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Working with the correct knowledge will bring all the luck anyone needs; however, consider how many are labouring with out of date knowledge required to run and manage a business in today's challenging climate.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.
Friday, July 23, 2010
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.
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