Learning from the decisions of others
As I've mentioned in previous columns, one of the best decisions I made for my business was making an effort to talk to and learn from other shop owners. Through trade associations, 20 groups and travel to industry events, I've been fortunate to talk with probably hundreds of shop owners over the years and have asked what's working for them and what isn't. With few exceptions, I've found fellow shop owners very willing to share their own experiences and ideas, which has been invaluable as I work to improve my business.
One question in particular has proven to be a good conversation-starter in those informal meetings. By asking other shop owners if there's a particular good business decision they've made during their career – or conversely a bad decision or something in hindsight they wished they'd done differently – I've gotten some great business advice and perhaps avoided some costly business mistakes.
BAD DECISION. Missed opportunities are a common regret among shop owners: The satellite facility that could have been acquired at a good price. Leasing instead of buying property that over the years became far more valuable than the business itself. Even waiting longer than necessary before starting a business.
GOOD DECISION. While many successful shop owners say they perhaps should have started their business earlier in life, those who appear to have been successful from early on are those who spent some time – even up to several years – doing some planning, location-scouting, financial saving, etc. Some say a move to a high-visibility location was among their best decisions. Some point to an investment in a shop management system as a key to tracking and managing their company's performance, history and customer list.
BAD DECISION. The tight economy has many shop owners regretting their own excessive optimism: Over-staffing when times are good. Buying too much all-new equipment at one time, taking on too much debt. More than one shop owner presumed that adding a new venture – towing, upholstery, mechanical work – was a step to higher profits, only to find those businesses had their own challenges and could become a distraction from their core business.
GOOD DECISION. Several shop owners cited "caution" as a good business decision. They are glad they didn't add employees last year as they considered doing or didn't replace one or two who left in the last year. That's helped them keep their staffing in line with business this year without having to let anyone go. And the shop owners who seem to get through upticks and downturns in business most easily are those who have kept their debt low, preferring to pay cash for big-ticket purchases or at least rarely taking on one loan before another is paid off.
BAD DECISION. "Putting too many eggs in one basket" is a phrase that often comes to mind when some shop owners talk about their own mistakes. They've gotten to a point in their business where one source of work – one dealership, one fleet, one insurer – accounts for 20, 30 even 40 percent of their business. When that source of work makes a change – for whatever reason – the bad decision the owner made hits "like a kick in the teeth" as one shop owner said.
GOOD DECISION. Diversification and specialization both are among the decisions various shop owners have said paid off for them. As vehicles become increasingly complex, those specializing in particular brands or higher-end vehicles say they are able to become more knowledgeable about and productive in working on those vehicles and in some cases can command higher rates. Conversely, many shop owners say getting work from a wide variety of sources helps reduce the highs and lows experienced by those more dependent on fewer sources.
BAD DECISION. Maybe the most common type of mistakes shop owners talk about deal with personnel issues: The shop owner whose manager left taking others with him after building a tighter connection with fellow employees than the owner had. The bad employee kept on longer than he or she should have been. The technician hired in haste because of a "desperate situation" who ended up costing the shop far more than having left the job unfilled for a few more weeks.
GOOD DECISION. No shop owner I've talked to who has instituted better hiring practices – including reference or background checks – has ever regretted that decision. I also remember reading an article about a shop some years ago whose owner admitted he was the person in his business who most needed to change. His lack of management training – having worked only as a technician prior to opening the shop – had him less-than-successfully trying to run the place like it was the military. His honesty was a good reminder to me that it's not only others that may need to change to help a business improve.
We all might have similar answers to these if asked the good decision/bad decision question. But I think it's a great way to start a conversation with a colleague that will more often than not let you both walk away with something that will help you each improve your businesses.