Are you nervous about the change required?

Shop owners are becoming more aware today of “what” the Independent shop owner and our sector must do to ensure its future prosperity. It has nothing to do with purchasing commodities for a better price. It has nothing to do with creating more shop “activity”. It has nothing to do with finding more customers to sell to. This new “what” is a dramatic shift “change” in business culture and it is making many shop owners very nervous. They are questioning themselves “am I up to this?” or asking “can I do this?” and “will I understand this?”

It is only natural to be nervous about something when you are entering “unexplored territory” in the sense that you haven’t done it, or don’t do it, everyday. This new territory is called Business Management and understanding “what” the numbers of your business mean and specifically “what” are your business numbers telling you about your business.

To many shop owners, this is “accounting stuff” and claiming that it is not important to them on a day-to-day basis, they end up burying their head in the sand and continue to do the “same old”, “same old” of seeking better pricing from parts distributors. In their minds, that is how you make profit. This way of thinking and understanding of how a shop is operated will ultimately cause their business to fail and/or continue with a lifestyle of “buying themselves a job”. They will also sustain an extremely unprofessional marketplace image. As much as all of us within the industry would like to, no one can help these shop owners, until they are prepared to help themselves.

This article is for the people who want to try to help themselves.

As mentioned above it is only natural to be nervous, or have a sense of uncertainly/ anxiety, about what you must do. I must say emphatically, however, you can do it, and you must realize this. I have seen this transition from “technician” shop owner to “business manager” shop owner accomplished so many times before. I can not accept that any situation is unique or different.

Consider that you studied very hard, and “paid the price” to become a competent automotive service technician. I am in awe of many technicians I know from the point of how they can comprehend the vast amounts of technical knowledge required today in understanding precisely how a modern vehicle works and interacts with itself. It truly is mind-boggling, yet, they understand it.

When you have gone through the process of nurturing the self discipline required to get through reading the technical manuals written today and then understanding them in terms of creating that “picture” in your mind as to what it is, I can assure you that, with the same effort and focus, Business Management analysis will be a “piece of cake” to you.

The numbers within your business will tell you precisely where your strengths and shortfalls lie. They will tell you what type of customer base you have, and attracted and where opportunities lie to improve your customer base in order to reduce your business stress. The numbers will tell you about the overall competency of your staff and show you where to improve each person’s abilities to maximize their performance and improve their job satisfaction. Your numbers will tell you how much “net profit” you are making on each work-order/invoice before you close it off so there will be no more “guessing” as to whether you are making money that day or not. 98% of all shop owners have been taught to measure their gross profit. Not good enough any more! Today you must measure net profit.

The personal issues to overcome to achieve this are:

1. Slow Down!! You must be willing to focus specifically on the topic itself.

2. Bury the old excuses “I don’t have time”, “I can’t get away”. Yeah, and you have never gone fishing or hunting or taken a vacation in your entire life since you opened the shop. Those are excuses and you know it.

3. Get away from the shop. You need an environment that is comfortable and without distractions. A nice hotel usually accomplishes this task.

4. Present Business Management as a topic in a “visual” format. Linear number crunching has a tendency to make things more complicated then they really are and, it is boring, but turn it into a day to day relative point to your specific business and then it makes sense as you picture it in your own mind. This is the Instructor or Facilitators job, not yours.

5. Get working with your own business numbers. But now, this time, present them slowly to you with an explanation to you as to “what” they mean. When explained properly, your numbers in front of your eyes begin to “talk” to you about what is actually going on in your business.

Once you have been through this PROCESS, then it is a matter of simply practicing what you have learned. As we were told by our parents when we were kids, “practice makes perfect”. That was, and still is, excellent advice. It really is the same principle you had learning the technical end to become a competent technician.

Many shop owners across the land have been intimidated by business people trying to impress the shop owner or, quite frankly, make the shop owner feel inferior about business issues and shop measurement formulas and guidelines. These methods are unprofessional and totally uncalled for. I can attest to the fact that if a technician ever tried to teach me the analysis and workings of a modern engine today, well, let’s just say they better have a lot of patience with me because that would intimidate me immensely. You see it does work both ways. It is time to bring expertise together from both sides of the table and rely on one another’s expertise to maximize the bottom line of the shop. When the bottom line grows then, and only then, will we secure everyone’s future.

The changeover from being a competent automotive technician to business person capable of understanding the ramifications of numbers management is not an overnight process. It takes time and it takes discipline, the same principles that apply to the technical end of the business.

I know many technicians who are shop owners, wished “life” was simpler, but know one individual or group is responsible for the fast pace complicated industry we are all working in today. It is just reality, so we all must adjust and re-learn, and execute differently within our business to deal with it, which in turn will allow us to survive and, more importantly, prosper.

Consider what the alternative is when shop owners and managers live day-to-day with apathy. Time is working against them. The math will not work! Not only will the shop eventually fail in professional terms, Managements financial affairs will be a mess and the anxiety and stress brought to the staff and their families will be great. Shame on those shop owners who refuse to see this. Shop owners have a tremendous amount of responsibility and one can not take that lightly.

Big pats on the back, and “High Fives” for the shop owners and managers who take the time, buckle down and give it a hearty try to get their head around this topic and culture. You are the people that should be put on the pedestal of our industry because you are the ones that will take us into the next generation. Well done; keep up the good work; stay focused; don’t give up and no matter what, keep on learning. As, once again, we were told as kids, “you can never know too much”. Mom and Dad were right again!

Robert (Bob) Greenwood is President & CEO of E. K. Williams & Co. (Ontario) Ltd. and Automotive Aftermarket E-Learning Centre Ltd. Bob has 29 years of industry-specific business management experience. He has developed shop business management courses for independent Service Providers recognized as being the most comprehensive courses of their kind available in Canada. Bob is the first Canadian Business Management Consultant and Trainer to be recognized for his industry contributions when he received the prestigious North
wood University Automotive Aftermarket Management Education Award in November 2003. E. K Williams & Co. (Ontario) Ltd. offices specialize in the independent sector of the automotive aftermarket industry preparing analytical operating statements for management purposes, personal and corporate tax returns and business management consultation. Visit them at www.ekw.ca and sign up for their free monthly management e-newsletter. Automotive Aftermarket E-Learning Centre Ltd. is a leading edge company devoted to developing comprehensive shop management skills through the e-learning environment. Visit www.aaec.ca and take the free overview. Bob can be reached at (613) 836-5130, 1-800-267-5497, FAX (613) 836-4637 and by E-Mail: greenwood@ekw.ca or greenwood@aaec.ca