SprinklerMagician

I'm curious how things are going now. I did almost exactly the same thing that you have outlined here and I am making more money working less. I'm not burnt out anymore. How are things now?

Old post but I'm going to reply. Look at your objectives. Why are you doing what you are doing the way you are doing it? The answers can be deceiving. Obviously we are all trying to make money. So lets break it down. Maybe we want a higher car count or a higher ARO. I'd say forget all that has been said above (albeit very valuable in and of itself in the proper timeframe) and look at what you are doing for a minute. If you were all by yourself with no employees would you be making money? How much? Those activities which generate lots of profit can be delegated to employees, those that don't necessarily generate tons of profit (oil changes maybe) are killing you. It is amazing how one man or a two man shop can survive just fine and cover overhead, but if you go to three and things aren't organized for efficient scaling and things get out of hand real quick and to track the source of the issue seems impossible. The issue seems invisible. Then we start working on improving the wrong things. My guess is that one or more of the following applies: 1. Your guys aren't busy and this is why you are paying them hourly. 2. There are some or a lot of things that take your or your employees' time that generate no revenue, and this seems okay because you aren't overworked. 3. Your guys aren't so good that they can run the shop without you, so you have to be there making things work. That making things work thing doesn't directly generate revenue in and of itself. 4. Warranty issues are getting out of hand. Could you cover your overhead if you were the only tech? If not then could you do so with a two man show? If not then prune the overhead out. If so then I'd say try that and use the third guy part time as needed. If he is unwilling then you have to work as a two man show until you have nailed the model, have made money to prove you can be successful then you can grow. This is hard because you will have to say no to more work. I've learned that if you can't make money being small then getting bigger only makes the problem worse whereas most people thinks it gives them a competitive advantage. I also believe that treating people right and eliminating advertising costs is a better way to acquire new business. Referrals are better anyway.

I agree. When they pay for something it has to be fixed. If it is going to cost more to fix it right they need to know. Every time they are going to blame you for the problems even though they weren't your fault. Try to fix everything you possibly can and they will more often than not be happy to pay the extra money to have it fixed rather than a little money for a broken car.

As a business you are responsible to your customers. You rely on your employees to support you in this but in reality all the responsibility rests on your shoulders. If your tech is doing side work, even at home or another location, then he will favor his clients over yours because he is fully responsible to them whereas responsibility to your customers is shared between you and he. If I find out that any of my guys are doing side work, even at home, they are fired immediately. When heads roll that sends a clear message to everyone else that if they want to work there they abide by the same rules. Vice versa if you let this guy walk on you then everyone is going to be asking. Just like you and me I realize that all their friends are going to be asking them for help with their cars. These guys have skills and to bottle them up can sound cruel to them and so my answer is this: No revenue for side work, not even parts. You can help your friends if you don't charge them a dime. They have to go to Oreilly and pay retail for their parts and bring them to you, then you can help them. Otherwise you are a referral partner and drive traffic to the shop. If I find out that you are competing with me then your employment will be terminated immediately. Follow through or your guys will walk all over you.

I would look at it from your tech's eyes and from your customer's eyes. She brought the car in and she got it back with something she had to take care of. If you take care of her, even if she is willing or says she is willing to take care of it on her own, then she will be your customer for life. If she has to pull teeth to get you to fix it then she isn't coming back. Making her happy in this case will cause her to trust you more than if nothing had ever happened. Your tech lied to you because he doesn't know how to fix it. He doesn't want to be responsible because he isn't. Being lied to and letting him get away with it sets a precedent to permit that kind of relationship/behavior in the future, not just with him but with all your techs. Not good. I am not perfect and this is probably not the best solution but here is what I would do: 1. I would fix the customer's car myself because I don't want anything to be at all wrong to cause her to come in again; or worse to not come in again because she feels sheepish to complain again. If I felt so to do I might repair whatever was causing it to not work in the first place. It may cost a lot of money but she may then offer to pay, but at a minimum she will be referring anyone she can to your shop. 2. I would tell the tech that I value him and his effort to make my business a success, but that trust is of utmost importance in the process. I would tell him that I hope that he would feel comfortable telling me that he broke it and that he is uncomfortable fixing it if he thinks he isn't capable. Then I would state to him that I know that he lied to me and that if that happens again that his employment would be terminated; this isn't up for argument this is a statement. If he tries to argue that he didn't lie then he still is not trustworthy and I would fire him right then. Everybody makes mistakes, but that doesn't make it acceptable because someone has to pay for it. You are the shop owner and the tech is the employee, you bear the risks of running the business; however I see the viewpoint of others that the tech should be the one to pay for it and I would agree if I trusted him to do it properly; but based on the fact that he may only be a tire tech and that you are a risk bearer yourself and that I in your shoes am thinking about my future relationship with a customer who may have lost trust in me (not my tech), I would have done as I have stated above. Sounds like you have things figured out.

That is a different business strategy you are pursuing. My questions are these: 1. Does opening up a second shop create any competitive advantages that cannot be obtained with one shop? 2. Does the second shop run on its own or does it eat up your time constantly? Could you go out of town for 2 weeks without things falling apart? 3. Can you hire and pay good people to fill the positions created? Hiring good guys is almost impossible now. 4. What will you be doing on a day to day basis and do you want that change? 5. Is your client base resilient in recessions? 6. Is there enough room in the market for it or will that location be slow (a profit looser) for the first while? 7. Have you got it nailed? Are you doing well at what you are doing now? Don't think that getting bigger will solve all the headaches of the day because it will just make them worse. You have to have everything figured out before you scale. If you can answer favorably to those questions then I say go for it.

I agree with all that has been said above, In addition to that I will say that the building is communicating something that your service writer needs to do his best to communicate when and if he can. When you go to a restaurant that cooks your meal improperly you can tell the instant you put it in your mouth that the service was poor. When you pay a law firm to write the terms to your contracts to protect your business legally you hope that your service wasn't poor; but you will only know if ever there is legal action against you, so in reality you may never know. Most people don't speak the language of auto mechanics and they are screaming for some reason to believe that they are being taken care of. That big fancy building is playing a part in communicating that. If people can be educated that what I have done was the best way to do it or that I found extra problems and fixed them better than the last guy or that I used better parts or something along those lines then they always pay my high rates and say, "thank you for doing it right." If that can be communicated then they will come back forever. If you get a big fancy building then you eliminate your competitive advantage and paint yourself into a corner with high overhead. Just be honest and make sure that your customers feel that honesty every time they come in. Take care of them with a smile when they have warranty issues and they will send all their friends. If I can say one more thing it would be to increase rates if necessary. Often times people believe that if they are paying less then they are getting less and that if they are paying a lot then the service must be good. If you are doing good work you ought to be making good money. People will see those rates and expect good service rather than sub-par service.

Just my .02. It seems like every time I am on the fence about letting someone go it eventually happens. It is down the road that I can see more clearly that they were terrible and that they screwed everything up. Things work better and you end up being happy they are gone. It is a hard decision to make because what you are really worried about is your workload and trying to figure out how you are going to do it without them. The truth is things end up working out in ways you can't see. Every time I have fired someone I have wished later on that I had done it sooner. However I haven't painted myself into a corner with large overhead. I have been fired before and it was hard on my ego. I have decided that it is irresponsible for me to hire someone who I will need to fire. If I can foresee problems then I don't hire. This keeps you out of the place of keeping someone because you feel bad for them. I also try to decide if they need to be kept or fired, then decide how to do it; those are two decisions. How I am going to fire them or what I am going to say or how they are going to react cannot play a role in the decision to keep them or not.