Organizing Estimates
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A healthy repair shop business starts with a healthy mind and the right people
The day to day operations of running a business can take its toll on anyone. To be a business owner means to address problem after problem and finding the right solutions. Sometimes the decisions we make will be the right ones, sometimes not. If we are not careful, this emotional roller coaster we call being in business, can make us focus too much on the negative, and not the positive things that happen in our lives. With nearly 4 decades as a business owner, I can say with certainty that one of the basic building blocks of being successful in business is having the right team of people around you and getting yourself in the right frame of mind. You need to find and hire great people. But once you have them, you need to do all you can to take care of them, train them and make them successful in order for you to be successful. Is it easy? No. But it is essential. Most important; you need to treat each day as if it were a gift from the heavens and base your entire perspective from a position of strength and remaining positive. I know it’s not easy, but I can tell you, it works.By Joe Marconi, in Joe’s Business Tips For Shop Owners
- repair shop management
- employee management
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Article: How Much Is Your Shop Worth?
By Bob Cooper If you speak with most shop owners they’ll tell you that they think their shop is worth x amount of money. Ask them how they came up with that number, and they’ll tell you it’s based on what they heard another shop sold for, or it’s predicated on their annual sales. But if you really want to know what your shop is worth, first of all, forget everything you’ve heard about “goodwill” and the fact that you have thousands of names in your database. That’s icing on the cake, but it’s not something a buyer can take to the bank. And although there is some value associated with some franchise names, there are two things that are most important to a buyer: the “tangible assets” and the “income history.”
Tangible assets are things like real estate, cash in the bank, secured receivables, inventory and equipment. To put it another way, these are the assets that buyers could turn into cash if they had to. When you’re establishing the value of your inventory and equipment, bear in mind that the actual appraised value may very well be far less than what you originally paid. So tangible assets are always number one.
In regard to “income history”, we all know that past performance is no guarantee of future performance, yet the substantiated income history of a company is what buyers can use to forecast earnings. And don’t forget: The amount of money the “company” made does not include any income you’ve drawn out of the company as a salary. The company’s income is the amount remaining after all expenses, including your salary, have been considered.
So imagine you’re looking to buy a shop, and let’s say the tangible assets are worth $400,000. In addition, let’s say the shop has a history of generating $100,000 in annual income after all expenses, and let’s say the owner has been drawing a salary of $80,000. So if you were to buy that shop, how much would you be willing to invest? Well, only you can answer that question, but I hope you take these 6 points into consideration:
1. If you were to liquidate after you purchased, how much could you sell the assets for? I call this the “street value” of assets.
2. How long has the company been in business, how long have the key employees been with the business, and what’s the probability that these key employees will stay on once you buy?
3. What is the probability of the company continuing to earn the same $100,000 in annual profits, and for how long?
4. In regard to the $80,000 salary the owner was taking, would you be willing to do what he or she does for the company for the same amount? Or will you be able to hire someone to do that job for the same or less?
5. If you were to invest the same amount of money in any other business or investment vehicle, would you receive a better return?
6. What are the terms of the purchase price? You may be better off to pay a higher price in return for a lower down payment, good financing rates and a non-compete.
So, how do you establish the value of your business? Not by the icing (goodwill and number of names in your database), but by looking at it through the eyes of both a banker and a buyer. Since 1990, Bob Cooper has been the president of Elite, 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 coaching and training 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 learn more about Elite by visiting www.EliteWorldwide.com, or calling 800-204-3548.
View full articleBy Elite Worldwide Inc., in AutoShopOwner Articles
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New Quick Links Section Added
We've added a tab for HOME in our main menu when logged in, which takes you to our home page and same place you would get to by clicking our logo. To make things a bit easier to navigate, we've included 2 rows of Quick Links to help you find important sections and for new members that are learning our site. 😀By Alex, in AutoShopOwner Announcements
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MEN ARE JUST HAPPY PEOPLE
MEN ARE JUST HAPPY PEOPLE This needs no explanation - and is a fun read, no matter your gender. Men Are Just Happier People! What do you expect from such simple creatures? Your last name stays put. The garage is all yours. Wedding plans take care of themselves. Chocolate is just another snack. You can never be pregnant. You can wear a white T-shirt to a water park. You can wear NO shirt to a water park. Car mechanics tell you the truth. The world is your urinal. You never have to drive to another gas station restroom because this one is just too icky. You don't have to stop and think of which way to turn a nut on a bolt. Wrinkles add character. Wedding dress - $5,000. Tux rental - $100. People never stare at your chest when you're talking to them. New shoes don't cut, blister, or mangle your feet. One mood all the time. Phone conversations are over in 30 seconds flat. You know stuff about tanks. A five-day vacation requires only one suitcase. You can open all your own jars. You get extra credit for the slightest act of thoughtfulness. If someone forgets to invite you, he or she can still be your friend. Your underwear is $8.95 for a three-pack. Two pairs of shoes are more than enough. You almost never have strap problems in public. You are unable to see wrinkles in your clothes. Everything on your face stays its original color The same hairstyle lasts for years, maybe decades. You only have to shave your face and neck. You can play with toys all your life. One wallet and one pair of shoes - one color for all seasons. You can wear shorts no matter how your legs look. You can 'do' your nails with a pocket knife. You have freedom of choice concerning growing a mustache. You can do Christmas shopping for 25 relatives on December 24 in 25 minutes. No wonder men are happier! NICKNAMES If Laura, Kate and Sarah go out for lunch, they will call each other Laura, Kate and Sarah. If Mike, Dave and John go out, they will affectionately refer to each other as Fat Boy, Bubba and Wildman. EATING OUT When the bill arrives, Mike, Dave and John will each throw in $20, even though it's only for $32.50. None of them will have anything smaller and none will actually admit they want change back. When the girls get their bill, outcome the pocket calculators. MONEY A man will pay $2 for a $1 item he needs. A woman will pay $1 for a $2 item that she doesn't need but it's on sale. BATHROOMS A man has six items in his bathroom: toothbrush and toothpaste, shaving cream, razor, a bar of soap, and a towel. The average number of items in the typical woman's bathroom is 337. A man would not be able to identify more than 20 of these items. ARGUMENTS A woman has the last word in any argument. Anything a man says after that is the beginning of a new argument. FUTURE Awoman worries about the future until she gets a husband. A man never worries about the future until he gets a wife. MARRIAGE A woman marries a man expecting he will change, but he doesn't. A man marries a woman expecting that she won't change, but she does. DRESSING UP A woman will dress up to go shopping, water the plants, empty the trash, answer the phone, read a book, or get the mail. A man will dress up for weddings and funerals. NATURAL Men wake up as good-looking as they went to bed. Women somehow deteriorate during the night. OFFSPRING Ah, children. A woman knows all about her children. She knows about dentist appointments and romances, best friends, favorite foods, secret fears and hopes and dreams. A man is vaguely aware of some short people living in the house. THOUGHT FOR THE DAY A married man should forget his mistakes. There's no use in two people remembering the same thing!By xrac, in Non-Automotive Discussions
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Yelp, is with worth it?
Hello all, Just wanted some general feed back from a few automotive repair shops regarding Yelp. We have been contacted by a sales rep from Yelp for quite sometime now regarding paid advertisement, though we have declined. We have noticed a few negative reviews, and many positive reviews though they are not being displayed. Is it worth it to "pay" Yelp and see what the outcome would be? Thanks in advance for your thoughts. NickBy CAautogroup, in Auto Repair Shop Management Help? Post Here!
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