Monthly Archives: September 2014

ACGI Featured in AutoInc Magazine, August 2014

Read the entire article here.

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Fall in Love Again!

Scott Wheeler

Regain the magic you once felt.

Why do people fall out of love with their auto repair businesses? This could happen for any number of reasons, but primarily it occurs because they lose hope due to the various challenges they face: increased complexity of the vehicles they service; lack of highly trained, qualified techs; loss of profits; poor cash flow; long hours; loss of customer loyalty and burnout. And of course, there’s also the sluggish economy.

I think it’s due to the lack of proper training and education, including goal setting, and lack of a “Plan B.” When I ask how many of my clients started with a legitimate business plan, the answer is close to zero.

The people I’ve spoken with who have shut their doors feel a tremendous sense of sadness, failure, uncertainty for the future, and really don’t think they can work for anyone else. They are dismayed that all of their hard work has resulted in nothing. Their ship is suddenly without a rudder, and they’re not prepared to meet the rest of the world on its terms. Many of the business owners I work with feel a tremendous sense of loyalty to their employees. Many of them will carry on even if the “writing is on the wall” because they don’t want to admit failure and let everybody go.

How can those feelings be avoided?

In my 36 years of experience, I’ve only encountered a handful of business owners who had a business degree. They have often been educated in one of two schools: the first is the so-called “School of Hard Knocks,” which is very expensive and frustrating; and the second is getting management and business training through any number of training classes.

Reading is an easy way to stay on top of your business. There are thousands of books on business management.

In addition, having a solid business plan – complete with contingencies for common pitfalls such as poor cash flow – to rely on as your guide is so important.

What are some tips for falling in love with your business again?

First, be very clear about your goals. Not too many shop owners really take this seriously. You do have to be realistic, though. If you only have two bays, it’s not likely you’ll do a million dollars in gross sales.

Second, write down a comprehensive plan of action. Ignorance is OK, but only temporarily. Take stock of your current situation. Begin with what net operating profit is desirable and mandatory, and work from there. What are your total operating expenses, exclusive of parts and loaded labor costs? How much in gross sales and what gross profit margin is required to attain your particular net operating profits?

Paying attention to your numbers is crucial, too. You need to know what your key performance indicators (KPIs) should be, and know when you’re hitting them. More importantly, you must know how to make the numbers go up or down. In other words, when a tech breaks off a bolt performing an exhaust manifold gasket repair, how will this affect your profit-and-loss statement? What effect will this have on customer loyalty? What about the throughput of work in the shop? Your business is nothing more than a math problem, so if you don’t know or understand the math, get educated. The mantra, “If you can measure it, you can manage it,” really applies here.

Next, examine your processes closely and determine what is working, and what is not. Do you have a proper work dispatch system in place? Do you have effective service consultants at the front counter? Do you have essential systems and processes in place? Make sure the systems you have in place are realistic for your business.

What’s the key to executing change?

In my presentations, I show a “triangle of change.” The triangle is one of the strongest geometric shapes known. What is unique is that each leg supports and is likewise supported by the other two legs of the triangle. But take just one leg away, and it collapses on itself.

So, if one is trying to effect change, at the center of the triangle you must have all three legs present and in the proper measures. One cannot effect change without commitment to that change, a solid game plan, and taking action on that plan. If you take away any of these essential ingredients, then change will not occur.

If a person has solid commitment, and a plan, but takes no action on that plan, then change will not occur. And lastly, if someone takes action toward their plan, but has no real commitment, then as soon as the first obstacle presents itself, change will not occur.

What are the steps to effective goal making?

The goal should cause you to learn, stretch and grow as a business owner. How do you find out what you really want? Your goal must be clearly stated and written down. You have to be very clear about it, and it cannot be minimized or ignored. Ask yourself if this is really your goal. Maybe it was the husband’s goal, but he has since left the business or passed away and the wife is now running the operation and it’s not her goal.

Next, you should include a timeline. Do you want this done next week, next month, five years from now? Ask yourself the following set of questions: What do you want? When do you want it? What are you willing to give or give up to get it?

And finally, you’ve got to identify the obstacles to overcome. There’s going to be some problems along the way. You have to be able to anticipate that and have contingencies in place. What are you going to do if cash flow gets tight? What are we going to do if we experience another recession?

Try to take advantage of all the resources that are available to you, like groups or coaches. There are a lot of places out there that assist people step by step to go through this. Also, identify what skills and knowledge you need. I’m still amazed by how many people think P&L stands for parts and labor, instead of profit-and-loss statement. It’s a very serious document they need to be able to understand to effect change in their business.

How can people start to change their attitude toward their repair business?

The automotive service business is a tough business. The vehicle owners who come into the shops have problems, they want it now, and they want it achieved without any problems. The very nature of what we do is demanding. It can chip away at even the best of attitudes. Change to most of us is uncomfortable and many people are resistant to change. But the definition of insanity is doing the same thing over and over and expecting different results. So that’s going to mandate that either change is eminent or they will be forced to close their business.

Editor’s Note: This article is one in a series of management articles contributed to AUTOINC. by Automotive Management Institute (AMI) instructors. To learn more about AMI, its courses and instructors, visit www.AMIonline.org. AMI administers the distinguished Accredited Automotive Manager (AAM) program.

W. Scott Wheeler, president of Automotive Consultants Group Inc. (ACGI) is a shop management expert in the transportation industry, with more than 36 years of experience in the automotive, trucking, heavy equipment, marine, motor sports and defense aerospace industries.

He holds numerous ASE credentials, including two master’s certifications. He has experience working in every position from tech to fixed operations director to mechanical engineer. Wheeler has authored four books for the automotive industry. He continues to write, consult and speak professionally at major industry events throughout the U.S. and Canada. He can be reached at scott@automotive consultantsgroup.com.

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