Keys to Repairing Erratic Car Count By Robert Spitz

Robert Spitz
Snr VP Business Development

Keys to Repairing Erratic Car Count by Robert Spitz

Erratic car count is a situation all too common in many shops.  It creates cash flow problems, erratic production problems, not to mention the anxiety it causes for the owner of a shop.  Understanding what the causes are is the first step to repairing the problem.  Following are nine points for any shop owner or management team to address and fix.  These are not short-term solutions but lay the groundwork for long-term stability.

Marketing and PR knowledge

Most shop owners are not in the position to hire a marketing/PR firm to map out a strategy and plan for their business.  However, it is the first step to repairing an erratic car count.  This means anyone who is responsible for the success of a small business better understand the art of public relations and marketing.  They are big subjects with a lot of twists and turns, but they are learnable and must be embraced.  Taking a class in the subjects is the first place to start.

Having a marketing plan

There is an old saying that I find to be true: “A bad plan executed is better than a great plan that is left on the shelf.”  You must have a plan of action.  Who is your audience, and what are the demographics of your shop?  What do these people need and want from a vehicle service facility? When they shop for automotive services, how do they do it?  Most likely, they shop online.  This means you must have a strong internet presence consisting of a professionally-built website with well-managed social media.  This has got to be in your plan.  Most people in this industry are from a technical background and haven’t a clue as to how the average person thinks or what their needs are.  It is so easy to assume you know, which is a terrible mistake.  A casual survey with some pointed questions of the business’ existing customers can help in formulating a plan.  

Working the shop’s customer data-base

If you forget about your customers, they will forget about you.  Part of your marketing plan has to include working your existing customer data-base.  This is part of having a good customer retention marketing program.   This can be done internally if you have the time or the shop can utilize one of the CRM programs available in the market.  Either way, staying in touch with your existing customers and keeping your name and your face in front of them is a critical part of an overall marketing plan.

Word-of-Mouth Advertising

Anyone who has been in this industry longer than a week knows it is driven by word-of-mouth.  Today’s customers rely on social media for advice on where to purchase services.  Encouraging customers to leave positive reviews for your shop on one of the social media sites has to be done religiously.  Businesses thrive or die on referrals. 

Attractive Facility

There is a technical term used by female customers known as the “yucky” factor.  No one expects a repair facility to be a “pristine” show-case, but it has to be clean, orderly, and attractive. 

Sales Skills

Sales is an intricate part of any marketing plan.  A shop can waste a fortune on advertising if the sales aspect of the plan is missed.  Advertising’s job is to get the phone to ring and to get people stopping by.  Sales’ job is to get the potential customer to commit. Anyone working the front counter and answering the phones has got to be well-trained in communication and sales.  The people on the front have to have the right personality and aptitude.   

Technical Know-How

It is fine to have plenty of sizzle created by PR and Marketing, but it will be short-lived if the back does not have the steak.  A shop has to have the technical know-how to properly diagnose and fix the vehicle the first time.  This requires employing the best practices on inspections from the service writer through to quality control.  A shop can do a top-notch job, but if there is no standard process for quality control before the vehicle is delivered back to the customer, the shop can still lose the customer and end up with a bad review.

Customer Service

When it comes to customer service, the delivery of the vehicle is as important as the intake of the vehicle.  This is a golden opportunity to leave a great lasting impression.  Never just hand the keys to the customer and just thank them.  Walk them out to the car, and let them know how much you appreciate their business.  This is the time to ensure the customer knows the fine job you performed.  It is the time to resell the job and go over warrantees and features of new components.  This time also gives the shop an opportunity to schedule any work that is coming up in the future, and this is the time to ask for referrals and reviews.  Make the most of this opportunity. 

Follow-up

A shop can cut themselves out of the herd by doing the simple action of calling within a couple of days to ensure the customer is happy with the job. If there is a problem, the shop can be pro-active in getting any problem handled quickly.  The bottom-line is you have got to be more customer-centric than repair-centric with the modern day customer if you want to repair erratic car count. 

If you are not happy with your car count, Management Success! can help.  Give us a call at 818 500 9631, email us at morgan.scott@managementsuccess.com or visit us on-line at www.managementsuccess.com.  Wishing you success!

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

A Look Inside Your eMarketing Health: Where Do YOU Rank on Google?

Search Engine Optimization (SEO) is crucial in getting more visitors to your website and getting ahead of your competitors. You may have realized – after a while of getting almost no phone calls originating from your website – that first-page rankings are not as simple as they seem. Even if you have a great website, if it is at the bottom of search results, then it is losing you money. So what can you do about this?

FACT: Top-rank listings in search engine results are created by organic search traffic, not “pay per click” or paid-for ads. Website owners always seem to want an SEO “magic bullet” to increase their rankings, but the organic search traffic is what maintains certain websites at the top of the list.

In order to get on the first page, a lot of thought, research, and work must go into your SEO. One vital strategy for achieving this is to use specific keywords and revolve your website’s content around these keywords. Remember, your future clients are out there typing specific words into that search engine – those words should lead straight to your website!

FACT: SEO is constantly evolving. You’ll notice that when you type the same phrase into a search engine one week, and then again on a later week, the results are never the same. It is proactive marketing that always keeps your website ranking high.

The goal is to modify your SEO strategy to make sure your website always ranks high in search results. An extra step would be to have your SEO maintained by a professional who not only understands the changing nature of SEO, but also understands the ins and outs of the automotive industry. That way, he or she will know exactly what needs to be updated in order for the website to remain at a high level and attract customers.

It can take time to get on that first page, but when you do, the payoff is great – increased calls, new clients, and more income for your shop!

If you need help with your website, want to get better rankings, or would like a free analysis of your website, visit us at www.mswebpros.com.

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

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.

Management Success!

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

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!

Take a Free Online Shop Business Analysis!

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

Marketing To Women: A Female Shop Owner’s Perspective By Nancy Knight Management Success!

Nancy Knight
co-owner of Knight’s Automotive
Ledgewood, NJ

As a wife, mother and major decision maker in my family when it comes to purchases of goods and services, I have lots of experience as a consumer.   My past experiences as a female consumer, both good and bad, have helped influence the way I market and manage my own auto repair business.  I make sure that our shop gives the same friendly service and high quality products that I expect from the people I do business with.    In particular, I pay special attention to meeting the needs of my female clients.  

Why do I have so much attention on female clients?  It turns out that I am not alone as the major decision maker on purchases for my family.   Even in what is perceived as a male domain, women request 65% of the service work done on cars (in our shop it’s closer to 75%)  Women spend over $200 billion on new cars and servicing of vehicles each year.  We buy more than half of the new cars in the US and influence up to 80% of all car purchases.  There is power in the female demographic indeed.  It pays to find out what your women customers want and need then deliver it.   To do this successfully you must first understand that men and women—for the most part—communicate and make decisions differently. 

Besides trust, which is important to both male and female consumers, women want a “relationship.”   We all know that being in a relationship requires a higher level of care and communication to nurture and sustain it in the long term.  Women want more information about what is being done to their vehicle and why.  They want you to listen to them, educate them and not talk down to them.   I call this the C.A.R.E. factor:  Completely And Respectfully Explain their car care needs to them in language they can understand.  We like to use visual aids at the counter and walk the customer out to the car when necessary. 

While men tend to communicate less and want a brief explanation of price and function of the repair or service, women want more details.  Female clients also prefer you to take a personal interest in them, their families, jobs and hobbies.  Ask a woman about her kids, her business accomplishments or her hobbies and watch her brighten up immediately.  This increased familiarity, sincere care and concern goes a long way in building long term relationships with your female customers.  Since, happy, long-time female customers are more inclined to refer business to your shop than male customers (in my experience); they are the best customers to have.

Acknowledging birthdays, anniversaries or writing personal thank you cards are successful marketing actions to consider in building relationships with your female client base as well as personal follow-up phone calls after service is performed. Some additional points to ponder when marketing your repair shop to women are:

• Make sure that your shop is clean and neat both on the inside and the outside. Do not confuse this with fancy. The reception area should be scrubbed and fresh smelling.  Include comfortable seating where possible. Female-friendly magazines, coffee, bottled water and fresh baked cookies are nice touches. 
• Pleasant music playing is preferred over a television blaring bad news.
• Insure that your bathroom is sparkling clean and smells good. 
• Just as your physical location should be scrubbed, so should your online reputation.  Women are more likely to engage in social networking sites such as Twitter and Facebook as well as check review sites such as Google, Yelp or Insiderpages before deciding who to do business with. Respond to your reviews and engage your customers on these sites.  Happy customers will share your information with their friends and family members online.
• Make certain that your website is fresh and attractive. Including personal information about yourself and your employees makes you real to potential customers. Pictures and education points are also helpful.
• Set up regular maintenance schedules and send reminders. Utilize all the current technologies such as text messaging and email as well as direct mail according to the individual preferences of your customers. 
• Leave your customer’s cars clean and smudge-free. Besides making a good first impression, making a good last impression is also important especially to the more discerning female customer. Use floor mats, seat covers or steering wheel covers to prevent any dirt or grease from damaging the interior. Do not change the radio station. Offering a complimentary car wash or interior vacuum for large jobs are also welcome treatments.
 
These are just a few female friendly ideas to get you started.  Of course the best way to find out what your female customers want and need is ask them!  Survey your female customers.  They will love that you care enough to ask their opinion.  This is another action which builds long term relationships. 

At the very least, ask your wife, mother, girlfriend or daughter her opinion of your shop.  They will tell you like it is, both the good and the bad.  Adjust accordingly.  It is helpful to ask yourself: how would I want my wife, mother, girlfriend or daughter to be treated? Go over this viewpoint with everyone at your shop from service writers, managers to technicians.

Though I have addressed the female customer base, many of these points are good practice when dealing with your male customers as well.   Make the women happy and the men will certainly follow.    It takes a little effort, but it will pay off in the long run, with repeat business, future referrals and an increased viable customer base.  That is a huge return for just “making Mama happy.”

I learned ALL this and so much more with Management Success’s amazing and knowledgeable staff. I very highly recommend that you attend the How To Increase Your Profits seminar—don’t wait! Let their staff show you just how successful your shop can be!

Get help with your marketing and other management tools—join us at a Seminar near you!

Visit www.managementsuccess.com

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

Are You Busy Being Busy or are You Busy Making Money? Management Success!

We talked to three different owners to find out the difficulties they had in their shop before they attended the “How to Increase Your Profits” seminar. Here’s what they told us:

Peyton Knight
Knight’s Automotive
Ledgewood, NY

Dino Di Giulio
Body Best Collision
Sonoma, CA

David Saline
2nd To None Svc.
Moriarty, NM


Q:  What was happening in your shop that prompted you to go to the seminar?

Peyton:
For me it was lack of control in the shop and not knowing where to turn to for the answers.  I would be with a customer and the techs would just be standing around.  I would finish selling the job, then would walk out and ask why they weren’t working on cars. They would say, “Well, I don’t know what to do next, boss.”  And I would explain to them what needed to be done next with every car. “Well, I don’t know how to fix this one, boss, what do I do now?” they’d say, or “Well, I’m waiting for a part, the part’s not here yet.”

At the end of the day everyone would leave and I’d be stuck there working on cars at night.
I could fix a car alright, but I just didn’t know where to turn to for the answers of how to run my business. I knew for sure this wasn’t the way to do it.

David:
The reason we went to the seminar in the first place was that Management Success was able to completely describe our shop operation without even being there. I was doing service writing, being the mechanic, outside sales, managing. I was doing everything and was working from 14-16 hours a day.

I’d spend most of the morning writing up service, getting the customers checked in, and then the afternoon I was writing estimates, doing phone calls and trying to get parts ordered—all while trying to work on vehicles at the same time!  Then I would make sure the customers that had to be done and gone by the end of the day were finished. Then I worked on everything else from 5pm to 10 or 11pm at night trying to keep up with the work. And I did have two other techs working with me.

I had no time with my family, I spent all my hours up at the business and all I was making was mechanic wages.

Dino:
I just needed help. I was at my wits end. I was not in a good place health-wise, I wasn’t in a good place mentally, very tired when I got home every day—especially on those days when we were really busy. We weren’t organized, that’s the simplest way to put it. My shop was very clean, but organization wasn’t one of the things that was in place. I was the owner running all the time from the front to the back. And if I added a new employee it seemed like things got worse. We were getting busier and busier and I just didn’t know how to deal with the workload like an owner should. 

I was tired of chasing my tail and a friend had done the seminar and told me that it was great, he really got a lot from it. And this was someone who owned multiple shops. So—I went to the seminar.

Q: How was your point of view changed about what was going on in your shop after you went to the seminar?

Peyton:
I sat there for two days at the seminar trying to figure out how the speaker knew every single thing that was going on in my business!  How did he know all the problems I was having?  If he knew that much about what was going on in my shop and he’d never been there, then obviously he knows his stuff about running a shop. When I sat with the consultant to go over my business analysis you get with the seminar, he really broke it down for me. Between the speaker, the consultant, and talking to the shop owners who had actually been to the seminar before I realized there were real people out there with real shops that changed their business with the seminar. I could believe it. I got the confidence that Management Success would be able to help me repair my shop. And they did!

David:
After I heard everything the seminar speaker had to say and the seminar was over I realized I had to make some changes in the shop or we weren’t going to make it.

One of the first things that we did was improve the organization and work flow system in the shop. We had a system before but it was all verbal, whoever was doing the job did all the details verbally, we would end up doing the invoice with the customer standing in front of us. Sometimes we could only guess what should be on the invoice, and who knew how much we were losing there!

Now all the billing is done before the customer gets there. The Service Writer keeps track and everything is double-checked as it goes through the system. We also have Quality Control as part of our service now, to ensure everything is running smoothly before the customer is called.

I was able to get off the floor and was no longer working on mechanical stuff. I’m spending more time doing outside sales, bringing in new customers. Now I come in at 9 a.m. I’m off by 5 p.m. I have my weekends off and if I choose to go out of town I can just pick up and go and the shop runs itself, nothing to worry about.

Before Management Success the business was running me completely.  I was at its mercy. Whenever customers showed up or called, I was on call 24 hours a day. I was in the shop more than I was at home. There were many nights I spent sleeping in the shop because it wasn’t worth my time to go home to sleep.

Now WE run the business. What a difference!

Dino:
After the seminar, I looked at my business differently. I started on the road to getting things organized, putting systems in place, making people accountable for their area. It’s as simple as that! I didn’t see the shop as a problem anymore. Before, I would go home after a long day and just go “holy crap,” you know? I mean there were days when I wished I had never gone into work. At the seminar, I was given this “toolbox” for my business and I knew I had to open it up and use it and fix my shop.

I had things I changed right away, including putting the correct work flow in the shop to handle the jobs. Putting everything in writing instead of being verbal was the first major shop policy that I put in and boy did that help, cause I was probably the worst of all at putting things in writing!

It was a change for my business, but also a personal change.  Because of all the things I learned from that weekend at the seminar and after, my entire life changed. It changed the way I look at a lot of things for the better and the shop is now the best that it’s ever been.

Management Success! How to Increase Your Profits Seminar

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

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

Management Success! Automotive Shop Website Design

FIND THE BLACK HOLE IN YOUR SHOP!
TAKE THE BLACK HOLE TEST!

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

FIND THE BLACK HOLE IN YOUR SHOP! TAKE THE TEST!

Spring 2013 Management Success! Beach Getaway Convention

Management Success! 2013 spring convention offered excellent opportunities for networking with other like–minded shop owners, many of whom run some of the top automotive shops in the US and Canada, exclusive convention workshops tailored for auto shop owners to bring their shop to the next level of expansion and fun with the many planned outdoor activities.

What Does it Really Take to Make a Shop Profitable? - by Robert Spitz, Management Success!

Bob Spitz
VP Production
Management Success!

Ten years ago an independent repair shop owner could make a pretty good profit. Today, for many, it’s much tougher. Why? Did the industry really change that much in ten years?

Yes it has.

Many things about running a shop have changed, making it more difficult to make a profit. So, ten years later there are shop owners working impossible hours and literally going broke doing so.

But there are some shops that do make big money—even in the face of these huge industry changes. How is that possible, you ask?

Small to Mid-Size Shops

In most small shops that are doing up to $25K in sales a month, the owners have come from the technical side of the business.  Their time is primarily spent fixing cars.

Other small to mid-size shops have pushed their monthly sales to around $45K.  The owner is usually also the service writer and oversees the rest of the business.  Their technicians fix most of the cars. Sometimes, owners bring in their wives or girlfriends to help.

What these shops have in common is that their business grew to a certain level of monthly sales and then ran into a barrier that stopped the business from growing.

Common Barriers for Small to Mid-Size Shops

• Problems finding good help.
• Not enough customers.
• Working too many hours.
• Not making enough money.
• Owner being overwhelmed.  (“My shop is so unorganized!”)
• Owner has to check on everything or else nothing gets done right.

The barriers become unsolvable.  Owners try everything they can think of to come up with a solution.  When you talk to shops that have been in business for 5 to 30 years and are still struggling with the above problems, you find that most of the owners have given up.

Unfortunately, they often decide to close or sell the shop, turn the shop over to a family member, just hope it will get better or simply keep on doing the same thing until they retire or die. They get to the point where they won’t believe anyone that tells them there might be a solution to their problem.

Bigger Mid-Size & Large Operations

The number of shop owners who have taken their business to the next level is much smaller.  These are shops doing between $50K - $90K in monthly sales.  They will occasionally help the service writer or help in the back, but normally they are not working in the operation on a day to day basis.  But these shops run into barriers, too.

Common Barriers for Bigger Mid-Size & Large Shops

• Getting someone to manage with the same care factor as the owner.
• Getting someone to manage the way that the owner wants it to be done.
• Running into problems when a key person, either the manager or a good technician, is lost.

Here you have owners who can run the shop themselves, but are unable to get the job fully turned over to someone else.

There is another group of owners who have pushed their operations above $90K to over $200K in sales a month.  They can come and go as they please.  Most don’t open their shops in the morning.  They have a service writer or manager who runs the day-to-day operation. Here the owner has successfully turned over the job of running the shop to someone else.

They will tell you that they have no real problems and they are not really interested in taking their shop to the next level.  Eventually, they will start to tell you about the barriers that they have run into and why they have decided not to expand further.

Expanded to the Next Level Then Fell Back

Some owners in this group got the business to the next level then something happened to pull them back down.  Sometimes they lost a good manager or a key technician. Other times, they started to get alarming reports from their good customers along with a drop in business.  When they investigated they found the manager was creating problems and decided to go back to running the shop themselves.

Multiple Shop Locations

Finally, there are shop owners who open multiple locations.  They also eventually have problems.  They expand to a level just beyond the ability of the staff to effectively control and run the business.

The owners are not involved with the operation, they’re doing something else.  They hire a general manager to run shop operations.

During the growth they can make money like mad. They start just opening stores and putting people in place very fast.  But eventually the organization starts to have trouble.  The owner gets frustrated because he tells the management what to do and while some changes are made, most of it doesn’t get done.

Common Barriers for Multiple Shop Locations

• Expansion happens too quickly to put real systems in place.
• Owner can not get management to run the locations the way he wants them to be run.
• Owner can not implement changes in the way things are run.
• Training staff doesn’t always help.

If he starts going into his shops and inspecting, he will likely find all kinds of things that he has strict policy against.  They are not doing it his way and he can’t seem to be able to implement the changes he wants.  He has all kinds of training programs, some of which help while others don’t.  The operation starts to flounder.

The Real Problem

There are three things that you need in order to be a really successful multi-location operation.  Having a system for production and getting it implemented is one of the missing basics.  Another is the right organizational structure. The last is the ability to find and train the right people to do the job.

The trick is having a successful model in one shop, then be able to duplicate that model in multiple locations. Most owners expand too quickly to control the operation.

The Real Solution

At every one of these levels, there are common barriers that must be handled in order to expand and be more profitable.  The owner’s inability to handle a problem is solely based on his lack of knowledge of how to handle that problem.  The more you grow, the more management knowledge and skills you need.  It is the key. Otherwise, growth stops and profits plummet.

At Management Success! we have helped shop owners to solve each of these problems.  Isn’t it time that you quit being frustrated or just hoping things will get better?  Isn’t it time that you learned how to solve the problem that is preventing you from taking your business to the next level? Isn’t it time you started making the profits your shop should really be making? It is. Now is the time.

MANAGEMENT SUCCESS! "How to Increase Your Profits" Seminar Description

FIND THE BLACK HOLE IN YOUR SHOP! TAKE THE TEST!

It's The Economy! By Mike Lee Management Success!

Mike Lee
President
Management Success!

Ah! Over the years, we have heard this complaint on numerous occasions. Shop owners complaining about things getting tight and that there is not enough business and "I can't pay my bills, etc."

Let's go over some basics about business and handling the "tight economy." A shop goes through cycles or periods of where business is good followed by a period where business is bad. This has been going on since the beginning of time. So we can conclude that it is going to happen again. It appears we are in one of those times when things are a little tough.

Now, if you have been through this before, hopefully, you have learned some things. Some businesses survive and a lot don't. Why? Most of the time, the shops that survive know how to handle the tough economy!

They do the right actions which helps them through the difficult period. Such as:

Work Harder

Successful shops know when the economy gets tough, they have to work harder. What I really mean is they have to work smarter. Just working an extra 3 hours day will not solve the car count problem. It will not solve a shop that has gotten lazy and dropped out successful actions they were doing when they were small.

The most common of these successful actions is they used to be "hungry". When they first started in business, they were very aggressive. They did whatever it took to get business in the door. Many times, new shops will pass flyers out door-to-door or in malls promoting that they were a new business that was opening. They passed out business cards to everyone they knew.

But as soon as they got busy, they stopped these actions, even though they contributed to the shop getting busy. So part of the working harder is go back to being hungry and aggressive.

Promote!

They promote! This doesn't mean they spend a million dollars on advertising or promotion, but they do actively increase their efforts with their customers. They are able to effectively get results without having to spend lots of money doing it.

When things slow down, shops tend to stop promoting. This is not the right thing to do.

I love people who spend lots of money to learn how to create tricky, expensive promotional campaigns. When in reality, the key to promotion is word of mouth. So instead of spending tons of money on promotion, you can increase your car count by having a plan to spend more time with your existing customers.

Personal contact with your existing customer costs you additional time, but is more effective than any promotional piece ever created. Explaining the bill and what you are doing and why is very effective promotion. There is no promotional piece that will replace having a high care factor and good communication skills in dealing with your customers.

Fix The Cars!

The other day I got an e-mail about a problem a potential customer was having. He was complaining about bad checks, business slowing down and then proceeded to give a full picture of all the promotional actions that he was doing. He was spending a ton of money and he indicated that 50% of his business was new customers. He asked a ton of questions that did not make any sense.

I asked a couple quick questions like what his average repair order was and what was his cost of parts and labor. It was very obvious that he had other problems than promotion problems. The number one problem was the quality of work going out the door.

When 50% of your weekly business is new customers, wow!! Something is definitely wrong in the quality of work. A growing and expanding shop is built on repeat business and word of mouth. The part of the industry that has heavy repeat business needs to have about 90% of their business be from existing customers or you are starting to have problems.

If you are in the part of the business that doesn't operate on repeat business, then word of mouth is everything to you. Every time you finish a car, you put a referral out in the world. This referral is either good or bad and generally it is up to you to make it a good referral.

First Rule of Promotion: Fix the Car

Second Rule of Promotion: Treat the customer fairly with a high care factor.

I know of shops that do no promotion or are not even listed in the yellow pages, but they do terrific business, because of the way they fix the cars and handle their customers. They have a good number of new customers coming to their shop because of referrals from their existing customers.

A New Level of Expense

In good times, shops tend to get very lax on the control of the money. They start buying things and expanding without looking at the long term effects of this. They take on heavy debt and commitments due to the fact that they are making lots of money and it appears to be no problem.

But when the economy slows down, they begin to get into real trouble because their monthly overhead is now out of sight. While smaller and the overhead was low, they could handle a drop in business and survive rough times.

I find that the most successful operations go back to the basics when business slows down. They work smarter. They get more aggressive on making sure that they are doing everything that they know helps create good customer referrals and repeat business. They tighten the financial belt, make sure that they don't spend money on things that don't work and do spend money on those that do!

I hope this helps.
Mike Lee

MANAGEMENT SUCCESS! Where is the Black Hole in your Shop? Test

FIND THE BLACK HOLE IN YOUR SHOP! TAKE THE TEST!