C1 Cover 07.13 7/31/13 9:58 AM Page C1
Marketing to Women
Beating Time Stealers
Why Shops Fail July/August 2013
Glenway Auto Center Building Customer Confidence Through Consistency
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速
July/August 2013
Shop Profiles
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24 Glenway Auto Center, Cincinnati, OH 42 Top Shop Automotive, Santa Barbara, CA Case Study: Buying/Selling An Automotive Service Center
Features
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Shop Profile: Glenway Auto Center
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18 Marketing To Women: -Actions Speak Louder Than Words! 32 Case Study: -Buying/Selling An Automotive Service Business 48 Shop Management: -Beating Top Time Stealers
Sponsored by
Beating Shop Time Stealers
Shop Profile: Top Shop Automotive
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Departments Shop Owner Staff
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Technology: Paperless Vehicle Inspections, Part 2
Executive Interview: Rusty Bishop, Federated Auto Parts Distributors
Shop Operations: Business Success
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In Memoriam
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Founder of Babcox Publications
Edward S. Babcox (1885-1970)
Chairman
Tom B. Babcox (1919-1995)
䊚2013 by Babcox Media, Inc.
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|Technology|
by Uwe Kleinschmidt, CEO, AutoVitals
How Paperless Inspection Might Change The Way You Run Your Shop I’m happy to report that since the last article, I’ve received feedback expressing that newly implemented features have significantly improved the benefits for shop owners, technicians, service writers and, last but certainly not least, motorists.
Let’s take a closer look at some of these features. Many are obvious, while others take you into a world of best practices for your shop in ways you would not expect. If you haven’t looked into paperless inspection, please check out the last article in the May/June 2013 issue of Shop Owner magazine. I’d also like to invite you to collaborate with me on www.AutoVitals.com/EIS. These resources explain how the
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prospect of paperless inspection can significantly improve your shop’s productivity.
Electronic Beats Paper The obvious benefits of turning a fixed-size paper document into a flexible electronic inspection sheet include: ● Significant relief for technicians and service advisors. The technician no longer needs to write, and the service advisor doesn’t need to attempt to interpret the scribbling. This tedious process is replaced by the technician tapping the condition or action on the tablet, followed by the service advisor copyand-pasting a link into the Shop Management software. Done! ● More complex problems can be described by utilizing the speech-to-text feature or even simply being voice-recorded by the technician. Employees running back and forth between the back shop and front
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office or yelling across the shop floor will be a thing of the past. ● Because an unlimited number of inspection templates can be created, the arduous process of attempting to make template changes, and then print them, are over. In fact, our software allows you to print a paper version of the sheet in the event that no tablet is around. With this enhanced flexibility, technicians and service advisors will inevitably improve productivity. ● As the motorist looks at a professional leaflet of inspection results, including OEM service recommendations and recent recalls, they not only clearly see the results, but also get
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educated. Images of problem areas help them to understand why the recommended action is important and what would happen if it were ignored. ● The technician selects OEMrecommended services and recent recalls as well as TSBs right on the tablet (see image 1 at right). The service advisor will then confirm them or change the recommendations and inform the motorist. ● All inspection topics can be audited and changed by the service advisor. They can even be re-assigned to the technician for completion so that no item gets overlooked. ● It’s been proven that using an electronic inspection sheet saves
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Image 1
anywhere between 10 and 15 minutes per vehicle.
Creating A Baseline For Your Shop Let’s take a look at some of the benefits facilitated by paperless inspection, which have the potential to make a profound improvement in technician and service advisor productivity, as well as shop effectiveness. Shop effectiveness is the measurement we use to describe how well technicians and service advisors work together, and how a shop owner can identify what practices are best to implement. The purpose of this assessment is to achieve higher shop profitability and maintain a high CSI (customer satisfaction index).
canned jobs to the technicians right away? This would not only simplify the service advisor’s work, but it would also set a baseline for any type of action. In addition, with our integration into your shop management software, the job history for the list of canned jobs for the given inspection topic can be mined in the database and presented to the technician. Thus, the technician can look at the inspection history on the tablet to see whether or not the job had been sold in the past. A young, inexperienced technician can learn from a highly experienced technician by checking out the job history for the same vehicle type as the vehicle in question. What if the technician needs to add more time than the job history shows? Just tap the labor increment and submit the inspection results to the service advisor. The advisor will be able to order the same part number and create the estimate in a heartbeat. Check out image 2 for an example.
Technician And Service Effectiveness Today, technicians identify a problem based on the inspection sheet topics on paper and write down recommended actions. The service advisor looks them over and selects the appropriate canned jobs for the estimate. Why not present the Image 2 www.ShopOwnerMag.com
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Image 3
Going Full Circle Setting the standard by using the canned jobs as a baseline opens a whole set of very important metrics: ● Is the technician under- or overrecommending jobs compared with other technicians in the shop, or in the network of shops that specialize in the type vehicle? ● What percentage of recommended actions by the technician appear on the estimate? How often does the service advisor omit well-intentioned recommendations by the technician? ● What is the technicians’ value to the shop and how much of their recommendations will be purchased by customers? ● What is the rate of motorist satisfaction and how often do they return as a repeat customer? If they are well defined and used effectively across the shop, you can imagine how valuable canned jobs can become for running your shop. Image 3 shows a typical report for
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shop effectiveness. Using tablet and other mobile technologies not only initiates the road to a paperless shop, but they also enable the ability to measure shop effectiveness and hold technicians and service advisors accountable to each other. What is your experience with mobile devices in your shop? Do you want to try the AutoVitals Electronic Inspection Sheet and shop reports? Just scan the QR code below with your Android or iOS-based tablet and test the first 15 inspections for free! SO
Uwe Kleinschmidt is the CEO and founder of AutoVitals in Santa Barbara, CA. The company’s Web-based services focus on the independent automotive repair industry. AutoVitals’ products facilitate highly effective Concierge Auto Repair services, covering all aspects of the service advisor’s interaction with prospective and existing customers. Highly effective and optimized websites, workflow support in the shop, as well as customer retention and social media services are just a few ingredients. He can be reached by visiting www.autovitals.com or calling 1-866-949-2848.
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Corporate|Spotlight|
DENSO Helps Drivers ‘Breathe Easy’ When They Replace Their Old Cabin Air Filter Cabin air filters are a fairly new addition to passenger cars and trucks, so much so, many drivers are not even aware that they have a cabin air filter in their vehicle. DENSO has launched a new marketing campaign to raise awareness that these cabin air filters need to be replaced on a regular basis to improve the air quality in the cabin, and that there are no better cabin air filters than DENSO First Time Fit® filters. DENSO’s cabin air filter awareness is designed to communicate with various audiences, including retail customers, auto shop counterpersons, installers and warehouse distributors.
The DENSO Difference While all cabin air filters may look alike on the outside, they don’t perform alike. The DENSO engineering team has worked directly with the new vehicle manufacturers to refine the design of the First Time Fit® Cabin Air Filters so they deliver exemplary filtering performance:
The bottom line is that DENSO First Time Fit® Cabin Air Filters deliver the engineering, quality and performance that makes them the logical choice when it’s time to change filters. Visit www.densocaf.com or call 888-96DENSO.
• Premium filter media stops particulates down to 0.001 microns, which out-performs conventional pleated filters. • The design of the DENSO First Time Fit® cabin air filter ensures optimal airflow and filtration while minimizing airflow noise in the cabin. • DENSO First Time Fit® Cabin Air Filters are designed to fit right the first time so they are easy to install.
DENSO Products & Services Americas, Inc. www.densoautoparts.com
ADVERTISEMENT
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Executive|Interview|
Rusty Bishop CEO, Federated Auto Parts Distributors Rusty Bishop began his career in the automotive aftermarket more than 40 years ago when he joined Fisher Auto Parts where he held a number of positions in warehouse and jobber store management and also served as a director of the company. In 1985, Bishop cofounded Federated Auto Parts Distributors, a program marketing group for major warehouse distributors headquartered in Staunton, VA. Through the years, Bishop’s leadership allowed Federated to grow to become one of the leading program groups in the industry. Bishop’s long history of service in the automotive aftermarket includes: Board of Directors of ASIA 1991-1993; AWDA Membership and Marketing Committee Chairman 1999-2002; AWDA Board of Governors 2000–2003 and 2005-present. He also served several years on AWDA’s Annual Business Conference Task Force. Bishop currently serves as Chairman of the University of the Aftermarket Foundation Board of Trustees. One major industry trend is that most Americans are holding onto their vehicles longer. As a parts supplier, what product categories do you see benefiting most from this trend? At Federated, we follow industry trends in an effort to better understand and anticipate changes in the marketplace. It’s true that consumers have been keeping their cars longer and that trend has resulted in an increase in vehicle maintenance that helps move prod-
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ucts like filters and wiper blades, but it also has created more demand for replacement parts. In fact, over the past few years we have seen growth in replacement parts as a percentage of total aftermarket spending. This is due directly to an increase in the average vehicle age and the soft economy. Product categories like brakes, shocks and struts, axles, bearings, timing parts, etc. all benefit from the extended mileage of vehicles kept longer by car owners. With this focus on replacement parts, we are seeing growth in the professional service sector and a decline in do-it-yourself repairs.
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What steps is Federated taking to improve parts fulfillment, information systems, reduce costs and so on? Many distributors today carry in excess of 200,000 different parts. With the average age of vehicles at historic highs plus the proliferation of nameplates and models, it is very difficult to always have every single part in stock. We are dedicated to providing complete coverage in all categories to help our professional service providers exceed their customer expectations. Federated distributors are investing in systems and processes to improve availability. There is a focus on speed and accuracy in everything we do from delivery service, information and responses to integrated systems that provide data seamlessly at the lowest possible cost. Our members are investing in new facilities designed for faster order processing, better stocking capabilities and bar code equipment that allows for paperless processing. We are integrating with our suppliers and collaborating with our customers
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to deliver useful, timely and more complete information. Federated works to help our customers and suppliers reduce cost. This is done through enhanced processes, information and execution methods. For example, communicating a catalog discrepancy, identifying a high warranty item, forecasting the need for a new item, or providing a service bulletin or technical information can all provide value and cost reduction that may be difficult to measure. That’s why we offer a shop profitability analysis and training designed to help quantify and measure improvement opportunities and potential. In short, day in and day out, we do everything we can to improve everything we do. Other than parts for maintaining and repairing cars and light trucks, does Federated offer niche lines and other specialized products? We are always looking to supply customers with new products whenever possible, and this can mean
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adding a niche line to complement a product offering. The Federated CoMan warehouse is extremely effective at creating complete categories by partnering with multiple suppliers focused on doing what they do best. The Co-Man operation also allows us to consider emerging categories and make them available to members before market demand is mature. With some of the new technology and diagnostic-driven products, we are seeing once-emerging product categories mature and grow, allowing for new categories to come to the forefront. We are working closely with suppliers to develop more coverage for specialized markets like marine, farm and fleet, industrial and so on, and we support Opticat’s efforts to expand catalog listings in many of these areas. What issues keep you up at night? We worry about the amount of inventory that exists in the distribution network today and how new technology will impact our business and that of our customers. We know that vehicle manufacturers want a bigger share of the service market and are trying to “lock out” independent repair shops. That’s why we are so appreciative of all those who are fighting for the Right to Repair legislation that is critical to not only our industry, but the motoring public. Also, because we are concerned about a thriving future for the motor vehicle aftermarket, we support a variety of education initiatives to help
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attract and train talented individuals that make an industry strong. What’s your gut feeling about the outlook for the remainder of 2013 and 2014? In the coming years, Federated members will continue to sell parts, shops will continue to repair vehicles and consumers will continue to get tremendous value from the aftermarket. I believe that there is an opportunity for sustained growth in the aftermarket with an older vehicle population, slow new car sales recovery, an improving economy and a growing vehicle population. Taking advantage of the opportunities ahead requires collaboration with our customers and a renewed focus on consumers. Federated offers many valuable tools to customers, including the best marketing and support program in the industry, the Federated Car Care Center program. Because service providers have limited time to spend with their customers, Federated has developed training programs to help shops strengthen customer connection and retention levels, attract new patrons, increase vehicle count and the average cost of repair orders, and enhance and grow their bottom line. While things may not get easier in the coming years, this is a business that rewards hard work and honesty. When I look at our membership, service provider customers and supplier partners, I feel very optimistic about the future. SO
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Marketing to|Women|
by Bogi Lateiner, owner, 180 Degrees Automotive
It’s More About What You Do Than What You Say
Let’s be honest: our industry has a less-than-stellar reputation, especially among women. It’s understandable, considering that less than 1% of ASE-certified technicians and only 7% of service advisors are female. This is still predominantly a man’s world; and let’s be real, most men just don’t get women.
This helps explain why most women, if asked, will tell you they dread going to a service center. In fact, my own experience as a young woman was bad enough that I pursued training as an auto technician just so that I never had to bring my car to a shop again! Even when women are not being taken advantage of, they feel that they are. Women have traditionally been alienated by and left out of the automotive conversation, but their buying power is on the rise. Consider the following:
• Women account for some 85% of all automotive sales in U.S. households. • 50-65% of customers at service centers are women (and the number continues to go up considering that many male customers leave financial decisions to their wives). • For the first time in history, half of all U.S. workers are women. These new insights bring about a huge opportunity. From vehicle manufacturers and tool companies to parts suppliers and repair shops, many in the automotive industry have been recognizing this disconnect and are scrambling to capitalize on it and market their products and services specifically to women. Yet, despite the best efforts of many of these companies, 74% of women report that they feel misunderstood by automotive marketing. This means you have a
Car-care clinic for women at 180 Degrees Automotive.
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tremendous opportunity to set your shop apart if you can successfully market to women. Here are some things you can start doing today to grow your business with women leaps and bounds ahead of the competition.
Stop Marketing To Women You heard me right. Stop marketing to women, at least in the traditional sense of the word, and start attracting people to your shop because of who you are and what your business stands for. Posting a picture of a woman on your website or using the term “female-friendly” in your copy can be insulting, unless it’s backed up by an organization that truly caters to women and makes all customers feel comfortable and at ease. Appealing to women is not just about having “women’s” magazines mixed in with the hot rod magazines. Instead, focus your energy on getting to know your customers as individuals. Find out what they want from their repair experience and then do everything in your power to provide it.
genuinely want to be a part of your neighborhood. You’ll find that many people will respond positively and want to support you and your business. Put it into action! • Join your neighborhood association, the chamber of commerce and local networking or community groups, and regularly attend meetings. • Volunteer for community or charity events. • Support other local businesses, both personally and professionally.
You Are In The Relationship Business, Not The Car Business Women are relationship-oriented. People do business with people, not with businesses; and this is especially true for women. Get out of the shop and be an active participant in your community, not simply to self-promote, but because you Bogi Lateiner, owner, 180 Degrees Automotive
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Don’t Just Fix Cars — Create An Experience The less it feels like auto repair, the better. Fixing cars correctly the first time and having a meaningful warranty that you stand behind is crucial. However, given our industry’s reputation, it is not enough. We need to go above and beyond to earn the trust of our customers; we need to create “an experience.” From the moment a customer walks in the door, to the follow-up call they receive days after their visit, focus on providing a service that is just as much about them as it is about their car. Put it into action! • Convert your “waiting room” into an inviting “living room.” You’ve got it right when it no longer looks like an auto repair shop. • Welcome people warmly by name. Introduce yourself with a handshake if they are new customers. • Remember to make eye contact when talking to customers. • Have coffee and snacks for your customers. Offer their dog a treat or their child a toy. • Consider hiring a customer service representative whose sole responsibility is to make each of your customers feel individually cared for.
It’s All In The Details Women are generally more observant and detail-oriented than men. Take a look at your shop from a fresh perspective. Clutter, dirty counters, sloppily dressed employees, worn furniture or neglected plants can reflect poorly on your business. People will equate what they see with how well
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you take care of their car. If you already have a clean and updated customer waiting area, take it up a notch and focus on the little details to make your shop really stand out. Put it into action! • Clean bathrooms are a must! To really impress your female customers, add a hook to hang a purse, scented lotion, and maybe even a stash of tampons and diapers for emergencies. • Make sure customers aren’t listening to impact guns and technicians talking while they wait. Play quiet music and enforce a strict “front of house” conduct code with your staff. • Never send a car home dirty. A greasy steering wheel or handprint on a window can negate even the best repair experience and may be the only thing a customer will remember.
Make It Easy To Do Business With Your Shop Having a broken car is a huge inconvenience. So, your customers will feel respected and cared for if you offer a variety of ways for people to conveniently do business with you and get on with their busy lives. Help your customers keep track of upcoming service needs. Minimize the stress of car repair by having a system in place to remind them about recommended work or services that are due. Put it into action! • Offer a shuttle service to get them to work or home. • Provide free loaner cars so they can get on with their busy day. • Provide Wi-Fi and a quiet place for them to work or relax in your “living room.”
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Customer waiting area at 180 Degrees Automotive
Convert your “waiting room” into an inviting “living room.” You’ve got it right when it no longer looks like an auto repair shop. • Create a kids area so children are entertained while Mom (or Dad) waits for the car. • Find out how each customer likes to communicate and utilize phone, e-mail, text or standard mail to stay in touch.
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An Educated Customer Is A Loyal Customer Women (and non-car-savvy guys) often feel that because they don’t understand cars they will be sold things they don’t need. Service advisors should be doing just what their job
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title suggests: advising. Educate your customers whenever possible. Help them understand repairs by showing them what you’re doing, and explaining why each repair is necessary. Women are more likely to trust you (and therefore buy from you!) if they see that you are willing to be transparent and educate them. Not only will it build the relationship and your customer’s trust in your shop, but the repairs will sell themselves.
Put it into action: • Leave a small gift in every car after repairs are completed. • Surprise your customer with a cupcake on their birthday or a rose on Valentine’s Day. • Wash every car you service. • Have a customer appreciation party. • Send hand-written thank-you cards for referrals.
Put it into action! • Bring people into the shop to see what you are talking about if they’re waiting on-site, or e-mail them photos if they’re waiting elsewhere. • Don’t assume they don’t know anything or don’t want things explained to them. • In order to build relationships with your current customers and to attract new ones, offer regular free car-care clinics for women. • Share car care tips on your Facebook page or website. (You do have a Facebook page and website, right?)
The Bottom Line
Give ’Em Something To Talk About Women like to talk. On an average day, we say a whole lot more than most men do. Women are also more likely to write reviews online and use social media to talk about their experience at your shop. Make sure you’re giving these women something good to say about you! Other people talking about how great you are is far more valuable than any amount of paid advertising. So, spend your energy (and advertising budget) giving people great reasons to talk about you.
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Stop thinking about marketing to women and start thinking about improving your relationship with women customers, your community and your customers in general. Give your business a makeover so that you genuinely appeal to the 50-65% of your customers who are women. You’ll be surprised to find that the other 35-50% of your customers will notice and appreciate it as well. Even if you just focus on one of these areas at a time, it won’t be long before all of your customers, regardless of gender, are happily spreading the good word about your business. SO Bogi is an ASE Master Technician and owner of 180 Degrees Automotive in Phoenix, AZ, an awardwinning full-service repair shop that specializes in educating customers and creating a positive automotive repair experience. She is passionate about changing the way people think about the automotive industry. Bogi teaches basic car-care classes for women at her shop, as well as for independent shops and dealers across the country. She is an automotive expert on AskPatty.com, a member of the Automotive Women’s Speakers Bureau, and co-host of All Girls Garage on Velocity Channel. Learn more about Bogi and her shop at www.180auto.com.
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Shop|Profile|
by Debbie Briggs, contributing writer
Glenway Auto Center Building Customer Confidence Through Consistency Having been a car dealership for 90 years has its benefits. Glenway Auto Center in Cincinnati, OH, opened in 1919 and serviced Chevy vehicles until the doors were shuttered in 2009, in the wake of dealership closings across the country. But, as the saying goes, when one door closes, another often opens — and, in this case, it was as an independent repair facility and body shop less than a year later in June 2010. Co-owners Phil Purkiser and Mark Ackerman have never forgotten the business’s dealership roots, taking the best of that world and putting a fresh spin on it to become one of the larger independent repair facilities in the greater Cincinnati area, and an ACDelco Professional Service Center (PSC) to boot. “We have a dedicated cus-
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tomer drive-in lane, where customers drive inside instead of parking their car outside and walking in,” Purkiser says. “Since we used to be a dealer, a lot of our current facility has been set up how we used to operate.” Rather than reinvent the wheel, Purkiser and Ackerman decided to spruce up an already nice building by taking off old doors and replacing them with glass ones. “It wasn’t so much improvement, as it was opening it up,” Purkiser says, adding that it’s
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made for a “bright atmosphere” that customers notice — often. “At least once a day, customers will comment about how clean the facility is and make comments about the waiting area, bathroom and drive-up area.”
Do What You Know The shop still specializes in the repair of GM vehicles, however, the switch to independent has allowed the facility’s eight techs — six flat rate and two quick lube — to work on all makes and models. Given that expansion, all the technicians are paid to attend training throughout the year. “All six of my flat-rate technicians are ASE-certified, and we have other General Motors’ certifications as well,” Purkiser says. “I have a couple of guys who are SP2 haz mat certi-
fied. And then we just have on-going training by the ton — training as far as Hyundai, Kia, Honda and Toyota. We just continuously train on those (nameplates), over a dozen classes a year, at least.” Reps from suppliers such as ACDelco, NAPA, CARQUEST and Denso will teach classes at the shop on common issues such as driveabili-
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ty. Techs will also take advantage of ACDelco’s interactive distance learning classes. Purkiser is quick to point out that employees are paid to learn. “They are paid for that training,” he says. “I know I’ve talked to a lot of technicians from other shops, and they don’t get paid for that. I want them to be enthusiastic about taking classes.” That and a number of other factors help explain why the shop experiences very little turnover. “We have a great work atmosphere and a very clean facility,” Purkiser points out. “The average number of years our employees have been working for us is 13 years. They go from 28 years down to two.”
How Can We Help You? Glenway prides itself on catering to long-time and new customers alike, and don’t just take Purkiser’s word for it — Google it. Purkiser says their reliance on CRM provider Demandforce has helped them build an impressive customer service rating. “Demandforce follows up the day after we close a repair order, asking that customer via e-mail how their service was and to please rate us,” he explains. “If you Google us, you’ll see a five-star rating (out of five) from more than 800 reviews.” With the proliferation of smartphones, Purkiser says they decided to forgo “snail mail” in favor of e-mail and are very aggressive in getting a customer’s e-mail address for all communication. And if you think that approach keeps the shop from having a person-
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“If you’re not putting out the best product, then you probably shouldn’t be doing what you’re doing. With our association with ACDelco, we feel very strongly about the services that we provide. -Phil Purkiser
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able reputation, think again. Purkiser says Ackerman routinely visits businesses in the area, live and in person. “My business partner will actually go from building to building talking to people,” he says. “They all know his face, and they ask for oil change coupons when he comes in. So we’ve created an atmosphere where we’re keeping in touch with people, and we want to make sure they’re keeping in touch with us. We’ve found a lot of new customers that way.”
“As we’ve attended some of those, we’ve tweaked some of our procedures, as they relate to shop supplies, labor rates, places where we weren’t in the ball game,” he says. “It’s made a substantial increase — probably a three- or four-point increase as far as gross profit goes. It doesn’t matter if you’re the owner or the car jockey; you have to be trained to keep up with today’s business.” Purkiser said the shop was also laid out slightly different during the transition from dealership to independent in order to maximize the shop’s 17 work bays. “We’ve dedicated just two stalls to doing the quick lubes, which keeps all that fast-moving traffic out of the flatrate technicians’ stalls,” he says. “That increases our productivity quite a bit by not having the flat-rate technicians working on the oil changes.” Another change to their 10,000-sq.ft. building during the transition was
Staying Current Vehicle technology isn’t the only area in which a successful shop needs to stay current. Purkiser says he and Ackerman, along with their four service writers, have all attended seminars through the Automotive Training Institute on how to boost profit in business.
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the switch from old incandescent lighting fixtures to T5 florescent lighting which uses a quarter of the power of the old bulbs, significantly increasing energy efficiency. “We also put in oil-burning furnaces, so we don’t have to send our oil offsite and it doesn’t cost us anything to burn it,” he says.
Consistency Is Key When asked about the shop’s continued success, Purkiser is quick to point out the relationships the shop has developed with ACDelco and the Better Business Bureau. “It shows that we’re serious about our business,” he says. “We have a high-profile business here, and we expect to keep it that way.” In addition to those affiliations, Purkiser says consistency has gone a
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long way in building customer confidence in the shop. “One of the key factors here is consistency,” he says. “We feel we’re very good with that. We have the same faces here, the same procedures for every customer who comes in. Customers can expect the same thing every time they come in here — clean waiting room, clean bathroom and free coffee. The technicians can expect a clean place to change their clothes, clean stalls to work in and cars to work on.” Of course, quality repairs are also a large part of the equation, and that’s something you can count on at Glenway Auto Center. “If you’re not putting out the best product,” Purkiser concludes, “then you probably shouldn’t be doing what you’re doing. With our association with ACDelco, we feel very strongly about the services that we provide.” It’s a tried and true plan for success that has worked since 1919 and will surely carry the shop through the next 90 years. SO
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Buying & Selling|An Aftermarket Business
by Art Blumenthal, MBA CBI
Case Study: Buying & Selling an Auto Service Business A Look At The Perspectives of Both Buyer & Seller As the Process of a Memphis, TN, Auto Service Center Changing Hands Unfolds “Buying a business is like working on a MBA the hard way…a real trial-by-fire. A good business broker can smooth that arduous process…” …Bill Brickhill, Buyer
It’s All About Creating A Step-by-Step Plan My dad was an avid woodworking craftsman and Mr. Fixit. He would eagerly await the Sears Craftsman tool catalog to arrive each month, and almost everything he purchased is still in use decades later for my own home projects. My fondest memories as a kid were spent with dad planning and building one home improvement or repair project after another. To facilitate the process of deep thought, some people doodle, others jog or meditate or pray, or do a thousand other things that make us human and seek answers to life’s ongoing problems. My father, a methodical accountant by trade, found his escape as a jack-of-alltrades builder and tinkerer. His systematic approach and
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painstaking attention to detail were evident in both his work and his hobbies. Each project would be carefully planned and organized. I admired his calm approach when an unforeseen problem occurred, a deliberate pause followed by an orderly adjustment to the plan. As a kid, sometimes if I saw the workshop light on late at night, I would sneak in and offer my help, always eager to learn how to use a new tool, especially one with a motor in it. Those were bonding moments that I clearly remember. Once I was an adult and chose an automotive aftermarket career, I carried
an auto service software developer and now as a business broker specializing in the aftermarket, I’ve applied the principles learned from my dad to my work — create a step-by-step plan, own the right tools to do the job right, maintain focus on how the final outcome should look, work patiently and diligently to achieve the right result, adapt and react to the roller-coaster of unforeseen circumstances, and gain satisfaction from a positive result. I’ve found that every new listing is like a fresh new project. Although the perfect outcome is always a Win:Win situation for both buyer and seller, the backgrounds and experiences of the
Automotive service is really all about step-by-step procedures, whether the problem is simple or complex. with me the concept that every challenge can be approached by patiently putting together a plan and strategy, with the flexibility to calmly react and find a solution when things go wrong. Automotive service is really all about step-by-step procedures, whether the problem is simple or complex. As business owners know all too well, having a shop run in an orderly fashion is an everyday challenge…whether diagnosing an intermittent starting problem on a customer’s vehicle, or ensuring the right parts are available for each job, or closing the books at month end, or the myriad of other challenges. During the years that I was an owner of multiple Midas shops and then as
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people involved and the steps to getting there are always different. For example, although many business sales involve a retiring, older owner selling to a younger buyer, here’s one that was just the opposite…
Seller’s Background & Motivation To Sell C.J. Passmore II worked for 10 years in the auto service business owned by his family for 26 years, purchasing the business in 2008. At age 29, with a wife and expecting a new baby, C.J. decided to get a fresh start and move in a different career direction. Although he had been approached in the past with offers for his successful franchise,
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the timing didn’t seem right until now.
Buyer’s Background & Motivation To Buy Bill Brickhill is a U.S. Navy veteran, having served his country since 1981, for 20 years of active service, followed by seven years in the reserves. He was initially an enlisted man, trained as a Machinist’s Mate, but then later received his commission as an officer. So he has experience working at every level and on all size Navy ships. He spent years getting his hands dirty, as well as supervising those who do. When asked what attracted him to the automotive aftermarket, Bill admitted that it had been a long journey, commencing about six years ago, a year before his retirement from the Navy. While working as a civilian consultant, he started looking at different career options. “I really wanted to own my own business, but wasn’t sure which industry would be the right fit. Once both of my kids got to high school age and my family and I decided to make our permanent home in Memphis, I explored various possibilities, from convenience stores to gas stations, liquor stores, even at one time coming close to buying a sports bar, but then changing my mind,” said Bill. He continued, “I really wanted a business which matched my professional values in which I could make a positive impact.”
An Overview Of The Business The Memphis, TN, auto service center is an established, profitable turnkey operation with equipment, inventory,
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Bill Brickhill, buyer
and experienced employees in place. This well-maintained, seven-bay, fully-equipped shop was staffed with the owner/manager, two full-time and two part-time quality technicians in a building of approximately 4,000 square feet. The Memphis metropolitan area has a population of 1.2 million residents, including 680,000 in the city of Memphis. The business is located on a busy intersection with Poplar Avenue, a high traffic commercial strip which runs east/west between downtown Memphis and a nearby Interstate 240 exchange. The area includes several strip retail centers, including the Eastgate Shopping Center directly across the street. The shop provides comprehensive vehicle repair and maintenance services, offering total car care including brakes, oil changes, exhaust, scheduled maintenance, tires, and steering and suspension services.
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Seller & Buyer Connect With The Business Broker C.J. said, “A couple of years ago, the business broker Art Blumenthal learned that someone was interested in my business. But when he called me about it, the timing wasn’t right for me. So at the time, he told me that if I ever want to sell, to give him a call. So when I was ready, I just called Art.” Bill said, “By chance I found the Memphis shop listing posted by Art Blumenthal on-line and then checked out his website and did some research and contacted him.” Art arranged for a face-to-face meeting in February and flew to Memphis to join them. “Long story short…” said Bill, “…it was a good fit.”
response was exciting. “Art took the reins of the sales process…he even flew to Memphis for the first introduction and walkthrough by the potential buyer, Bill Brickhill. Once it was established that Bill was a serious buyer, we both relied on Art to walk us through the many issues that crop up…especially with the involvement of the attorneys and the bank. But I’ve got to say that Art was always on top of it and was very good in communications with my attorney and the buyer’s attorney and the banks and coordinating everything. I was very pleased with what he was able to do. It was handled in a very professional way. Then we closed on May 8th, again with Art present to oversee all the details.”
What’s The Business Worth? “I already knew what I wanted to sell it for,” noted C.J. “Art looked at everything and said that would be a fair price.” Establishing a sales price included taking into consideration a variety of factors: • Past and current sales trends; • Strong discretionary cash flow; • Pre-approved for 85% Wells Fargo Bank financing, with a SBA guarantee; and • Excellent demographics in the immediate area.
Scope and Timeline Of Purchase Process
Scope And Timeline Of Sales Process
A few weeks after the closing, C.J. said, “I am quite pleased with what’s happened…the successful conclusion…and I believe Bill feels the same way.” The sales contract provided that the seller would provide a minimum of two weeks training after the closing. C.J. said, “For a few weeks until the
C.J. said, “I contacted Art in December, we listed it in the beginning of January and he found a buyer by the middle of February. Art had put together a very comprehensive presentation for potential buyers…I was very impressed with it…and the rapid
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Bill noted, “Buying a business is like working on a MBA the hard way…a real trial-by-fire. A good business broker can smooth that arduous process. For a first time buyer, having someone involved who knows the ropes is definitely a plus. There’s an amazing amount of paperwork and negotiations to get the deal done.”
Post-Sale Activities And Observations
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smith, while the telephone kept ringing with customers and vendors calling after business hours. Since he was there, Bill patiently and politely took all the calls while the interview proceeded, simultaneously turning off work lights and equipment. He is assured and comfortable in his role and the master of his domain. He commented, “It’s not that owning a shop is so difficult. It’s just that there are so many Seller C.J. Passmore II (left) passes the business keys to new things to think about owner Bill Brickhill. and take care of.” C.J. has been end of the month, I was there every relieved of the stressful day-to-day day. I’ve trained a lot of people on the responsibilities of the business and operation of the business in the past 10 can now enjoy more time with his years and Bill is picking up on it pretty growing family and exploring other quickly. He has a mechanical engineeroptions and interests. ing background. Customers and employees seem to really like him. I want In Conclusion him to be as successful as he can be, and I’ll do anything I can to help him.” And as for me, now it’s time to move Bill has welcomed the opportunity on to the next projto “Be Your Own Boss” and has been ect…and I’m lookable to take a look at the business ing forward to it. SO from a fresh perspective.
Win/Win Outcome Interestingly enough, when Bill was interviewed for this case study, it occurred at closing time for the shop and proved his acumen as a multitasker…a key character trait of a successful shop owner. A broken door lock had resulted in his need to await the arrival of a lock-
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Leveraging more than 30 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Art is a member of IBBA (International Business Brokers Association, Inc.). For more information, or to initiate a no-obligation confidential consultation, visit www.art-blumenthal.com.
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Shop|Operations|
by Bob Cooper, president, Elite Worldwide, Inc.
The Top 7 Reasons Most Shops Fail
Over the years, I’ve had the opportunity to work with many of the top shop owners in America. I have met thousands of owners who simply go about business as usual and then, unfortunately, and unexpectedly, fail.
I have made quite a few discoveries along the way, so I would like to use this article to share what I feel to be the top 7 reasons most shops fail.
1. Pride. There is no question that pride plays an important role in a shop owner’s success. It motivates them to take extra steps to ensure a clean shop, properly repaired vehicles and satisfied cus-
tomers. Certainly there is a place for pride, and all successful shop owners have it, but they also know when to put it in check. They do so by admitting to their mistakes, complimenting their employees for a job well done, and as Henry Ford exemplified, they accept the fact that they can’t build a successful business on their own. The shop owners who are unwilling to set their pride aside when it’s appropriate to do so are the owners who inevitably will fail.
2. Fear. As with pride, fear also plays an important role in a shop owner’s success. The fear of not doing a good enough job for their customers, the fear of a new competitor moving into town and the fear that accompanies investing
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in themselves and their employees are all shared by the top shop owners in America. What separates them from those who fail is that they face their fears head-on and take the proper action to ensure their success. In contrast, the shop owners who fail are paralyzed by fears, take no action and wake up to find their worst nightmares come true. They lose key employees, their car counts drop and their profits disappear.
3. Not realizing what their jobs are. Successful shop owners know that the best way for them to build their business and help their customers is by doing what they should be doing as business owners: setting company goals, developing the plan, hiring the superstars, bringing out the best in employees and ensuring their shop’s success. Those who own failed shops typically have big hearts and can be found under the hoods of vehicles, chasing parts
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and sweeping their parking lots, instead of doing what they should be doing as owners. These are all things that need to be done, but by other people, not by the owners.
4. Not knowing when and how to invest. Most shop owners are quick to invest in equipment, inventory and, in most cases, marketing programs. These are all investments that certainly need to be made. However, beyond these types of investments the top shop owners constantly invest in their most important assets: themselves and their employees. Whenever I look at the financial statements of a struggling or failed auto repair shop, one thing is almost always consistent: there is a glaring absence of any investment in their own education or in the training of their staff.
5. The absence of systems. Successful shop owners have clearly
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defined procedures for answering every phone call, writing up their customers, inspecting vehicles, recommending and selling services, performing services, car delivery and customer follow-up. The shops that fail rarely have systems in place. I have found that their employees typically have their own ways of doing things, which is a guaranteed recipe for failure.
6. Trying to be everything to everybody. Most shop owners try to please everyone, and, for the most part, that’s good. But the top shop owners realize that bringing in the wrong customers will drive down their profitability, erode morale and wipe out their profits. They know exactly who their ideal customers are, and, in turn, target them with all of their advertising programs. The shops that fail are more interested in filling up their service bays, than bringing in the right people. On the other hand, the top shop owners are concentrating instead on securing the right people and the right vehicles.
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7. The absence of goals. By having clearly defined goals, the top shop owners are passionate about their mission, make better decisions, do a far better job of hiring good people, have happier customers and put more money on their bottom line. The shop owners who fail typically operate their shops from week to week, run up debt and get burned out, ultimately resulting in closed doors. In closing, if you want to build a more profitable, successful business, you already know that there are no guarantees of success. The one promise I can make is that business, as with life, is all about choices. If you set your goals and put fear and pride aside, you can successfully build an auto repair shop that is second to none. Others have, so I know you can, too. SO
Since 1990, Bob Cooper has been the president of Elite Worldwide Inc., www.EliteWorldwideStore.com, an ethics-based company that helps both struggling and successful shop owners take their businesses to new levels through one-on-one coaching from the industry’s top experts. The company also offers shop owners sales, marketing, and management seminars, along with service advisor training. You can contact Bob at contact@eliteworldwidestore.com, or at 800-204-3548.
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Owners (left to right): Mark Zaunius, Pat Roell and Willie Contreras
“Together, Willie, Pat and Mark have created a great working environment.” –Tess McKenzie, Top Shop’s Administrative and Marketing Advisor
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Shop|Profile|
by Debbie Briggs, contributing writer
Top Shop Automotive Three Talented Guys And A Successful Automotive Repair Shop What do you get when three guys who also happen to be technicians become friends? A highly successful Santa Barbara, CA-based repair shop. And, here’s how the story goes... In August of 1986, Willie Contreras established Top Shop Automotive in Isla Vita, CA, specializing in Volkswagen repair. After three years of working on his own, Willie brought on Mark Zaunius. With Mark’s expertise in Volkswagen repair, the shop was able to expand and fill two out of the three bays at the shop on a fairly consistent basis. Pat Roell, a master tech on European and Asian cars, rented one of the bays and opened up his own business, Strictly Foreign. It turned out to be a “win-win situation,” according to both Pat and Willie. They sent each other work on a consistent basis: all VW work went to Top Shop and all European, Asian and German cars were referred to Strictly Foreign. In 2004, Hans Loesch had reached out to Willie to let him know that he was retiring as owner of his shop, Loesch’s Automotive Repair, and offered Willie his location in Santa Barbara. Willie was beyond elated. Hans was his mentor, as he start-
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ed out with him when he was a junior in high school. They are very close to this day. “It was my dream, as a teenager, to be able to go back to Loesch’s as the owner since it was the nicest shop in town,” says Willie. But, it was time to take the next step: bring Top Shop Automotive and Strictly Foreign out of Isla Vista and move into his mentor’s shop under one agreed upon name: Top Shop Automotive. According to Willie, it was then that these three friends would become business partners as well. With their growing customer base, Pat’s certification as an ASE Master Technician, Mark’s expertise in everything Volkswagen and Willie’s drive to succeed, in August of 2004 Top Shop Automotive established itself at 177 S. Patterson Ave, Santa Barbara, CA, as an “Honest and Dependable” shop.
Do What You Know, Know What You Do Thanks to Willie’s love for all
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Back Row: Techs, Martin, Oscar and Jerry; Service Writer, Lou; Second Row: Owners, Mark, Pat and Willie; Front: Administrative & Marketing Advisor, Tess
things Volkswagen — he has a vintage 1966 VW 21 Window Microbus — more than 50% of the shop’s business is VW. Pat and Mark serve as the shop’s head techs, and they supervise and guide three additional techs, who have been with the business since 2006, shortly after Top Shop expanded to its current location. All five are ASE certified. “Together, Willie, Pat and Mark have created a great working environment,” says Tess McKenzie, Top Shop’s new Administrative and Marketing Advisor. “We encourage and sponsor training, and we hire only upbeat, cheerful and amazing people. We then give them the tools and structure they need to succeed.”
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That structure includes maintaining a calendar of local automotive training classes sponsored by Top Shop, as well as working with consulting company, Management Success. “They offer online training and much more through a valuable tool called Visual Management Technology,” McKenzie explains. “It includes real-time video cameras placed in strategic locations, visual training aids for all shop personnel, web-based graphical productivity analysis and much more.”
More Than Word Of Mouth According to McKenzie, owners Willie, Pat and Mark know that running a suc-
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cessful business takes more than just word-of-mouth referrals — especially if you want to keep growing. “When the shop started, back in the day, the only form of advertisement was word of mouth, and that worked since the shop was small and it was just three guys!” she says. “And the shop still gets its fair share of new word-ofmouth business through maintaining healthy relationships with our amazing customers, tow truck drivers and other local business owners.” Willie adds that “being a AAA certified shop has also had a positive impact on the shop.” In a world where tweeting and texting seem more commonplace than face-to-face interaction, businesses need to adjust to the times — and Top Shop has done just that. The shop’s website has been updated and is even more user friendly, maintaining high visibility on search engines. The shop also makes its presence on Facebook, Twitter and WordPress a priority. But in the end, all the promotion in the world won’t matter if a shop can’t produce quality work and meet customers’ expectations. “Any shop can promote themselves in several ways: in person, through media, their customers, etc.,” McKenzie says. “However, if we’re not performing quality work from start to finish, we cannot attract or retain customers.” This is very apparent as the owners all put their heart into their work every day they walk into their shop. Willie adds, “We hire service writers who are naturally upbeat in mannerism, with strong communication and listening skills and who are absolutely solution driven. And we couldn’t do what we do without knowledgeable, trustworthy and skilled technicians.”
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Appearance Matters Operating a facility that’s clean and inviting cannot be underestimated. The front office area at Top Shop fulfills those things and more — who doesn’t like chocolate? “Our front office area is clean, smells good and is bright in color and décor,” McKenzie says. “We offer several waiting room tokens of our appreciation: current magazines, a KCup coffee machine, Hershey’s Kisses, cold bottles of water and lemonade or ice tea on hot days. Most new customers actually comment on us offering them cold bottled water and how the shop doesn’t ‘smell like an auto repair shop.’ “I always laugh at that one,” she adds. “Being a new addition to the shop and female has definitely brought a different perspective, especially since 65% of the shop’s customers are women!” McKenzie says they also staff the office with the right people — a smile can go a long way in building a customer relationship that will last a lifetime. “The office staff is very much a part of the shop’s appearance,” she says. “Walking into a business staffed with smiling faces who acknowledge your presence is critical.” And it’s the little things that also help build those client relationships: something as simple as a putting a “thank you” card with a lollipop inside each vehicle upon completion or taking the time to call customers to make sure they were satisfied with their repair. “It’s all about maintaining healthy relationships: building trust and providing solutions,” Willie explains. “How we manage our customers definitely sets us apart from other shops in
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the area. We do this by being honest and dependable and not overwhelming customers by overselling jobs.”
Being Open To Change After the shop moved to its current location, the owners then looked into Management Success (mentioned earlier) for help. The impact on the business was nothing short of amazing. Willie recalls the days before then when they all would be busy working on cars, and then the phone would ring, so they’d stop and look at each other until one of them would answer it! Of course their work would always be interrupted, but somehow they managed to get it done. With Management Success, the key step was to assign each of them “a hat.” Willie has the absolute gift of charm and chit chat, and was assigned to be the service writer; Pat
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and Mark love to put their thinking caps on and troubleshoot any repair issue, so, of course, they were given the head tech hat to wear. When people have a clear direction, they are able to build the confidence and ability to be amazing. And they really are. While successful in their new location, the owners wanted to take the shop to the next level — and that’s where Management Success came in. “Learning how to successfully implement management, sales, marketing and production processes have put the owners more in control of the business,” McKenzie says. “One of the key changes made was to begin managing the business on a daily and weekly basis, rather than waiting until the end of the month to see whether or not the shop made money. Now, adjustments can be made to operations immediately to meet profitability goals. Proactive versus reactive business management: It works!" While profitability is always crucial, delivering solutions in the form of quality repairs is the ultimate goal at Top Shop Automotive. “We deliver solutions to our customers,” McKenzie concludes. “We speak to them with respect and integrity, deliver a great product and are always striving to be the best choice for auto repair services for Santa Barbara County.” SO
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Shop|Management|
by Vic Tarasik, owner, Vic’s Precision Automotive
Time Stealers
Identifying And Averting Barriers To Productive Use Of Your Precious Time Whether it’s silver, gold, platinum, diamonds, rubies or even cold, hard cash, we take numerous measures each day to protect our valuable items, some more drastic than others. We use locks, banks, safes and alarms to ensure their safe protection. We lock our homes, cars and businesses in order to safeguard our personal possessions and the things that are important to us. And yet, what is commonly overlooked, is something more valuable; so valuable that once it’s lost, you have no hope of ever recovering it. We all have the exact same amount of it each day, and tomorrow we start off with a fresh batch of it. Some of us use it much better than others and make the very best of it. What I’m talking about is time. While we don’t know when “our time” will ultimately end, we do know that each day we are given 24 hours or 1,440 minutes. It’s up to us to make the most of that precious time and do everything in our power to protect ourselves from nonproductive use of it.
Time Stealers Each day, we are confronted with a myriad of choices as to what to do with our time. Furthermore, each
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day we have a vast number of time stealers that are unmercifully ready to take what we don’t protect. Much like steam rising from the top of a boiling pot of your favorite pasta, once time is gone, it’s gone forever.
Identify Them Like any security flaw, it’s necessary to first identify the weak-
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ness before putting measures in place to better protect one’s valuable items. So, let’s look at some time stealers and see if you can relate to a few.
Lack Of Planning This is when you show up at the shop and the day takes on a life of its own. You find yourself surfing from one challenge to another and really not getting anything accomplished until after you have put out most of the fires. Suggestion: The best way to combat a potential lack of planning is to start off each day with a list of items you want to accomplish and consider that list your road map for the day. Like any journey, you may have side trips, but by the end of your day you’re closer to your destination. Starting out your day in this way will help keep you on track.
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E-mail, Internet And Smart Phones Wow, these can be the “black hole” of time stealers! According to The Harris Interactive Poll, the average person spends 13 hours a week on the Internet via their computer and smart phone. Another recent study by Nokia says that we check our smart phone once every 6 ½ minutes, which amounts to 150 times in a 16-hour day! Suggestions: Check the Internet and answer e-mails during down periods. Remember that keeping up with things on the Internet won’t change their outcome. Also, a ringing phone doesn’t always need to be answered; let it go to voicemail and tend to it when you can dedicate time to the person who called.
Interruptions Have you ever found yourself working on a project and someone stops in
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❉
Just because a phone rings, doesn’t mean you have to pick it up.
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with a “quick question”? Well, it never really is quick and it can take you 15 minutes to get back on track once you wrap things up with the person who just dropped in. Suggestion: Have a method in place to communicate to your staff whether you are available or not. At Vic’s, I have a sliding sign on my doorway that shows my availability. If the sign indicates that I’m on “Green Time,” I’m available for any need. Whereas, “Red Time” signifies that it’s not a good time unless there’s an emergency. This works out really well for us and I have shared it with others who have effectively put this practice into place.
Phone Calls As an owner, you are most likely off the counter and your service advisor is ordering parts online, right? If not, they should be, as it boosts their productivity. As an owner, your phone rings for different reasons. Just because it rings doesn’t mean you have to pick it up, as mentioned earlier. Let it roll into voicemail and get to it when you have the time. Also, if you want to be really focused, set your phone on “do not disturb” and you won’t be tempted to pick up the ringing phone.
Meetings Whether it’s with a customer, vendor or employee, professionals spend 5.6 hours a week in meetings, according to the Microsoft Office Personal Productivity Challenge (PPC) study. Suggestion: Plan your meeting objectives well in advance and set time limits for each specific area of discussion. Planning is applicable mainly to your vendor and employee relationships.
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Know How To Say ‘No’ As a general rule, if people, customers or employees, can dump their issue at your feet, they will. We had a customer who needed her 90,000-mile vehicle service done in two hours because she and her family were leaving for their vacation that afternoon and she had forgotten to come in earlier. While my answer was “Yes, I can get you in and perform the service,” we completed it on our schedule, which was later than she wanted. Our customer did not get to leave when she wanted, but her lack of planning was not going to be an emergency on our part. Because we are in the service business, it’s in our nature to want to please our customers, whether they’re internal customers (employees and staff) or external customers. Learning when to say no can be beneficial not only financially, but also when it comes to being more productive time-wise.
The Bottom Line If you don’t guard your time, no one will. So take inventory of the areas that need to be addressed and you will give yourself more time to do what pleases you, and take charge of your day. The end result will be a happier you and a more profitable shop! Want to share your time-stealing tips? Drop me a line at vic@Vics Precision.com. SO Vic Tarasik is the owner of Vic’s Precision Automotive, The Woodlands, TX, a 30-year industry veteran and long-time 20 Group member. His 10-bay, 7,000 sq.-ft. shop specializes in customer service, in addition to expert vehicle repairs. Vic can be reached at vic@vicsprecision.com.
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