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Joe Marconi

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Blog Entries posted by Joe Marconi

  3. Joe Marconi
    Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
    At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
    I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
    Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
    With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
    Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
  4. Joe Marconi
    We all know there are times of the year that are better than others and times when business is slower than what you would like it to be. While every company goes through highs and lows, there are things you can do to help keep your bays full all year long.
    One of the best ways to achieve a more consistent car count is to make sure that every customer that leaves your shop today has their next future oil change or factory maintenance appointment booked. Please don’t tell me you have tried this process and it doesn’t work for you; it does work. You can’t get out of your dentist’s chair before booking your next teeth cleaning!
    Let’s face it, the days of the 3,000-mile oil changes are long gone, so if you are waiting for the customer to book their own appointment, good luck with that strategy. You need to be proactive and book the customer’s next service appointment. I would also recommend booking your customer’s next tire rotation, which will be approximately every six months for most customers.
    Here’s the essential component of this strategy:  Make sure all customers you have booked for a future appointment are logged in your calendar. And make sure that each customer receives a phone call or text a week or so before the appointment date; if the customer can’t keep that date, no problem! Simply book another day!
    This isn’t rocket science, but it does take a proactive approach on your part. Start today, and you will reap the benefits of this strategy in no time at all.
    What about electric cars? Well, they need services and repairs too. I will address that in a future blog, so stay tuned!
  5. Joe Marconi
    Since our opening on April 25, 2009 we have increase business by a whopping 29%. We now have to insure that this becomes the norm and not just a grand opening bounce. Just about all our plans are falling into place. The added four bays and increased parking have allowed us to take on more work and become more efficient. We handle just about all walk-ins and refuse no one who calls for an appointment. We are determined to take care of our customers on their schedule, not ours.
     
    There is, however, a down side to the increase. We are starting to get a few complaints from customers on a variety of issues. We track customer service through a CSI cards, phone calls and email surveys. Our scores, although still very good, are not what they were prior to the opening. Our score prior to the opening was around 99.9%. That number has decreased to around 97%. This is unacceptable to me. I called for a team meeting last week to discuss this issue. Out of the meeting we found that we may be understaffed and that our attention to our customers is suffering. Our car counts have increased from 18-20 cars per day to 32 to 40 cars per day. The logistics of handling the increase, phone calls and other daily duties has put a strain on the entire staff.
     
    We need to regroup and analyze every step of the sales and service process: From the phone calls, to scheduling, to dispatching, to the actual service or repair and car delivery.
     
    This is where we are right now. Trust me, I have no regrets. These are good problems to have. Most important is that we maintain what made us successful in the past. And that’s serving the public, providing the very best in customer service and automotive care.
     
    Stay tuned!
  7. Joe Marconi
    There are many things to consider when creating a marketing plan. Among them are establishing a budget, what forms of media should be used, and whether traditional advertising, such as TV, radio, and print, is still relevant.  And of course, how much should be allocated to social media and digital advertising?
    All the above are essentials to any marketing plan. However, the first step is ensuring that you have a healthy workplace and that your employees understand your company’s culture and the overall mission and vision. 
    We all know that happy employees create happy customers. No form of advertising can overcome a toxic workplace with unhappy employees. If your employees are not creating an amazing customer experience, your marketing plan will not work.
    Advertising and marketing may bring in customers, but the people in your company creating an amazing customer experience will be the most important component of your marketing plan.  It’s the customer experience that sells work and gives the customer a reason to return. 
    Creating an amazing employee experience, which creates an amazing customer experience, is also the most cost-effective part of your marketing plan. In fact, it cost next to nothing.
  10. Joe Marconi
    A recent study, done by Harvard Business School, concluded that the real problem with attracting and retaining employees has more to do with the workplace environment, not pay or benefits. While the study did find that an adequate pay plan and offering an attractive benefits package did help with recruiting and retention, it’s not enough to satisfy the needs of employees, especially those of front-line workers.
    The study also stated that in 2021, many companies were convinced that giving raises, sign-on bonuses, and other perks would solve the worker shortage problem and prevent people from quitting. However, this strategy did not work. So, what does work regarding attracting quality people and keeping them employed?
    Essentially, it all comes down to the culture of your company.  Management: do all it can to consider the individual needs of your employees. Your employees want to feel that they have a voice, that their opinion counts, and that their role in your company is both respected and recognized. Yes, pay and a great benefits package will go a long way toward making your employees feel secure, but that’s only financial security. People want more than money.
    To attract and keep top talent requires creating a company that people feel proud to work for. You need to reach the hearts and minds of your employees. Become a leader that people are enthusiastic about working for. You want your employees bragging to their friends and family that your shop is a great place to work!
    Step one to attracting and retaining quality employees: Create an amazing workplace environment for your employees!  Trust me, happy employees make happy shop owners too!
  11. Joe Marconi
    We are in the final stages of construction. The exterior siding is almost complete along with the electrical work, plumbing, security system, heating and air conditioning. We expect the building to be complete within six to eight weeks, barring any unforeseen obstacles. Photos of the project will be available soon.
     
    A great deal of time has been spent on the design and layout of the not only the building, but the parking lot layout and the workflow process, as well. One thing I have learned in the past 28 years is that productivity is the key to profit. How your technicians move through the day can be the difference between making money and losing your shirt.
     
    Our old parking lot was a nightmare. We would park 25 to 40 cars in a lot designed for a maximum of 18. We would stack cars 3 to 4 deep and found ourselves on many an occasion moving 2 to 3 cars to get to the one we needed. This killed productivity and morale. We can now park 50 or more cars which greatly improves productivity and traffic flow. Also, an inviting, organized parking area means a lot to customers. They know where to park, and find it easy to navigate in and out of the lot.
     
    Perhaps the most important is in bay design. The existing 6-bay shop will be reserved for the bigger repair and maintenance work: transmissions, engine repair, analysis, timing belts, etc. We will staff this building with 3 techs, a foreman and a service advisor. Each tech will have 2 bays. With this design, a tech can bring a car in one of his bays, diagnose the problem and have the other bay available to start on another car if he needs to wait for parts to arrive. Or, if an unexpected vehicle arrives with a problem, having an extra bay available is convenient. This eliminates having to put cars back together when waiting for parts or having to work on jacks outside the bay due to lack of room. Again, I can’t stress enough that productivity is the key to profit. Keep the techs flowing smoothly throughout the day will make you more money.
     
    The new facility will have 4 bays and will primarily be used for more express-type service: oil change service, tire rotations, state inspections, tires, alignments, batteries, etc. One of advantages of designing a building from scratch is that you design it the way you want. Everything aspect about the new 4 bay shop is tied to productivity: The location of the office, phones, computer information system, inventory, bathroom, tire machine, balancer, floor jacks, jack stands, part delivery entrance and other equipment.
     
    Each bay will have overhead access to an air line, droplights, electrical power and metered oil reels. Each tech will have a cart complete with chemicals, rags, oil drain plugs, oil drain gaskets and other hardware. You don’t want techs walking to the far side of the shop for an oil filter and then to the other side for a drain plug gasket and then across the bays for an air line. That wastes time and kills productivity. Everything a tech needs must be within reasonable reach.
     
    The new facility will have three techs and one service advisor. We will install 3 Rotary Lifts: two 10,000-pound lifts and one 12,000-pound lift. The fourth bay will be the alignment bay. A flush-mounted Hunter alignment machine will find its home in this bay.
     
    Although we will promote while-you-wait service, we will not position ourselves as a quick lube. However, contrary to what many people in our industry believe, we welcome walk-ins and actually encourage it. I do realize that smaller shops with 2 to 4 bays may find it difficult to accommodate people walking in without an appointment, but the consumer's mindset has changed the way it expects service. For small shops and larger ones, I recommend developing a system that accommodates customers on their time, not yours. People don’t always have time to make an appointment to drop their car off for service. And they certainly will not make an appointment to drop a car off for an oil change. Performing simple services like oil changes, tire rotations and state inspections will build a customer base that will eventually lead to more profitable work.
     
    To expand your business will require an increase in your customer base and a different business model. At our shop, we no longer tell people when to bring in their car; we ask them when they would like to bring it in. Building a business is about building relationships, one customer at a time. Make it easy for the customer. Don’t get bogged down with a rigid schedule. It will take time to develop and your people may resist change.
     
    Our entire workflow process is designed to maximize productivity in order to boost car counts. An increase in car counts gives us the opportunity to sell more work and prosper.
     
    Find ways to prosper, it’s a lot more fun.
     
    Stay tuned!
     
     
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  12. Joe Marconi
    For automotive shop owners, tax planning is an ongoing process. You should meet with your accountant at least once a quarter to review your financials, expenses, major purchases, cash reserve, payroll, etc., and make needed course corrections.
    Below is a general list of tasks that should be done by the end of the year to prepare for tax season, which is right around the corner.
    Schedule a meeting with your accountant and ask if any information, reports, or documents are specific to your business. Update your inventory and run a report for December 31. Review your and your employee’s retirement accounts; fund them if needed before the end of the year. Purchase equipment, vehicles, etc., to reduce taxes ONLY after discussing with your accountant and coach. Check your accounts/receivables and print a report with a closing date of December 31. Prepare a list of any uncollectable debt for your accountant. Prepare your accounts/payables. Determine which bills will be paid in the current year. Ensure that all loan interest income and expense is properly itemized on your P/L. Ensure that all major equipment purchases are properly itemized on your balance sheet. Prepare any investment dividends documents. You may need to wait until January to obtain these documents. Make sure you have all receipts and records for any capital improvements or leasehold improvements made this year. Contact your attorney for any required corporate meetings, filings, etc. Discuss with your accountant how to payout any end-of-year employee or corporate officer bonuses. Ensure that all payroll information and worker’s compensation information are correct. Remember, preparing now may save you from paying too much in taxes and will relieve stress from your life.
  13. Joe Marconi
    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!
  14. Joe Marconi
    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!
  15. Joe Marconi
    Our grand opening was held on Saturday, April 25th. The weather was perfect. Hundreds of people came out to visit our new facility. The affair lasted all-day and ended about 7:30 that evening. All the money spent on prompting the affair was well worth it.
     
    A special thanks to CARQUEST Auto Parts, who provided their barbecue wagon, blow-up racecar, tent, banners and other items.
     
    It was great to see many customers share in the festivities and we had the chance to meet many new people from the community. We had a local radio station broadcasting a live remote that helped bring many people in and created a lot of excitement in the area.
     
    We opened the new 4 bay expansion shop officially on Monday, April 27th. The first week we had an increase of 27% in sales. This bounce in sales is obviously due to the excitement we created with months of promotions. Now we need to maintain the momentum.
     
    The best news is that the techs love the new facility. We had a meeting after the first week and everyone said that although we worked on more cars than usual it didn’t seem has hectic. We have total of 10 bays now and 6 techs, leaving bays open for walk-ins and up sells. Also, if a tech is waiting for parts that will not arrive for an hour or so, he can use one of the open bays, rather than putting the car back together. This increases productivity.
     
    I will keep this blog open to report on the progress of the new shop.
     
    Photos will follow soon too.
     
    Stay tuned!
  16. Joe Marconi
    We are now in our 6th month of construction. The building is completely framed with the electrical work almost done. The windows, doors and siding should be complete by the beginning of December. This coming week will be a challenge. We need to put the binder coat of blacktop down before the blacktop plants close for the winter. This will mean loss of at least one to two workdays. And with Veterans Day on Tuesday (a usually great sales day), I do not want to loose much needed revenue. We will probably have to schedule around the blacktopping and make up for it later on in the week or on Saturday, with longer days, possibly into the night if needed.
     
    The past six months have been filled with excitement, anxiety, fear and anticipation. We finally got approved for our new signage, which completes all town permits. We need a DOT inspection of the driveways, which I don’t see any foreseeable issues.
     
    Probably the biggest concern is going through the winter months. We are located in New York, about 45 minutes north of NYC and the weather can be unpredictable at best. You can have 60-degree days in January and 3-foot snow falls in February. This can delay construction and consequently delay our opening.
     
    Other concerns of mind are the details of the project. Every aspect of the project: construction, finance, equipment purchasing, financial forecasting, advertising, marketing, branding and goals are being reviewed and tweaked.
     
    They say experience is the best teacher. If that is so, I have the best instructor in the area.
     
    Stay tuned!
  17. Joe Marconi
    With one month to go, we are working hard making all the final preparations for the grand opening. The building is complete and most of the equipment has been installed. Each day starts with a review of our plan list to insure every task will be accomplished before opening day. Ten months of construction and years of planning are nearing the end.
     
    We had a team meeting last week, after hours, to review the workflow process and the elements of the expansion. Adding four bays and another building will bring challenges and we expect a bumpy road in the beginning. Even with all the planning, things will go wrong. But, we are convinced that the additional bays, increased parking lot size and the new business model will allow us to increase efficiency and improve productivity. Customers will also benefit as we promote our while-you-wait express service. Time will perfect the process.
     
    There will be other challenges as well. Additional employees, increased overhead and a big monthly mortgage payment, just to name a few. I have run the numbers countless times and know exactly what we need in terms of sales, car counts and income to support the new business. At the present rate of growth it will takes us a few years to realize any real profit.
     
    The benefits of the expansion far outweigh the risks of the expansion. Our facility and property had many issues that would eventually lead to problems down the road. Our parking area was too small, our facility size would not support future growth, and the building that was demolished was in state of disrepair and hurt the equity value of the property. The improvements made to the property and the addition of a new building, increase the value of the property substantially, even in this economic climate. Plus, the additional 4 bays will give us the opportunity to accelerate our growth rate.
     
    Our opening date is April 25th. It will be filled with events, food, prizes, music, a live remote from a local radio stations and tours of the new facility. Invitations will be sent to our customers along with invitations to local public officials. We hire a marketing agent to handle the advertising, promotion and press releases.
     
    To tell you the truth, at this point, I’ll feel a lot better when those bays are in operation. All the years of planning on paper is one thing, but the real test will be when those first cars start rolling into the bays. I can’t wait for sweet sound of an air gun, the compressor and the clanking of wrenches.
     
    Stay tuned!
  19. Joe Marconi
    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!
  20. Joe Marconi
    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!
  21. Joe Marconi
    We have all seen botched automotive repairs by people who were either not qualified or who tried to save money by attempting to do the repair themselves. And in the end it cost more money then it would have originally been because now the job has to be done over or completed correctly. The same holds true when building an addition or new facility.
     
    Picking a General Contractor is perhaps one of the more crucial steps if you are going to expand your facility or build another facility from scratch. Unless you have experience in construction or your family is in the construction business, I would not recommend doing it yourself. You need to pick a qualified General Contractor. There are just too many areas that you may not be qualified in.
     
    In my case, the general contractor picked up many questionable items during the design stage that would have cost me money down the road. Also, the coordination of all the different contractors is mind-boggling. A good G.C. knows the right contractors and will hand pick the best people for the job. The G.C. gets paid a percentage of the total job, but it’s well worth it.
     
    For me, I need to know that the project will be taken care of from start to finish so I can concentrate on building and running my business. My expertise is the automotive business, not the construction business.
     
    When choosing a G.C. ask people in your local area about well-known builders. Also, ask your customers. There just might be a G.C. or builder in your own database. Try to stay with a local company. It will be easier to go and see some of the work that the G.C. has done before. Plus a local G.C. knows the area, has dealt with the town before and will be familiar with your local building department, planning board and zoning board members. This makes a huge difference, especially if you live in a small town.
     
    As we speak, the framing is started and the property is finally graded and ready for new blacktop.
     
    Stay tuned!
  22. Joe Marconi
    Everyone needs direction and everyone needs deadlines. We would never conduct business without knowing when parts are going to arrive, when jobs need to be done, how long jobs will take to complete and every other aspect of running a repair business. What’s vital to your business is to understand the amount of work needed (labor hours and parts sold) in order to reach your sales goal, which translates into profit. In other words you establish deadlines and goals on a daily basis. You probably do it so instinctively that you don’t even realize you’re doing it.
     
    Construction is a bit different. Although it’s your project and you have a General Contractor (G.C.), you are at times at the mercy of a particular contractor. I have gotten tough over the past few months and talk frequently to the G.C. about the progress of the construction.
     
    With any construction project, establish goals and deadlines from the start. Meet with the G.C. and the all the contractors and establish a realistic deadline for completion for each contractor. Review those deadlines often and make the contactors accountable. This may be hard. What happens in the construction business is that if they land another contract, they try to do both at the same time, yours and the other job. They don’t want to loose the income so they over extend themselves. I can’t blame them, but your main concern is your project and this needs to be conveyed to the contractor. The General Contractors on my project is extremely good at making sure contractors hold up to their commitments.
     
    My job is to have periodic meetings with the G.C. to review the progress and to make sure we’re still within our budget. Cost overruns and extras can kill you. There will be countless extras that each contractor will want to up sell you. Stick to your game plan. If the extra saves money in the long term, carefully consider it. If it’s a “nice to have”, but not a “need to have”, it might be best to pass on it. There will be enough unexpected expenses for you to worry about.
     
    We are coming down to the wire, with about 2 months to go. Every waking (and sleeping) hour is devoted to this project. Excited? Yes. Scared? A little. Nervous? You bet!
     
    Stay tuned!
  23. Joe Marconi
    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!
  24. Joe Marconi
    Tomorrow is the bank closing for the construction loan. A construction loan is different from a bank loan for property, home or condo. Let’s say you looking to buy a home that sits on an acre of land and the agreed upon price is $500,000. The bank will do its due diligence to determine if this is a sound investment. The bank will also insure that your income qualifies you for that particular loan. With a construction loan such as mine, where I am erecting a 4 bay facility on property that I already own, I go to the bank with a plan. My plan must include projected costs of the project, projected increase in business and details on how I will grow the business. The bank does an analysis to see if the plan makes financial sense.
     
    For a construction loan, the bank will need to see detailed estimates from the builder, plumber, electrician, excavator, etc. The bank will also perform an appraisal to determine the value of the property and business at the present time and the projected value after the completion of the project. This is extremely important. If the loan amount you’re asking for is $500,000, the bank will use the property and building as collateral against the $500,000.
     
    Another major difference with a construction loan is how the money is disbursed. Let’s go back to the example with the purchase of a home. The bank will lend you the full amount at closing for the home less closing costs and any money you put up. You start paying back the loan with interest usually the following month.
     
    With a construction loan, money is disbursed in stages. The bank oversees the project and distributes only the money to pay for the portion of the project that has been completed. So, let’s say the excavator’s work is complete and his bill his $75,000. The bank will release the money to pay that part of the project. You pay only the interest on the portion of the money borrowed. The actual loan (principle and interest) does not begin repayment until the project is complete.
     
    This is why it is extremely important to work with the contractors and vendors to get hard figures and calculations. You don’t want to go over budget and be left with less loan money then what you projected. AND, always build in a contingency figure of 10% or 15% to cover unexpected expenses. Believe me, there will most certainly be unexpected expenses.
     
    Also remember to factor into the project all the expenses you incurred prior to putting a shovel in the ground; Architect fees, site work, attorney fees, consulting fees, town fees and any other expenses incurred prior to and not including the actual building construction.
     
    A word of advice when dealing with contractors and vendors, get everything in writing. Don’t rely on the “good old handshake”. Another piece of advice, when you make a mistake, and you will along this tough process, put it behind you. Mistakes are unavoidable.
     
    Stay tuned!
  25. Joe Marconi

    Are Your Employee Pay Plans Legal?

    By Joe Marconi,


    Employee Retention
    As an auto shop owner and a business development coach, I know from experience that there are countless ways to create employee pay plans. From hourly, flat-rate, salary, incentive-based, performance-based, team bonuses, profit sharing, on and on and on. However, the question is: are your pay plans legal? 
    To complicate matters, overtime and minimum wage laws differ from state to state and may vary from county to county within a state.  Wage and hour laws are ever-changing too.  
    Here’s my advice to shop owners: Consider hiring a wage and hour labor attorney or retain a human resource company specializing in wage and hour regulations to review your employee pay plans. You cannot leave it to chance. All it takes is one disgruntle employee to make a claim against you, and your life could be hell.  You should also have your pay plans reviewed every few years and any time you change the details of a plan.
    Effective pay plans can considerably benefit your auto repair shop and incentivize your employees to reach their goals and company goals. In addition, great pay plans can help retain valuable employees.
    Protect yourself, your business, and your employees – Ensure your employee pay plans are compliant with federal, state, and local laws and regulations.

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