Auto Service World
Feature   June 1, 2002   by Jim Anderson, Editor

Are we profit-obsessed?

At some point, the business owner will simply have to stop spinning wrenches if he or she wants to keep control of the operation.

We get plenty of letters at SSGM, which is just the way we like it. Agree or disagree with the issues you read on these pages, the feedback is good for reader and magazine alike. A recent letter from Southwestern Ontario owner/technician Paul Vann regarding one of Bob Greenwood’s columns was a little different, and I think, thought provoking. Paul writes: Most (technicians) in my opinion, do not have a degree in marketing, nor want one. Why would anyone advise such a person, with a passion for repairing/maintaining vehicles, to get out of the shop, give up what they love and start pushing papers? Do you take your star player, with the most talent and experience, and bench him to keep score? NOT ON YOUR LIFE! I suppose we are not talking about life, just business, where greed and profits rule all!”

Are we obsessed with profits in this business? It depends on your perspective. If you can develop a thriving business based on significant amounts of time spent in the bays, and love it, there’s nothing better. Unfortunately, what Bob is describing, and what I see frequently, are shop owners who aren’t in the bays because they love the lifestyle, but because they need to, in order to stay alive. In those cases, most know that they need to get into the office more, but simply can’t be in two places at the same time. As a result, marketing, merchandising and management troubles loom large. It all depends on your competitive environment. If you calculate that you need growth to finance technology and hire better staff, there isn’t much option but to get at least part of that traffic from other shops. The equipment that boosts productivity has to be paid for, and as volume increases, the number of bays will swell also. At some point, the business owner will simply have to stop spinning wrenches if he or she wants to keep control of the operation.

Don’t want the hassle? Then specialize, and become the go-to shop for your niche market and let word-of-mouth work for you. The problem is, the costs just keep going up, and as margins slim, the threshold level of activity for break-even just keeps going up, which is why the chains and five or six bay independents are often local market leaders. Can you win with a two-bay shop? Sure, but if you’re a general repair operation, at some point growth has to happen or you will either disappear, or evolve into businesses that don’t compete with larger, more efficient shops. Myself, I’d love to be the Ferrari guy with a two bay shop somewhere and not worry about the bottom line. Unfortunately, for most of us, profit has to be paramount if we’re going to survive, grow, and pay our people the kind of wages they deserve for the increasing levels of knowledge required to service modern vehicles. In the long run, is this a sustainable way to run a society? That’s another question. Maybe not, but in the meantime, the bottom line, rightly or wrongly, has to come first.

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