Auto Service World
Feature   March 1, 2007   by Jim Anderton, Technical Editor

Running on Empty?

Entrepreneurs are the backbone of the Canadian economy. They're the real job and wealth creators, taxpayers and drivers of innovation, yet in our part of the economy, there's a dirty little secret tha...

Entrepreneurs are the backbone of the Canadian economy. They’re the real job and wealth creators, taxpayers and drivers of innovation, yet in our part of the economy, there’s a dirty little secret that no one’s talking about: Many are poor. Not the welfare/starving/can’t survive kind of poor, but they are taking home less than they could earn as a technician in the bay, and sometimes less than the technicians they employ.

Here are a few warning signs of a business on the brink:

1 No financial control. If your business operates by depositing cash at the end of the month, paying bills and then taking home the rest, you’re in trouble. The correct way is to pay yourself a salary proportional to your risk and effort, and then reinvesting what’s left after that in the business. If the business can’t afford to pay you a decent salary, your business is in trouble.

2 The illusion of wealth. If you’re driving your business service vehicle as a personal ride, or are topping up the household toilet paper account from the shop supplies, is that equivalent to income? If your business owns a $50,000 SUV — great! But your salary should still be able to support the purchase of your own wheels, whether you buy your own car or not. Perks like business vehicles are not a reason to discount your pay.

3 The allure of ownership. Business owners are the street-level heroes of the Canadian economy. What technicians have not considered opening a shop? There is a certain prestige and personal “juice” that comes from ownership, but that goes away instantly with anything from a bankruptcy to a biopsy. Are you betting on the future to paper over a lousy present?

There are lots of other warning signs that self-employment isn’t working as well as it should for you. The good news is that the business of vehicle service is totally understandable and controllable by anyone with the brains to work in the bays. Train for it, think hard about it, and if you’re really more interested in wrenching than managing, get back to what you love. I believe it’s easier to be a good business owner than to be a good technician, and we need a lot more of the latter. I’m not suggesting that owners should give up, but make sure that ownership is both what you really want, and pays you for your effort, because to make it profitable, you’re going to have earn it.

What’s the personality of a successful owner/manager? I don’t think there’s any one model, but of the many I’ve met over the years — the ones who really shine — seem to have an easy comfort with their people and operations, even during periods of extreme stress. I guess I’m talking about a sort of dynamic, this-can-be-fixed optimism, combined with a realistic appraisal of their own strengths and weakness. They’re the ones who go to management training courses and ask a lot of questions. They’re also the ones who pay competitively and have very little staff turnover.

How can you spot a well-managed shop? It’s orderly, clean and has a positive “buzz,” even when it’s crazy busy. I knew a shop owner of a three-bay operation who had pizza delivered for a staff lunch at each tech’s birthday. Customers loved it, and would even wait for their cars so that the guys could take a break as a group. What’s significant? The owner knew each of his employees’ birthdays, and made the gesture. Attitude matters.

Shops still fail in this country, but no shop needs to.

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