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.

Want Better Shop Management Skills - Learn to Play Golf

Only the golfers who own/manage an automotive business will really appreciate this particular BLOG and the message it truly sends.

I just came back from my annual 10 day golf outing at Pinehurst/Southern Pines North Carolina. I love that region and the overall State itself but most of all I love their golf courses. The people throughout the region are warm and beautiful and the golf courses are challenging and visually spectacular. As for my personal golf rounds this year?...let's just say my friends, once again, had an incredible amount of patience with me and my attitude towards my own golf play ..........but....the weather was great!!

Playing a round Golf is so very similar to running an automotive shop business today.

Golf is an interesting and very disciplined sport as is owning and managing an Independent automotive maintenance and repair business. You truly have to learn the right self-disciplines that must become habits in order to succeed.

Consider the similarities:

Golf tells it like it is no matter how good you may look in appearance. Many golfers look like pros in appearance with the bag, the clubs, the clothing and the shoes, but read the score card to tell you the truth. Similarly many shops may appear to look good on the outside but take a look at their true net-income after tax and ensure a professional management wage and market place rent have been factored in.

Golf is very humbling. The true golf score measurement brings you back down to earth. When you are given strokes through the handicap system it only covers up your real score. Your handicap is the smoke and mirrors show of the sport. Similarly, it is irrelevant how much your ego is telling you how great you think you are with your shop business, if you are not achieving a 35% ROI over all in the business, you are "shot down" by the real world who really know your "handicap(s)". When shop management only measures its business in total sales and sales per invoice and does not include average billed hours per invoice coupled with total shop site efficiency, their lack of net income is like having a handicap. It is not telling you the truth....you think you are running a great business....BUT...you really are not the top player you may perceive.............yet!!!!

You need to get a new skill-set together and practice them if you have the discipline to do so.

Golf has no sympathy for lack of mental discipline and physical sloppiness. You end up with a boogie,double boogie or worse on more holes than desired. Excuses are always so plentiful in golf but also very cheap. When running a shop, average billed hours per invoice starts to tell the truth about what processes and methods you really adhere to. Does your shop achieve an average 2.5 billed hours per invoice for basic consumer vehicle maintenance? If not what is wrong with your business "processes"? In golf, a consistent correct swing and "format" is critical to a great shot and your overall score. In business the right and consistent internal processes (format) to achieve the desired and sustained results takes discipline and practice.

There is no doubt about it.......Golf separates the men from the boys. In business key measurements separates the true entrepreneurs from the "wannabees"

A great golf score is so very much like running a highly profitable shop business today because the self disciplines to achieve the desired results are very identical. Without a lot of self discipline backed up with on-going practice and an attitude to continuously learn in order to improve, one finds it extremely difficult to achieve the ultimate desired results.

Hey if it was easy, everyone would have a great golf score..........hey if it was easy every shop owner today would run a financially successful enterprise.........

Revisit your score card. Do the math. Are you measuring your business with a handicap system or are you a "scratch" entrepreneur?

OE Website Access Must Be Planned

On May 1st 2010 all Independent shops in Canada are suppose to have open access to the OEM websites which was agreed to through a voluntary agreement.

This simply means that information such as vehicle calibration codes and the ability to re-flash and reset the vehicle computers coupled with diagnostic information is suppose to be available to the Aftermarket for a reasonable fee.

Some words of caution on this key leap forward for the Independent sector that I received from respected competent technicians:

1. Ensure you have hard wire to the various laptop computers available throughout the bays and preferably located at the technicians tool box. Wireless is not recommended when it comes to downloading a re-flash issue. Hard wire & high speed is important as certain downloads, such as a BMW re-flash which could take up to 8 hours to complete, and the last thing one needs is an interruption due to a poor connection. A hick-up with a download could destroy a vehicle computer.........if you are not familiar with the variables in downloading information, get ready to write the cheque!!

2. Invest in high end laptops. Bargain priced low-end laptops are not the way to go for this job. Make sure they are stripped of all the software "stuff" that comes with them. You don't need interference with items to slow the process down when downloading information from an OEM website for a specific vehicle!!!! Forget the Excel, PowerPoint and all the other "software verbiage" that accompanies a laptop. Keep it simple with Windows 7 as the one feature to allow access to the internet.

3. Communicate, communicate, communicate!!! When one technician has an experience with an OEM website issue, it is imperative to stop the bay activity and take the time to call everyone over to witness and explain the experience. Everyone must see the issue live in order to learn/familiarize themselves with the various website set-ups and diagnostic issues. The old concept of "I am the only one who knows this site or issue" is wrong and will be detrimental to the shop in the long run. It must be a "team" effort and experience. Management and staff must understand the importance of this issue.

4. Be prepared for a new learning curve. Re-flashing is an important issue BUT it is not the only thing. Website information and where it is located must be learned throughout the shop and this will take a lot of time as every OEM website is different. The culture of the shop must be "exchange information when discovered, no exceptions". The internal shop strategy of everyone is an island does not hold water any more. Internal communication and everyone acting in a team format is the ONLY way that this will work internally.

5. If you are thinking you are going to get rich quick through this new information access with the ability to re-flash and calibrate vehicle computers.........you may be disappointed. Do the math. The investment will be incredible. There will be many stepping stones to be taken such as internal processes for capturing and documenting time will have to be thoroughly reviewed and mastered. This will require an investment of time and manpower to ensure we, as a sector, serve the end client/consumer competently and professionally.

The Independent Aftermarket sector is a unique division of the automotive industry. Take the time to do this right so your shop can serve the end client/consumer in the most professional manner. The shop culture must embrace the philosophy of "We will NOT let you down".

SLOW TIMES MEANS PAY ATTENTION TO SHOP PROCESSES

Have you ever noticed that when the shop is slow, management has a tendency to panic? Welcome to the break down and repair business. The fact is it has been extremely slow from coast to coast. Over the past 4 weeks I have traveled from the Atlantic region to the shores of the Pacific and regions in between, talking with many people from all levels of the industry. Business is definitely different.

A main contributor to the slow business is that too many shops rely on the break down and repair business model from the past 40 years. They are running an installer based business model from yesterday's era versus a comprehensive service provider based business model required today. The previous generation's business model is broken. The math does not work any more.

This is why the preventative maintenance business model must be adopted and embraced.

Vehicles are still moving out there so they must be properly maintained.

Preventative maintenance is currently being neglected by the consumer. You can thank the high consumer debt load coupled with the fact vehicles are also built better. They just don't break down the way they use to. Another factor is the shops through out the industry have failed to educate the client/consumer about budgeting for their vehicle to ensure safety and reliability.

During this slow period of time it would be wise to start building and refining the shop's internal process and procedures by going through your data base and research the last time the customer/client was in for preventative maintenance service? Start by reviewing all flush services required. As you know complete fluid maintenance is critical to reliable vehicle performance today. From there locate what other specific items were declined in previous visits by the client that must be brought to the table again. Review manufacturer recommended required servicing based on client mileage utilizing industry resources such as Mitchell, Alldata and Identifix.

It is the shop's Professional responsibility to ensure the client's vehicle is safe and reliable. This is what you are hired for. This is why clients trust you. It is time to review their file completely and then contact them. Work with the client. This on-going process must be instilled as a culture in the shop's daily and weekly procedures. Become proactive rather than reactive.

Take charge of the business. Review all internal vehicle inspection procedures and processes with the staff including the items above coupled with thorough time clock recording which is required to ensure proper billing at the front counter. Bring the staff together as a team; a team that understands its responsibilities to serve each and every client to the very best of our ability. We must never let a client down. Let the staff see and hear you counselling the client and lead them by example.

It is easy for an owner/manager to sit back and complain about the world while they try to slash expenses, then they focus on parts cost by shopping jobbers all over town for a better price to save $5 or $10 on a part, rather than concentrate on their core business which is shop productivity. They then think they can discount themselves back into prosperity by now putting on price specials trying to keep the bays busy. Do the math. Math doesn't lie. These discounting, out of control shops from yesteryear, are trying to make 2 + 2 add to 7.

The shops that have now gone back to the old style of business with the oil change loss leader method will not only do more damage to their own business but also to the reputation of the automotive aftermarket industry. Everyone knows these shops try to sell up and do anything to find work to keep the staff busy. This shop's culture is always all about them and not the end client/consumer. Client/consumer trust is not in place and never will be with this method. These shops just don't get it. They always end up buying themselves a job and a terribly poor one at that, as management is chained to the business 6 days a week.

The real issue in these modern times is taking control of the business by understanding the math and managing the client's vehicle and their relationships the shop has in place. From there the shop executes its responsibilities of trust on behalf of the client. Client's are not thinking about vehicle service because they are too busy in their own lives and besides, to them, the vehicle seems to be running just fine, however, you know that if it is not maintained properly a potential costly and time consuming inconvenience for the client could occur. Educate the client/consumer by counselling not selling. The average client/consumer is not stupid but they are uninformed.

Consider all the options...........you are in the relationship business. You are the Professional. Take your responsibilities seriously.

WE HAVE THE KNOWLEDGE TO MANAGE, DO WE HAVE THE GUTS TO MANAGE?

Many shop owners have invested the time to learn how to manage their shop in today's new realities. This is excellent and they must be applauded for that commitment made to their business. Now they return to the real world of the aftermarket after the course with great intentions and are faced with the incredible day to day distracting noise within the industry.

The changes required to the shop are substantial and will take, on average, 2 to 3 years to fully implement, but the biggest impediment to making the change will always be Management's self discipline to get it done.

Self discipline is everything in moving a business forward today. Self discipline is only controlled by one person and is no one else's responsibility. Self discipline will be the key measurement in the end when evaluation takes place as to why the business succeeded or why the business failed.

It takes a lot of guts to remain disciplined to see things through as the owner/manager now must re-enter business territory that they have purposely tried to avoid in the past. Two examples include:

1. Owner/managers are not comfortable with confronting a long-term staff member to see if they can change to get them on board to create a TEAM concept within the shop. No one likes staff confrontation but in some cases it must be done as you need the right people and the right attitude on the bus.

2. Owner/managers find it difficult to insert the new day to day measurement disciplines required today as they now must work closer with the bookkeeper, knowing they are not an expert or even comfortable discussing accounting formats but they must learn to do so in order for the business to move forward.

The owner/manager is facing many personal internal fears when making changes to the business, but the changes must be made IF the bottom-line opportunities are going to be realized.

In the end it is clearly acknowledged that running a professional automotive service shop today is the most complex business in the retail world. If it was easy, everyone would embrace it. Knowledge, pure guts and incredible self-discipline are required to "get it done".

Are you one of the select few entrepreneurs who will be enjoying an incredible and rewarding business career moving forward into the next 5 to 7 years of the aftermarket or will you end up being a historical footnote in our industry?

Look in the mirror. Talk the truth to yourself. You now have the knowledge and all the resources at your disposal to succeed. Use them. Believe in yourself. Push yourself each and every day. Be proud of who you are and what you and your business stand for in delivering integrity, service and quality to your business clients and your community.

You CAN do it!!

7 STEPS TO YOUR NEW BUSINESS MODEL IN 2010

There are steps that a shop owner can start to take to transition the business into the modern day format that is required to be successful for this new decade.

Consider each point as it applies to your operation.

1. THINK ABOUT THE SHOP'S HISTORY: Never embark on a new plan without first understanding where the shop came from. Discuss the shop's history with your team and talk about why change is required and how each individual will benefit from the change desired.

2. DO SOME MATH: Study the basic numbers of the business and project how the numbers would change in the business when the new transition is in place. Math does not lie and when the employees income improves and the shop's bottom-line is positively impacted, then effort to make the transition makes sense.

3. SEEK OUT THE SHOP'S VULNERABILITY: With any transition in business there is always one or two weak links in the chain. Review the shop's weakest points and how they would have to be changed in order to support and make the transition work.

4. ARE THE RIGHT PEOPLE ON THE BUS?: In any business having staff with the right attitude is everything. A negative staff member creates conflict, business stress, and always slows any new desired process down. I would rather have a staff member with an incredible positive attitude and little experience over a highly qualified individual who knows it all. Do an inventory of the shop's staff. Can this shop operate as a team or is it too individualistic? Today's business requires a team.

5. DON'T SELL, COUNSEL: Work on changing the mind-set throughout the shop that we are Professionals being hired by our client to advise them based on the clients parameters. This is the Professional way of doing business today. When the client is properly and Professionally served, the sales will look after themselves. Review all internal vehicle inspection and reporting processes to ensure the client is being properly and fully informed.

6. MEASURE THE RIGHT CRITERIA: Transition the business effectively by monitoring and measuring 2 basic items on a weekly basis, namely, the average billed hours per invoice (minimum 2.0 to 2.5 hours per invoice for basic consumer vehicle maintenance) and total shop efficiency (minimum 75% with a desired goal of 80%). Report and discuss these numbers to the staff as they point out exactly the effectiveness the shop is having, as a team, with each client.

7. PATIENCE WITH DISCIPLINE: If change was easy, the entire industry would be embracing it. The fact is transitioning the business to a new culture requires Management patience coupled with discipline to execute. It is so easy to make up an excuse to stop trying or quit.

I believe 2010 will be an exceptionally positive year for the Independent sector of the Aftermarket. There is a lot of pent up demand for vehicle preventative maintenance that was turned down or neglected during 2009. The shop's that have transitioned their business to professionally serve their clients are in the right position to reap incredible rewards.

Are you enjoying a career or have you bought yourself a job?

ROWING TOGETHER - WE'RE ALL IN THE SAME BOAT

Let's work together to get to safer shores.


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

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

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

Jobbers:

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

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

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

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

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

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

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

Shop Owners:

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

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

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

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

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

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

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

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

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

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