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By Elite Worldwide Inc.
By Bob Cooper
According to a recent article in the Wall Street Journal, some CEO’s are starting to understand the price they have to pay for quick profits, and many of them are now taking a different approach. Although all companies should consider their long-term growth and financial stability, there has been an ongoing challenge that today’s CEO’s face; the relentless demand for immediate profits that is put on them by their stockholders.
Look at it like this. Publicly traded companies (i.e., Delta Airlines, General Motors, etc.) are owned by stockholders just like you and me. Although small investors like us don’t have a voice with such large companies, there are Wall Street fund managers that do have their ear. These are the people that buy and sell stock in staggering lump sums, and in order to entice those fund managers to invest in their companies, and to then keep that money invested in their companies, the CEO’s need to show strong profits not just for the year, but for quarter after quarter. The CEO’s know that if they miss their earnings (profit) mark, then there is a strong probability the fund manager will consider pulling their investment, and investing their money elsewhere.
In summary, investors like you and me put pressure on our stockbrokers to generate good profits for us, and in order to do so they put pressure on the fund managers, who then put pressure on the CEO’s. The end result? The CEO’s know if they don’t deliver, they may very well be out of a job, which is why so many of them are far more focused on short-term profits than long-term success.
Are their exceptions? You bet, and the late Steve Jobs is a classic example of someone who had a long-term vision and who invested his profits back into Apple. Of course there are others who do so, such as Warren Buffet of Berkshire Hathaway and Bill Gates of Microsoft, but they are few in numbers compared to the CEO’s that are driven by short-term success.
So now that the Wall Street Journal is reporting a shift in how CEO’s think about squeezing the golden goose, you may want to revisit your shop’s business strategy as well. Since Steve Jobs is considered by many to have been the greatest CEO of all time, you and I should certainly feel comfortable following his lead.
How you view and operate your shop is certainly a personal decision, and I understand everyone is going to have different goals in mind, yet I feel there are some principles in business that are too good to be new. As Steve Jobs showed us, one of these principles is that we can’t let short-term interest or a quest for immediate rewards overcome our better judgement. Let your competitors make that mistake. Instead, just as Steve did, you need to set long-term goals that you believe in, you need to create a plan for reaching those goals, and then you need to constantly invest in your future. Some examples would be investing in training programs that address the newest vehicle technology, or taking the time now to implement an apprenticeship program that will help you develop your own superstar advisors and technicians in the coming years. I’d also recommend launching marketing campaigns that build your brand and focus on your principles, rather than campaigns focused on discounts that are designed to generate immediate sales. These are all surefire ways of investing in your future, and keeping you well ahead of your competitors.
If you follow the example that Steve jobs set for us by reinvesting in your company, and if you live by the principle of never putting money ahead of people, you will see what your competitors will more than likely never see; a more profitable, successful business that is good for you, your employees, your customers and the industry. I am sure you will agree that beyond the great products, Steve Jobs gave us quite the gift; a lesson in how to build an incredible business.
“Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with online and in-class sales, marketing and shop management courses. You can contact Elite at [email protected], or by calling 800-204-3548."
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Anyone who uses all data manage online has seen the new "recommended jobs" which is associated with canned jobs. I'm curious how canned/pre-priced jobs effect your margins. For instance, we primarily work on pickups so my concern would be if I price a brake job for a 3500 Dodge it would leave the canned price to high for smaller vehicles. This does seem like a nice way to speed up the write up, I'd like hear how everyone else does this.
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Do any of you just say no to certain jobs that are a guaranteed nightmare? Maybe Ztec timing belts or F150 exhaust manifolds to give an example. I do but I feel bad. I've done manifolds on newer trucks, booster comes off to drill out the studs, engine jacked up to drill another one, its just something I don't have any interest in doing. I have the tools, experience, and skill to repair pretty much everything, but some jobs are just not worth it to me. I can't count how many times both arms are coated in grease up to my shoulders and after ten hours its not even close to being done. Why did I take this job?
I hate to be a gravy tech or a gravy shop but if I'm turning down 5 brake jobs to do one rusted manifold what did I accomplish? Man card credit? Ego boost? Pride? No thanks I'll pass.
I have a help wanted out for a technician. A tech that I know applied for the job. He is a very nice person , ASE master, L1, and about 10 years of experience . He is a very smart and capable tech,His down fall is that he has had six different jobs , after a year or two his performance drops and he leaves. The reasons vary : performance, personal reasons etc. I have had very little response to my ad. Do I take a chance and get some time out of him or pass and keep looking? Thank you for any responses .
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By Joe Marconi
Some repair operations have finality to them. By that, I am referring to jobs that do not require additional labor after the job is complete. For example; installing a tail light lens, set of wipers, an air filter or cabin filter. Once these jobs are done, they are done.
There are other labor operations, such as brake work and wheel alignments, that even though a road test is required after completion, there is enough gross profit built into these jobs, that we do not need to worry about the total labor charges.
Now, let’s take an O2 sensor, catalytic converter or other similar jobs. Theses jobs are not over once the part is installed. The tech needs to retest the system and the component, verify the repair and road test the vehicle. In addition, more time is needed to sell that type of repair. Where I am going with this? Understand that you need additional labor charges for retesting, verifying the repair and road testing.
The labor time to replace an oxygen sensor is only part of the repair. You also need to account for the additional time needed to complete the operation: retesting, verifying and road testing. Not taking this into account could hurt labor production, which will affect your bottom line.
Oh yes, I am hoping that everyone is getting paid for testing too.