The next 24 months will be the most important months of your shop's business life.
This year is not like any other in the history of our industry. This is not a time to accept the traditional Aftermarket summer shut down as we can not afford to lose any time. It is moving that fast.
With the demise of the "D-3" and the closing of dealerships, the Aftermarket shops and jobbers must aggressively get their Professional act together. We can not afford to take the summer off as the traditional excuse for inertia. The clock is ticking. The opportunity to greatly enhance marketplace image and attract new clients that traditionally used the OE dealers is here and now.
It is all about the client's experience!
Shop Business Management must be revamped and relearned as it is so critical today. Issues such as to how to protect core competencies while building shop bottomline profitability, discover and how to align your business resources, how to build collaborative business relationships, rethinking your business model to maximize marketplace penetration, how to leverage your market position, how to create and measure a professional shop team, what it takes to develop and how to measure client loyalty must all be addressed now, not sometime in the future. It will be too late.
DON'T WASTE THIS CRISIS.......
Friday, May 8, 2009
Thursday, April 30, 2009
Investment In Training & Development Must Be Sustained
Opportunity is knocking at the front door for every Automotive Service Shop. Is your shop taking advantage of it?
I am writing this article just after attending the "Lindertech North" technical training weekend in Toronto. I always like to drop into this event and listen to technicians and their issues. It seems the "elite technicians" of Canada show up for this conference each year and I really value their opinion.
I was amazed how many technicians were expressing to me this year about the shops in their area that were not taking Technical and Business training seriously enough and they were not investing in high-end equipment required to do the job right. They were telling me "these guys run a break down and repair shop and just don't get it Bob; they talk about everything as a cost and will not invest into their future; they have an excuse for everything. What do I do because their lack of professionalism reflects on our sector and marketplace which my shop is obviously part of?"
The answer I shared with each person was "Only you are responsible for the results that come out of your shop. No one else is. Today it is all about the "experience" the customer/client has while the vehicle is in the shop. You can not control what other shop owners do, only consistently send the message to them that they must get engaged with the new reality. If they so choose to not do that, then make sure your own back yard is in order at all times. Always set the example for others to follow."
I know the frustration that is out there from the better techs and shop owners. These "other guys" who "play mechanic" will always be there. In the past I have used the term "cockroaches" well it still seems to apply. They just don't go away. They are a nuisance to deal with. Interestingly have you ever noticed that these poorly run shops are fortunate to have a spouse who works outside the business because the business can not provide enough income to look after the family and provide a great lifestyle? These shop owners buy themselves a job, and a lousy one at that, and they think they are running a business. These shop owners are contributing to the problem for our sector, certainly not providing or being part of the solution.
I encourage the better automotive shop owners and technicians to keep pressing hard in your market that competency and professionalism is everything today. Keep blasting the message. Who cares if they criticize you for always pushing competency and professionalism? What are they pushing? Complacency and mediocrity? Keep the talk up too with automotive parts suppliers and Associations that they also must apply pressure on the weaker shops. We are all in this together. Our actions and results collectively set the image for the consumer. If more and more shops keep raising the bar, the consumer will see the difference and more importantly "experience" the difference. I think at this time in our Aftermarket history this is the best we can do. It would be nice to have accreditation standards to open up a shop in the first place but I think that will be for the next generation to tackle. The best we can do is through setting the best example at all times and never let our guard down.
Business and technical training must be an on-going investment in the automotive service and repair industry. Budgets must be set in place each year to ensure competency is sustained. Dates must be set aside and times booked to attend the necessary functions. No training today is a one time visit. Constant revisiting is a necessity. The reality is that in many cases over-night travel will be required to attend the right course to obtain the right knowledge. I know many shop owners that have sent their technicians to the USA for important training because it was not available in Canada. There never is any compromise. The technicians can easily be gone for 4 or 5 days on some of these courses. I know many shop owners that have traveled great distances to enroll themselves in the necessary courses that provides the management solutions that need to be addressed. This is the level of thinking and professionalism that is required today.
To give you an example, shop management should now be planning for a minimum of 100 hours of technical training per year per technician. That is what it will take to stay up with current technology. Automotive management should also set side at least 10 days a year for up-dated management training and development as many different issues and topics must be revisited.
Equipment must be constantly reviewed and examined to ensure the right equipment is in place allowing for the right diagnosis and therefore providing the right solution. Short-cuts due to a lack of proper equipment does not serve the consumer professionally and should not be tolerated by professional automotive technicians.
Perhaps many who are reading this article may perceive that I am pushing the bubble and stirring up the waters. Well what is wrong with that? Discussions must now start to become intense as too many people have been sitting on the sidelines watching the show and neglecting their responsibility to their business and ultimately to the consumer.
Let's talk this issue up because incredible opportunity is here today for the Aftermarket to take back market share by developing trustworthy relationships with the other consumers who have been dealing with the OE Dealerships. To retain their trust and loyalty, the Aftermarket must be very competent with each visit the consumer has with us.
Let's fully commit to getting focused now and really start making a difference. We can do it!! And deep inside, I know you want to do it. Take one step at a time and start to make the next 365 days a real adventure in your business.
I am writing this article just after attending the "Lindertech North" technical training weekend in Toronto. I always like to drop into this event and listen to technicians and their issues. It seems the "elite technicians" of Canada show up for this conference each year and I really value their opinion.
I was amazed how many technicians were expressing to me this year about the shops in their area that were not taking Technical and Business training seriously enough and they were not investing in high-end equipment required to do the job right. They were telling me "these guys run a break down and repair shop and just don't get it Bob; they talk about everything as a cost and will not invest into their future; they have an excuse for everything. What do I do because their lack of professionalism reflects on our sector and marketplace which my shop is obviously part of?"
The answer I shared with each person was "Only you are responsible for the results that come out of your shop. No one else is. Today it is all about the "experience" the customer/client has while the vehicle is in the shop. You can not control what other shop owners do, only consistently send the message to them that they must get engaged with the new reality. If they so choose to not do that, then make sure your own back yard is in order at all times. Always set the example for others to follow."
I know the frustration that is out there from the better techs and shop owners. These "other guys" who "play mechanic" will always be there. In the past I have used the term "cockroaches" well it still seems to apply. They just don't go away. They are a nuisance to deal with. Interestingly have you ever noticed that these poorly run shops are fortunate to have a spouse who works outside the business because the business can not provide enough income to look after the family and provide a great lifestyle? These shop owners buy themselves a job, and a lousy one at that, and they think they are running a business. These shop owners are contributing to the problem for our sector, certainly not providing or being part of the solution.
I encourage the better automotive shop owners and technicians to keep pressing hard in your market that competency and professionalism is everything today. Keep blasting the message. Who cares if they criticize you for always pushing competency and professionalism? What are they pushing? Complacency and mediocrity? Keep the talk up too with automotive parts suppliers and Associations that they also must apply pressure on the weaker shops. We are all in this together. Our actions and results collectively set the image for the consumer. If more and more shops keep raising the bar, the consumer will see the difference and more importantly "experience" the difference. I think at this time in our Aftermarket history this is the best we can do. It would be nice to have accreditation standards to open up a shop in the first place but I think that will be for the next generation to tackle. The best we can do is through setting the best example at all times and never let our guard down.
Business and technical training must be an on-going investment in the automotive service and repair industry. Budgets must be set in place each year to ensure competency is sustained. Dates must be set aside and times booked to attend the necessary functions. No training today is a one time visit. Constant revisiting is a necessity. The reality is that in many cases over-night travel will be required to attend the right course to obtain the right knowledge. I know many shop owners that have sent their technicians to the USA for important training because it was not available in Canada. There never is any compromise. The technicians can easily be gone for 4 or 5 days on some of these courses. I know many shop owners that have traveled great distances to enroll themselves in the necessary courses that provides the management solutions that need to be addressed. This is the level of thinking and professionalism that is required today.
To give you an example, shop management should now be planning for a minimum of 100 hours of technical training per year per technician. That is what it will take to stay up with current technology. Automotive management should also set side at least 10 days a year for up-dated management training and development as many different issues and topics must be revisited.
Equipment must be constantly reviewed and examined to ensure the right equipment is in place allowing for the right diagnosis and therefore providing the right solution. Short-cuts due to a lack of proper equipment does not serve the consumer professionally and should not be tolerated by professional automotive technicians.
Perhaps many who are reading this article may perceive that I am pushing the bubble and stirring up the waters. Well what is wrong with that? Discussions must now start to become intense as too many people have been sitting on the sidelines watching the show and neglecting their responsibility to their business and ultimately to the consumer.
Let's talk this issue up because incredible opportunity is here today for the Aftermarket to take back market share by developing trustworthy relationships with the other consumers who have been dealing with the OE Dealerships. To retain their trust and loyalty, the Aftermarket must be very competent with each visit the consumer has with us.
Let's fully commit to getting focused now and really start making a difference. We can do it!! And deep inside, I know you want to do it. Take one step at a time and start to make the next 365 days a real adventure in your business.
Wednesday, April 1, 2009
Billed Hours, Then Car Count. The right order of analysis
Across the country everyone talks about needing more car count in their business and the shops that say this are already are doing $500,000 to 700,000 per year in annual business or even more. In my Management classes when further analysis of invoices takes place we find that shops are averaging 1.6 to 1.8 billed hours per invoice on basic consumer maintenance, 2.1 to 2.4 billed hours on diesel work, 3.0 to 3.5 billed hours on mid duty vehicles and 7.0 to 8.5 on heavy duty work. Do your own analysis and compare.
The numbers get skewed because shop owners don't break out their mix of work coming in the bays, so when all invoices are combined and averaged they see 2.8 to 3.2 hours as an average and conclude they are doing a great job but things are still slow. They conclude they need more vehicles in the bays. I respectfully disagree.
When the math is completed the average shop in Canada requires only .5 to 1.0 more vehicles per day over what they currently have coming through the door IF they were managing their clients vehicles professionally. The facts are the industry is not breaking out the right measurement of its business and the current internal procedures and processes are not addressing the true problem.
Consider that basic consumer vehicle maintenance should average a minimum of 2.0 to 2.5, diesel work 3.0 to 3.5, mid-duty 4.0 to 6.0 and heavy duty work should average 10.0 to 12.0 hours per invoice. If a shop has a mix of work, break it out and measure it accurately. It is imperative as Professionals, to ensure that the current business is being managed correctly first before we go after any new business.
Once the internal processes and measurement are accurate, then a shop can determine exactly how many more vehicles are required per day in the shop based on the facts of their business. It is a mathematical calculation and measurement. Just saying "we need more" is not accurate....exactly how much more based on the facts of our business is the right question to determine.
We must ensure we grow the business in such a way that our current clients receive a consistent experience each time they receive services from us so they won't feel they are not a value to the business or the business does not care about them as much "as they used to".
Slow down and do the math of your business first so you can determine exactly what is right for your shop. I believe you will discover some "diamonds in the rough" that have been overlooked instead of increasing the shop and client stress levels with assumptions.
The numbers get skewed because shop owners don't break out their mix of work coming in the bays, so when all invoices are combined and averaged they see 2.8 to 3.2 hours as an average and conclude they are doing a great job but things are still slow. They conclude they need more vehicles in the bays. I respectfully disagree.
When the math is completed the average shop in Canada requires only .5 to 1.0 more vehicles per day over what they currently have coming through the door IF they were managing their clients vehicles professionally. The facts are the industry is not breaking out the right measurement of its business and the current internal procedures and processes are not addressing the true problem.
Consider that basic consumer vehicle maintenance should average a minimum of 2.0 to 2.5, diesel work 3.0 to 3.5, mid-duty 4.0 to 6.0 and heavy duty work should average 10.0 to 12.0 hours per invoice. If a shop has a mix of work, break it out and measure it accurately. It is imperative as Professionals, to ensure that the current business is being managed correctly first before we go after any new business.
Once the internal processes and measurement are accurate, then a shop can determine exactly how many more vehicles are required per day in the shop based on the facts of their business. It is a mathematical calculation and measurement. Just saying "we need more" is not accurate....exactly how much more based on the facts of our business is the right question to determine.
We must ensure we grow the business in such a way that our current clients receive a consistent experience each time they receive services from us so they won't feel they are not a value to the business or the business does not care about them as much "as they used to".
Slow down and do the math of your business first so you can determine exactly what is right for your shop. I believe you will discover some "diamonds in the rough" that have been overlooked instead of increasing the shop and client stress levels with assumptions.
Sunday, March 1, 2009
Sunday, February 1, 2009
FEEL LIKE YOU ARE WORKING HARDER? YOU MIGHT BE WORKING SMARTER!
The negative news all around us today certainly takes its toll on not only the consumer but also shop management and employees.
Consider that tough economic times actually means potential good times for the aftermarket, however, business processes must be adjusted to reap the rewards. Have you had this in-depth discussion with the staff?
Realistically, two words must now be communicated to the client on a regular basis during 2009. They are "reliability" and "safety". The customer/client may feel nervous about their job security and therefore reluctant to get things done on their vehicle this year and into 2010. As an automotive professional, you know that is not the right solution they should embrace.
Over the past 5 years the best shops have made the transition to the maintenance side and management of the vehicle on behalf of the client. Times have changed for the client and the shop must now also adjust again to stay in the game. An example question to explore would be "Do you know each clients situation and outlook for the year ahead for themselves?" You must know that detail because when they feel uncertain about their income security, they will even neglect preventative maintenance items. This is reality today.
To stay on top and carry out your professional duties on behalf of the customer/client you must spend more time with each person. Consider this example of a transaction. "John, based on how you use the vehicle and your expectations with it, the vehicle requires $850 of work to maintain it according to the manufacture specifications and maximize the life of the investment; however, to ensure the vehicle is reliable and safe for you, we must get this $250 done today and here is why. (You explain fully). I will work with you over the months ahead to get the balance of the work required done to ensure the vehicle stays up to standards which in turn achieves your long term expectations."
This approach takes into consideration the client’s situation, builds a solid trust and confidence relationship with the client and points out your professionalism that reliability and safety are the most important points today. It will also make you feel you are working so much harder for each transaction as time spent with the client has increased just to get the basic requirements done. This is not a bad thing, in fact, it is smart because you are building and extending the long-term relationship prospects with each client. Take a good close look at how the front counter is dealing with each customer and client. Are you clearly displaying to the customer/client that you are in this for the long run with them? Or are you trying to slam each transaction and get the most from them because you lack the confidence that the relationship of trust is not in place? Consider that clients will judge your business character and culture this year as never before. Management and staff must get on with the responsibility and learn how to transition the business and understand the new realities of this economy; an economy that opens the door to opportunity for the shops and Jobbers "that get it".
Thursday, January 1, 2009
Employer Burden Frozen at 2008 Levels. Labour multiples remain the same
The "Employer Burden" is the additional cost to the employee's basic wages. They are legislated by Federal and Provincial Governments across Canada. The total average burden is the same for 2009. We can hold the formula's for establishing labour rates at the 2008 levels.
EFFECTIVE JANUARY 1, 2009:
VACATION PAY 4.00%
CANADA PENSION PLAN: 4.95%
Pensionable Earnings up $1,400 to Maximum CPP Deduction per Employee
EMPLOYMENT INSURANCE: 2.42%
Maximum EI Deduction per Employee $732.00 (2.9% Increase)
STATUTORY HOLIDAYS: (9) 3.56%
Add .40 for each additional paid day off
WORKPLACE SAFETY & INSUR. (Auto Repair): 3.39%
Same as 2008 (Review Individual Pier Rating)
Total Employer Burden: 18.32% (Same as 2008)
Notes:
- The 9 Statutory Holidays are: New Years Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day (Each Province has variables on this)
- Do not forget to add any additional benefits you may provide such as Group Insurance, Enhanced Vacation Pay, Tool Allowance, and Registered Pension Plan etc.
- Separate payroll to identify the appropriate employees for auto repairs, gasoline, and office administration for Workplace Safety (Workers Compensation) Insurance Board purposes
- Stop deducting CPP and EI when the employee has reached the maximum contribution limit for the year
- As a rule of thumb use 27% as the burden multiplier to include Group Insurance and additional benefits paid/covered by the shop for employees.
EFFECTIVE JANUARY 1, 2009:
VACATION PAY 4.00%
CANADA PENSION PLAN: 4.95%
Pensionable Earnings up $1,400 to Maximum CPP Deduction per Employee
EMPLOYMENT INSURANCE: 2.42%
Maximum EI Deduction per Employee $732.00 (2.9% Increase)
STATUTORY HOLIDAYS: (9) 3.56%
Add .40 for each additional paid day off
WORKPLACE SAFETY & INSUR. (Auto Repair): 3.39%
Same as 2008 (Review Individual Pier Rating)
Total Employer Burden: 18.32% (Same as 2008)
Notes:
- The 9 Statutory Holidays are: New Years Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day (Each Province has variables on this)
- Do not forget to add any additional benefits you may provide such as Group Insurance, Enhanced Vacation Pay, Tool Allowance, and Registered Pension Plan etc.
- Separate payroll to identify the appropriate employees for auto repairs, gasoline, and office administration for Workplace Safety (Workers Compensation) Insurance Board purposes
- Stop deducting CPP and EI when the employee has reached the maximum contribution limit for the year
- As a rule of thumb use 27% as the burden multiplier to include Group Insurance and additional benefits paid/covered by the shop for employees.
Tuesday, July 22, 2008
Press Release
The Automotive Aftermarket E-Learning Centre Ltd. is pleased to announce the latest major release of its Business Resource Centre.Please take time to read the press release and visit our new site. We have listened to our subscribers and I know the changes we have made will be of significant value in providing solutions to your business management requirements.
Click Here to view the press release in PDF Format
To visit our website, visit: http://www.aaec.ca/
Click Here to view the press release in PDF Format
To visit our website, visit: http://www.aaec.ca/
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