GREENSBURG, Pa. – When John Fagan took over as manager of Smail Collision Center in Greensburg, Pa. he had some high hopes and steep challenges. The 23-year industry veteran took the managerial position after seeing what he describes as the “unrealized potential” of the Greensburg area. He would be running a shop that was part of a large auto dealership that sold everything from Kia’s to Mercedes-Benz models. On the downside, the shop had been on a four-year slide in sales and profits. Paychecks were shrinking, market share was going away, and the future was uncertain.
Fagan’s response was to implement some new processing concepts, but just as important, he says, were the efforts the shop took to reinvest in its employees and focus on team building. The first step involved establishing a line of communication between ownership, management and production. Everyone involved took the time to explain how the shop’s success was tied to the efforts of each of these groups. As a flat rate shop, when the business did well, everyone benefited.
“We shut down production everyday for two and a half months from 11:30 to 11:45 to have an open discussion with the employees. We were able to establish that the business and the employees all wanted the same things. We were able to get all of our objectives perfectly aligned,” says Fagan.
Fagan says the employees collectively answered questions like “What do we want?” and “What kind of business do we want to build?” “We discussed things like buying homes and families and paying for the education of children,” he says.
From there, the discussions eventually addressed how the business could evolve into the most “cutting-edge” shop in the area and what steps the shop would take to overcome the obstacles that it would face in meeting that goal.
“I really believe our success started when we got to know each other and what we wanted. That’s what got us started on what has turned out to be a terrific 30-month ride,” says Fagan.
Fagan says in two and a half years, the shop has achieved growth of 28 percent in sales and over 35 percent in profits. “The staff is making better money than ever and our customer base continues to grow,” he adds.
Fagan says one vital key for employee reinvestment is for managers and owners to taker a true leadership role. “It starts with you and your actions. You must be fully engaged, passionate enthusiastic and supportive,” he says. “You are the only person that can drive change by visibly showing that you are willing to do whatever it takes each and everyday. When your staff can truly see this from you consistently, they will become the most valuable asset of your business.”
His advice for shops planning for 2009: “Reinvest right now. Double down on your most effective asset, you. Build a team that can change and adapt quickly, that changes often, that can fix problems rapidly without blame and they will help you through these tough times.”
Looking to 2009, Fagan expects shop revenues to increase 10 percent. That’s down from the 16 percent growth he saw in 2008. Still, Fagan remains optimistic.
He’s not alone. A recent survey conducted by ABRN, shows more than half of all shops believe they will se rising revenues in 2009. The survey shows nearly 56 percent of independent repairers believing they’ll see more money next year. Eighteen percent believe their revenues will decrease while 29 percent believe profits will remain the same. Of those looking for increased revenue, 44 percent believe revenue will rise between six and ten percent. Twenty-seven percent believe their revenues will grow between 11 and twenty percent.
ABRN will continue releasing its survey findings on the state of the industry in its January 2009 edition and on-line at www.search-autoparts.com in the days and weeks ahead.
