Auto Service World
Feature   August 1, 2008   by

Big Time Success

At Richard Automotive in Three Hills, AB, small-town mentality has led to big time success.

When the popular show Corner Gas hit the television screens almost five years ago, it put Saskatchewan on the radar of millions of North American viewers, revealing the down-home humor hidden within the borders of a small prairie town. But the setting for the show – a family-run service station with adjacent lunch counter – highlights another important fact of Canadian life; not all repair shops are located in big cities.

Whether you live in Toronto or Dog River, most “best business practices” apply. But there are also some important differences in areas beyond the metropolitan core. Understanding what makes a small town tick is key to building and sustaining a thriving business, and one such thriving business is Richard Automotive in Three Hills, Alberta.

Three Hills is a town of 3,500 residents an hour northeast of Calgary on Highway 21. Brian Richard’s 6,000-square-foot shop sits on three acres of land at the west edge of town, with nothing behind him but wide open prairie. Across the fields to the north, you can see the three hills for which the town was named.

As a licensed technician, Brian has spent 19 years on the bench working in both Ford and GM dealerships, and even doing fleet work for Hertz Rental Cars. In 1996, he decided to open his own shop, a business that’s been growing ever since.

With a staff of five – two technicians, two apprentices and a service manager – Richard Automotive is the largest general repair shop in the surrounding area. And when you ask Brian about the secret of his success, his answer is “People. The reason the business is where it’s at right now is because of my staff. I have excellent people, both in work ethic and in character. I’m very picky in who I hire.”

The reason Brian is picky is because he’s learned a key lesson oft-portrayed in Corner Gas; in a small town, everybody’s important, and they all depend on each other. “Service is our first priority,” says Brain, “and that’s how we operate.” Having a good crew makes all the difference because reputation is vital. As Brian points out, “In a small town, there’s always talk at the coffee shops.”

Folks can be forgiving if you make a mistake, he adds, as long as you make up for it. “Even if it costs you, you’ll never lose.” He recalls a time, early in his business, when a staff member forgot to tighten down the distributor after a tune-up, resulting in a seized engine once the oil pump quit working. “We could have hidden the mistake, because how would the customer know it was our fault?” But Richard Automotive stepped up to the plate and paid for a $5,600 engine job. “If there’s any benefit of a doubt that we’re responsible, we’ll fix it,” says Brian. Maybe it’s part of the small town factor, but he finds that people appreciate that you’re honest with them up front, and they rarely try to take advantage of him.

Brian’s crew includes his lead technician Trevor McFadden, who has completed so many training courses that two entire walls of the front office are covered with his diplomas. Trevor’s diagnostic skills allow Richard Automotive to tackle just about any job, and they pride themselves on their “fix-it-right-the-first-time” philosophy. Their shop rate of $85 an hour is comparable with other shops, and just slightly less than the local GM dealership.

Joining Trevor is fellow technician Arlyn Bjorn, fourth-year apprentice Lee Stevens, and second-year apprentice Joost van der Wind. When Brian finds a good staff member, he works hard at keeping them. “I pay them well, top of the wage scale. You have to do that to keep good people.” Another factor in keeping good people has been Brian’s structured work week. “We’re open 8 to 5:30, 5 days a week, with Saturdays and Sundays off.” His guys will work late if they have to in order to help out a stranded motorist, but never on weekends. Being closed on weekends is one strategy that may not fly in a big city, but in small town Alberta, it’s an accepted way of life.

Service manager Dave Shuntz handles the front counter duties, as well as helping with the shuttle service for their customers. And if a customer’s schedule is too hectic, Dave and Brian go one step further. “If they can’t bring the vehicle, we’ll even arrange to pick it up and drop it off.”

Using ProLink, the front counter is connected to his main parts supplier, the local Napa store. It also shows him if the part is stocked in the main warehouse in Calgary. Brian has high praise for the staff at Napa for their exceptional service, as parts often arrive within 15 minutes of placing an order. “Maybe one part in a hundred I have to go get myself.” As a result, he can keep a reduced inventory, which helps to control costs.

As far as business modeling goes, there’s a lot of discussion about how to survive in the auto repair industry. Shop productivity seminars advise attendees to move from “breakdown customers” to a clientele of “maintenance customers.” But Brian isn’t so sure, pointing out that in small-town Canada, you can’t pick and choose your customer base. In the big city, with a good advertising campaign and a savvy business plan, you can focus in on a client base within a certain income bracket and mindset. But in a small town, you have all kinds – and what’s more, you need them all.

“Easily 50 per cent of our business is break-down customers,” says Brian. He has been to a number of management training courses, and while he doesn’t argue over the merit of the concepts presented, he feels that they have to be adapted to one’s own unique shop situation.

Another benefit of being in a small town is that you can save a bundle on advertising. Brian doesn’t run any ads in the yellow pages. “What’s the point? Everybody here knows where we are!” Besides, most of his clients arrive on his doorstep by word of mouth. But he does run some radio ads in Drumheller, a bigger town 45 minutes east, partly because he began to notice a lot of phone numbers in his customer database from that area. It also helps that in this part of the country radio air time is relatively cheap.

Richard Automotive is housed within a large steel building heavily insulated for the cold Alberta winters (the roof alone has over two feet of insulation). At present they have three hoists, but a fourth is on the way. “I’ll probably put in an alignment hoist,” says Brian, adding another service for his customers to take advantage of. Some of their key equipment includes a Snap-on Vantage, the Solace scan tool, and a Fluke 98 two-channel lab scope.

Although they have Mitchell on Demand loaded into the shop computer, Identifix (Napafix) is their diagnostic database of choice. “It’s an amazing program,” says Brian. “We started out just using it in the back, but now our front counter is connected as well.” He really likes the way input on successful fixes is constantly being added to the system, making it a live tool that is constantly being upgraded.

They also rely heavily on iATN. “The database on it is huge,” he says. “Sixty to 75 per cent of the time that we use it, we find something related to the problem.”

It’s a sign of our times that not only can a shop in Three Hills, Alberta have access to the same repair information as a shop in downtown Vancouver, but that they can stay current on the best business practices around. Even in his rural setting, Brian tracks not only the efficiency of the techs, but the productivity of his service manger as well as himself. “Yes, we’re a small town but we run a very efficient shop. Between Dave and I, our job is to keep the techs working on productive work.” To that end, he uses time cards, having his staff punch in and off jobs as they progress. In a variation of the flat rate system, the times are evaluated at the end of each month and those techs who perform beyond the average eight hours a day receive additional bonuses. The combination of high base wages and monthly bonuses has been a contributing factor in keeping competent staff, and in the long run, to the overall success of Richard Automotive. “The yearly numbers prove that,” says Brian, noting that the business has been continually growing over the last 12 years.

So as Brian Richard and his crew have proven, success in the repair industry doesn’t depend on a limitless pool of customers to draw upon or having all the latest tools or training. The key is people – you, your staff, and your customers.

Treat them all right, and the payoff will be sure, steady growth, whether it’s Ottawa or Yak, B.C…. Or even in Dog River, Saskatchewan.


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