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How to prevent exodus and hopefully hire someone too


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Hi,

I am in a process of purchasing a “functioning” shop where two mechanics (one A and one C) working as a father and son team. I would love to change some things at the shop right away, but know it could be a recipe for disaster. So I am thinking to work with them for a couple of month until they feel more comfortable with me, then start giving them job descriptions/expectations etc.

My nearest goal is to grow the business, so hiring new tech(s) is a must. How do I make the two original techs comfortable with the idea? I suspect they are pretty set in their old ways of not having anyone there. Any suggestions?

Oh, and if you happen to have a set of questions that you usually ask prospective tech employees/candidates, please PM me.

Thanks!

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I worked for a company that went on a buying spree to grow their business.

 

One of the "secrets" to a successful buyout transition was never to announce in our marketing that we were the new owners. We told customers that the old owners were taking long deserved vacations. Other than the legal announcements to vendors credit dept. we would keep the transition a very low profile as not to disturb people's sense of trust in the business.

 

We placed our counter people shadowing the old owners for two to three months, thus giving people the sense of familiarity with the new counter people.

 

As to the mechanics, we evaluated the mechanic's work history and performance. As much as possible we didn't change their work habits if they were productive and efficient, when we found deficiencies we would write an operating procedures manual and then trained them to adhere to it. Those that were not a good fit for the business were let go.

 

I did about 70 stores this way in over 10 years. Very successful way of buying businesses.

Edited by HarrytheCarGeek
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They are paid pretty well already, but no profit sharing right now. I don't know at the moment how good they are because I have not seeing them do the work yet, so profit sharing % will depend on their performance.

Do you pay them % bonus at the end of a week on the net profit?

I will be shadowing the owner, but he does not want to stay that long, so maybe will shadow him while negotiating :)

Thank you for your suggestions!

Edited by nmikmik
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I will be shadowing the owner, but he does not want to stay that long, so maybe will shadow him while negotiating :)

 

 

That's a red flag, if they are selling a successful business they should not have an issue with staying an annual quarter. If they do, that tells you that maybe there are other issues they are in a hurry to exit the business.

 

If they are in a hurry to sell for undisclosed reasons, you may want to reflect that in your purchasing price. I would not pay a premium on a business that the old owners would not like to stick around a bit. In a particular case as that, I would write off the business goodwill and just purchase the lease/real property and other tangible assets. My two bits.

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Thank you CarGeek,

 

That's pretty much what I am doing - hopefully today.

Maybe I am overpaying 15-20% over the asset value, in a rough estimate. I just came to conclusion that there is no good locations left in the area and I am paying for the location :(

btw, meant to tell you. 70 stores purchased and kick-started - wow!

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Thanks Jeff,

sounds reasonable, i just need to figure out how productive they are.

Between being honest about the changes and giving them an incentive to work hard, we should be ok ha B)

Edited by nmikmik
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I pay my guys a fairly low salary then they get a percentage of labor. IE, 300/week and say 20% of the 80$/hour they complete. It seems to keep them motivated but at the same time they feel save knowing even is we would have a slow week they get paid.

 

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  • Have you checked out Joe's Latest Blog?

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      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
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