Joe Marconi

Let's not forget that the economy goes in cycles and right now we are in a serious down turn. People react to both postive news and negative news. It will be tough to get through this period, but we will endure.

What kind of an impact do you see this will have to the aftermarket???

Thanks for those positve comments. Part of reason I decided to expand was to increase market share in my area. As general repair/service shops, we need to increase our data base, from which to draw upon. Stayed tuned for more updates as the project continues, Joe

Do you think people are relunctant to spend out of fear or becuase they are suffering financially?

We have tried back to school specials with little sucess. It appears that those who are concerned about the condition of thier cars before heading back to school bring their cars in anyway.

It's survial of the fittest. In these changing times, the cream of the crop will rise and become the champions.

Before I made the final decision to expand from 6 bays to 10, I asked myself a series of questions: Why expand? How will the expansion affect my current business? How much of an increase in car counts do we need in order to support the expansion? How much of an increase in revenue do we need to support the new mortgage? How will this affect the future of the property? Will the population in my area justify the expansion? Who is my competition? What legal steps do I need to take? Are there demographic trends in my area that would be a benefit or hindrance to the project? What do I need to learn in order to make this work? As I mentioned in previous blog entries, you cannot take on a project of this size by yourself. There are just too many variables and issues along the way. Plus, I needed to also pay attention to my existing business. I give a lot of credit to people like Donald Trump and Bill Gates who have the talent and genius to organize large projects. But their strength is in HOW they organize the project, not in actually WORKING the project. You will never see Donald Trump working a crane or bulldozer, nor will you ever see Bill Gates assembling a hard drive. Their strength is in their vision and ability to bring a project from concept to reality. Since I don’t have the financial resources of people like Bill Gates, I needed to organize the project, create a plan and outline a detailed list with goals of items that needed to be done. After the initial concept and business model was created, I created a goal sheet of all the things that needed to be accomplished. This included items such as meetings with contractors, a site engineer, an architect, my bank loan officer, a business consultant and my lawyer. My plan had to make legal sense and financial sense. The next step after I picked my professional team was to create a goal sheet and timeline that I could refer to on a weekly basis to get periodic updates from my team. In this way I could track their progress and make adjustments. This team would be needed to get all the town approvals and permits. This process took almost 2 years. While all this is happening, the actual business model, building design and details of the new facility had to be developed and refined. My next blog entry will outline the next steps. Stay tuned!

Has it become more of an issue with the economy the way it is lately or do things seem better???

Jake, have you any issues once the car is in the shop about pricing in this economy?? Joe

Thanks to all for the positive response to my expansion. I will update my blog this weekend and as soon I can I will start to post photos. The foundation for the building was completetd last week so there is not much to see at this point, but It might be fun to watch the project unfold. So stayed tuned for more info and photos Thanks, Joe

Most shops put their best tech (which is usually the highest paid tech) on tough diagnostic work. Shops also spend tons of money on equipment and education. What this means is that if the labor dollars don’t match the time and investment for that tech to work on a particular diagnostic job, the shop losses big time. I agree with you that we need to look at the bottom line and not micromanage our business. But, as we see more and more hi-tech systems enter our shops, we will no doubt see an increase in labor time devoted to hi-tech analysis. Much of the profitable work we did 20 years ago is no longer required on the modern automobile and shops find it hard to fill the bays. Times are changing. I believe that if the customer is approached correctly, you can get paid a decent price for diagnostic work. We are becoming specialists and need to be compensated for that.

For years we have used aftermarket cats with no problems. We recently had an issue with a Honda. The vehcile came back with the same cat eff code. After a bulletin search we found Honda had an updated cat for this car. I am not saying go to the dealer as your first choice, but only suggesting that you do a bulletin search on any diagnostic work. The dealer cat solved the problem.

Shops need to get paid for diagnostic time. Why is it that I speak to so many shop owners who have a fear charging for what they are worth? If I hear one more time that it only took his tech 20 minutes to diagnose a faulty O2 sensor or if the customer agrees to the repair they remove the analysis charge, I just may shoot someone! Shop owners have NO problem selling 1.2 hrs for replacing front brake pads and rotors on a Honda Civic which takes most techs about 15 minutes, but struggle with charging diagnostic time???? What about all the years of training, cost of diagnostic tools, updates, Alldata, Mitchell, IATN, Identifix, Factory web sites, etc. Factor those costs into your analysis time and you’ll see it’s not just the 20 minutes it took to find the faulty O2, but years of training and ten’s of thousands of dollars of investment. Who among fellow shop owners is as frustrated over this as I am?

In order for the expansion project to be successful, we need to increase revenue. With an additional 4 bays, we will have the opportunity to service more vehicles in a given day, but opportunity alone does not pay the bills. Filling those bays each day will be the challenge. I have put together a plan that will increase car counts by increasing our exposure in the community and by providing a while-you-wait service program. We have begun TV advertising the start of the summer and have already realized positive results. We made a decision to decrease all print ads and increase our direct mail advertising to existing customers and prospect customers. We spent months getting all our advertising in order: creating a central theme, logo and artwork. It’s important to be being consistent with our message, creating our brand and value proposition. Our “Say Yes” program has been a huge success and will be our platform to launch the new facility. The “Say Yes” program simply means will never say no to a customer and will make attempt to accommodate the customer on their terms. I know what your thinking, “Is he crazy, have the customer dictate the schedule?” All I can tell you is that it works. Our “Say Yes” policy has increased our car counts and gross sales. Yes, it was difficult in the beginning and our techs did revolt. But after they saw an increase in productivity pay, they quickly changed their minds. We also plan on having radio ads and expand our exposure on the Internet, using Google and Yahoo. In addition to our paper newsletter, we started a monthly email newsletter, which is sent to all customers and all businesses the area. Email programs are extremely cost effective and can be launched at a moments notice. The last piece of the plan involves teamwork. We have created in-house customer training seminars to reinforce the value of customer service to all employees. Marketing starts and ends at the front counter. The best brake job in the world means nothing if the service you provide is not world-class. Next, I will share how to organize a large project. Stay tuned!

Our building was approved by the Architectural Review Board last week, August 5, 2008. This is the final step in obtaining the actual building permit. We actually started in June demolishing the old building which will be replaced by the new 4 bay facility. As stated in earlier entries, this building will add 4 bays to our existing 6. The new 4-bay building will be a separate structure where all our quick, while-you-service will be performed. Our existing 6 bay facility will be our actual repair shop where larger and long term jobs will be performed. Once we have the actual building permit (which we should receive this week), the construction process will progress at a steadier pace. Our plan at this point is to get the building up and closed in by the winter. The interior will be finished during the winter months with a projected opening date of March 31, 2009. Stayed tuned!

Once we made the decesion to expand, we realized we needed to create a business model that will take us to the next level. One thing we did know. If we continue to conduct business the way we did in past, we would fail. Times have changed and motoring public has changed with it. There were three factors that we considered when we developed our new business model. First, cars last longer, don’t break down as much and don’t require the same amount of service and repair work the cars did years ago. Two, every segment of the auto industry, from dealership to national chains are car cars centers now. The service and repair pie is being sliced smaller and smaller. Three, we live in fast-paced world. We can no longer expect people to be given a scheduled date for their when it suits us. We have to be accommodating to the customer and book appointments when it suits the customer. In addition, we need to handle walk-ins. Turning away unexpected people who want to wait for an oil change or state inspection is bad business, in my opinion. What’s worse, turning away first time customers. That can be the kiss of death. If you look at all the large chains, tires stores and quick lubes, they welcome walk-ins. So based on our findings, if we want to expand and add four more bays to our existing six, we need to reach out to a larger customer base in order to increase market share and car counts. This can only be accomplished by accepting walk-ins, allowing customers to schedule the service time for their car that fits into their busy schedule, extend business hours, be open on Saturdays and promote while-you-wait service. I want to make one thing very clear. I am not say that this is the only model and that the way you conduct your business is wrong. And, I am not saying that we should completely change the way we have been doing business for so many years. This is the model I created based on the changing times and changing demographics from my perspective. Next entry…how to capture a larger market share and increase car counts. Stay tuned!

My bank loan for the construction project was approved last Thursday. That is a huge load off my mind. The money is not in my pocket yet; the bank still needs to do the appraisal, review the construction plans in detail and do an environmental impact study. I will let you in a few key things that made the loan process go smoother than expected. It occurred to me years ago that someday I might want to expand, purchase land or invest. To do this I would need money, lots of it. What I felt was important was to have a business that showed a profit, had growth and was involved in the community. Each year, for the last ten years I worked to insure that the business showed growth and made a profit. Another thing you need to do is to establish yourself in the community. Get active with the local chamber and other local organizations or church. Sponsor athletic teams and school activities. Get to know the people at the bank, including the loan officer and bank officials. If your bank is local and employ local people find out what functions these people are involved with and get involved. Reputation is also vital and equally important is to have a clean facility. Perhaps the most impressive thing I did was to create and extensive business plan showing past history, financial charts, employee team and our plans for the future. We outlined the area demographics and showed the potential for growth in our area. We carefully detailed the new business model and illustrated the potential growth we would have once the expansion was complete. There are many great books and computer programs that can help you with creating a professional looking business plan. Another thing a bank loves to see is a great credit rating and equity. Since I own the land, the bank looks more favorable on the project. Investing in your own property has advantages, especially if you can show sustained growth through the years. Stay tuned!

Our first strategic meeting was held at the local Chili’s Restaurant. Over a few beers and burgers my team and I outlined our future. We talked about the business today and the business yesterday. We talked about our successes and our failures. We talked about how the business has changed in the past 10 years and where we believed the industry was headed. Prior to this meeting we interviewed many customers to find out what they wanted from our company. We asked them what they didn’t like and what changes would they make in our business. We found out that although price is an issue, it’s not at the top of their list. What do our customers want? A friendly face, a fair price, one-stop-shopping, a good warranty and most of all to bring in their car when it was convenient to them. Many customers told us that we were always so busy and having to make an appointment for basic service was not acceptable. Because of this, many times they went to the local quick lube. Our customers never mentioned ASE certification, or asked what kinds of parts we use. No one asked what kind of equipment we had. I guess they assume we hire qualified techs and are equipped with the right equipment. I think it’s the same as when you go to the doctor; you just assume he’s qualified and has the latest equipment. Based on our feelings on where we thought the business was headed and what we found out by listening to our customers, we decided to design the new building to handle all the customers who prefer to wait for service. Our new business will market; “You don’t need an appointment, bring it right in”. The existing 6 bay facility will handle all the traditional repairs, diagnostic work and those jobs that require longer times for completion. All basic service work will flow through the new 4 bay facility. If extensive work is found and up sold, the vehicle will flow to the 6-bay facility for completion. The new 4-bay facility will work as a feeder to increase car counts and to satisfy while-you-wait service and emergencies such as flat tires, bulbs and wipers. We tested out our new plan the beginning of 2007. We began to offer while you wait service. We asked customers when would they like to bring the car in for service. This caused a lot of problems at first and my techs rebelled. Pulling techs off of repair jobs to do an oil change or tire repair caused a lot of tension. But for the greater good we endured. After 6 months things settled down and our car counts went up. Our productivity suffered a bit, but our ARO increased due to more up sells. We pushed the envelope to see how this model would work and it did! We expect an increase in our productivity once the new 4-bays are up and the repair techs can concentrate on their jobs. Now that we have the plan, what do we do with it? Next time I’ll talk about starting the process with the site engineers and the bank. Stay tuned!

I started my blog last week, Joe's Blog. It was suggested to me that I share my experience of constructing a new building, which will add 4 bays to our existing 6. I will outline the entire process, starting from 2 years ago when I first had this vision to expand. We broke ground just last month. The events and struggles were a real eye-opener for me and I hope you get both enjoyment and valuable information from reading about my project. Please join me while I re-create the journey from conception to construction. Joe

In the year prior to making the decision to grow the business and construct an additional 4 bays, I did extensive research in learning about franchise businesses, quick lubes, national chains and also big businesses such as Disney, GE, Starbucks, McDonalds and others. I wanted to find out why these businesses have a higher percentage of success and growth, as opposed to so many general independent repair shops that seem to struggle and plateau after a few years. I also visited many quick lubes and national chains to learn how they conducted business. I even took my car in for service at a few quick lubes and tire stores, without them knowing that I owned a repair shop. This experience was extremely enlightening and I advise all shop owners to do the same. What I learned from my research was that all these business differ the traditional repair shop in many ways and that there are many similarities among franchises, quick lubes and tire stores. And these similarities are not just common to the auto industry but common to all successful businesses. To be successful you need to have a plan, you need to have vision, you need to think like a businessperson, you need to market your business, you need to advertise, you need to create systems and you need to create policy that all in your company must follow. What I also learned is that the more consistent you become the more successful you become. This can only be achieved by creating systems that make your business more automatic and run without you. The more the business runs without you, the more profitable it becomes. If your business is dependent exclusively on you, your business will never grow. Perhaps the most important thing I learned is that you need to be a leader and that great leaders can't do it alone. Leaders need great people around them to accomplish great things. I created a team of advisors within my company. This team consisted of my service advisor, shop foreman and lead tech. I also recruited the help from my two sons, a financial analyst and a graphic artist. Together, we created a new plan to expand and grow the business. Stay tuned!

My first step in making the decision to expand the business was to overcome fear. Fear holds people back from achieving their potential. For me, it was the fear of failure and fear of the unknown. This project was doing something that was out of my comfort zone. For over a year I thought of every excuse NOT to expand the business: Where do I find more techs? How will I afford the new mortgage? Why do I want to start this at my age? Do I really need to do this? Why do I want the additional headaches? Aren’t things fine the way they are now? The project would involve demolishing and old building and constructing a new one. The new building will add an additional 4 bays and new customer waiting area. I had multiple meetings with the site engineer asking question after question. Finally he told me, “Joe, you have been going back and forth on this project for over a year, either sh_ _ or get off the pot”. At that moment I decided to go for it. I guess it’s easier to live in your comfort zone. It’s harder to move forward into the unknown. In future entries I will outline “The Plan” for the new building. Stay tuned!

28 years ago I made the choice to become a shop owner. For years prior to starting my business I worked hard to become a skilled mechanic. By the time I was 24 years old I was rebuilding engines, transmissions, solving the most complex electrical problems and became an ASE Master Tech. How did this benefit me when I went into business? NOT VERY MUCH! How did this help me with expanding the business and creating a new business model? NOT AT ALL! I opened in 1980 and after struggling for years it dawned on me that being skilled mechanically just wasn’t enough. I needed to become skilled with the mechanics of business. I needed these new skills to design my new business model. I will outline my steps in future entries and share the process. One thing is certain; you need to have a business mindset to create vision for your company. You need to become a leader. Why? You can’t do it alone. You need great people around you to help you build your empire. Stay tuned for more!

After working for more than 2 years, we finally have all the approvals for our expansion project. My business plan has been submitted to the bank and hope to hear from them soon. Our next step is to have the building designed approved, which we do not anticipate a problem. We now have 6 bays and will be adding four more bays, which will be a stand alone facility. This facility will accommodate all our while you wait customers and light service work. The repair work and bigger jobs will be done in the original 6 bay facility. A lot of work went into this project (many sleepless nights) to get to this point and it's not over yet. We broke ground last month and looking at 6-10 months for completion. I have to admit, creating a business plan and new model was not easy and out-of-my-comfort zone. It's like starting a new business. It's both fun and scary! I will make periodic updates as the project progresses and will share the step by step process needed to build and create something new. Please contact me with comments. I will share the experience with all. Stay Tuned!

I appreciate the input.

I have no issues when the vehicle is in the shop for service. We have no problems with that. What concerns me is giving prices over the phone before I see the car. It may seem straight forward at times, but I would still like to see the vehicle. I guess for certain jobs with regular customers, it should not be an issue. Agree? Or not?