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!