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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How Much PROFIT are You Leaving On the Front Counter? By Bob Spitz Management Success!

Bob Spitz
VP Production
Management Success!

I was talking with a distressed shop owner the other day, who was worried sick about his car count.   He told me all the money he had spent recently on marketing efforts, trying to resolve the problem.  “I’ve got mailers going out, my website is new, I don’t know what else I could be doing!” he lamented. 

After asking him some basic questions regarding his marketing and advertising efforts, I asked him the following:  “Do you track how many calls or walk-ins you get per week?”  This made him pause, so I continued.  “When someone calls your shop or comes in asking about your services, that is called a reach.   What happens with that reach can mean the difference between eating well and starving.  Marketing materials get the phone to ring, get customers and potential customers to visit your website or to stop by the shop.  Once that person reaches it is up to sales to close the deal.  These are two distinctly different areas of a business and they must be watched and kept track of carefully. 

“Who is answering the phone in your shop and do they like sales or do they think of sales as a necessary evil?”  That got his attention, because he did not know.   “Can you help me with this?” he asked.  I offered to set up some “mystery shoppers” to call and come in to his business to test the waters.  I would get back with him once I had the results.

I set up a team to do a series of mystery shopper phone calls and had a friend of mine drop by the shop and pose as a potential customer.  The end result was very revealing.  This is what we found:

• The phone was not answered promptly and sometimes went to voice mail.
• One three different occasions when the phone was answered the person answering did not announce who they were and sounded rushed and impatient.
• When asked for a price on a repair we were put on hold and waited longer than a customer would normally wait.  When the person came back on they quoted a price and then were not asked to set an appointment to bring the car in for an inspection.  The person on the phone seemed bored with the whole process.
• On one occasion when calling to ask for a price on a repair we were immediately given a discount.
• We were left on hold and forgotten about.
• On one call we were asked to bring the car in, and when we politely declined the person on the phone called our caller a jerk as he hung up.
• The on-site mystery shopper stood at the front counter and was not acknowledged by anyone in the shop until he begged for help from someone walking by the front desk.

We then surveyed the people working on the front and found neither of the two had any professional training in the area of sales, and one of them did not like selling or having to deal with customers!

I went over the findings with the shop owner. He was shocked and a bit embarrassed.  I told him to stop beating himself up, this wasn’t uncommon.   Often a shop owner can be the last to know the true condition of the front once he stops actively running the day-to-day operation of the business.

Then I told him this key concept.  “A shop can have a great advertising campaign, a very good looking, professional website and it will be all for naught and waste a ton of money if the shop has the wrong or untrained people on the front counter.  THE PEOPLE ON THE FRONT WILL EITHER MAKE OR BREAK A BUSINESS!”

We went over a list of attributes that his front people needed to be successful and checked to see how they stacked up.

Attributes of a Good Front Person

• They have to like people
• They have to enjoy the game of sales
• They have to be highly skilled at communication
• They have to know how to sell and close the deal
• They have to really care about the customers and the shop
• They have to enjoy responsibility
• The have to be organized
• They need to have good computer skills

Measuring his front people against this list, we came up with a solid plan to get his ship righted and went to work. We started monitoring his reaches and sales on a weekly basis, and started getting his guys grooved in on the “Good Attributes” and got them really selling!

The turn-around for this shop was not something that happened overnight, but is also did not take forever either, and the results where nothing short of miraculous.

I called the shop the other day and was greeted promptly and professionally by a cheerful individual who was a joy to speak with.  The results of a follow-up round of mystery shopping showed a 180 degree turn in the front, and the statistics prove it.   Sales were up 26% and the owner is breathing a lot easier these days!

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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.

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