepreneurs from the "wannabees"
A great golf score is so very much like running a highly profitable shop business today because the self disciplines to achieve the desired results are very identical. Without a lot of self discipline backed up with on-going practice and an attitude to continuously learn in order to improve, one finds it extremely difficult to achieve the ultimate desired results.
Hey if it was easy, everyone would have a great golf score..........hey if it was easy every shop owner today would run a financially successful enterprise.........
Revisit your score card. Do the math. Are you measuring your business with a handicap system or are you a "scratch" entrepreneur?
I just came back from my annual 10 day golf outing at Pinehurst/Southern Pines North Carolina. I love that region and the overall State itself but most of all I love their golf courses. The people throughout the region are warm and beautiful and the golf courses are challenging and visually spectacular. As for my personal golf rounds this year?...let's just say my friends, once again, had an incredible amount of patience with me and my attitude towards my own golf play ..........but....the weather was great!!
Playing a round Golf is so very similar to running an automotive shop business today.
Golf is an interesting and very disciplined sport as is owning and managing an Independent automotive maintenance and repair business. You truly have to learn the right self-disciplines that must become habits in order to succeed.
Consider the similarities:
Golf tells it like it is no matter how good you may look in appearance. Many golfers look like pros in appearance with the bag, the clubs, the clothing and the shoes, but read the score card to tell you the truth. Similarly many shops may appear to look good on the outside but take a look at their true net-income after tax and ensure a professional management wage and market place rent have been factored in.
Golf is very humbling. The true golf score measurement brings you back down to earth. When you are given strokes through the handicap system it only covers up your real score. Your handicap is the smoke and mirrors show of the sport. Similarly, it is irrelevant how much your ego is telling you how great you think you are with your shop business, if you are not achieving a 35% ROI over all in the business, you are "shot down" by the real world who really know your "handicap(s)". When shop management only measures its business in total sales and sales per invoice and does not include average billed hours per invoice coupled with total shop site efficiency, their lack of net income is like having a handicap. It is not telling you the truth....you think you are running a great business....BUT...you really are not the top player you may perceive.............yet!!!!
You need to get a new skill-set together and practice them if you have the discipline to do so.
Golf has no sympathy for lack of mental discipline and physical sloppiness. You end up with a boogie,double boogie or worse on more holes than desired. Excuses are always so plentiful in golf but also very cheap. When running a shop, average billed hours per invoice starts to tell the truth about what processes and methods you really adhere to. Does your shop achieve an average 2.5 billed hours per invoice for basic consumer vehicle maintenance? If not what is wrong with your business "processes"? In golf, a consistent correct swing and "format" is critical to a great shot and your overall score. In business the right and consistent internal processes (format) to achieve the desired and sustained results takes discipline and practice.
There is no doubt about it.......Golf separates the men from the boys. In business key measurements separates the true entrepreneurs from the "wannabees"
A great golf score is so very much like running a highly profitable shop business today because the self disciplines to achieve the desired results are very identical. Without a lot of self discipline backed up with on-going practice and an attitude to continuously learn in order to improve, one finds it extremely difficult to achieve the ultimate desired results.
Hey if it was easy, everyone would have a great golf score..........hey if it was easy every shop owner today would run a financially successful enterprise.........
Revisit your score card. Do the math. Are you measuring your business with a handicap system or are you a "scratch" entrepreneur?
Saturday, March 13, 2010
OE Website Access Must Be Planned
On May 1st 2010 all Independent shops in Canada are suppose to have open access to the OEM websites which was agreed to through a voluntary agreement.
This simply means that information such as vehicle calibration codes and the ability to re-flash and reset the vehicle computers coupled with diagnostic information is suppose to be available to the Aftermarket for a reasonable fee.
Some words of caution on this key leap forward for the Independent sector that I received from respected competent technicians:
1. Ensure you have hard wire to the various laptop computers available throughout the bays and preferably located at the technicians tool box. Wireless is not recommended when it comes to downloading a re-flash issue. Hard wire & high speed is important as certain downloads, such as a BMW re-flash which could take up to 8 hours to complete, and the last thing one needs is an interruption due to a poor connection. A hick-up with a download could destroy a vehicle computer.........if you are not familiar with the variables in downloading information, get ready to write the cheque!!
2. Invest in high end laptops. Bargain priced low-end laptops are not the way to go for this job. Make sure they are stripped of all the software "stuff" that comes with them. You don't need interference with items to slow the process down when downloading information from an OEM website for a specific vehicle!!!! Forget the Excel, PowerPoint and all the other "software verbiage" that accompanies a laptop. Keep it simple with Windows 7 as the one feature to allow access to the internet.
3. Communicate, communicate, communicate!!! When one technician has an experience with an OEM website issue, it is imperative to stop the bay activity and take the time to call everyone over to witness and explain the experience. Everyone must see the issue live in order to learn/familiarize themselves with the various website set-ups and diagnostic issues. The old concept of "I am the only one who knows this site or issue" is wrong and will be detrimental to the shop in the long run. It must be a "team" effort and experience. Management and staff must understand the importance of this issue.
4. Be prepared for a new learning curve. Re-flashing is an important issue BUT it is not the only thing. Website information and where it is located must be learned throughout the shop and this will take a lot of time as every OEM website is different. The culture of the shop must be "exchange information when discovered, no exceptions". The internal shop strategy of everyone is an island does not hold water any more. Internal communication and everyone acting in a team format is the ONLY way that this will work internally.
5. If you are thinking you are going to get rich quick through this new information access with the ability to re-flash and calibrate vehicle computers.........you may be disappointed. Do the math. The investment will be incredible. There will be many stepping stones to be taken such as internal processes for capturing and documenting time will have to be thoroughly reviewed and mastered. This will require an investment of time and manpower to ensure we, as a sector, serve the end client/consumer competently and professionally.
The Independent Aftermarket sector is a unique division of the automotive industry. Take the time to do this right so your shop can serve the end client/consumer in the most professional manner. The shop culture must embrace the philosophy of "We will NOT let you down".
This simply means that information such as vehicle calibration codes and the ability to re-flash and reset the vehicle computers coupled with diagnostic information is suppose to be available to the Aftermarket for a reasonable fee.
Some words of caution on this key leap forward for the Independent sector that I received from respected competent technicians:
1. Ensure you have hard wire to the various laptop computers available throughout the bays and preferably located at the technicians tool box. Wireless is not recommended when it comes to downloading a re-flash issue. Hard wire & high speed is important as certain downloads, such as a BMW re-flash which could take up to 8 hours to complete, and the last thing one needs is an interruption due to a poor connection. A hick-up with a download could destroy a vehicle computer.........if you are not familiar with the variables in downloading information, get ready to write the cheque!!
2. Invest in high end laptops. Bargain priced low-end laptops are not the way to go for this job. Make sure they are stripped of all the software "stuff" that comes with them. You don't need interference with items to slow the process down when downloading information from an OEM website for a specific vehicle!!!! Forget the Excel, PowerPoint and all the other "software verbiage" that accompanies a laptop. Keep it simple with Windows 7 as the one feature to allow access to the internet.
3. Communicate, communicate, communicate!!! When one technician has an experience with an OEM website issue, it is imperative to stop the bay activity and take the time to call everyone over to witness and explain the experience. Everyone must see the issue live in order to learn/familiarize themselves with the various website set-ups and diagnostic issues. The old concept of "I am the only one who knows this site or issue" is wrong and will be detrimental to the shop in the long run. It must be a "team" effort and experience. Management and staff must understand the importance of this issue.
4. Be prepared for a new learning curve. Re-flashing is an important issue BUT it is not the only thing. Website information and where it is located must be learned throughout the shop and this will take a lot of time as every OEM website is different. The culture of the shop must be "exchange information when discovered, no exceptions". The internal shop strategy of everyone is an island does not hold water any more. Internal communication and everyone acting in a team format is the ONLY way that this will work internally.
5. If you are thinking you are going to get rich quick through this new information access with the ability to re-flash and calibrate vehicle computers.........you may be disappointed. Do the math. The investment will be incredible. There will be many stepping stones to be taken such as internal processes for capturing and documenting time will have to be thoroughly reviewed and mastered. This will require an investment of time and manpower to ensure we, as a sector, serve the end client/consumer competently and professionally.
The Independent Aftermarket sector is a unique division of the automotive industry. Take the time to do this right so your shop can serve the end client/consumer in the most professional manner. The shop culture must embrace the philosophy of "We will NOT let you down".
Thursday, February 25, 2010
SLOW TIMES MEANS PAY ATTENTION TO SHOP PROCESSES
Have you ever noticed that when the shop is slow, management has a tendency to panic? Welcome to the break down and repair business. The fact is it has been extremely slow from coast to coast. Over the past 4 weeks I have traveled from the Atlantic region to the shores of the Pacific and regions in between, talking with many people from all levels of the industry. Business is definitely different.
A main contributor to the slow business is that too many shops rely on the break down and repair business model from the past 40 years. They are running an installer based business model from yesterday's era versus a comprehensive service provider based business model required today. The previous generation's business model is broken. The math does not work any more.
This is why the preventative maintenance business model must be adopted and embraced.
Vehicles are still moving out there so they must be properly maintained.
Preventative maintenance is currently being neglected by the consumer. You can thank the high consumer debt load coupled with the fact vehicles are also built better. They just don't break down the way they use to. Another factor is the shops through out the industry have failed to educate the client/consumer about budgeting for their vehicle to ensure safety and reliability.
During this slow period of time it would be wise to start building and refining the shop's internal process and procedures by going through your data base and research the last time the customer/client was in for preventative maintenance service? Start by reviewing all flush services required. As you know complete fluid maintenance is critical to reliable vehicle performance today. From there locate what other specific items were declined in previous visits by the client that must be brought to the table again. Review manufacturer recommended required servicing based on client mileage utilizing industry resources such as Mitchell, Alldata and Identifix.
It is the shop's Professional responsibility to ensure the client's vehicle is safe and reliable. This is what you are hired for. This is why clients trust you. It is time to review their file completely and then contact them. Work with the client. This on-going process must be instilled as a culture in the shop's daily and weekly procedures. Become proactive rather than reactive.
Take charge of the business. Review all internal vehicle inspection procedures and processes with the staff including the items above coupled with thorough time clock recording which is required to ensure proper billing at the front counter. Bring the staff together as a team; a team that understands its responsibilities to serve each and every client to the very best of our ability. We must never let a client down. Let the staff see and hear you counselling the client and lead them by example.
It is easy for an owner/manager to sit back and complain about the world while they try to slash expenses, then they focus on parts cost by shopping jobbers all over town for a better price to save $5 or $10 on a part, rather than concentrate on their core business which is shop productivity. They then think they can discount themselves back into prosperity by now putting on price specials trying to keep the bays busy. Do the math. Math doesn't lie. These discounting, out of control shops from yesteryear, are trying to make 2 + 2 add to 7.
The shops that have now gone back to the old style of business with the oil change loss leader method will not only do more damage to their own business but also to the reputation of the automotive aftermarket industry. Everyone knows these shops try to sell up and do anything to find work to keep the staff busy. This shop's culture is always all about them and not the end client/consumer. Client/consumer trust is not in place and never will be with this method. These shops just don't get it. They always end up buying themselves a job and a terribly poor one at that, as management is chained to the business 6 days a week.
The real issue in these modern times is taking control of the business by understanding the math and managing the client's vehicle and their relationships the shop has in place. From there the shop executes its responsibilities of trust on behalf of the client. Client's are not thinking about vehicle service because they are too busy in their own lives and besides, to them, the vehicle seems to be running just fine, however, you know that if it is not maintained properly a potential costly and time consuming inconvenience for the client could occur. Educate the client/consumer by counselling not selling. The average client/consumer is not stupid but they are uninformed.
Consider all the options...........you are in the relationship business. You are the Professional. Take your responsibilities seriously.
A main contributor to the slow business is that too many shops rely on the break down and repair business model from the past 40 years. They are running an installer based business model from yesterday's era versus a comprehensive service provider based business model required today. The previous generation's business model is broken. The math does not work any more.
This is why the preventative maintenance business model must be adopted and embraced.
Vehicles are still moving out there so they must be properly maintained.
Preventative maintenance is currently being neglected by the consumer. You can thank the high consumer debt load coupled with the fact vehicles are also built better. They just don't break down the way they use to. Another factor is the shops through out the industry have failed to educate the client/consumer about budgeting for their vehicle to ensure safety and reliability.
During this slow period of time it would be wise to start building and refining the shop's internal process and procedures by going through your data base and research the last time the customer/client was in for preventative maintenance service? Start by reviewing all flush services required. As you know complete fluid maintenance is critical to reliable vehicle performance today. From there locate what other specific items were declined in previous visits by the client that must be brought to the table again. Review manufacturer recommended required servicing based on client mileage utilizing industry resources such as Mitchell, Alldata and Identifix.
It is the shop's Professional responsibility to ensure the client's vehicle is safe and reliable. This is what you are hired for. This is why clients trust you. It is time to review their file completely and then contact them. Work with the client. This on-going process must be instilled as a culture in the shop's daily and weekly procedures. Become proactive rather than reactive.
Take charge of the business. Review all internal vehicle inspection procedures and processes with the staff including the items above coupled with thorough time clock recording which is required to ensure proper billing at the front counter. Bring the staff together as a team; a team that understands its responsibilities to serve each and every client to the very best of our ability. We must never let a client down. Let the staff see and hear you counselling the client and lead them by example.
It is easy for an owner/manager to sit back and complain about the world while they try to slash expenses, then they focus on parts cost by shopping jobbers all over town for a better price to save $5 or $10 on a part, rather than concentrate on their core business which is shop productivity. They then think they can discount themselves back into prosperity by now putting on price specials trying to keep the bays busy. Do the math. Math doesn't lie. These discounting, out of control shops from yesteryear, are trying to make 2 + 2 add to 7.
The shops that have now gone back to the old style of business with the oil change loss leader method will not only do more damage to their own business but also to the reputation of the automotive aftermarket industry. Everyone knows these shops try to sell up and do anything to find work to keep the staff busy. This shop's culture is always all about them and not the end client/consumer. Client/consumer trust is not in place and never will be with this method. These shops just don't get it. They always end up buying themselves a job and a terribly poor one at that, as management is chained to the business 6 days a week.
The real issue in these modern times is taking control of the business by understanding the math and managing the client's vehicle and their relationships the shop has in place. From there the shop executes its responsibilities of trust on behalf of the client. Client's are not thinking about vehicle service because they are too busy in their own lives and besides, to them, the vehicle seems to be running just fine, however, you know that if it is not maintained properly a potential costly and time consuming inconvenience for the client could occur. Educate the client/consumer by counselling not selling. The average client/consumer is not stupid but they are uninformed.
Consider all the options...........you are in the relationship business. You are the Professional. Take your responsibilities seriously.
Tuesday, January 26, 2010
WE HAVE THE KNOWLEDGE TO MANAGE, DO WE HAVE THE GUTS TO MANAGE?
Many shop owners have invested the time to learn how to manage their shop in today's new realities. This is excellent and they must be applauded for that commitment made to their business. Now they return to the real world of the aftermarket after the course with great intentions and are faced with the incredible day to day distracting noise within the industry.
The changes required to the shop are substantial and will take, on average, 2 to 3 years to fully implement, but the biggest impediment to making the change will always be Management's self discipline to get it done.
Self discipline is everything in moving a business forward today. Self discipline is only controlled by one person and is no one else's responsibility. Self discipline will be the key measurement in the end when evaluation takes place as to why the business succeeded or why the business failed.
It takes a lot of guts to remain disciplined to see things through as the owner/manager now must re-enter business territory that they have purposely tried to avoid in the past. Two examples include:
1. Owner/managers are not comfortable with confronting a long-term staff member to see if they can change to get them on board to create a TEAM concept within the shop. No one likes staff confrontation but in some cases it must be done as you need the right people and the right attitude on the bus.
2. Owner/managers find it difficult to insert the new day to day measurement disciplines required today as they now must work closer with the bookkeeper, knowing they are not an expert or even comfortable discussing accounting formats but they must learn to do so in order for the business to move forward.
The owner/manager is facing many personal internal fears when making changes to the business, but the changes must be made IF the bottom-line opportunities are going to be realized.
In the end it is clearly acknowledged that running a professional automotive service shop today is the most complex business in the retail world. If it was easy, everyone would embrace it. Knowledge, pure guts and incredible self-discipline are required to "get it done".
Are you one of the select few entrepreneurs who will be enjoying an incredible and rewarding business career moving forward into the next 5 to 7 years of the aftermarket or will you end up being a historical footnote in our industry?
Look in the mirror. Talk the truth to yourself. You now have the knowledge and all the resources at your disposal to succeed. Use them. Believe in yourself. Push yourself each and every day. Be proud of who you are and what you and your business stand for in delivering integrity, service and quality to your business clients and your community.
You CAN do it!!
The changes required to the shop are substantial and will take, on average, 2 to 3 years to fully implement, but the biggest impediment to making the change will always be Management's self discipline to get it done.
Self discipline is everything in moving a business forward today. Self discipline is only controlled by one person and is no one else's responsibility. Self discipline will be the key measurement in the end when evaluation takes place as to why the business succeeded or why the business failed.
It takes a lot of guts to remain disciplined to see things through as the owner/manager now must re-enter business territory that they have purposely tried to avoid in the past. Two examples include:
1. Owner/managers are not comfortable with confronting a long-term staff member to see if they can change to get them on board to create a TEAM concept within the shop. No one likes staff confrontation but in some cases it must be done as you need the right people and the right attitude on the bus.
2. Owner/managers find it difficult to insert the new day to day measurement disciplines required today as they now must work closer with the bookkeeper, knowing they are not an expert or even comfortable discussing accounting formats but they must learn to do so in order for the business to move forward.
The owner/manager is facing many personal internal fears when making changes to the business, but the changes must be made IF the bottom-line opportunities are going to be realized.
In the end it is clearly acknowledged that running a professional automotive service shop today is the most complex business in the retail world. If it was easy, everyone would embrace it. Knowledge, pure guts and incredible self-discipline are required to "get it done".
Are you one of the select few entrepreneurs who will be enjoying an incredible and rewarding business career moving forward into the next 5 to 7 years of the aftermarket or will you end up being a historical footnote in our industry?
Look in the mirror. Talk the truth to yourself. You now have the knowledge and all the resources at your disposal to succeed. Use them. Believe in yourself. Push yourself each and every day. Be proud of who you are and what you and your business stand for in delivering integrity, service and quality to your business clients and your community.
You CAN do it!!
Monday, January 4, 2010
7 STEPS TO YOUR NEW BUSINESS MODEL IN 2010
There are steps that a shop owner can start to take to transition the business into the modern day format that is required to be successful for this new decade.
Consider each point as it applies to your operation.
1. THINK ABOUT THE SHOP'S HISTORY: Never embark on a new plan without first understanding where the shop came from. Discuss the shop's history with your team and talk about why change is required and how each individual will benefit from the change desired.
2. DO SOME MATH: Study the basic numbers of the business and project how the numbers would change in the business when the new transition is in place. Math does not lie and when the employees income improves and the shop's bottom-line is positively impacted, then effort to make the transition makes sense.
3. SEEK OUT THE SHOP'S VULNERABILITY: With any transition in business there is always one or two weak links in the chain. Review the shop's weakest points and how they would have to be changed in order to support and make the transition work.
4. ARE THE RIGHT PEOPLE ON THE BUS?: In any business having staff with the right attitude is everything. A negative staff member creates conflict, business stress, and always slows any new desired process down. I would rather have a staff member with an incredible positive attitude and little experience over a highly qualified individual who knows it all. Do an inventory of the shop's staff. Can this shop operate as a team or is it too individualistic? Today's business requires a team.
5. DON'T SELL, COUNSEL: Work on changing the mind-set throughout the shop that we are Professionals being hired by our client to advise them based on the clients parameters. This is the Professional way of doing business today. When the client is properly and Professionally served, the sales will look after themselves. Review all internal vehicle inspection and reporting processes to ensure the client is being properly and fully informed.
6. MEASURE THE RIGHT CRITERIA: Transition the business effectively by monitoring and measuring 2 basic items on a weekly basis, namely, the average billed hours per invoice (minimum 2.0 to 2.5 hours per invoice for basic consumer vehicle maintenance) and total shop efficiency (minimum 75% with a desired goal of 80%). Report and discuss these numbers to the staff as they point out exactly the effectiveness the shop is having, as a team, with each client.
7. PATIENCE WITH DISCIPLINE: If change was easy, the entire industry would be embracing it. The fact is transitioning the business to a new culture requires Management patience coupled with discipline to execute. It is so easy to make up an excuse to stop trying or quit.
I believe 2010 will be an exceptionally positive year for the Independent sector of the Aftermarket. There is a lot of pent up demand for vehicle preventative maintenance that was turned down or neglected during 2009. The shop's that have transitioned their business to professionally serve their clients are in the right position to reap incredible rewards.
Are you enjoying a career or have you bought yourself a job?
Consider each point as it applies to your operation.
1. THINK ABOUT THE SHOP'S HISTORY: Never embark on a new plan without first understanding where the shop came from. Discuss the shop's history with your team and talk about why change is required and how each individual will benefit from the change desired.
2. DO SOME MATH: Study the basic numbers of the business and project how the numbers would change in the business when the new transition is in place. Math does not lie and when the employees income improves and the shop's bottom-line is positively impacted, then effort to make the transition makes sense.
3. SEEK OUT THE SHOP'S VULNERABILITY: With any transition in business there is always one or two weak links in the chain. Review the shop's weakest points and how they would have to be changed in order to support and make the transition work.
4. ARE THE RIGHT PEOPLE ON THE BUS?: In any business having staff with the right attitude is everything. A negative staff member creates conflict, business stress, and always slows any new desired process down. I would rather have a staff member with an incredible positive attitude and little experience over a highly qualified individual who knows it all. Do an inventory of the shop's staff. Can this shop operate as a team or is it too individualistic? Today's business requires a team.
5. DON'T SELL, COUNSEL: Work on changing the mind-set throughout the shop that we are Professionals being hired by our client to advise them based on the clients parameters. This is the Professional way of doing business today. When the client is properly and Professionally served, the sales will look after themselves. Review all internal vehicle inspection and reporting processes to ensure the client is being properly and fully informed.
6. MEASURE THE RIGHT CRITERIA: Transition the business effectively by monitoring and measuring 2 basic items on a weekly basis, namely, the average billed hours per invoice (minimum 2.0 to 2.5 hours per invoice for basic consumer vehicle maintenance) and total shop efficiency (minimum 75% with a desired goal of 80%). Report and discuss these numbers to the staff as they point out exactly the effectiveness the shop is having, as a team, with each client.
7. PATIENCE WITH DISCIPLINE: If change was easy, the entire industry would be embracing it. The fact is transitioning the business to a new culture requires Management patience coupled with discipline to execute. It is so easy to make up an excuse to stop trying or quit.
I believe 2010 will be an exceptionally positive year for the Independent sector of the Aftermarket. There is a lot of pent up demand for vehicle preventative maintenance that was turned down or neglected during 2009. The shop's that have transitioned their business to professionally serve their clients are in the right position to reap incredible rewards.
Are you enjoying a career or have you bought yourself a job?
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