Greenwood On Management: So You Own The Shop … Now What?

Travelling this fabulous country of ours, I have the privilege of talking with hundreds of service shop owners each year. I must admit though, I usually see the better shop owners as the other owners out there seem to be pre-occupied with hunting, fishing, or are too busy, have staff problems, or they really just don’t care about learning how to run a business. They say “that’s bookkeeper stuff, I’m a mechanic, that is why I hire a bookkeeper”.

It is this last point that I would like to bring to your attention.

I have talked with a number of shop owners and a number of jobbers about this issue, asking the question “why do many shop owners today not want to learn about the business end of their shop?”

There has been a common point of view coming to the surface.

It appears that the licensed technician who owns these shops, first and foremost, is a pretty decent technician. He appears to be morally in check in that he really wants to do the job right and try to serve the customer well. He had this desire to be self-employed from a “pride/self esteem” point of view, coupled with seemingly having the perception of available “perks” and “flexibility” of owning his own business. He feels that if he is a good technician, word will get out, the business will look after itself, and he would enjoy a good living doing what he likes to do the most, that is, working on vehicles in the back of the shop, diagnosing, and fixing them.

Many of these shop owners will make the comment “I don’t need management training because I have a bookkeeper that looks after that stuff, I fix cars…………that is what I do”.

The shop owners I talk to over the course of a year point out the very reality of this mind-set has created the following problems:

1. All bills of the shop are not paid in full each month.

2. Accounts receivable are too high and are out of control.

3. This shop has too high a debt load, a poor banking relationship, and sees his accountant once a year, because “he has to”.

4. This shop runs its business on first, being “price competitive “, second “specials” and always “cheap oil changes” to create traffic through the bays in order to find work.

5. This shop will always sell to anyone who comes through the door because they actually believe if sales are up, they will be more profitable.

6. This owner feels uneasy when the shop is not “busy”.

7. This shop owner looks forward to a cold winter, and hot summers, which is the main way he judges if he is going to have a chance at making some money.

8. This shop owner has staff making more money on the weekly pay cheque than he does.

9. The relationship with the shop’s jobber is one of non-business communication and only one of “give me your best price” and there is absolutely “no trust” between the two parties.

10. This owner complains frequently about his staff as he thinks good staff “cost” the business money.

11. This owner loves to pocket cash jobs on Saturdays in order to have some spending money, and “get by”, thinking he has a way of beating the government.

12. This shop is not clean, not organized, not progressive, under equipped, under stocked, and the owner seemingly blames “the World” (anyone but himself) for any problems the shop has.

These are all serious problems, but the fact remains that they have nothing to do with diagnosing and fixing vehicles. They are all caused by the owner not really understanding “how” this business should be run today. Keep in mind that back in the 80’s this sector of the industry made money despite ourselves and if “Dad” made his money back then and is insisting that the business be run the same way, then the “new owner” will just end up buying himself a job, or potentially go under, and create tremendous financial hardship to the family. This isn’t worth it, and it would be better to sell the business, get rid of the stress and go work for someone else where he will be in a situation of making a fine living without the financial risk associated with this business today.

The final point that creates this overall problem seems to be “personal ego” in the sense that the owner feels he was not that good at math in school, and may not “understand” the real business end of things which would lead him to be put into an embarrassing situation in front of his peers in that Business Management class. Any Business Management instructor who did that would be out of business real fast, so that is clearly an excuse, not a legitimate reason.

There will be a number of shop owners who read this and say the writer doesn’t know what he is talking about, but please remember one thing,…… it was your peers that mentioned this stuff…..I’m just reporting to you.

Weak independent shops are affecting the very livelihood of independent shops around them. It is time that all independents talked with each other and figured out that maybe learning “how” to run this business would be time well spent in order to create a better personal lifestyle, less stress, and a better overall operating shop for all of this sector.

As we close another year, perhaps it would be prudent to make the effort and take a chance at this “business management stuff” over the coming months next year. There are many courses available within our industry. Check with your Jobber and your Industry Associations, as they can find out what courses and where they are available. Consider that “excuses are the nails that build the house of failure”, and perhaps, just perhaps, it might be very well worth it to make a resolution this New Year to be a good listener for once, as your ears will never get you into trouble.

May everyone throughout our entire industry have a very Safe, and Happy Holiday, and may 2003 allow you to “slow down” and enjoy great health, and the real business success that is in front of you now.

Robert (Bob) Greenwood is President and CEO of E. K. Williams & Co. (Ontario) Ltd. and Automotive Aftermarket E-Learning Centre Ltd. Bob has over 27 years of Business Management experience within the automotive industry, counseling individual shops in Ontario. E. K. Williams & Co. (Ontario) Ltd. offices specialize in the independent sector of the automotive industry, preparing analytical operating statements for Management purposes, personal and corporate tax return completion, Business Management consultation and Business Management and Employee Development Courses. Visit E. K. Williams & Co. on the Internet at www.ekw.ca and sign up for their FREE monthly management letter sent to you by E-mail. Automotive Aftermarket E-Learning Centre Ltd. is a company devoted to developing Automotive Shop Business Management skills through the E-Learning environment over the inter-net. Students learn at their own speed, and at a time, and place, that best suits their needs; available 7 days a week 24 hours a day. Visit Automotive Aftermarket E-Learning Centre Ltd. on the Internet at www.aaec.ca

Bob can be reached at (613) 836-5130, 1-800-267-5497, FAX (613) 836-4637 or by E-mail; greenwood@ekw.ca or greenwood@aaec.ca