Cover march-april.2 3/20/14 10:22 AM Page C1
Improving Team Performance
Maximizing Shop Software
Getting Paid On Time
March/April 2014
Brighton Auto Service Federated ‘Shop of the Year’
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®
March/April 2014
Shop Profile 22 Federated ‘Shop of the Year’: Brighton Auto Service 46 Casey’s Independent Automotive Repair
Features 6
22 Federated Shop of the Year: Brighton Auto Service
6
46
Technology: Electronic Inspections
18 Shop Operations: Selling in 2014 36 H.R.: Improving Team Performance
Technology: Electronic Inspections
Sponsored by
Shop Profile: Casey’s Independent Automotive Repair
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®
Departments 12 14 30 40
Shop Owner Staff Publisher
Jim Merle 330.670.1234, ext. 280 jmerle@babcox.com
Editor
Mary DellaValle, ext. 221 mdellavalle@babcox.com
Graphic Designer
Cindy Strubbe, ext. 231 cstrubbe@babcox.com
Advertising Services Director
Cindy Ott, ext. 209 cott@babcox.com
Contributors
Chris Crowell, ext. 268 ccrowell@babcox.com
Finance: Getting Paid on Time
Executive Interview: Edward Covington, Mike Harvey, WIX Filters
Buying/Selling An Aftermarket Service Business: Case Study
Tim Fritz, ext. 218 tfritz@babcox.com
Management: Maximizing Shop Management Software
Andrew Markel, ext. 296 amarkel@babcox.com
Director of eMedia/ Audience Development
Brad Mitchell, ext. 277 bmitchell@babcox.com
Subscription Services
Maryellen Smith, ext. 288 msmith@babcox.com
Babcox Media, Inc. 3550 Embassy Parkway Akron, OH 44333-8318
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President
Bill Babcox bbabcox@babcox.com
Vice President/ Chief Financial Officer
Greg Cira gcira@babcox.com
Vice President
Jeff Stankard jstankard@babcox.com
Controller
Beth Scheetz bscheetz@babcox.com
30 In Memoriam
40
Founder of Babcox Publications
Edward S. Babcox (1885-1970)
Chairman
Tom B. Babcox (1919-1995)
䊚2014 by Babcox Media, Inc.
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|Technology|
by Neil Reilly-Shapiro, product manager, AutoVitals’ Paperless Back Shop
Nine Months Of Digital Inspections What Have We Learned? Now that Paperless Back Shop (PBS) digital inspections have had some time in the field, we are hearing some amazing feedback. Not only are our users reporting increases in the number of recommendations made by technicians during inspections, and more recommendations making it to the tech worksheet, but shop dynamics are improving as well.
Shop Dynamics? What if you could improve the relationship between the front and back of the shop? We knew that having the vehicle service history available on the tablet would be a great asset for the technician, but we could not have anticipated how it would change the relationship between the technician and service adviser. One surprise learned from
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our PBS users was that a digital process increased the confidence of technicians and service advisers in recommending necessary jobs to the motorist. Before going paperless, service advisers were not always advising the motorist of all the jobs recommended by the technician during the inspection. The service adviser was concerned that the motorist would perceive a recommended job as unnecessary, or that the tech might have recommended a job that was
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actually performed on a recent visit. Now that the technician can leverage the vehicle history on the tablet to confirm the last time a job was performed, as well as take a detailed series of photos of the condition, they can make recommendations to the service adviser with total confidence. Combined with the technician
armed with photos of the vehicle’s condition to clearly show the need for service to the motorist.
What Else Can Photos Do For My Shop? You know pictures convey a thousand words when it comes to recommend-
Technicians can leverage the vehicle history on the tablet to make recommendations to the service adviser with total confidence. effectiveness report we discussed in the Jan./Feb. 2014 issue of Shop Owner magazine, there is no more fluctuation in the quality of inspections. The service adviser can now confidently recommend jobs and is
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ing jobs to a motorist, but they also help your service adviser with these words: “Could I have your email address?” With all of our inboxes full of spam, many of us are reluctant to hand out our email freely, and your service adviser may not always bother to ask. However, when you offer a motorist a nicely presented, detailed inspection report loaded with photos, you’ll have no problem populating your company directory with customer email addresses. Equipped with the ability to take unlimited photos with every report and add pictures to the results of the tech worksheet, some of our PBS users have begun taking before and after photos of all repairs. There is no question in the customer’s mind that the work was performed, inevitably strengthening the relationship between your shop and your customer. Other popular subjects for photos that shops are making a part of every inspection include: - Tires (door sticker, size, condition, tread depth); - The gauge cluster (odometer,
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warning lights); - Overall vehicle condition and inspection stickers; - Fluids (visible levels, blotter test results), and; - Scanner results.
What About Hard Trends? Show Me Some Numbers Let’s talk about one of our shops that has been using digital inspections for the last six months with stellar results. The month prior to implementing digital inspections, this shop’s average repair order (ARO) was $360. Digital inspections
y Service This Visit — Safety Item Or Failed Component Underhood Condition Action Images/Audio Inspect ignition (boots) ✎ wires and spark plugs
Spark plugs are worn out
{TUN-0311} Spark plugs-R&R
Action
Images/Audio
Service Suggested This Visit
Underhood *Document fluid condition results
Condition ✎
*Check engine oil level ✎ and condition and check for leaks *Trans fluid (auto) (std.)
✎
✎ Inspect engine & transmission mount(s) Inspect fuel system/ throttle body
✎
See fluids in need of maintenance Dirty or dark
{ENG-014} Engine oil filter change service – R&R
Dirty transmission fluid Note: monitor fluid levels only due to age, miles and no history avail. Engine moving too much
{ENG-016} Engine Torque Mount – R&R
Note: Inspected, but suggested with spark plugs
{FUE-0201} Throttle body fuel system service – Clean
Service advisers can confidently recommend jobs, armed with photos of the vehicle’s condition to clearly show customers the need for service. www.ShopOwnerMag.com
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were initially performed on about one-third of all appointments during the first three months, and doubled to two-thirds of all appointments in the next three months. Now almost all appointments receive a digital inspection.
ing more than twice as many jobs as in the past. The ARO for the last month jumped to $520, a 44% increase in just six months! While this is due to the efforts of the shop owner, he recognized implementing the digital inspection program as a
Thanks to the power of digital inspections, technicians are recommending more jobs and service writers are selling more jobs. Using the technician effectiveness report, we found that during the first three months, 5.8% of inspections resulted in a recommended job from the technician, and, in the last three months, this metric jumped to 12.9%! Technicians are now recommend-
major factor in the improvement. He is now moving his second repair shop over to digital and says, “When I’m in my shop without digital inspections, I feel like I’m back in the ‘60s!” Thanks to the power of digital inspections, technicians are recommending more jobs; service advisers are selling more jobs; shop owners are more aware of the profit potential; and confidence is improved for everyone in the shop. Would you like to raise the quality of inspections in your shop? Get started with digital inspections today! SO Neil Reilly-Shapiro is the Product Manager for the Paperless Back Shop at Autovitals. He is a former automotive technician, holds a Master’s in Mechanical Engineering from UC Santa Barbara and has more than five years of industry experience. AutoVitals’ products facilitate highly effective Concierge Auto Repair services, covering all aspects of the service adviser’s interaction with prospective and existing customers. He can be reached by visiting www.autovitals.com or calling 1-866-949-2848.
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|Finance|
by Richard L. Lipton, CPA
How To Get Paid on Time Established Policies Will Help Improve Cash Flow Due to current economic conditions, it’s likely that collecting on your accounts receivables is becoming more and more of a challenge. Strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables.
The following suggestions will help your business improve its cash flow and tighten up its credit and collections policies. Some of the tips discussed here may not be suitable for every business, but they can serve as general guidelines to give your shop more financial stability. Define Your Policy. Define and stick to concrete credit guidelines. Your staff should not sell to customers who are not credit-worthy, or who have become delinquent. You should also clearly delineate what leeway your team has to stray from these guidelines when attempting to attract customers. Tip: You should have a system of controls for checking out a potential customer’s credit,
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and it should be used before vehicle service is performed. Further, there should be clear communication between your accounting department and your service writers as to current customers who become delinquent.
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Clearly Explain Your Payment Policy. Invoices should contain clear information about how much time customers have to pay, and what will happen if they exceed those limits. Tip: Make sure invoices include a telephone number and email address so customers can contact you with billing questions. Also include a preaddressed envelope. The faster invoices are sent, the faster you receive payment. Follow Through on Your Stated Terms. If your policy stipulates that late payers will go into
collection after 60 days, then you must stick to that policy. A member of your staff (but not a salesperson) should call all late payers and politely request payment. Accounts of those
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who exceed your payment deadlines should be penalized and/or sent into collection, if that is your stated policy. Train Staff Appropriately. The person you designate to make calls to delinquent customers must be apprised of the seriousness and professionalism required for the task. Here’s a suggested routine for calls to delinquent payers: • Become familiar with the account’s history and any past and present invoices. • Call the customer and ask to speak with whomever has the authority to make the payment. • Demand payment in plain, nonapologetic terms. • If the customer offers payment, ask for specific dates and terms. If no payment is offered, tell the customer what the consequences will be. • Take notes on the conversation. Make a follow-up call if no payment is received and refer to the notes taken as to any promised payments. SO
Richard L. Lipton CPA & Associates LLC, located in Florham Park, NJ, draws on its founder’s 10 years as a stockholder and manager of family-owned Sam’s Tire Co. in Paterson, NJ. Richard L. Lipton CPA & Associates LLC is structured to personally serve large and small clients who have a need for business consulting services, as well as accounting and tax services.
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14-16-Wix Executive Interview 3/18/14 4:05 PM Page 14
Executive|Interview|
Edward Covington Vice President Of Quality Assurance
Mike Harvey Brand Manager, WIX Filters
WIX Filters’ Edward Covington, vice president of quality assurance, and Mike Harvey, brand manager, discuss what constitutes “normal” driving, seasonal car care tips and how the iconic WIX brand will mark 75 years in 2014. SO: Edward, how can shop owners and technicians properly match oil filters to driving conditions? There are more than four million miles of roads in the United States, yet nearly 1.5 million miles – or 35 percent – of these roads are unpaved. Add to that farms, construction sites, stop-and-go traffic, short trips, towing, hauling or Edward Covington high heat and this scenario is the classic definition of severe service, or severe driving. Drivers who fall into this definition of severe driving should consider premium oil filters, which are designed for severe conditions and original equipment drain intervals. Mike Harvey On the flip side, “normal” driving is paved road and general daily travel – or travel where there is no stop-and-go
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traffic, short trips, hauling or high heat. While this is defined as normal conditions, a small amount of driving actually falls into this category. When combined with a traditional oil change interval, drivers should consider a standard filter. As a result, we recommend that shops provide their customers with oil and oil filters based on how they drive and their desired oil and filter change interval. Successful shops are those that talk with their customers, learning how they drive, what type of oil they prefer to use and their desired oil and filter change interval. Filter selection is then based on how these questions are answered. Stats and figures are all well and good, but in the end how to choose the correct oil and filter comes down to the relationship you have with your customer.
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SO: Edward, independent shop technicians must constantly ensure that the products they install are installed correctly. What advice do you offer technicians when it comes to installing spin-on oil filters? In the technician world, the untold story of spin-on oil filters is the cap wrench. As filters have gotten smaller, moved to harder to reach locations and sometimes located near the exhaust system, it is harder to grip them by hand, especially when the engine is hot. Add to that, the common misconception that a filter only needs to be “snug” and, as a result, the most common spin-on oil filter installation mistake is an under tightened filter. A cap wrench is a critically important tool to ensure that oil filters are tightened to recommended requirements, generally three-quarters turn after gasket contact. A poorly tightened oil filter can result in oil leakage and if left unchecked, may result in engine damage. SO: Mike, drivers typically focus on car care tips in the spring, or prior to the start of the summer driving season. What’s the most common tip that drivers perhaps overlook when it comes to maintaining their vehicles? One of the most overlooked filters in vehicles is the air filter – but it’s also one of the most important. Engines in today’s vehicles are sealed more tightly than those of previous model years and are not subjected to high
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levels of dirt. However, most dirt gets into the engine through the air filter or leaks in the air induction system. Consumers should follow the vehicle manufacturer’s recommendation for replacing air filters and inspecting induction systems. In addition, a recent urban mobility study by Texas A&M reported that Americans spend 5.5 billion hours in traffic annually. What they may not realize is that the air inside their vehicles is likely of worse quality than the outside air. If drivers are going to collectively sit in traffic for billions of hours each year, then they should consider checking their vehicle’s cabin air filter annually and replacing as needed. Cabin air filters are designed to capture contaminants, such as soot, dirt and other airborne pollutants, in most systems before they can enter the vehicle. SO: Mike, the average age of vehicles in the U.S. is 11 years, an all-time high. Should drivers replace air filters more frequently on older model vehicles? A good rule of thumb is to treat aging vehicles as we do aging bodies — or by paying more attention to how we fuel and filter older moving parts. Drivers should consider switching to
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premium air filters once their vehicles hit 10 years or 100,000 miles, which is when vehicle systems typically start to decline. SO: Mike, in your role as brand manager, how does WIX support excellence in automotive repair? We have a rich history of supporting all aspects of the automotive aftermarket industry, including through our partnerships with Babcox Media. We have rebranded an award for 2014 that recognizes the skills and professionalism of today’s automotive technicians. The “WIX Driving Performance Award” will also recognize game changers in automotive service. Entries are being accepted at WIXDrivingPerformanceAward.com and the winner will be announced at AAPEX in November.
WIX is also partnering with Babcox Media to sponsor the 2014 Tomorrow’s Technician’s School of the Year and Counterman’s Counter Professional of the Year awards, and all three programs support excellence at every level of the automotive repair industry. Each year we see high-caliber nominations from the best technical schools, counter professionals and shop technicians and we look forward to selecting
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top-of-the-line industry professionals in 2014. SO: Mike, WIX Filters will celebrate its 75th anniversary in 2014. What’s next for the brand and what are your goals in the anniversary year? We are marking our 75th year with a marketing program focused on customer engagement and backed by seven decades of industry leadership in aftermarket and original equipment design. Our focus today is the same as it was when we were founded in 1939 — to provide our customers with premium quality filters designed to exceed their performance demands. We are proud of our brand’s global growth and innovation, and our focus on product development has made the name “WIX Filters” synonymous with a rich tradition of excellence. Our sales promotions and materials this year are designed to increase customer sales, raise brand awareness and connect customers with experiences involving their love for racing and the WIX brand. On April 1, for example, we are rolling out a die cast of one of the most recognizable American cars – the 1939 Ford Deluxe Coupe – as part of our collectible die cast collection. The collectible is captured in 1:18 scale die-cast replica, complete with a custom paint scheme and vintage 1939 North Carolina license plate detail to commemorate our 75th anniversary. Other highlights in 2014 include: the WIX Filter Sale Day promotion; specialized, hands-on training sessions through the WIX Institute of Filtration Technology; and the popular WIX Hummer H2 mobile marketing unit, which is set to eclipse a half-million miles driven since its inception in 2004. SO
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Shop|Operations|
by Bob Cooper, president, Elite Worldwide, Inc.
Selling Auto Repair in 2014
Focus On The Value And Benefits Of Your Services As our industry continues to evolve, there are a number of changes you need to consider. Cars are being built better, so they are lasting longer. With service intervals constantly being extended, you will see your customers less often. Additionally, as the competition continues to heat up, your advisers will need to be razor sharp from that first call through car delivery. Here are some tips that can help you be more successful this year when it comes to driving up your sales and customer satisfaction. 1. With first-time callers just a mouse click away from contacting another shop, you need to ensure that your advisers are at the top of their game when it comes to selling themselves, and your company, to the caller. Remember, customers need to feel comfort-
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able with your adviser before they will be open to recommendations. You should sit down with your entire crew and create a list of the top five reasons people should choose your shop. Rather than listing the same features your competitors would list (equipment, warranties, etc.), your list should include items such as your culture of never putting money ahead of people, the fact that you’re AAA approved, that you’ve been
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serving the community for more than XX years, have 5-star ratings on review sites, etc. 2. With vehicles lasting longer, your advisers need to be really good at selling maintenance. Most advisers make the fatal mistake of focusing on the parts and labor, rather than the benefits and value of the service. Instead of trying to sell the spark plugs and filters that your customers don’t want to buy, your advisers should be telling your customers how the maintenance will help squeeze every mile out of every gallon of gasoline, protect their vehicle manufacturer’s warranty, maximize the resale value of their vehicle, and the like. At Elite, every student who goes through our sales training meets with their coworkers to create a “benefit list” for their more popular services,
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and then reviews that list prior to presenting the sale. The results have been outstanding, so I would strongly encourage you to do the same. 3. When customers need a major repair, like a replacement engine or transmission, make sure your advisers don’t jump to the conclusion that the vehicle is not worth fixing. For example, if a customer needs $5,000 worth of work to put his/her vehicle back into toprunning condition, in many cases, it may very well be a great investment for the customer. As we all know, when someone buys a used vehicle they are buying two things: a lot of unknowns, and someone else’s problems. On the other hand, if they invest in their
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own vehicle, they’ll know exactly what they have, those repairs will be warrantied, and they won’t have to go through the exercise of selling their vehicle and buying a replacement. You should have an in-depth conversation with your entire staff about major repairs, and how, in many cases, they are the perfect solution for your customers. You should then discuss how you can help your customers cost-justify the investment. For example, if a customer in need of a major $3,000 repair were to keep his/her vehicle for just three years, the investment would be less than $100 a month. There is no way they would be able to purchase a replacement vehicle for anywhere near that low of an amount. Your advisers need to help your customers through the math because, not only is it their job, but they have an ethical responsibility to help your customers make the right decisions.
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4. Never stop the selfimprovement process. You should have your advisers record their sales presentations in a way that meets with all applicable laws, then once a week you should review some of those recordings. This will give you the opportunity to congratulate them on most of their sales and have a conversation on what could have been done differently on those that were lost. If you follow these tips, and if you never put money ahead of people, your sales and your customer satisfaction this year, will go straight up. 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-onone coaching from the industry’s top experts. The company also offers shop owner 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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Shop|Profile|
by Debbie Briggs, contributing writer
Brighton Auto Service Federated ‘Shop Of The Year’
In an age of social media and constant connectivity via smartphones, who you know can help make or break your business. Just ask Bill Wasylyk, Bobby Lee Keeney Jr. and Eric Muir, co-owners of Brighton Auto Service in Brighton, MI. Their long-standing association with Federated Auto Parts has played an integral role in the shop’s success.
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Brighton Auto team (L to R): technician Tom Summers; porter Les Jankowski; technician Chris Donovan; technician Mark Boon; technician Alan Abdella; technician/owner Eric Muir; owner Bill Wasylyk; owner Bobby Lee Keeney Jr.
“Working with Federated member Motown Automotive Distributing has helped us remain competitive and offer our customers excellent prices on top-quality parts,” Wasylyk says. “Also, we belong to the Better Business Bureau, ASA and ASE. We are constantly striving to partner with any association that would increase our exposure and benefit our customers.” It’s that kind of commitment to customers that has resulted in Brighton Auto Service being named the Federated Shop of the Year. The annual program recognizes a top shop with a demonstrated track record of excellence in such areas as customer service, quality repairs, knowledgeable staff and community involvement. Brighton has been providing top-notch repairs and customer service since 1986.
Quality Repairs Known for the motto, “We fix almost anything on almost any vehicle,” Brighton Auto Service has eight bays,
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with several having the capacity to double-stack vehicles for a total of 10 service stations. While its six ASE-certified technicians specialize in both foreign and domestic vehicle repairs, the shop is recognized as the import expert in the Brighton area, due to Muir’s continuous efforts in the area of education as the shop’s number one tech. “We specialize in all types of
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repairs, from the most difficult driveability problems, tuneups, engine and transmission replacements, to oil changes and other basic maintenancerelated issues,” Muir says. “We really do fix almost anything on almost any vehicle.” Advising Brighton’s six ASE-certified techs, Muir holds associate’s and bachelor’s degrees, in addition to his ASE Master Technician status, which he has held for 28 years. With the company since 1991, Muir is also certified in H-D Truck and maintains an L1 Advanced Driveability certification. Not surprisingly, employee retention comes easily when you offer competitive pay and a pleasant, professional work environment. Having a reputation as a premier family-owned repair facility doesn’t hurt either. “Typically, based on our reputation for being a topquality, very busy shop, we maintain a very low rate of turnover, so our need to recruit new employees is very minimal,” Wasylyk says. “When, and if, a new technician is required, we have many technicians responding to an ad placement or a wordof-mouth mention.” Wasylyk and Keeney also make it a point to offer their technicians continual training from many different resources and, as a rule, encourage their employees to attend all training offered from various technical resources, using OEM scan tools and the latest in diagnostic equipment.
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“This is the only way we can stay on top of the diversity of repairs that we work on across all nameplates, import and domestic,” Keeney explains.
Quality Customer Service
We perform only the repairs that are needed and never oversell or recommend work that is not necessary.” Word of mouth is the backbone of Brighton’s steady customer base, but the shop does advertise — and
Brighton’s owners say they attract and maintain customers by offering them quality service at a fair price. What that means for customers is that they never have to worry about inaccurate work or paying for unnecessary repairs. “We install quality, branded parts and participate in a nationwide warranty program that gives our customers assurance and confidence in our repairs,” Keeney says. “We also offer a free shuttle service and customer pick up and drop off when needed.
support the local community — by promoting various area children’s athletic programs. They also maintain a website, www.brightonautoservice.com, as well as actively participate in social media. “We continue to work diligently at creating a website that interacts well with our
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customers,” Wasylyk explains. “Recently, we contracted with a new provider to track and maintain customer feedback and to modernize our website so it is completely interactive with our customers. Our desire is to continue to improve our website and social media programs to increase our customer base and to keep them informed of all our monthly specials and quality initiatives.” And it’s those quality repairs that keep customers coming back and telling friends and family about their positive experiences at the Michigan shop. “We sustain our business by treating our customers fairly and limiting our comebacks to a minimum,” Muir says. “Our success is based on the word of mouth of our quality work and the high percentage of repeat customers. Our customers now span a new generation of customers who
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come to us for their repair needs because we repaired their parents’ and grandparents’ vehicles!”
Quality Parts, Fair Prices Always neat, clean and inviting to customers, Brighton Auto Service features a professional atmosphere and relies
our organization.” Wasylyk sums up the shop’s success by going back to the shop’s core values: Providing its customers with the best value possible, using quality Federated parts that are installed correctly the first time and at fair prices. “We are deeply committed to offer-
“We promote a professional attitude, with a pleasant work environment, and supply our technicians with the opportunity to learn and grow within our organization.”
on superior workmanship to set the shop apart from the competition. “We would rather offer fair prices than to have an extravagant facility,” Keeney explains. “The best strategy we know to boost shop profitability is to offer our valued customers excellent work at a reasonable price. This strategy keeps us very busy! “This strategy also relates to how we boost productivity,” he continues. “We promote a professional attitude, with a pleasant work environment, and supply our technicians with the opportunity to learn and grow within www.ShopOwnerMag.com
ing our customers the absolute best service possible at the best possible price, using only quality OEM or aftermarket parts,” Keeney says. “We are also committed to the latest, most advanced cutting-edge technology available in our industry. This ensures that we can fix almost any problem our customers may encounter.” With that kind of dedication, Brighton Auto Service is sure to continue to live up to its customers’ expectations and provide repair excellence for many years to come. SO
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30,32-35-Buying_Selling_Art Blumenthal 3/11/14 3:17 PM Page 30
Buying & Selling|An Aftermarket Business
by Art Blumenthal, MBA, CBI
Case Study: Overcoming Daunting Challenges Selling An Automotive Aftermarket Business “I recommend to anyone who is looking to sell their aftermarket business to obtain the services of a business broker who knows our industry. Art Blumenthal is the model for that, and he was so good that once we settled, he was the first one I paid.” — Sam Mitchell, Seller of Mitchell Tire Service (Goodyear Independent Dealer), Glassboro, NJ
While every transfer of business ownership is unique, unforeseen challenges — in this case, a national business recession that resulted in decreased sales and complicated by environmental and family ownership issues — can cause the selling
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process to drag on for what seems like forever, to the frustration of all parties involved.
Family-Owned Business Mitchell Tire Service, a Goodyear independent dealer-
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ship in Glassboro, NJ, was opened in 1951 and moved to its current location in 1954. It was family-owned and operated by the Mitchell family for more than 60 years. Sam Mitchell was just a kid when his father and uncle first built the business as partnered owners. Sam owned another business for 27 years in an area about 20 miles away when his father passed away in 1999 and his uncle asked him to relocate to help run Mitchell Tire Service. Sam and his brother and sister were the heirs to their father’s percentage of ownership of the business. Over the next three years, until the estate was settled, Sam sold his former business and became a full-time manager. “As joint owners, we hired a local business brokerage firm in 2002 to represent us for a year, with the goal being to sell the business and split the proceeds,” Sam said. “There were no positive results to that effort. That may have been because we were just asking too much for the business. “But since I was running the business, and we had no viable takers, it was decided in 2003 that I would continue as the manager. At the same time, Goodyear had created the Goodyear Gemini Automotive Care program, so we dove into that and did quite well. During the next four years, until the recession hit in 2007, we shopped the business around on a word-of-mouth basis within the Goodyear community of independent owners. Every year we had one or two people who were interested in
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the business, but none of them ended up being financially qualified buyers.”
Automotive Aftermarket Business Broker Sam and his team hung in there, but sales dropped precipitously over the next few years. In 2011, he saw an ad and contacted me for business brokerage services. “Over the next couple of months, we worked together in formulating a selling plan, including the creation of a comprehensive marketing package with financial statements,” Sam said. “We were selling both the real estate and the business. Sales for the business had gone down significantly, so most of the value was in the real estate. Art arranged for an appraisal, a real estate listing agency and demonstrated how important it is to have a specialist in the automotive aftermarket to properly prepare for a sale.” Goodyear is a globally recognized brand, offering total car care including brakes, oil changes, scheduled maintenance, air conditioning, steering and suspension services. So, we marketed Mitchell Tire Service as an independent Goodyear retailer — an established, turnkey operation that already has equipment, inventory and employees in place. The store had recently transitioned from the Gemini Automotive Care Program to the new Goodyear Tire and Service Network. The well-maintained, fully equipped shop of approximately 9,000 sq.-ft. has nine service bays and extensive tire storage areas. The shop is staffed
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with two experienced service managers and four full-time technicians. Approximately 60% of sales were derived from automotive service and 40% from tires. Mitchell Tire Service has an excellent customer service reputation built by the Mitchell family ownership and has provided brand-name tire products and consistent service to a loyal
leading national and local chains. Within only a couple of weeks, we had two interested buyers. In fact, Sam was thrilled to obtain not just one, but two letters of intent within the same week. Sam decided to pursue the higher offer and embarked on a year-long journey of environmental studies and contract issues. The prospective buyer contracted
customer base. It’s located in an area of population and economic growth.
with a firm for a Phase 1 environmental report, followed by Phase 2 testing. Long before, in 1995, a gasoline tank had been removed from the property, and the Environmental Protection Agency through the State of New Jersey had issued No Further Action documentation. The conclusions of the 2011 Phase 2 testing recommended additional testing and monitoring
Environmental Issues In July 2011, once preparation was completed, we began to confidentially advertise the business on the Internet and actively promote the business to my network of executive contacts at
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wells, carrying a cost of $50,000, which the prospective buyer wanted the seller to fund. Despite best efforts to reach a compromise, negotiations broke down and the prospective buyer backed off on the deal. “This whole process dragged on for a year, until the second half of 2012, and we were all extremely disappointed that we had lost the deal,” Sam said. I was then able to obtain a Letter of Intent from a local four-location chain with a purchase offer for less money, but, by then, Sam was eager to sell and willing to agree to less if it was a cash deal. “That deal broke down because the attorneys for both sides could not work out a satisfactory compromise on the environmental representations to be included in a purchase agreement,” Sam continued. “By that time, it was the end of 2012.” We persevered and, in early 2013, found interested prospective buyers. But either they could not financially qualify or would not tackle the environmental issue.
tal situation was complicated, but that buyer was willing to control the testing and was satisfied enough to proceed with the transaction with no representation from the seller and a limited amount of money put in escrow. It successfully closed in August 2013. When Sam was asked if he missed the daily grind of the business, he said, “Funny you should ask that. The answer is ‘No!’ My uncle retired about eight years ago and I was the lone hands-on manager right to the end. Over the past couple of years, I was really feeling the pressures that accompany business ownership. That included everything from managing the six employees, to doing the books and payroll on a new computer system, to jumping in and helping the techs when we were busy, to bearing the financial stress of dramatically increasing taxes and overhead expenses, to shoveling the snow. “I do miss customers and my guys, but my only regret is that I didn’t meet Art sooner and sell the business eight or 10 years ago.”
Successful Closing
Seller’s Advice to Other Sellers
In March 2013, I was able to get the other original interested major chain buyer engaged again. The environmen-
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Sam was asked if he had advice for other aftermarket business owners
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contemplating selling a business. He responded, “Based upon my experience, I would advise them to first get their ducks in a row regarding any potential environmental issues they may have. Environmental testing can have far different conclusions based upon which firm is doing the testing. “But over and above the very specific environmental testing challenges I experienced, it’s important to have thorough environmental records and manifests by reputable firms regarding drains, grease traps, and tire and used oil and anti-freeze removal. Most
fessionalism in representing us very much. He really looked out for our interests throughout every aspect of the process and, due to the many stressful challenges facing this sale, was able to calm me down on more than one occasion so that we could continue moving forward. “I learned that as a result of his extensive background in the automotive aftermarket, both as a shop owner and in the auto service software business, Art had many industry CEO contacts and could pick up a phone, make things happen and get things
“When contemplating selling a business, I would advise owners to first get their ducks in a row regarding any potential environmental issues they may have.” — Sam Mitchell, Seller of Mitchell Tire
banks will want to see all that prior to loan approvals. “Also, I think it’s very important to be flexible, and to have a good attorney who will present the proposed contract and not allow negotiations to drag on needlessly while the meter is running. “I recommend to anyone who is looking to sell their aftermarket business to obtain the services of a business broker who knows our industry. Art Blumenthal is the model for that, and he was so good that once we settled, he was the first one I paid. “Throughout the 28-month period, Art persevered and was actively involved in all aspects of the selling process,” Sam continued. “He always had an open line, communicated well and never gave up. I respect his pro-
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done. He didn’t waste our time with unqualified buyers.” Sam is fully enjoying retirement with his wife, Gloria, and feeling free of the stress of running a business, while recognizing that younger people can derive a great deal of satisfaction by pursuing the dreams of owning their own shop. SO 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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Human|Resources|
by Greg Sands, CEO, Mudlick Mail
Improving Employee Performance Set Goals, Then Establish A Tracking Mechanism To Measure Performance
Improving employee performance is a critical issue that most shop owners struggle with on a daily basis. I’ve discovered that building and maintaining a strong team of high performers is an ongoing process that requires a range of strategies, from providing the proper training to offering opportunities for growth.
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For many shop owners, tracking employee performance often falls by the wayside until a major problem arises. Yet, when it comes to achieving goals outside of work, we often rely on metrics to determine if we’re reaching
tracking mechanism to measure performance. The goals and methods of measurement will clearly vary by job. For technicians, we look at the number of hours flagged per week and hours per ticket. We also track rechecks. For managers, we have minimum expectations for sales and margins. The benefit of this approach — in addition to helping provide a clearer snapshot of staff
our objectives. If you want to run a marathon, you track your time. If you want to lose weight, you measure your body fat. The same concept holds true when it comes to evaluating employees. You must set goals for each position in your shop and then establish a
performance — is that it eliminates any shop politics. An employee who is a personal friend won’t receive special treatment if his performance doesn’t merit it and, conversely, a staff member you may not be close with may still rise through the ranks if the perform-
Here’s a look at the methods I’ve used to improve employee performance and reduce turnover.
Tracking Performance
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ance warrants a promotion. I also have employees sign off on what’s expected of them, so they are fully aware of the stakes involved. In my experience, there are usually three reasons for lagging performance. Either the employee doesn’t know how to do the job, isn’t capable of doing the job or doesn’t care about the job. Of those options, the only one you can really address involves the employee who doesn’t know how to do the job. That’s where training proves to be essential. If a manager isn’t meeting sales objectives, it may be that his sales process needs improvement. Maybe he isn’t communicating a sense of urgency to customers. The way to solve that problem is to reiterate the customer service process and to conduct one-on-one meetings to ensure that the employee understands key sales concepts. Of course, if an employee’s performance still fails to improve after re-training, you need to cut ties. For one-shop operators, that requires a stable of talent waiting in the wings so that you aren’t held hostage by poor performance.
dates who seem to switch jobs every year. The past is a pretty good indicator of the future, and job hoppers are likely to continue to repeat their previous patterns. Training is also key in the retention process. An employee who feels helpless and lost will start looking for other options before long. That’s why we don’t track performance for many of our employees until they’ve been fully trained and with the company for at least a month. We reinforce training by having managers check in with new employees regularly to determine if they are happy and gaining knowledge. Remember, a new employee is an investment. You’re not going to recoup your money until that staff member knows what he’s doing. Rewards and recognition also provide incentive for solid workers to stay. There are several ways to acknowledge good performance. • Bonuses are one option, and while we do offer a bonus to managers based on overall store performance and individual sales, it doesn’t amount to a large portion of the manager’s overall compensation package. I personally dislike handing out cash as
Tracking employee performance often falls by the wayside until a major problem arises. Yet, when it comes to achieving goals outside of work, we often rely on metrics to determine if we’re reaching our objectives. Retention Strategies Half the battle with employee turnover is won during the hiring process. When interviewing prospective employees, steer clear of candi-
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a reward because it’s difficult to offer anything else for good work once you’ve established a cash incentive. • Recognition is a great way to
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Don’t underestimate the importance of offering employees opportunities to grow. A top performer will have higher ambitions, and it’s crucial to figure out how you can fulfill those needs. reward strong performance. I’ll take the top salespeople to lunch to congratulate them on their accomplishments. Having that personal time with the boss is something they really appreciate. I also track my managers weekly and share their sales achieve-
ments in a spreadsheet that is circulated among all my stores so that everyone knows who are the top performers. The pride felt in reaching the top of the list serves as a huge motivator to managers. • If you’re a smaller operator, you can achieve the same impact by spending five to 10 minutes of every staff meeting recognizing strong performers and their achievements. Less formalized rewards, such as buying lunch for the staff on a busy Saturday, can also help build goodwill. • Finally, don’t underestimate the importance of offering employees opportunities to grow. A top performer will have higher ambitions, and it’s crucial to figure out how you can fulfill those needs. Because I’m frequently opening new stores, I’m able to offer high achievers the chance to potentially run a new location. For those with smaller holdings, consider offering increased responsibility or even providing ownership in your shop. The goal is to give the employees a reason to stay. SO Greg Sands is the CEO and founder of Mudlick Mail in Acworth, GA. The company provides demographically targeted, direct mail programs for automotive service and repair shops nationally. Greg also owns and operates 29 repair shops across the country. Greg can be reached at greg@mudlickmail.com or 1-866-794-0167.
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Shop|Management|
by Terry Keller, shop owner and president, Auto Profit Masters
Improve Customer Satisfaction And Your Bottom Line Day By Day Choosing shop management and point-of-sale software is a bit like buying a vehicle. The sheer number of makes and models available can be intimidating for a shop looking to get started or change to a new system. With that being said, maximizing your use of shop management software is critical. Shops with hand-written repair orders are at a significant disadvantage
not only in the 30,000-foot view of their shop, but also when it comes to basics like proper customer followup. So, how do you choose
Regularly checking data such as your average repair orders, over time, will allow you to better react to trends both in the short and long term.
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Another way to use your shop software to the fullest is by tracking your marketing efforts. If you don’t track which coupon you’re getting back from which mailer, you won’t be able to replicate your success.
between the different makes and models? Perhaps a better question is: what can you do to get the most out of the shop management software you already have (or are considering)?
Mark It Up One of the easiest and most important things to do to get the most out of your shop management software is to use the parts markup matrix. No matter what your shop software calls it, this is where you set the markup for a particular cost or type. Whether you set percentages or a multiplier doesn’t matter, as long as you’re using it to control your parts gross profit. Since this is one of the easiest numbers to control in your shop, and one of the most important numbers for keeping the lights on, being able to set this (and then actually setting it) is
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critical for getting the most out of your shop software.
Check Your Numbers — Every Day Besides your parts gross profit, there is no shortage of significant shop numbers that you should be looking at every day (or night) to make sure you’re on the right track. In other words, if you don’t keep score, you won’t know if you’re winning. Shop software won’t generally tell you what’s wrong or how to fix it, but it can help you spot problems long before your accountant crunches the numbers at the end of the month. You won’t see that average repair order trending down for weeks and months if you’re not taking the time to track each and every day.
Pay Attention To The Details Of course, you can really only dig in if you actually use your shop software the way it’s intended. Taking a shortcut — like neglecting to assign technicians to a ticket — may not seem major at the time, but skipping these critical steps can really hinder your ability to understand how your shop is performing. In this scenario, assigning a technician to a ticket may not seem like
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it affects much — after all, you can still understand how the shop is performing as a whole without it — but if the shop starts declining, and you can’t see how the individual techs are doing, you won’t be able to make the right decision about who to hire or train. Another way to use your shop software to the fullest is by tracking your marketing efforts. If you don’t track which coupon you’re getting back from
which mailer, you won’t be able to replicate your success.
Mine Your Data Perhaps the most underappreciated feature in any shop software is the ability to export the data so you and your bookkeeper can dig in and learn even more about your shop’s performance — good and bad. If you’re limited to only what the software developer thought would be useful tools, there will almost certainly come a day when you’ll want more. Whether you’re looking for in-depth attrition information so you can see where your best customers
Shop software won’t generally tell you what’s wrong or how to fix it, but it can help you spot problems long before your accountant crunches the numbers at the end of the month.
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are going, or looking to groom an email list for a customer newsletter, shop management software that doesn’t let you export the data easily will hinder your ability to really understand your shop and create great marketing campaigns.
No ‘One Size Fits All’ No shop software is the complete package, however. Questions like “How effective are my service writers?” aren’t easily answered by any point-of-sale system, and, at the end of the day, it’s up to you to find the issues and then train your team to fix them. This is why perhaps the most important feature of any shop management software is that it’s easy enough for you to use and apply every day. If you avoid reports because they’re hard to read or understand, you’ll
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never be able to make improvements. When that happens, you fall into the trap of waiting until the month is over to get the report back from the accountant. By then, it’s too late to act — the money has already been lost; the customers have already been burned. In other words, the best shop management software is the one you will use and want to use daily. SO
Terry Keller is a shop owner, service writer and AMI-Approved trainer for auto repair shops. He is also the President of Auto Profit Masters and creator of the RPM ToolKit™, which integrates with shop POS software to help owners identify problems in their shop and get one-click training solutions. Reach him at contact@autoprofitmasters.com or (303) 795-5838.
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Shop|Profile|
by Debbie Briggs, contributing writer
Casey’s Independent Automotive Repair Success Hinges On Sharing Your Vision With Your Team And Empowering Them To Get The Job Done
The mark of a long-lasting business isn’t just profitability during times of economic prosperity, but also adjusting when things take a turn for the worse. Vancouver, WA, Shop Owner Casey McGowan has seen hard times — and taken the steps necessary to ensure his business not only stayed afloat but flourished as well. “We had to take a hard look at our business model when the economy took a turn for the worse around 2007,” says the owner of Casey’s Independent Automotive Repair Inc. “We work and live in a blue-collar area, so we were hit hard during that time, as were our customers. “In response, we went to a full inspection-based service
model on all vehicles that pass through the shop,” McGowan explains. “We are in the business of advising, not harsh,
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pushy sales. We understand that all repairs and needed preventive maintenance may not always be in the budget right now, so we prioritize, and reconnect with the customer using timely reminders.” This approach not only helped the 12-year-old shop through hard economic times, but also keeps customers coming back for repeat service. McGowan says while he does some direct mail and local advertising, the majority of his business comes from customer referrals. “We want to have our customers for life, not the ‘one-and-done’ jobs that so many repair shops are doing these days,” he says, adding that keeping costs down helps achieve that goal. “I’ve tried to keep my costs down on all the things I can. We don’t want to raise prices to offset swollen and needless expenses. I watch all incoming and outgoing costs, and
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I’ve worked with all of my vendors to receive the best quality parts at the best price. Because of this, I can get the margins I need and still offer my customers competitive pricing.”
Shop Appearance McGowan is quick to point out that a clean, inviting facility doesn’t have to be new, but rather consistently maintained so that customers feel comfortable in any part of the building, which includes 14 service bays. “We believe in showing our customers the concerns in and under their car whenever possible,” he says. “That means they are escorted into the work area, and that’s when they get a feel for your work ethic and dedication to professionalism. “This is an area I feel very strongly about,” he continues. “I feel you don’t have to have a new facility to keep it clean, organized and productive. This is in your direct control, where so many things are not. If customers see a clean, organized work area, equipment that is in its place and not covered in oils and grease, they come to a very
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quick conclusion that this is probably a well-run company that can take care of all their automotive needs. That is what we strive for.”
Professional Work Ethic Casey’s Independent Automotive Repair services all major nameplates whether foreign or domestic, but specializes in automotive and light-diesel
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truck repairs. The shop employs four ASE-certified Master Technicians and three general service technicians. “We offer full benefits, including paid vacations, to all full-time employees, as well as a professional, well-kept work place with a familyfriendly atmosphere that is conducive to positive attitudes,” McGowan says. “I feel a high-performance workplace with a no-negativity policy makes for
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a very productive team.” While he’s constantly on the lookout for new talent in the automotive field, McGowan says he’s been fortunate to have a solid team and relies mainly on word-of-mouth referrals when he is in need of a new employee. “I don’t believe in stealing employees from other repair businesses,” he says. “I used to worry about that
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happening to us, but the more time goes by, the more we have talented automotive professionals contacting us. So, the word is getting out that we treat our employees very well and truly appreciate their role here.”
Always Improving Part of the appeal for technicians and service advisers alike is the shop’s
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commitment to ongoing education. As McGowan likes to say, you “can never stop learning.” “We have an ongoing training program with both online and instructor-led sessions,” he says. “I take advantage of all my vendors’ courses and always offer them to my employees, including service advisers, and management training, which I use myself. There is a golden nugget of information in every session we attend.” In the same way, McGowan is always striving to improve shop productivity, closely following technician time management processes. “We are able to track each technician’s efficiency and productivity as a commissioned flat-rate technician,” he explains. “So, if we see a technician struggling in a certain area, such as diagnostics, we can get him or her the help, training or equipment they need to be more efficient.” McGowan’s ongoing improvement
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efforts don’t stop there, but also apply to the shop’s website, www.caseysindependentauto.com. He currently works with Motorhead Marketing to make sure the website’s design stays current as well as mobile friendly. “Search engine optimization is an ongoing and constantly changing form of marketing,” he says. “SEO is a term that used to fit into some sort of box, but not anymore with so many ways to improve your rankings and opportunities with social media. It really is something you are just never done with.”
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McGowan also belongs to several industry associations, including AAA, BBB, RLO Training, ACDelco and TechNet. He says each one has helped propel his business forward. “I feel they all offer lots of positive, helpful information and support,” he says. “But working with other professional shop owners and management in the automotive repair field has been one of the best things I have ever been a part of. I’m so fortunate
to have professional coaching from people like John Waffler from RLO Training, and the relationships with other owners going through the same challenges as we do. That entire process is invaluable.” When it comes down to it, McGowan points back to the shop’s
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commitment to exceptional service and customer education as their main ingredients to success in the automotive repair industry. “Make a clear path of where you want to take your business, think outside the box, and share that vision with your employees,” he concludes. “Empower the people around you and let them know that their role in the shop’s operation is crucial to everyone’s success. Let them know how much they are needed as team players, from the car porter to management. Most of all, don’t stop setting goals as a shop owner, and remember that you can’t win unless you are willing to lose sometimes.”
With his clear vision and dedication to quality repairs, McGowan is sure to win more than he loses, with Casey’s Independent Automotive Repair continuing to be successful well into the future. SO
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