Monday, June 24, 2013

A Shop Owner’s Guide to the Basics of Success, by Robert Spitz, Management Success!

Robert Spitz
Snr VP Business Dev
Management Success!
A while back, I called a shop, knowing it was way past closing time, but betting I would get the owner. Sadly, I was right. It was 8:00 pm in his timezone, and he gave me the usual line, "I was just wrapping things up." He had missed his son’s ball game and was feeling a little low since this had become a pattern in his life: missed opportunities to spend time with his family.

George (the owner) told me he had spent a fair amount of time wondering how to juggle all of his business, family, and personal obligations and how to keep everyone, including himself, happy - all while maintaining his sanity. George was stuck in a rut and did not know how to get out. Everything seemed bleak. Having worked and helped hundreds of "Georges" in my time, I knew what was going on and that it was fixable. I just had to get George to agree to let me give him a hand. 

The first thing I had him do was sit back, take a deep breath, and answer a few questions:

1. What is your goal here? 
2. Who are you doing all this for?
3. What are you really trying to accomplish?

Once he started thinking about this, he realized there is no single answer. As we get older, our priorities change. Things that were vitally important to us when we were in our 20s are not all that important now. I had him ask himself, "What is important to me, and how do I get there?"

Your business has more than one purpose. It has a purpose for you, your customers, your employees, and your family. By identifying these purposes, you can align your goals and priorities more easily. Take a moment to sit back, relax, and imagine what your business and your life would be like if everything was ideal.

If you can imagine what it could be like, then you are well on your way to setting goals that you can work toward achieving. The ability to imagine is extremely important for a business owner. Once you have a vision of your ideal business, how do you get from where you are now to where you wish to be? 

The answer is simple: you need a plan. It cannot be the old “work harder and longer” plan. Most shop owners have tried that, and it has just made them more tired, not more successful. Still keep in mind that, while any plan is better than no plan, your plan must be something you are willing and able to do. What good is a 50-page detailed plan if you are unwilling to do it?

To create a better plan, first ask yourself if you merely need a “tune-up” or if a “major overhaul” is in order. Also, look at what is right about the business. What do you want to change? What are your strengths and weaknesses? Make some lists.

Management Skills
The top item on the list of things that you need to improve should be your own knowledge of business. Many owners are highly skilled and trained in the area of repair, but woefully lack in the area of business management. It is the business management skill that will take you from where you are to where you want to be. What if you were as skilled and confident in your ability to run your business as you are in diagnosing and correctly repairing a vehicle? Most likely, your business would be in a very different place.

Once an owner is no longer just a technician, he or she needs to have a new and different set of skills. To the degree you do not have them, the business will suffer. For an owner, technical skills are not enough. Here is a list of the areas in which a successful business owner must have confidence and expertise. It can give you an idea of where to begin improving your ability to run your business.

• Planning
• Marketing
• Sales
• Organizing
• Employee management
• Finance
• Training
• Public relations

The problem with planning is if you do not know where you are going, you cannot come up with a plan. It is like jumping into your car and starting to drive with no destination in mind. If your goal is to wander around until you run out of gas, that might be fine. Otherwise, you are just wasting your time and energy! To come up with a good plan, you have to figure out your goals and be certain of what you are trying to accomplish.

Marketing and Sales
Have you ever heard the old expression, Build a better mousetrap, and the world will beat a path to your door? This is not entirely true because if you fail to tell anyone about this new whiz-bang mousetrap, no one will ever know about it! You have to market your business. You have to let people know you are there and show them what you can do for them.

Marketing gets the phone to ring and gets new and old customers to show up. You also have to make sure you have someone who can sell them the needed services once they are on the phone or at your door. I have seen some great marketing completely wasted by an inability to sell once the prospect inquired. Your service writer should be able to convert 70% of all inquiries into appointments.

Your shop only grows to the extent that you can handle confusion. Once things get too confusing, you stop selling, which severely limits your profits and growth. A common solution to confusion is hiring more people for the front; on the downside, this hurts your bottom line and may not even solve the problem. The correct course of action is to look for ways to streamline the operation and to figure out how you can be more efficient. You have to organize the various activities of the shop into a workable sequence.

Employee Management
Employee management is a tough area for a lot of shop owners, but it does not have to be.  Establish your goals, and communicate these goals to your crew. Then, make sure the shop is well-organized and everyone knows how to get their job done. Set up a bonus plan or a production-based incentive program. Track each employee’s production, and evaluate only on that basis. You will quickly see who is on your team and who is not.

Finance, which includes pricing your goods and services, has to be very well-understood by a shop owner. Knowing how to set up your finances for your own benefit - and not for the benefit of the bookkeeper or accountant - is a must.

Ongoing training programs that keep everyone in the shop sharp are critical. The shop owner must provide them, and the employees must be willing to participate. Watch out for employees who are not interested in receiving training.

Public Relations
Shop owners must have some knowledge of public relations, especially as their shops grow and become successful. Not everyone you deal with is a sweetheart! You do not have to hire a PR firm, but make sure you get your good work well-known in your community so the shop is held in high regard.

I called George at the shop the other day. It was 3:30 pm his time, and his service writer informed me he was gone for the day. I smiled, thanked him, and said I would call him tomorrow morning.

Before another day passes, take the time to envision your ideal scene and establish your goals. Then, make sure you have the business knowledge you need to carry out the plans that will help you reach your goals. Good luck on your road to success!

Management Success!

Monday, June 17, 2013

The Size of the Problem by Mike Lee Management Success!

Mike Lee
Management Success!
It is an interesting phenomenon to talk to a shop owner whose statistics are downtrending, whether it is a small shop without enough work or a big shop that is still doing a good volume of cars but isn’t making enough money.    Whatever the situation, the owner doesn’t seem to be able to fix it.

The manifestations of confusion are varied, depending on the problem.   Let’s start by first identifying the problem, which can usually be described as “they are not making what they need to be in order for them to be happy and winning in the business.”  (Translation: They are not making money!) 

It Is The Economy

When a shop is not doing well, there are many reasons that create the problem.  Normally, the shop owner picks out the one that seems to be the most obvious.  There is not enough work, or customers are not spending like they normally do.  

Whatever the shop owners have been doing to solve the problem has not worked and they go into apathy!   Oh! Talking to them about solutions is like talking to a stone wall.  They aren’t listening and they are sure there is nothing that can be done about it.

But, I never let that stop me!   So I start attacking the problem.   When I ask what the problem is, they start bringing up vague generalities in which there appears to be no possible solution.

1. “Its the economy”
2. “The customers are not spending money on their cars”
3. “Everyone is slow”

You can’t solve any of those problems, because they are a generality and it is not the real problem in terms of the business.   The first step of solving their problem is to move the owner out of apathy!  (Translation:  Moving him from “there is nothing that can be done about it” to “well maybe something might be able to be done about it.”)

The Size Of The Problem

We start by defining the size of the problem.   I first ask what their gross monthly sales have been on average.  Let’s say 40,000 a month.   Next, I ask how much their monthly breakeven is.   Let’s say that is about 43,000 a month.    Obviously, he is losing about 3,000 a month!   If he wants to make at least an additional $1000.00 that means about $4,000 more a month is really the size of the problem.

Ok!  We are at least recognizing the real problem (not enough money) and the size of the problem ($4,000 more a month).  First step in handling a problem is to clearly define what the real problem is.   If you do not identify the real problem, then every solution to the problem will not work.

There is no solution to the economy being bad other than to ignore it and concentrate on the problem the bad economy created for you and your shop.   The real problem that a bad economy created for you is the fact that you are not making enough money to break even or heaven forbid, make some money.   

So if you don’t find the size of your problem, then it is unlikely that you will come up with a solution that will fix the real problem.   Everything is dependent on identifying your real problem and then confronting and handling the real issue.

Next we want to break down the real problem (not enough money) to a size that can be confronted, and then come up with a real solution to handle it.   So in this case, I would ask the guy how many cars he does a month.   Let’s say 200 tickets a month.  If we divided the $4,000 more he needs to make, by the current amount of cars that he is doing, then it turns out that he needs to average $20.00 more per ticket on the work that he already has in order to go from total apathy to where there “might be something he can do about it.”

Or since he is averaging about $200.00 per ticket now, he would need just one more car a day.

Let’s look at a possible solution to getting the $20.00 more per car or getting one more car a day to come to his shop and buy the normal services he offers.

Look, I know about 7 or 8 ways to get $20.00 more per car and probably 3 to 4 ways to get one more car in the shop.  I know how to be more efficient and increase the production of his people.  This doesn’t even count the ways the average shop is just blowing money out the door and doesn’t know it.

1. Do Pre-Service inspections on each car.  This is generally good for $15.00 more per car.

2. Do complete inspections on every car.  Doing it right and selling it right, means easily $20.00 more per car.

3. Get your service writer trained so he does a better job of getting new customers in or handles the current customers properly.   Increasing the Service Writer’s closing rate is good for 2 to 5 more cars a week, which is worth about another $1,600 to $4,000 a month increase.

Body Shops:  Oh!!! Oh!!!  Please, getting your Estimator trained on handling the Insurance Companies if you are part of a DRP program, or increasing the capture rate on estimates if you are not, is good for $1000.00 a week more or the $4,000 a month alone.

Likewise, learning how to increase your shop efficiency in a Body Shop is good for at least one more car a week which is another $4,000 a month.

4. Increasing the production of your technicians 3 or 4 hours week is good for $200.00 per technician.

5. Putting in an effective referral program with your existing customer base is usually good for 2 to 5 cars more a week.

Well like I said, there are about 7 or 8 things you can do to make a change in the overall condition of your operation without costing a ton of dough and changing the bottom line from a negative to a positive.

But, then again, it requires that you want to change and you are willing to change, and that you know how to implement the changes.   

I highly recommend you read the article from Scott Bickley of Little Wolf Automotive in this brochure to see what can happen when you change your mind and start doing something different.

I wish you much success!
Mike Lee

Management Success! Automotive Shop Website Design

Wednesday, June 12, 2013

What About Helping Your Help? By Bob Spitz Management Success!

Bob Spitz
Snr VP Business Dev
Management Success
You might not like this article at all!  Then again, you might love it. 

Go ahead and read it anyway because I am going to lay it on the line right here, right now.

When repair shop owner say, “I can’t find good employees.

Here is what they are REALLY saying. “I don’t know how to help employees.

How’s that for a 180 degree shot right in the nose?

Ugly isn’t it?

But it’s fact.

When a business person is in the process of recruiting and hiring what they are really looking for is Potentially Great Employees.  Trying to hire Great Employees who are already top notch technicians who are trained in all the procedures of the business and never needs to be told what to do because they just magically know exactly what the owner wants all the time is very difficult, there is just not that many of them in the pool!

This is not just a fact a shop owner has to “deal with”.  This is about survival.  It is something a shop owner needs to know all about.  Otherwise that shop is going nowhere, and the owner finds him or herself stuck in the paint booth, or pounding on a fender from dusk till dawn.

If the shop owner knows how to take willing new employees and turn them into real help, well then the shop owner knows how to help a new employee.

It is as simple as that.

You have to know how to deliver the goods (real help) to the employee.

That is not backwards management.  You are there FOR THEM.  That is a head on, direct, “the-way-it-is” kind of truth.

Too many owners and managers get this in reverse then step on the accelerator and wonder why they are not moving forward.  They think the employee is there to serve the owner, which is backwards.  You want them there (A) serving the customer and (B) serving the business and then (C) the gold will flow to you.

There is a 500 pound gorilla in front of the treasure.  This is it: The employee needs help actually getting squarely ONTO THEIR JOB.

And just when it is looking nice and smooth and profitable a 1,000 pound gorilla shows up. Here it is: Often the employee needs help getting BACK ONTO THEIR JOB when they have slipped.

This is not a pitch about “oh you poor, helpless, victimized technician let me help you get to work on time at least once this week”, or “I am so sorry I looked at you crosswise last Thursday when you completely botched those four procedures in a row and blew all the monthly profits but will you please be my best friend forever.”  No, that is not the point here at all.

If you can bring a person UP TO THE LEVEL of doing consistent quality work then you have really helped that person.  And all the while THEY are helping you.  And they know it.  And they are proud of it.  And that helps them more than anyone may ever know.  That is world-class help.  There is not much better actually.

You think teaching is a saintly job?  You’re right it is. It requires a high ability to tolerate stupidity!  But what about taking all that teaching and focusing it on the real world so the person does something useful, valuable and beneficial with it?  I think you would agree that would be real teaching.  It is an even tougher job to do right - the job of bringing out the very best in a person so they routinely get exceptional results with whatever they set their mind to.  And that would be a greater gift to the person than just textbook teaching.

Far too few shop owners know how to offer it.

Most shop owners sincerely want to help their team.  But they do not know how.

It is tough to fess up that the real problem is not having the ability and know-how to help an employee – real help – getting them actually ON THE JOB and KEEPING THEM FOCUSED AND PRODUCTIVE ON THE JOB.

Some owners (not the most responsible ones) might spit out some tough sounding drivel like “Well the technician works for me”.  Or “That estimator ought to know who butters their bread.”  Maybe they will say something like “Don’t they know who cuts the checks around here?  If they cross me I’ll send them packing.”  It can be any such foolishness, and those comments are all pretty much the same shade of black and blue.

Here’s the straight scoop:

First you hire potential help and then you have to help them help you.

It really is not any more complicated than that.

But wow, does it get flipped-flopped upside down and around.

Technicians work with cars.  Managers work with people.

Cars are cars and people are people.  Not the same thing.  But some of the concepts are a bit similar.

For example, take care of a car and it takes care of you.  Do not properly maintain a car and it will eat you alive.

You get an employee to take care of you by showing them how to do their job and by getting them to do it!

That’s helping them.

Show them, teach them, push them, make demands, don’t accept “no”, teach them more, but all the time you are actually HELPING them. 

They will be stronger for it.  And so will you.

So the next time you hear a shop owner say “There isn’t any good help out there anymore…

What can you say to s person who says that?

Get some help.  Get trained in employee management and learn how to recruit and hire the right potential employees and how to turn them into a winning team that can really get the work done!

Then your team will get you your pot of gold, and they will get theirs.  Wishing you nothing but success! 

Management Success!  The Employee Management Specialists

Monday, June 3, 2013

A Bad Week, by Robert Spitz, Management Success!

Robert Spitz
Snr VP of Business Dev
Management Success!
Recently, a shop owner was venting to me about the “bad week” he was having. He was not really interested in running his shop anymore. He just wanted to coast along until he could sell it, so he could do what he really wanted with the rest of his life.

When I say he was “venting,” it was worse - he was furious! Earlier that week, his lead tech had been into a Ford block and had managed to sheer off the head of a bolt. So, the tech got a bolt remover and sheered the bolt remover as well! That is when the tech ran out of ideas and gave up. The owner, who is an excellent tech, stepped in. He removed it, re-threaded it, and finished the job - bang, bang! Boy, was he ticked off about all this. This incident was not the only thing that had gone wrong during the week, but it was the one that drove him over the edge.

Here is the truth. The entire incident was a direct assault on what he was trying to accomplish. He hired a tech that he thought - in other words, hoped and wished - could do good work. He wanted to slide along as an owner. He definitely did not want to be there, but he had to be there; otherwise, everything would fall apart. Like a ball and chain, he felt he not only had to be at the shop, but he had to have his head under the hood. In his eyes, several things crashed in at once - a very bad week.

This shop owner is a super individual, definitely worthy of the best possible life. So, after I heard this I cut straight to the heart of it all and asked him what he really wanted to do with the years to come. He first apologized for venting and then eloquently outlined some excellent dreams.

He said his time spent thinking about visions of a better future was the only thing helping him get by with a work situation he sometimes hated. But there was an unworkable fantasy in the middle of all this, and I knew it would block his dreams if he did not tackle it. He was sick of sheered bolt removers, but he was even more tired of employees who sheered off bolt removers! He still had a shop and he still had employees, but in his mind, he was done with all of it - and there he sat.

Quite frankly, this adds up to more than a bad week. 

I could not help him with his week, but I could certainly help him with his future.

He needed to learn how to get others to do a good job. An owner’s primary duty is to get others to get the work done. This is easy to say, but it takes tremendous skill. That, alone, would change his life in a big way. Yes, he could do an excellent job himself. That is an exceptional starting point in any activity. If you cannot deliver the goods, then what matters? 

Here’s the bottom line – many shop owners are great techs. They will say (and they are often dead-right about this) that they are the best tech they know. However, they need to be able to say “I make the best techs I know." When they can truthfully say that, from that point forward, their life will change fast. Many things will not change for a repair shop owner until they can make that one thing happen.

It is not the end of all bad weeks, but it is the beginning of a bright new future. Now, here is my question to you: Can you make the best techs you know?

At Management Success! we can show you how. Then, the new game can begin.

Management Success! Website Design