The Importance of Having an Exit Plan for Your Repair Shop

Flip over the news…open your browser…switch over to talk radio…there's a lot going on in the world right now.

• Death of Osama bin Laden.
• Gas prices.
• Libya, Syria, Iran, Pakistan.
• Japan's earthquake and nuclear emergency.
• NFL lockout.
• Obama's birth certificate.

I'm not trying to sound like an alarmist — my point is that there are a LOT of distractions out there right now taking your attention away from this…

Graphic by John Lohman. Click on it to see it full size.

If this graphic doesn't make it clear enough, my point is this: we are headed for serious financial trouble as a country.  Interest rates WILL explode upwards.  Inflation WILL continue to make your dollars worth less and less.  Small business loans WILL become incredibly hard to get.

This isn't a political thing.  It's not a matter of left vs. right or Democrats vs. Republicans.  This problem has been brewing for over two decades, and will ONLY go away if congress cuts spending on Medicare, Social Security, and Medicaid (this video from Harvard economist Jeff Miron explains the problem in about one minute).  Unless you think that elected members of congress are likely to do something that will make them lose their seats, this problem will get much, much worse before it gets better.

I'm not trying to scare you.  I'm trying to help you.

Yes, things are bad and getting worse for politically unconnected shop owners.  But they're worse for those shop owners who aren't paying attention, which is why YOU are already on the right track.

Now that you know the problem this country is going through when it comes to its debt, you know that it's never been more important to…

STAY FOCUSED, DEVELOP SECURITY AND HAVE AN EXIT PLAN

What is your plan? Are you going to sell your business and retire?  Going to keep the business in the family?  Just like the country as a whole, kicking the can down the road for a few more years only makes the problem worse.  So…do you HAVE a plan?  Are you working towards it EVERY DAY?

If you're just trying to take things one day at a time, you're going to wake up one day and find it's too late to get out of the game.

Here is what we’ve done and what we're doing in our shop, and what we recommend to our clients:

• Systematize all operations. The business value of a shop can be dramatically enhanced by solid, clear systems, policies and procedures. Make your team accountable for following these.
• Measure all important numbers so they can be managed and improved. Without measurement of the vitals in your shop, you cannot manage them for improvement. Again, this is critical for your team to understand and make happen.  This starts with finding and using shop management software that allows you to easily measure your team, hold them accountable, and manage remotely in a few minutes each day.
• Move toward total remote management. By installing the two items above along with a chain of command and clear expectations, a shop owner can move toward remote management of the business. This will also multiply the value of the business and put it into a position that will allow you to own it as an arm-chair investment for many years past retirement age (if you so choose).
• Build a dominating brand with higher-end customers. By dominating your market your sales can remain stable and even grow – even in very rough economic conditions. When loans become non-existent and interest rates skyrocket, you will have the cash flow you need to survive and thrive.
• Seek good consulting, tax and legal counsel. Whenever you decide to sell your business, either through a third party, to family, or to one or more employees, get good legal, tax and strategy counsel. You can set yourself up for success or failure by the advice you seek and follow.
• Focus on your plan and execute! Once you have all the components of your plan indentified, do not let anything get in the way of moving forward and executing your plan. This is the only way you will ever be able to retire in the manner you deserve and desire.

If you keep your eyes on what's important — the safety and security of yourself, your family, your employees and their families — you'll be much more likely to stay successful and exit on your schedule instead of hoping for the best.  If you have a question about how you as a repair shop owner can be planning for your future, leave us a comment below or send us an email!

Successful repair shop owners usually need help — and there’s nothing wrong with that!

Image used under the licensing agreement from Getty Images©

Stop me if you've heard this one before: when you started your shop, you did it all.  You worked at the front counter, did most of the work in the bays, chose the marketing, and lead a small team of people you hired yourself.

The busier you got, the more directions you were pulled in.  Managing employees and holding them accountable…tracking productivity and making sure nobody is wasting time and money…spending hours digging through expenses to make sure you're not losing money…doing more than ever and getting less done.

And tell me this doesn't sound familiar:

"How many entrepreneurs have missed their son's football games, or daughter's soccer games? A dilemma emerges as the entrepreneur sells the vision, manages one or more functions and works the floor. Vacations become a fading thought. Blood pressure rises…Every day, every month, all year long they find themselves traversing an endless loop. They are busy, but not making progress toward their vision."

The problem is that even the best business owners need support, says George Tyler in a GREAT article in Colorado Biz Magazine called "From entrepreneurial vision to profitable reality" (read the whole thing here).

It's true of nearly every shop I've been in.  That's where Terry was when I met him (use the box on the right to get his messy, bloody story for free), and it's where shop owner after shop owner is stuck.  The problem isn't usually what the shop owner is trying to do with the shop…the problem is usually that shop owners just don't have the time to do it alone.

When a shop owner "spends 70-80 percent of their time crusading for the business, the company's revenue grows," writes Tyler.  But if the shop owner "spends only 20-30 percent, the company begins to slide into financial ruin."  In other words, you need help getting back to what made you successful at the beginning: the time to concentrate on what you love.

Some of this takes work.  Hiring people to take your place as you move into remote management won't happen overnight.  But when it comes to holding employees accountable, freeing up your time, stepping out of the role of number-cruncher and knowing more about your productivity and profitability without adding to your workload…

The RPM ToolKit™ does all of these things for you so you can get back to being the spouse, parent and shop owner you wish you had the time to be.  And it does these things for less than the cost of a single RO each month.

Like Tyler writes, in order to avoid running in place and wearing themselves out, shop owners "must identify the problem; resume being the visionary; and find people to conduct each required role."  In other words, the best thing a shop owner can do to become more successful is to find a tool or an expert that can "review the symptoms, diagnose the problem and recommend a cure."

From gross profit to day production, from technician efficiency to service writer closing ratio, the RPM ToolKit™ gives you the power to find the holes in your production, see where money is being left on the table, and instantly get access to solutions from our online encyclopedia, video tutorials, audio podcasts and more.

It’s truly the ONLY WORKING Scan Tool in existence…for your SHOP. Even better than a scan tool, the RPM ToolKit™ gives you the step by step answers on how to fix everything it diagnoses – with one click.

Read George Tyler's entire article…you don't have to be stressed, overwhelmed or stuck working in your business instead of on it… In other words, you can be successful, and help costs less than an average RO each month!

Motor Age Recognizes the RPM ToolKit Contest Winners!

Congratulations once again to the RPM ToolKit™ Contest winners for the first quarter of 2011. Be sure to check out the Auto Market Weekly video from Motor Age, where the contest winners are recognized for their accomplishments!

Click here to see the video!

How Do I Ask For (and Get) a GREAT Testimonial?

When was the last time you kept tabs on what people are saying about you on the internet? Just take a look at what has happened to a local post office who does not pay attention to their online reputation…

Google doesn't just give people the ability to leave bad feedback…it also collects feedback from other websites across the internet! I picked a Post Office so I wouldn't embarrass anyone, but I know there are repair shops out there who are buried beneath bad reviews on the internet. (Wondering why this is so important? See how targeted online marketing destroys regular yellow pages.)

Whether you're talking about online reputation or any other kind of marketing, it's never been more important to keep a steady stream of great testimonials coming into your shop. But even when they know they need great testimonials (for an effective marketing piece or to cover up a bad review) shop owners and service writers everywhere are resistant to asking for testimonials from happy customers. Let's fix that! Here's how to ask for and get great testimonials, reviews and referrals…

STEP ONE: IF THEY'RE HAPPY, ASK!

If your customer is happy with the job you've done, what is the hang up? Whether it's right at the front counter at checkout or on the phone during a follow up phone call, you should be asking if they're satisfied so that you can address their concerns.

Right then and there is where you should be asking: "Mrs. Johnson, I'm glad you had such a pleasant experience here at our shop. We really like taking care of you, and we were hoping you could help us with something. Would you be willing to write us a testimonial?"

It's that simple.

Yes, some people will give you testimonials without you having to ask. But that happens rarely, meaning if you won't ask for a testimonial from happy customers, you will probably never have enough to effectively protect your online reputation.

If you're ready to start asking, then let's dig in!

STEP TWO: DON'T LEAVE THEM HANGING!

Once they've said yes, you've got a choice: let them write whatever they want and hope you get a testimonial you can use…or help them through the process and guarantee you get a great testimonial right off the bat.

A GREAT testimonial has four simple pieces:

• Why they were in trouble. ("My brakes were squealing.")
• How and why they came to you. ("My friend told me about Keller Bros.")
• How you helped them. ("Not only did they fix my brakes, but they also gave me a ride to work, picked me up, did a full inspection, and helped me understand and prioritize other issues that could leave me with big repair bills down the road.")
• How things are different now as a result. ("My car is enjoyable to drive again, and I look forward to referring my friends and family to your shop!")

It's as easy as that!

By guiding them through this process, you'll make it easier for them to write (filling a blank page can be intimidating!) and you'll help guarantee that you get a testimonial that you can use on your marketing, online and hang in your shop!

STEP THREE: YOU GET BACK WHAT YOU GIVE

Chances are you've heard of The Secret or the Law of Attraction or Karma or the Golden Rule…so stop and think…

Are you giving great testimonials?

The next time you're impressed with the service somebody provides or thankful that somebody went above and beyond, take a moment and tell them your story!

Do you have a story about how APM has helped you or your shop? Your testimonials mean more to us than anything, and we'd love it if you could share your story with us.  Please take a moment and tell us about how your shop has transformed in an email or through the comment box below!

Busting the Gross Profit Myth!

Who should you listen to when it comes to setting a target for your gross profit percentage in your shop?  There are a LOT of opinions out there, but you don't have to look any farther than your categories of expenses over the last decade to know that something's not right with your profits…those expenses not going down as a percentage of your sales, they're going UP!

Be sure to read Terry's blog and the the TRUTH about where you should be setting your Gross Profit Percentage target over in search-autoparts.com!  It's the key to surviving inflation, rising prices, and other problems in your shop!

Click here to read Terry's blog!

Be sure to leave your questions or comments below or over on Terry's blog!