We all know that it’s the shop owner’s job to keep customers and staff happy, the tools working, and the shop organized. A well-managed, clean shop is fun to operate and ready to go if you get an offer you can’t refuse.
This series outlines steps to make your shop “presentable.” Get it ready, and then keep it gleaming. The articles are written from a current ownership perspective. The series will culminate at Expo, October 19–22, with an interactive workshop.
Regardless of your age or interest in the sale of your shop today, consider this series “required” or “must do.” Every ATRA Member should understand the importance of preparing for a smart exit. If done correctly, it can take a year or more.
Most important is your decision to begin learning about transferring your business. Start the process to be ready for your smart exit.
You must increase value. It’s your job as CEO. More important, it’s your job as CIO — Chief Inspiration Officer — to demonstrate to your staff that it can be done and then show them how.
There are multiple meanings to the phrase “increase the value.” What I’m referring to is both what your shop is worth from an IRS perspective and what someone will actually pay for it.
Accountants Say
An expert accountant can discuss the obvious ways to demonstrate an increase in value:
- Three tax returns showing a pattern of increasing sales, net profit, and assets, with, if possible, some decrease in cost of goods sold, expenses, or liabilities.
- Customer job tickets showing a steady increase in some combination of average sales, repeat business from clusters of customers who belong to the same family or group of friends, online reviews by customers on your Google+ or Facebook pages, or articles you and your staff have written on the company blog or web site.
- Steady employment history with a mix of senior, middle, and new technicians joining your firm, succeeding, and then retiring. You can show this even in small firms of just a few employees where the employees are comfortable and feel rewarded for their efforts.
A Practical Way
Are you proud of your shop? What looks good and what needs improvement? Consider your:
- Building
- Sign
- Customer entrance and waiting room
- Front counter where job tickets are written, keys accepted, and payments received
- Bathrooms
- Shop
- Inventory
Which area needs the most improvement? Fix that first. Work to make your shop glisten. You want your customers to be proud to tell their friends where they take their cars. Grow your shop’s value by focusing on increasing the value for all your customers’ experiences, every time they visit.
Be Active in Your Community
You and your employees have kids and grandkids. There are neighborhood kids living near the shop. Support the kids’ and community’s activities in sports, neighborhood groups, 4-H, school bands, and community gardens with contributions, and by going to local events. Get your business name out there on scoreboards and at community events. Show you care. Reward employees who get involved.
Have employees rotate answering the phone and waiting on customers. Avoid being the only one giving estimates and delivering cars. If you’re indispensable, you become irreplaceable.
Customers know your business and reputation. Don’t make it about you. Customers know exactly what they can depend on from your business: Fix that transmission quickly, at a fair price, and stand behind your work.
Man or woman, young or old, regardless of race or religion, customers need to know they’re respected, and the work is done and done right the first time, at a fair price. That’s simply being professional and demonstrating expertise and reliability.
Every single visit to your business needs to impress today’s customer of your professional abilities and ethics.
If you don’t grow value, the survival chances and transferability options of your years of effort are low. So get on with it!
How, you ask? How can I increase value? Satisfy customers. Make them happy… deliriously happy. They take their car to you broken and pay you to fix it. It’s that simple.
You can’t build a business alone and then sell it. You’re building a team of employees to operate a “customer satisfaction machine.” The building, equipment, and even the customers are less valuable than the trained team that operates that business and fulfills customers’ needs. That system has to operate with or without you. Make it a proven system you can sell.
Don’t Wait; Adapt Today!
Now describe that business: What do those employees do? What should they do to fulfill your customers’ needs today and next year?
Give your staff advanced training, mentoring, and coaching. Design systems that support their creativity to “steer” your business, instead of just operating it. A big part of their creativity is their ability to notice market changes and adapt to those changes, today and every day.
Write down your success recipe for satisfying customers. Build a customer fulfillment process with the help of your staff. Make it a shop that repairs broken transmissions, fixing cars right the first time, at a reasonable price. Scale it. Sell it. What’s your recipe, your formula for success?
Obviously not every shop is going to become a major enterprise with lots of locations. There’s a place for shops large and small. Regardless of size or number of employees, figure out your shop’s future for the sake of your employees, your family, and yourself.
The tools of 100 years ago are still used, but not much. Computers and automation are going to be tools of growing importance going forward. Bring a young person into your firm to help imagine what your firm could become. You yourself can’t do it.
Your job now is to inspire, train, mentor, and coach… to build your company into a viable entity for the next 10 to 20 years. It’s time for you to plan a graceful way to step aside and let others take over.
There are enormous changes happening in the automotive world. Electric and self-driving vehicles are coming. A hundred-plus years ago, expert horse breeders and buggy builders had to make difficult choices about how they were going to adapt to a changing world. Be among the first to adapt and change, not the last.
Consider collaborating with another shop with an innovative owner. Together you might design new products and services to use your expert skills, tools, and customer base to solve customers’ evolving needs. Technology is driving change. Ride it as a surfer on a wave and plan your smart exit!
Next month in GEARS, we’ll cover increasing your shop’s value.
John E. Anderson will be speaking at this year’s Expo. John is a longtime business coach who helps business owners evaluate their businesses, adjust their operating practices, build a strategic plan and make a Smart Exit™.
In the coming issues, John will discuss some of the strategies he’s developed. He’ll show you how to turn your business around, so you can answer the three questions, and ultimately, find a smart exit that works for you.
Post your questions and observations on the ATRA Forum. A CEO Circle of shop owners is forming to discuss these topics leading up to the EXPO. Email ATRA for further information smartexit@atra.com
