Auto Service World
Feature   February 1, 2014   by Murray Voth, TACT

Letting Go and Becoming a Better Owner

No one likes to work for a micromanager. Someone who watches over your shoulder, rechecks your work, asks you repeatedly if you got something done. It seems like a micromanager doesn’t trust you. You wish you could do your best, but the...

No one likes to work for a micromanager. Someone who watches over your shoulder, rechecks your work, asks you repeatedly if you got something done. It seems like a micromanager doesn’t trust you. You wish you could do your best, but the owner or manager holds you back with their over zealous nitpicking. No one really likes to be a micromanager either, but it seems like you are always putting out fires, no one can do it as well as you or you just can’t find anyone who can do the job right. You are always afraid that something is going to go wrong, a customer is going to be upset or something is going to break and cost you money. Because you feel so responsible for your business, because things feel so out of control, you never leave the business. Rather than you owning your business it owns you. Holidays are few and far between, workdays are long and time off is just a fantasy. We won’t even talk about the nagging from friends and family that you never have time for them.

It feels like you are forced to wear all the hats in the business: owner, manager, shop foreman, technician, service manager, service advisor, book keeper, accountant, shuttle driver, car washer and diaper changer. Many of you in this situation have landed there because of several mistaken perceptions. Because the money is made in the bays you think that you need to be the one working on cars because you are the best and the fastest. In some cases, you feel that you need to do all the service advising, because all of your customers know you and you are nervous that an employee might charge them too much or upset them in some other way. And the last misperception is that you feel you cannot afford either that technician or advisor, or find someone who is as good as you. In all three cases, it comes down to a matter of good leadership ability, management skills, systems and procedures and ultimately trust. If you are honest with yourself, you are desperately trying to micromanage everything because you have never found the right employee, you have never trained the right employee, and have never empowered and held the right employee accountable. And on a deeper level of self-honesty, you are afraid of hiring someone who is better than you.

There is No Manual

I will acknowledge that you work very hard, that you are highly intelligent, that you take your business seriously and that you care. I also know that if you thought about it, you are also afraid. I know — I have been in your shoes. But just as you don’t need any qualifications to be a parent, you don’t need any qualifications to own a business. I hope after reading this article you will wake up and realized you have been pregnant and delivered a baby, and you have no idea what to do with this baby called an automotive shop. So let’s face reality together. You are the manager of your shop by default, but that does not mean you are necessarily the right employee, you may have never been trained to manage, maybe you have never been empowered or held accountable, yet you are the owner of the business. You have been doing the best you can with what you know. And I also understand that it is hard to admit that after being in this racket for such a long time there might be a better way. You are pretty convinced that if there were a better way, you would have figured it out by now. If this article seems to have a minor resemblance to my last one, you are right. It is my goal to elaborate further on one key concept, your responsibilities as a manager.

As a manager, it is your job to operate the business in such a way that the company makes a profit for the shareholders. In this case as the owner, you are the major shareholder. If you unexpectedly received $500,000 in cash, chances are the first thing you would do is reduce your debt and then invest the remainder. As the investor you would do your research and find a financial planner to help you get the best return on your investment, and hold them accountable. As a shop owner you have probably invested at least $500,000 dollars into your shop over all the years you have been in business. However, if you are like most shop owners, because this took place over time and you did not spend $500,000 at one time, you don’t expect the same return on this investment.

Changing Your Mindset and Finding the Right People

So the first change of mindset you need to make is that you need and deserve a return on your investment. In order to accomplish this you must learn how to measure the business to see if you are getting the return you need. This means learning how to create and read financial and key indicator reports and understanding industry benchmarks and how to attain them. Then you need to research and learn what are the best practices that well run automotive shops are using to attain these benchmarks. These best practices are quantified in a series of standard operating procedures that are available from many training companies and on the web. No more flying by the seat of your pants. The concept of an independent businessperson is misguided. You cannot do this by yourself, you will need to find people and trust others to learn from and to support you in this journey.

You will need to attract, hire, train and retain the employees required to fill the different positions in the company. You will provide job descriptions, training, staff meetings and regular employee reviews. This means that you will need to learn how to write good advertisements that will attract the right people. You will need to find out where the best places to advertise are. This practice of waiting for the right person to walk through the door has to stop. You may as well buy a lottery ticket — the odds are the same. Other skills that will be required are how to interview well and how to select a good candidate, and then you need to have a formal orientation and training plan. In order to keep good employees engaged and keep them working for you, they will need clear job descriptions and employee reviews. In addition, regular staff meetings keep them informed of your expectations, and give them an opportunity to contribute suggestions to the business. As you get more comfortable with this process and begin to hire people who are better than you at their specific position; they will take ownership of that position and with two way accountability you will be able to stop being a firefighter.

You will ensure that all the company operating expenses are paid, accounts payable are paid and accounts receivable are collected. This is a job that can be delegated to a good bookkeeper, either an employee or an outside service provider. However, delegation does not mean abdication. You will still be responsible for reading and studying the results and responding appropriately, meaning that even though you don’t do the actual work, you understand how it works.

You will research and source the required tools, equipment, training, software and computers needed to operate the business. This will require learning how to budget and forecast, how to manage cash flow, and how to work with retained earnings in the business — having money for a new hoist ahead of time, rather than having to borrow money or get into an expensive lease.

You will meet with suppliers to negotiate best quality, delivery, pricing and service for the business. This does not mean beat up the supplier for the lowest price. In most cases, you are just passing those savings on to your customers, so you don’t make more profits anyways. This negotiation should result in a long term relationship with added value like a strong warranty program, excellent delivery and priority service, a great selection and inventory, and a built in volume rebate. Think of how well you treat your loyal clients, which is what you will experience with this type of relationship with your suppliers.

You will need to manage and control the expenses of the business to ensure that the business can operate effectively yet not waste or overspend. This takes a fine balance and good cash flow management. If you cut expenses too far, you will be unable to operate effectively. If you cheap out on the quality of the tools and equipment you purchase, you pay extra in the long run. Learn how to create and manage your gross profit. Gross profit pays your expenses and your net profit. Once you understand this, you will find the right balance in expense management. Note: your business is not a cash cow used to fund your hobbies and your toys.

You will research and create a marketing plan to grow the business. In this case you may need to collaborate with and hire a professional, but you need to be on top of what is working and what is not. There are a lot of flakey marketing and social media people out there, who will take your money and not provide any results.

You have been in business this long, so you are doing a lot of things right. If you are like many shop owners, you have started out as a technician, and have no fear when it comes to learning and keeping up with technology. Just look back to where you have come from. So lets transfer that ability to learn to a whole new set of skills. There are many resources out there available for you, but it takes courage, humility, and a desire for financial results to make this huge course correction in your business a reality. My hope is that your day will be filled with meaningful work that produces results, rather than meaningless activity, which only produces stress.

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