We just wanted to say, "Job well done!" The addition of the Rui Martins "Process for Success" 2 day course to the 3 day "High Performance Profitability in the New World of Automotive Maintenance" course by Bob has been much anticipated and very much valued. It truly has brought everything that Bob has been teaching together.
We can not say enough about the time and work involved in bringing such an amazing course together and how fortunate we are to have such knowledgeable and dedicated individuals behind us and the AAEC BEST concept. It just makes sense for these courses to go hand in hand.
Again, we did not know what would be in store for us, but were more than pleased with what was presented and how it was presented. We are no longer looking at the cost of such courses, but rather the importance of the course and the education that we all will gain from them. It is very important to have access to such courses. It also provides for an opportunity to be in a place outside of the work atmosphere and "bonding" with one another and having the chance to build relationships with our peers. The feedback from our staff was very positive. It was like a light went off in their heads. They finally understand what we are trying to accomplish and what we need to do to reach our goals. They could relate to Rui because he has been in a shop and he knows what goes on. They understand the processes of proper vehicle inspections, documentation and reporting procedures back to the front counter. They also understand the roles of the front counter and the processes that they have. We realize the importance of the roles that each one of us plays and we all know what that role is and that we must all be on the same page and reading from the same book to succeed. We "all" realize the importance of communication and how those lines must remain open because even the smallest breakdown can be detrimental. It is so important to have "every" member of our team go through the management training courses. We must set an example and walk, talk, live and breathe by that. We must make sure that our vision is clear, that we have the ability, motivation, resources and checks and balances in place to make change possible. If just one of these is missing, we end up with confusion, anxiety, frustration and a lack of confidence and our credibility is lost.
Rui is an amazing individual who is so passionate about this industry and wanting to see the necessary changes so that we can still have an Aftermarket in the future. This was very evident when he visited our shop to do an on site critique. We can not put into words what we took from spending that day with him. He was bursting with enthusiasm! He would be out in the back shop with our technicians and then would be almost running into my office to show me where we could be capturing more billed hours and then he would photocopy papers and go back out into the shop. He would relay the information to the techs and you could just see lights going off. It was an experience we will not soon forget. In fact, he came into my office so many times, that I had to tell him he was beginning to make me feel bad. All the money that we had "left" on the table that day, never mind over the years, we could very well have been retired years ago! It wasn't like we weren't getting the vehicles into the shop or doing the inspections, we were not billing for the work that we had performed. This was not something that we had ever done properly. Oh, if we could turn back time...
It is very important to be able to have the mathematical equations and know the numbers of your business and what they mean to your business and to your bottom line. That is why it is so imperative to have Bob's course and to understand the mathematics first. The math does not lie!!!!
We are so blessed to be a part of the AAEC BEST concept and cannot say enough about the value of having a Coach and Mentor such as Bob who is so committed to bringing about change in an industry that does not want to change. If only more people would see what his "vision" is and believe that it can happen. We believe and we know that it works. We are proof that it works. We know that this journey will have it's ups and downs and we are excited with the addition of another remarkable man, Rui Martins. We know that he has a huge heart, is very passionate and you can tell by talking to him how much he loves what he is doing. Having a team like this behind us and of course, our parts representative, Jamie, who has been a part of our journey every step of the way also. We have built a trusting relationship and we each know what our roles are and what we need to do to succeed!
Kevin & Stacey Gustafson
Gustafson's Auto Clinic Inc
3915 53 street
Athabasca, AB
T9S 1A7
p.(780) 675-5869
f.(780) 675-5884
Toll Free 1-877-675-5869
Monday, February 21, 2011
Tuesday, January 25, 2011
The Changing Marketplace Continues - Now What?
The trend in the Aftermarket continues it metamorphosis and we must figure out what to do.
Consider these points:
1). The consumer continues to challenge us and displays little patience. Their personal lives are stressed.
2). We have moved from 90 day oil changes to 180 day oil changes which revolves around winter and spring tire changes.
3). The rush at tire change over means billed hours per invoice plummet.
4). The consumer wants anything done on their vehicle only when they are in the shop at those 2 times a year. How does a shop schedule for preventative maintenance?
5). Parts suppliers are swamped with parts orders and must sort out inventory issues for a 90 day period and a short 60 day period then figure out how to survive the rest of the year.
What does this mean for the next number of years for a typical Independent shop and parts suppliers?
We are now coming down to 2 seasons which will give a shop 60 days when the weather turns nice in the spring and perhaps as much as 90 days in the Fall (about mid Oct to mid December) in which to make the necessary net income to carry a shop for the year. In between those periods we will experience a struggle to generate business unless the shop and the industry finds a solution that serves the consumer professionally and the consumer is willing to accept. It won't be easy but it means our Aftermarket business model must be re-invented once again.
Due to increased quality within the vehicle, breakdown just doesn't constantly occur. The consumer will be in to get the tires changed over from winter to all season in the Spring and back to winter tires in the Fall. When will you have time to inspect the vehicle for safety and reliability if that is the only time you see the consumer? It is therefore very important to communicate and educate the consumer to a minimum of annual but preferably semi-annual vehicle inspection. The reality is however, the consumer says fine, do it when you change my tires. How can we do that?
The problem here is, the shop can't function that way. The shop can no longer work like a dentist office with a visit every six months such as January and June visits because in reality the consumer reacts to the weather to have their vehicle looked after and that is the Spring and when the weather turns bad in the Fall. Exact dates do not exist.
Does the Aftermarket have the answers for this yet. No we do not BUT we must diligently work on it and solve this problem. If we don't, the Independent shop will be, if not already, in serious trouble along with their parts suppliers.
Open the discussion at every level of the industry to discuss this and let ideas roll out because it is about vehicle safety and reliability for the consumer coupled with financial survival of the Aftermarket.
Consider these points:
1). The consumer continues to challenge us and displays little patience. Their personal lives are stressed.
2). We have moved from 90 day oil changes to 180 day oil changes which revolves around winter and spring tire changes.
3). The rush at tire change over means billed hours per invoice plummet.
4). The consumer wants anything done on their vehicle only when they are in the shop at those 2 times a year. How does a shop schedule for preventative maintenance?
5). Parts suppliers are swamped with parts orders and must sort out inventory issues for a 90 day period and a short 60 day period then figure out how to survive the rest of the year.
What does this mean for the next number of years for a typical Independent shop and parts suppliers?
We are now coming down to 2 seasons which will give a shop 60 days when the weather turns nice in the spring and perhaps as much as 90 days in the Fall (about mid Oct to mid December) in which to make the necessary net income to carry a shop for the year. In between those periods we will experience a struggle to generate business unless the shop and the industry finds a solution that serves the consumer professionally and the consumer is willing to accept. It won't be easy but it means our Aftermarket business model must be re-invented once again.
Due to increased quality within the vehicle, breakdown just doesn't constantly occur. The consumer will be in to get the tires changed over from winter to all season in the Spring and back to winter tires in the Fall. When will you have time to inspect the vehicle for safety and reliability if that is the only time you see the consumer? It is therefore very important to communicate and educate the consumer to a minimum of annual but preferably semi-annual vehicle inspection. The reality is however, the consumer says fine, do it when you change my tires. How can we do that?
The problem here is, the shop can't function that way. The shop can no longer work like a dentist office with a visit every six months such as January and June visits because in reality the consumer reacts to the weather to have their vehicle looked after and that is the Spring and when the weather turns bad in the Fall. Exact dates do not exist.
Does the Aftermarket have the answers for this yet. No we do not BUT we must diligently work on it and solve this problem. If we don't, the Independent shop will be, if not already, in serious trouble along with their parts suppliers.
Open the discussion at every level of the industry to discuss this and let ideas roll out because it is about vehicle safety and reliability for the consumer coupled with financial survival of the Aftermarket.
Monday, January 10, 2011
Welcome to January and February
Nothing much changes within the Aftermarket.
January and February are months of "soft sales", "doubtfulness", "anguish" and don't forget the obvious "I'm going broke, I have no money" syndrome.
OK time for a wake-up call that I'm sure I will get negative feedback on.
Nothing has changed!!!!! and THAT is the point. The Aftermarket remains the same expecting different results......the professionals call that "insanity" YET we continue to stick with it.
TIME TO GET ON WITH IT AND CHANGE IT UP!!
The breakdown and repair world is dead if not totally dying a slow and tragic death depending on where you are located. We are now onto the NEXT generation, namely MANAGING our client's vehicles on their behalf.
This means that we must educate the consumer FIRST to the NEW world of vehicle technology. We have done such an incredible job keeping this a secret from them. We seem to be good once we get focussed and keeping the consumer in the dark is a milestone of what we have done well.
PREVENTATIVE MAINTENANCE is how the vehicle works today.........not break down and repair. It is our Professional responsibility to take charge on behalf of our CLIENT to ensure their vehicle is SAFE and RELIABLE. It means properly educating the client to HOW, we the Aftermarket, will look after you. We will ensure safety and reliability of your vehicle(s) but, in order to do that, we must start this way..........two full vehicle inspections per year, and we will manage that process for you. We must pre-book proper vehicle inspections 6 months apart but within a time frame that fits your schedule. We will take the responsibility of following up with you 2 weeks before the pre-booked appointment to ensure the date works for you. We will always advise you of any manufacturer concerns regarding your vehicle. We will mange this based on your driving habits, our weather conditions in our part of the country and your expectations with your vehicle. Let's have an open and sincere discussion about this process so we can understand your expectations.
We within the Aftermarket must change our thinking and Culture along with the "Processes" that can bring this to fruition.
Don't ignore the message.............this IS the new Aftermarket. Embrace it OR you will starve. I can't be more black and white about this message.
January and February are months of "soft sales", "doubtfulness", "anguish" and don't forget the obvious "I'm going broke, I have no money" syndrome.
OK time for a wake-up call that I'm sure I will get negative feedback on.
Nothing has changed!!!!! and THAT is the point. The Aftermarket remains the same expecting different results......the professionals call that "insanity" YET we continue to stick with it.
TIME TO GET ON WITH IT AND CHANGE IT UP!!
The breakdown and repair world is dead if not totally dying a slow and tragic death depending on where you are located. We are now onto the NEXT generation, namely MANAGING our client's vehicles on their behalf.
This means that we must educate the consumer FIRST to the NEW world of vehicle technology. We have done such an incredible job keeping this a secret from them. We seem to be good once we get focussed and keeping the consumer in the dark is a milestone of what we have done well.
PREVENTATIVE MAINTENANCE is how the vehicle works today.........not break down and repair. It is our Professional responsibility to take charge on behalf of our CLIENT to ensure their vehicle is SAFE and RELIABLE. It means properly educating the client to HOW, we the Aftermarket, will look after you. We will ensure safety and reliability of your vehicle(s) but, in order to do that, we must start this way..........two full vehicle inspections per year, and we will manage that process for you. We must pre-book proper vehicle inspections 6 months apart but within a time frame that fits your schedule. We will take the responsibility of following up with you 2 weeks before the pre-booked appointment to ensure the date works for you. We will always advise you of any manufacturer concerns regarding your vehicle. We will mange this based on your driving habits, our weather conditions in our part of the country and your expectations with your vehicle. Let's have an open and sincere discussion about this process so we can understand your expectations.
We within the Aftermarket must change our thinking and Culture along with the "Processes" that can bring this to fruition.
Don't ignore the message.............this IS the new Aftermarket. Embrace it OR you will starve. I can't be more black and white about this message.
Thursday, December 16, 2010
So NOW You Are Thinking Succession??
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!!!!!
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, 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.
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