The independent sector of our industry has a funny way of looking at itself. Too many shop owners believe that they are the same caliber of business as the maintenance/repair facility down the street....
The independent sector of our industry has a funny way of looking at itself. Too many shop owners believe that they are the same caliber of business as the maintenance/repair facility down the street. Nothing could be further from the truth.
Why can one business charge $75 per hour and the shop is constantly full, and a shop within two blocks charges $55 per hour and is struggling to find work?
One would obvious think that the “potential” for business with the higher priced shop that is busy must be different than the “potential” for business with the lower priced shop. That is a fair assumption to make, but sorry, it is wrong. All shops within the market trading area have the same potential. Potential is dictated by the population base of the given marketplace. As the population increases, the potential for business increases. As the population decreases, the potential for business decreases.
What is distinctly different from each shop in the marketplace though, is their “capability” to maximize their potential. Every shop has different capabilities, and by measuring the capability, it becomes clearer why some shops are busier and more profitable than other shops.
There are six items we consider in examining a shop, and we call them “the six questions of capability”. Every problem within any shop falls within one of these six categories, therefore, it is easier to define where the business “cancer” is, and allows one to focus on resolving the problem once it is clearly defined.
The first question to examine is “Attitude”. What is the attitude of the shop owner/manager and the staff? Ever noticed when you walk into a shop you seemingly can “feel” the attitude of the premise? Is the attitude positive or is it negative? A negative shop will never reach its potential in business. The owner/ manager is usually complaining about his lousy, cheap customers, the fact that business isn’t like it used to be and you will never be able to make the kind of money that we made in the “80’s”, or complaining how you can’t keep any good staff any more as “they always want more and don’t want to work for it”. It is obvious that this environment is not a fun place to be, and the owner/manager is, quite frankly, a pain to work with. When the owner/manager is in this frame of mind, I can guarantee you the staff will have a negative feeling about the entire business. The owner/manager has no vision for the business, no plan for the future, he just likes to complain all the time, “for the sake of complaining”, and always points the finger at someone, or something else, for all his woes.
The second question to examine is “Personnel”. What is the “quantity” and “quality” of the people working within the shop?
Every November the shop is extremely busy, so busy in fact we could use double the staff. However we don’t have that “quantity” on board, therefore we rush the cars in and rush them out to ensure all customer/clients are looked after. The rushed process however, ensures that we don’t maximize our potential for business because we didn’t have the time to properly inspect the vehicles as we were “too busy” and management didn’t have the right “quantity” of people to ensure a full vehicle inspection could take place to maximize sales and service to each and every customer/client.
Also the shop must look at the “quality” of the staff to maximize its potential. An apprentice technician is not qualified to do high end diagnostic work, yet if that is all the shop has on staff, then the “potential” for diagnostic labour is lost. Does the shop hire and train the right “quality” of staff to serve the customer/client base it is selling too? What is the talent depth of the shop? Without the right “quality” of people, potential business is lost, comebacks are usually high, and customer/client perception of the shop is low.
The third question to be examined is “Inventory”. Is the shop carrying the right inventory to serve the current customer/client base? Does the shop inconvenience the customer/clients by making them wait time and time again for parts to arrive because we didn’t carry the obvious inventory we should have to serve this customer/client? Is the inventory management system “tight” enough to ensure the right inventory turns are being met each year, and that the proper quantity of stock is re-ordered on time? A poor inventory management system can create inefficiency within a shop, and create lost potential sales for the business as the customer/client simply says, it’s ok, I’ll catch you next time for that item, as I don’t have the twenty minutes in time to wait for it now to come in. We all know what happens here; next time never happens, and the sale is lost … potential is lost.
The fourth question is “Equipment”. Is the shop properly equipped to meet the demands in automotive maintenance/repairs of its current clientele? If the shop does not have the right equipment and some work is done by “faith-healing” the vehicle, then in time the reputation of the shop goes down, as word travels among customer/clients that the shop is not competent enough to handle “my” vehicle. This shop can’t fix the vehicle the right way the first time. Once again, without the right equipment, technicians are forced to be inefficient with their work and usually management is blaming the technician for low productivity vs management in competencies by not ensuring the shop was equipped right in the first place to do the work called for.
The fifth question to be examined is “Facility”. Does the facility look professional, is it attractive to come to, is it set up to properly accommodate its customer/clientele it is selling to? Take the time to do this simple exercise. Stand across the street for ten minutes and look at your facility and honestly answer this question to yourself; I am new in town, I am looking for a competent automotive maintenance/repair outlet, what would make me WANT to turn into your location and check you out? Customer/clients today do not want to turn into and deal with a facility that is a “grease-pit”. Is your facility set up to the way your customer/clients want it, or the way you want it? Pay attention to your customer/clients views, not yours; sorry you don’t count anymore. It is the customer/client who pays you, it is the customer/client that must be pleased, so give them, and set up, the facility the way they would like it to be allowing them to come to it on a regular basis with a comfortable feeling.
The sixth and final question to be asked is the “Finance” situation of the shop. Without the proper finance in place, you can not create the professional facility that is appealing to the customer/clientele you desire to sell to, purchase or lease the right equipment required, stock the correct inventory at the right levels, hire and train the most capable personnel in your trading area, and believe me, without the right finance in place, your attitude is something less than to be desired.
It is important to note though, that out of the six questions, the most important one is your ‘Attitude”, since it is your attitude that affects all the other questions being examined. Without the correct attitude in place you can’t even get started at solving any problem of your shop including how you set your labour rates.
The next time your looking around and you see one shop busy and the next one not, review the six questions of capability, and I am confident you will find the correct answer your looking for. SSGM