Auto Service World
Feature   February 1, 2010   by Murray Voth, TACT (Total Automotive Consulting And Training)

Knowing That You Are A Business Owner

First of a series of articles outlining successful strategies for shop ownership

Many of us go through life working hard, taking things as they come and not really questioning if this is how it should be. We don’t ponder if things could be better or if they should be better; we accept our lot in life without much complaint. Others of us go through life in a constant state of complaining, feeling like victims of the outside forces that buffet us. We assume things should be better, but can’t seem to find a way to get there, we always find fault outside of ourselves. Then there are others who take the time to think how can I make this better, why are things the way they are, and do things have to stay the same?

Because most of us are busy working, making a living and dealing with life, we have limited time and resources to handle more than what is right in front of us. As individuals it is hard to keep up with all the information being generated and the changes taking place around us.

My goals will be to challenge each one of you to question the ways things are, to critically evaluate your long held beliefs and those of your industry and peers.

First steps in making things better

If you have never really considered that things could or should be better, it might be time to give that some thought. You may have the belief that life is hard and that is just the way things are. Nothing of value comes easy, so the only way to success is through hard work, sweat and tears. In general, I agree with the latter part of this belief, you will find that anything I write about will take work; it will not be a silver bullet.

Have you been surprised to learn that many of your customers are not as loyal as you thought? You feel like they owe you at least that, after all these years of service. Maybe you are frustrated by your suppliers as they never give you a break. Or you have had it with your employees. “Good help is hard to find” is now your favorite expression. We know things should be better, but somehow it is usually somebody else’s fault. In this case we need to evaluate our expectations and clarify responsibilities. Maybe by making something our fault we can finally make some of the changes required by our business or workplace.

We know based on research done by Total Automotive Consulting and Training and other studies that between 95 and 97 per cent of all independent automotive shops are started by automotive technicians. The harder to answer question is why do they start shops? Some could not stand how they were treated by their employer or how the shop treated their customers, “I can do this better.” Some want to make more money. Some want to be their own boss, be in control of their own destiny, more freedom and flexibility. Some say, I am a better technician than my boss. Some got laid off, or were tired of not enough hours. Some are the second generation in the business and inherited the shop. Have you noticed a reason what is missing? How about the concept of “I have $250,000 in the bank and I am looking for a business to invest in;” “My goal is to make a 20 per cent return on that investment each year;” “I think I am going to buy an automotive repair shop.”

Once you have picked yourself up from the floor from laughing so hard, realize this, there are many business people who do just that. They take their own money, borrow more, and invest in businesses. They are called entrepreneurs. They figure out how to make money in whatever business they buy, they build up the business and then in some cases sell it and in other cases expand to larger or multiple locations.

Know That You Are A Business Owner

The first thing we need to decide is that we are primarily a business owner, not a technician. We then need to understand that the business and we are separate entities. We own the business; the business does not own us.

The primary purpose of a business is to make a profit; part of this profit pays for your return on investment as an owner. The business is responsible to you as the owner for your profit, to its employees as their source of income and their career, to its suppliers for timely payment, to the banks or any other lenders if money was borrowed, to its customers for value given, to its competitors for fair business practices and competition, and to society for best environmental practices and social responsibility. As the owner of the business you can choose to work for the company or not, just as many other professional business owners and entrepreneurs. In general the three key positions in an automotive shop are manager, technician and service advisor. Every business needs to have a manager. As a rule I would recommend that if your business does not have a manager, that you as the owner would fill that position. We need to understand at this point that the role of owner and manager are also two different things.

The role of owner and manager need to be separated for several important reasons. The first is that as a manager you are responsible to the company to help it fulfill its purpose and responsibility. (It is important to note that your pay as a manager is different than the profit you keep as an owner. The company needs to make enough money to pay you and to generate a profit.)

Secondly, the manager position should have its own job description and set of responsibilities. You may not always be the manager. What happens if you cannot work because of an extended illness, someone still needs to be the manager. Or as the company grows you may need to hire a manager to replace you as you move on to other opportunities. Or you might want to retire, but still have the profits as a retirement income. You may also have partners in the business, defining these roles clarifies how to deal with profit sharing and compensation. Thirdly, this concept clarifies lines of accountability and expectations between owner, manager, and the company.

My hope is that by seeing your business in this way you can actually gain better control of your time and your life. You don’t have to feel like the business owns you. You can learn how to manage the company, you can have a better return as the owner, and the company will be far more successful.