The Real Reason Why Independent Repair Shop Owners Are Struggling, by Robert Spitz

Robert Spitz
Senior VP Business Development
Management Success!

Some say it is because people are leasing cars, and therefore feel no need to maintain them. Others say it is the auto makers’ grab for domination of the repair market.  Many say it is because there are no more good technicians. And a few blame the increasing complexity of cars, the economy, the weather...

The only reason an independent repair shop struggles to make ends meet is lack of management know-how. Specifically, paper flow, routing, and tracking of key statistics are not done or are inadequate; the owner is wearing too many hats, cannot delegate, and is therefore “too busy” to really make any money; doesn’t do the basic, routine internal marketing actions to make the most of the existing customer base; doesn’t know how to handle personnel or “handles” them poorly; doesn’t know how to find good technicians at the drop of the hat; doesn’t provide adequate incentives to employees based on their production.

There are hundreds of things in a successful repair shop which must dovetail like clock-work for that shop to run at peak efficiency on a consistent basis. When they do, it’s a money-spinning thing of beauty. But that all falls under the heading of management know-how.

Why is it that one shop is busy all the time and another right next to it is dead? Why can one technician rapidly know out whatever job you throw at him – with high quality – while another suffers from broken bolts and wrong parts, takes forever, and blames everyone but himself?

Running a shop is just as technical as fixing cars. There are certain management tools you must have to get the job done at all. There are certain business aspects you need to know cold, so that you can think on your feet with them and track where you are at at all times.

Shop owners who do not have a command of the Management Technology are really nothing more than shade-tree managers and will always have some external excuse to justify their ineptitude. So, don’t buy into the industry doom-sayers’ negative rationalizations. 

For many years now, we have helped thousands of independent repair shops in every part of the country become and stay more successful than they even thought possible. I can therefore assure you with complete certainty that the only difference between a struggling shop and a successful shop is the owner’s level of management expertise.

Your shop will rise to your level of management expertise and no further. If you want to keep getting what you’re getting, just keep doing what you’re doing. If, however, you want to create a better scene for yourself, your family, and your employees, call us at (818) 500- 9631. We are industry-specific and here to serve you. Please call now.

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Why You Need Management Training By Bob Spitz Management Success!

Bob Spitz
Snr VP Business Dev
Management Success

There was a time when having good mechanical skills, some common sense and a dose of good luck was enough to have a successful auto repair business.  That time is gone forever.  To have a successful business today requires strong management skills, and these skills can only be obtained through solid training in the area of management.  

What Does Management Mean?
First off let’s clarify what is meant by Management Training.  The dictionary definition of manage is: organize; regulate; be in charge of something. A good technician needs to be able to organize and regulate their tools, equipment, time, and work space in order to successfully get the job of servicing and repairing vehicles done.  This ability is different from the ability to actually perform the repair or service, but no less important.

Technicians go to school for years and continue their technical training to keep up with the ever changing modern vehicle. The management skills needed to be a professional technician is fairly easy to learn and does not take a long time. But these skills do not translate easily to the task of managing a business. Yet it is only these management skills that most owners are relying on to manage their businesses. 

Managing employees, finances, customers, flow lines, advertising takes a much higher level of education in order to be successful as a business person.  To have a successful business, business management skills are needed.

Goals and Planning
Before anything can be managed there has to be an overall plan of attack.  Planning a business requires having a know goal or objective that is trying to be achieved.  What is the purpose of the business?  Where does the owner want the business to go?
Once this is known then planning can occur.  There are three basic areas that require planning: Organization, Finance and Marketing.  By far organization planning is the most complicated as this involves the proper use of space and employees. 

Employees
To be successful a true team needs to be developed yet employee management is one of the trickiest areas.  Knowing how to recruit and hire good people, how to compensate them correctly, train them to do their jobs and when they don’t how to correct, discipline and motive them? There is a tremendous amount an owner needs to learn about people. 

Organization
In order to get the most out of the employees in a business the business has got to be organized.  But what does that really mean.  Organizing is the act of lining things up in a logical sequence so that at the end we have something done, and done in a smooth and efficient manner.  Twenty-five percent of an owners day needs to be spent on this process and this includes training.  To get the maximum production out of an area the people in the area must be trained in the jobs they are doing.

Finances
Financial planning is more than having an accountant that can be trusted.  Financial planning requires that the owner of the business knows how to set up the finance area of the business in order to get accurate information quickly, know what the numbers mean and then steer the business into good financial condition.  That means the owner has to know how to read the reports, control expenses, create solvency and invest wisely.  An owner of an auto service facility needs to have the same level of training and skill in this area as in any area of the business.  It can not be left to someone else to do.

Marketing
There are many theories and opinions regarding marketing and advertising an automotive service facility.  What works in one part of the country does not mean it will work in another.  In fact, you can have a successful campaign in one part of a town, and have it do nothing in another part of the same town!  Understanding the principals behind why this is is critical for any business owner to understand.  The people in our industry tend to copy what someone else is doing without any knowledge as to what works and what doesn’t.  It gets to be a bad case of the blind-leading-the-blind.  Advertising is not cheap, and an owner needs to know what will and will not work in his or her market.

Marketing planning has to be thought through completely with true information at hand, and it needs to be done well out into the future.  The success of any business relies on knowing and having the knowledge of marketing basics.

I have touch on three key elements in this article.  They are by no means the only areas that an owner has to be skilled in handling.  So when we look at the modern day automotive facility and the emotional and financial investment most people make in their businesses it becomes clear that knowing how to diagnose and repair vehicles, although important, is not where the money is for the owner.  Get trained in the techniques that will help you be successful: Get Management Training!

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Business is Slow, and I Need More Leads! - by Mike Lee, Management Success!

Mike Lee
Co-founder
Management Success!

My service writer says, "Business is slow, and I need more leads!"

It is not unusual for some of our good clients to occasionally say they were doing okay, but it has slowed down. This is one of the areas which drives shop owners crazy. Just when they thought they were going to make some real money, the business slows down. 

There are several possible sources for this problem, but the one we are going to discuss in this article is: If business is slow, it is always the service writer. 

I can't tell you the number of times I have heard about shops having problems, and suddenly they change their service writer and - boom! - the business takes off.

Shops do not become busy by luck or accident. Oftentimes, successful businesses have a service writer who is good at selling, while the shops not doing well try to figure out where all the customers went. Let's look at some service writer basics which determine whether a shop will be busy or not.

Selling is a Necessary Evil!

A service writer needs people. It is amazing how many service writers really do not like to deal with or talk to customers. A good service writer likes people and enjoys talking to them. 

Oftentimes, when we interview service writers from shops around the country, they will indicate that selling is a necessary evil. This is a sure-fire indicator the service writer does not like dealing with people.

I Don't Want to Make Them Mad!

A service writer has to be willing to handle customers, even the tough ones. A good service writer is not afraid of the customer! 

A service writer has to have the ability to tell customers things they do not want to hear - upsetting things, such as it is going to cost more to get their car fixed. Unfortunately, some service writers are afraid to handle customers and tell them the truth - it costs money to fix cars! 

Some service writers are so afraid of upsetting customers and not willing to risk it, so they resort to not telling customers the full story on their car. They try to sell only what they think customers will pay for the job, instead of asking for the money on the full job. 

They suffer from the "Tricky Lower-Jaw Disease." This is the disease that afflicts service writers when they need to tell customers the repairs are going to cost $750.00. Their lower jaw goes into stutter mode, and $450.00 comes out of their mouth!

I Never Want to Rip a Customer Off!

Some service writers have high personal integrity and are careful to make sure they never rip customers off, especially by not overcharging for the work that needs to be done.

Again, this decision leads to service writers becoming rip-off artists. They end up ripping off the business, the employees, the employees' families, the owner, and the owner's family.

It is the responsibility of service writers to sell the work profitably, so all employees and the owner(s) of the business make enough money to live comfortably.

This comes from not knowing what is a fair price to both the customers and the business.  Most shops set their prices based on the "Grand Fake 'Em Method." Their prices are not based on their own costs, but on what their competition is charging. Of course, their competition is going broke, but they have to be competitive.

Can't You Give Me a Ballpark?

Price jobbers! This is the area which drives a lot of service writers nuts. Many service writers are not good at handling potential customers over the phone! Some shops quote prices for major work over the phone to new retail customers. 

This comes from not knowing how to handle price shoppers and, in some cases, the belief a shop must give prices over the phone for major work. 

The truth is that good service writers will normally be able to get 20-30% more business if they learn how to handle price shoppers and do not quote prices for major work over the phone. There is a technology to effectively selling. Most service writers have not had any professional training.

The result is a loss of income for the business and a lot of frustration.

I Need to Speak to a Technician!

A lot of women are involved in the automotive business and many let the lack of training stop them from becoming service writers. They are afraid that male customers will not be willing to listen to a woman because she is not a technician.  

At Management Success!, we have found a lot of women have the ability to be very effective service writers. Some of the most effective service writers in the industry are women who have learned to handle customers. One of the main reasons they are so effective is that most women do not have the technical knowledge for cars - and the less technical knowledge a person knows, the better they are able to sell the work.

In addition, women generally tend to be better at listening and have better communication skills. As a result, they do a better job of handling customers because they listen and do not overwhelm customers with a bunch of technical jargon that the customers do not understand.

I Want to Think it Over!

What the customers are saying with the famous "I want to think it over" statement is they are in confusion and are not sure that what their service writer is telling them is true. This is an indicator that the service writer is not in communication with the customer.  

Customers who are in confusion will not buy! They will go somewhere else. Trained service writers should know whether or not their customer is tracking with them and what they are thinking - this should happen before they get to the end of the sale only to find out the customer wants to think it over. 

When the customer says...

1. "I have to talk it over with my spouse."
2. "I want to think it over."
3. "I will have to wait."

...they are really saying, "The service writer hasn't sold me yet!" A lot of service writers spew out their sales procedure unaware of what the customer is really thinking. The service writer is not in good communication with the customer, but is really just talking to the customer.  The customer is wondering if the car really needs the work and the service writer is telling him or her how much. 

The customer is in confusion and the service writer does not know it. This is because the service writer has not been trained. Most service writers lack the technique of selling and are not in good communication with the customer. When this happens, the shop loses sales and customers.

The Phones Are Not Ringing!

"The phones are not ringing!" This is a favorite statement made by service writers when sales are down. It is normal for a shop to have one or two slow weeks; but overall, if one shop's sales are down, but other shops in town are doing well, then the problem lies in that one shop - and the problem is the service writer.

It takes a person who is motivated, likes people, and does not have his or her attention on other things to be good at sales. One problem of owners being service writers is they are splitting their attention among lots of things which need to be handled. If they have something pressing which needs to be handled, sales will drop. It does not take much for a shop to lose two or three jobs a week when the service writer is not focused. This is why it is best to have someone whose sole function is sales. When you have a service writer, the key point in sales is the rule: It is always the service writer.

I can recall numerous occasions when a client indicated the sales were down, and I gave them the rule. When they got in communication with their service writers, they found that he or she was having marital problems, had a sick child, or had another personal issue, which was diverting their attention from the job and affecting their customer service.

When a job has been growing, sales have been good, and suddenly it starts to go down, the first thing is to pull in the service writer and find out what is going on. Service writers will say it is slow and the phones are not ringing. That is a sure-fire indicator that they have something going on which is preventing them from doing their best.

Being a service writer requires a person's full attention. Service writers must like people and must be willing to tell customers things they do not want to hear. They must know how to do it and need to have good communication skills to know what the customer is thinking.

The Solution to the Above Problems

Just as you would not put someone with no training and knowledge on a tough computer diagnostic problem on a car, you would not allow an untrained person to be your service writer, correct? The sharp businessperson will make sure the service writer in his or her shop is knowledgeable in the technique of sales and has all the tools necessary to do a good job.

I recommend all of our clients who have started their training in business management to come to the five-day service writer course and bring their service writers to learn sales techniques and good communication skills. This is a challenging course that demands a lot out of the attendees. In the end, attendees leave the class with improved communication and sales skills. But, it is only money - yours!

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The Size of the Problem by Mike Lee Management Success!

Mike Lee
Co-founder
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.

Solutions:
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

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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.

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I'm Sure I'm Making Money, So Where Is It? By Mike Lee Management Success!

Mike Lee
Co-founder
Management Success!

One of the major problems facing shop owners is the fact that they spend everything they make. Even when the business is expanding and they are doing fairly well, they seem to have problems accumulating money.

One of the least understood areas of the business has to do with MONEY! Very few people know how to accumulate money and live within their means.

This is amazing, since one of the major benefits of going into business is to make more money. Yet a great many shop owners had more money to spend when they didn't own anything and worked for someone else.

Most of the money-related problems in the business come from not understanding how to handle and control money, both in the shop and at home.

No Matter How Much I Make, It Never Seems to Be Enough!

Over the years, I've observed an interesting phenomenon where the business grows and yet the owner is unable to take more money out of it. Eventually the owner quits expanding the business, because even though it has doubled its gross sales, the shop is making less and less money!
 
It is not unusual for businesses to be grossing over a million dollars a year in sales and not have enough to pay the bills!

The solution is to learn the correct way to accumulate money despite the bills and all the reasons why it can't or shouldn't be done. Otherwise, the business will spend every dime and have nothing left over.

My Accountant Says We Owe Lots of Taxes, So Where's the Cash?!

Most shop owners were trained as technicians, not as business people. So when it comes to understanding the financial statements given to them by their accountants, they haven't a clue. Unfortunately, a good many accountants don't either. There are tremendous confusions regarding balance sheets and profit and loss statements.

An example of this is a shop in the Midwest owned by two partners who were told by their banker that they were doing really well and should borrow the money to expand. After they borrowed $198,000 and then found that they weren't making any money, the banker wanted them to sell off their personal stuff (houses, etc.) to pay the note down.

After becoming a Management Success! client, they paid off $40,000 of the debt in 8 months, except now the banker says they're not showing any profit and should go buy inventory so that "the financial statement will look good."

He advised them to go back to the way they were doing it two years before. If they had followed this advice they would be out of business and have no homes!

Their accountant gave them similar information and said they were "not doing it right." (Oh! By the way...they have a new banker and new accountant!)

What shop owners don't understand about financial statements can result in them following bad advice and potentially going out of business. The solution here is to get trained on how to read and understand financial statements!

Sales Are Going Up, But Expenses Are Going Up Faster!

It is very common for shop owners to see their sales increase dramatically as a result of learning to do some marketing and advertising. However, in the course of expanding, their costs can go up just as fast. What is happening here is the owner tends to concentrate on the shop rather than the money.

Part of the process of changing from being a technician or service writer to an executive who runs the business is the realization that an executive must put his attention on THE MONEY! Often, the owner of the shop doesn't know exactly where the business is at in terms of financial matters, and doesn't have the ability to get key data necessary to make good business decisions.

Most owners are shooting from the hip when it comes to the financial numbers. Too often, they leave this area for others to handle. As a result, they are never sure what is really happening, because in the owner's mind, it ain't his job!

NEWS FLASH!!! One of the primary jobs of a business executive is to control the money!

We Make Just About What We Need!

Another common problem is shops that are doing "okay" but never seem to get the full potential out of their business. Often this is because when the business starts to do well, the owner tends to relax.

A common trait among business owners who are at the top of their game is that they don't relax. The key to really getting the most money out of the business is to keep the pressure on and do the right thing at the right time. I also recommend that you never let employees, service writers, or the production department know exactly how well you're doing, or they'll relax too.

The Secret to Getting the Most Money Out of the Business

The real secret to getting the most money out of the business starts with the shop owner and his ability to control the money! The difference in getting 20% out of the business vs. 35% is in the office, and in controlling the checkbook.

A shop owner should know where the business stands at all times, and be able to know everything about the money coming in and where it goes. The successful executive is at least a week ahead in planning, fully understands the purpose and the use of financial statements, and is able to guide the accountant instead of being totally confused by him or her.

Ultimately, the shop owner is responsible for making sure the company is solvent, making LOTS of money and putting LOTS of it away for emergencies, and having a plan to get everything paid off.

Take control of your business; learn what you need to know to guide the business into a strong financial position and personal prosperity, it is your job, but Hey, it's ONLY money ... YOURS!!

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Help! Help! I Work At A Madhouse! By Mike Lee Management Success!

Mike Lee
Co-founder
Management Success!

When I used to do on-site consulting, one of the first things that stuck out in a real busy shop was how insane everyone was. The first time I saw this was in a very busy shop in Maryland. They had two Service Writers and they both needed space-age phone talker helmets. They had cars and customers all over the place and the phone was ringing off the hook. The owner was so busy helping out that he just waved to me because he just didn't have time to talk.

I watched them for a while and concluded that the two Service Writers had to be crazy to work under that much stress and the owner definitely shouldn't have been involved in the process.

Later, I noticed that time after time, I would go into a busy shop and would see everyone was running around like crazy. Occasionally, I would hear heated discussions or very upset people muttering to themselves. It was very obvious that nobody knew how to organize the place and they were killing themselves and not being very efficient at anything. The biggest problem was that they weren't even aware of how much money it was costing them to do things this way.

The Owner Promised Me It Would Be Done Today!

Nothing drives a Service Writer crazier than to find out from the customer that the owner had promised the customer that his car would be done today and not told the Service Writer.

Did the Part For the Buick Come In Yet?
Don't you just love it when you are busy trying to sell a job to a customer and a technician wants to interrupt you to handle some problem?

Is My Car Going To Be Done Today? I have seen Service Writers actually throw phones against the wall because one of their customers calls every five minutes to see if their car is going to be ready.

When Is My Car Going To Be Done? You Told Me the Same Thing Yesterday!
This is another version of the customer who calls constantly wanting updates on his vehicle. It is amazing how much time is wasted answering the phone and then checking on the status of the customer's cars.

Did You Get the Authorization To Work On the Ford Truck?
How many times a day does someone in your organization ask the Service Writer or you questions about the status of a car or when is a part going to arrive?

There Is No Change. It Is Still Doing the Same Thing It Was BEFORE You Worked on It.
Just Ducky! Just Marvelous! This is just what the Service Writer wanted to hear at the end of a super busy and crazy day. Sometimes, they want to kill the technician who did the work on the car.

I Thought You Ordered It.
This is another lovely piece of news to a Service Writer trying to handle a customer on the phone about when his car will be done. It turns out the part the car needed was never ordered and of course, it will take a week from today to get it. You're thinking, "Do I have to do everything myself?"

I Am Sorry, We Are All Booked Up! I Can Get To It In About a Week!
When I hear owners and Service Writers saying that to customers, I go NUTS! I want to grab the owner and the Service Writer and explain to them how much money they are costing themselves by not having the shop and the front organized.

I remember visiting a shop where the Service Writer told me that he was in overwhelm and it was a madhouse and he didn't know how he was going to get it all done. I looked at the parking lot and the bays and asked "Is this all of it?" He indicated that it was. I told him that it didn't look that busy and that he probably would be over the hump by 2:30, if he did it right.
He handed me the clipboard and said, "You do it then!" I took the clipboard and got all the data on every job and where it stood and when it was promised and who had what. By about 2:00 o'clock it was pretty much a piece of cake from there and he indicated he could handle it. After closing, I sat down with him and showed him how I did it.

Some Basics

If you ever want to watch a really organized operation, be on an aircraft carrier doing flight operations during wartime. It is an amazing thing to watch. They have lots of people doing dangerous activities at a breakneck speed and have occasional unplanned disasters happen, but they handle it all with incredible speed and efficiency. The key is they are trained. They are organized. They have procedures. They all know how to do their jobs.
Of course, if you don't want to join the Navy to learn how to speed up your organization and handle a lot more cars with half of the effort and stress, you and your Service Writer should come to our three-day Controlling The Front Workshop.

At the workshop you will learn how to handle the basics of organizing and controlling the front part of your operation. You will learn how to handle more work in less time and under less stress. You will gain new insight on how to turn your front operation into a lean, mean, money-making machine. It's only money! Yours!

MANAGEMENT SUCCESS! Training and Consulting

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I am Too Busy to do the Controlling the Front Workshop By Mike Lee Management Success!

Mike Lee
Co-founder
Management Success!

There are 3 ways to increase the bottom line in a shop.

1. Increase your prices.
2. Cut your expenses.
3. Increase the volume of work being done by the shop.

One of the fastest ways to make money, when a shop tends to be very busy, is to organize the front of the operation so it can handle more work effectively.

Boom and Bust!

Without organization and training, one of the things that can happen to a really busy shop is the Boom or Bust phenomenon.

This is especially true with clients who have entered a period where the shop is really busy. Just like a race car, a shop will peak out at a certain level of efficiency. When they go beyond that level of work that they can handle effectively, a lot of negative things start to happen.

The Service Writer starts to become overwhelmed. He starts to make little mistakes and then sometimes bigger mistakes due to the lack of control and organization. When this happens, the shop starts to become less efficient.

He then starts to spread his overwhelm to the production people. Technicians start making silly and costly mistakes. Things are forgotten. The small mistakes creates comebacks and this adds to the confusion and the overwhelm and spreads back to the already overwhelmed Service Writer.

How to Lose Customers

When a Service Writer gets into overwhelm and things start to get chaotic, most Service Writers will begin to stop the flow of business. They begin to not push to get customers into the shop as soon as possible. They start pushing work away. They tell the customer that they are super busy and can't handle it for a couple of days or next week or occasionally for a week or two.

When this happens, they don't realize that they are killing their future and losing good customers. The difference between being super busy and slow is not that much on a per day basis. It only takes about 2 or 3 more cars a day to make a shop super busy. So it doesn't take much of pushing work into the future to start to slow a shop down.

The other missing piece on this is when you put a good customer off for 3 or 4 days or a week. Occasionally, they will decide to take it somewhere else to get it fixed because your shop is too busy. Sometimes, those customers will like the new shop better and you have lost a good customer and you don't even know it.

Normally, within about 2 to 3 weeks, things have slowed down. The shop doesn't realize that it is partly responsible for creating this problem. They are not aware of what is happening, so they continue to let things slide until the shop is dead slow. At that point, the owner now is screaming for more business.

So the shop starts another cycle of boom or bust.

Too Busy or Too Slow!

At Management Success! we have watched this happen repeatedly to our clients. One of our Service Advisors will call a shop about doing the Controlling The Front Workshop and the owner of the shop will say "Man, we are swamped and can't do it now. Call me in a month."

The Service Advisor will call again in about a month and the owner of the shop will say, "It has quieted down and I want to think about it. Call me in another month." The Service Advisor calls in another month and the owner says that they have no business and they want our help with marketing, because they need customers.

Organizing the Front Office Improves the Bottom Line

The owner of the shop doesn't realize that one of the fastest ways to improve the bottom line is by organizing the front part of the operation. When the owner and the Service Writer are trained on the basics of controlling the front operation, it means big numbers on the bottom line.

Example: Shop A: The owner and the Service Writer are not trained and the shop tends to max out at about $10,000 a week in volume. After doing the Controlling the Front Workshop, Shop A can easily handle $15,000 week and seem slow. Also, Shop A will not tend to have this constant pattern of boom or bust.

Time to Change!

So are you tired of this boom or bust pattern? Are you tired of chasing the business? Are you tired of going through periods of craziness followed by periods of boredom? If you get into a condition where the shop is so busy that you can't handle it, that shop needs to have both the owner and the Service Writer do the Controlling the Front Workshop. But it is only money, yours!

MANAGEMENT SUCCESS! Controlling the Front Workshop

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Getting Your Business Organized, by Robert Spitz, Management Success!

Robert Spitz
Snr VP Business Dev
Management Success!

“I'm too busy to get organized!”

I'm sure it was originally said in jest, but that's exactly what goes on in too many small businesses. The owner / manager is extremely good at what he or she does, but the idea of stopping long enough to organize the business seems impossible.

The result is management gets overwhelmed trying to get the machine (the business) to produce anything profitably. Too many times the real problem is the person responsible for running the business doesn't know how to organize. Here are some tips on how to tackle this problem.

Let's first look at what organization means: Organization is the action of lining things up in a logical sequence to get something done, and done efficiently; in other words, getting it done in the most economical manner without wasted time or motion. Management means controlling some activity so that activity can operate smoothly and productively.

Management's job is to ensure the products of the company are being produced profitably. When we look at this explanation, it's easy to see why management can have a very difficult time. It's hard to manage an area and get things done when organization is lacking!

Never Organize for Organization's Sake

When embarking on the task of getting organized, it's important first to look at what it is you're trying to produce or accomplish. What's your goal? It's easy to get lost in the woods if the destination isn't clearly defined and known. So the first step is to name what you want to accomplish. A complete understanding of what products the business produces or could produce is the starting point for any organization project.

Make a List

Start off with a list of, say, 10 things you'd like to improve about the business. Now narrow the list down to 3 items… and then pick one. Hopefully it will be the one that, if done now, will quickly improve the overall performance of the business.

Name What You Really Want

Name what it is you really want. If you don't completely name what it is you what to accomplish, you can end up with weird, unworkable solutions.

Example: Doing It Wrong

Situation: Production is being slowed down waiting for replacement parts. 
Improvement Wanted: Speed up the production line. 
Solution: Keep a large inventory of parts on hand. 
Problem with this Solution: Ties up my money in inventory; drives up assets; drives up taxes. Parts are hard to control and start walking out of the shop; lost revenue. 
Solution to Inventory Problem: Hire a parts person. 
Problem with this Solution: Increases inventory and payroll.

See how nutty this can get? What went wrong? What's really needed isn't named completely.

What's more, as you can see by this example, it isn't enough just to name the problem; you also have to name what you want, to come up with a solution that makes sense. By naming the thing you really want now, you can start walking backward from that point to come up with the actions needed to organize the area.

Example: Doing It Right

Let's go back and look at the original problem.

Situation: Production is being slowed down waiting for replacement parts. 
Improvement Wanted: Speed up the production line.

Now Name What You Really Want: The right parts at the right time, without increasing inventory or payroll.

What does it take to get the right parts at the right time without increasing inventory or payroll? What do you need to do to accomplish this goal? Now let's work out a solution.

Walking Backward

Now with this one area of the business, look at what steps are needed to be done to get this area into the condition you imagine. Make a list of the actions that have to be taken. Look it over carefully and ask yourself, “If I take these steps, will I get what I want?” Make sure that each action makes sense and that there aren't any needless or redundant steps.

Possible Solution: Look over appointment book the night before for all vehicles that are scheduled to come in, and preorder the parts that will most likely be needed. Now work out the rest of the steps needed.

Getting Others to Understand and Use New Systems

A great tool for management to use when organizing an area is a flow chart. A flow chart allows you to put down on paper what you're visualizing. Flow charts allow you to see where there might be a flaw or a bug in your thinking.

Once again start with what you want and start working it out from there. Once you have it worked out on paper, you can easily show it to others to gain agreement that your plan will not only help the shop, but will also make their lives easier.

Go through any new procedure with the people who'll be involved. Do dry runs and drill it until the new procedure is smooth and everyone's questions are answered. You can come up with great new organizational plans and systems, but if you can't get the people that need to use them engaged and in agreement, your efforts will go to waste. But when you take the time to do it right and train people on any new system, life is good! Good luck in your efforts and here's to a more organized business!

Learn how to better organize your business by attending the Management Success "How to Increase Your Profits" Seminar.

MANAGEMENT SUCCESS! "How to Increase Your Profits" Seminar

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Should Your Technicians Be Selling Service? by Robert Spitz, Management Success!

Robert Spitz
Sr VP Production
Management Success!

In this industry, there are two schools of thought on this matter. I have heard arguments on both sides that are both good and bad at the same time. Let us take a look at this and come up with a consensus. First, we need to clarify a technician's job.

What Is a Technician's Job?

Defining what is wanted from a particular position in a company helps simplify what functions must be done to get the product or end result of that position. With a technician, it is fairly straight forward:

A technician must correctly diagnose, repair, and recommend any future needed repairs and services so that the vehicle does not have any immediate problems.

From this, we can draw up a list of actions that must be done to achieve the desired product or result. So where does sales fit into this picture?

Most shops are started by technicians who have more ability and drive than the other technicians in town. They have a desire to be their own boss and to have their own successful business. To survive, they quickly learn that they have to have some sales skills. Mixed with their technical skills, this can become a powerful combination. If they fail to learn even the most basic sales and management skills, their growth will stall, and so will their dreams. They eventually figure out they cannot do both jobs of selling and fixing cars. There are just not enough hours in the day.

In order to grow, technicians or sales people need to be hired. Of course, this requires new management skills on how to recruit, hire, and put people on the job so they can now produce in a volume that allows the business to grow and the owner to make money.

A technician earns a living by diagnosing and repairing vehicles. All of a technician’s time must be focused on these two functions. When we pull technicians off vehicles to deal with customers, they are now mixing the functions of sales into their job and are no longer doing what needs to be done to achieve the purpose of the position. This cuts heavily into their production and creates comebacks. So, organizationally, this does not make much sense.

When Using Technicians for Sales Does Makes Sense

There are times when using a technician to help close a sale makes sense. Sometimes the customer is skeptical or just does not understand even though you have used sales aids in your presentation. Using technicians as a “technical tag” can be very powerful in this instance. Knowing which technician to use and when to use him or her is a sales skill that all service writers need to have. The technician needs to be trained on how to do this and must keep the answers short and to the point. The service writer guides the customer back to the vehicle and asks the technician to show the customer why he recommended a particular repair.

Learn this technique and use it on those tough sales, and you will close a lot more. Sales people have a purpose and a function, and technicians have theirs. Do not mix up these jobs, but learn to use the strengths of both to your and the customer's benefit.

MANAGEMENT SUCCESS! Online Shop Analysis for Shop Owners

For more information, call Management Success! at 818-546-5836 or visit ManagementSuccess.com. We are here to help!

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