The Journey:
Driving Profits and Dreams HomeOver the upcoming months, I plan to share with you winning strategies that have worked for thousands of shop owners in the United States and Canada. The challenge is knowing which strategies work better in rural or metropolitan areas. Because all of you are motivated differently, we will try to help whether you want to increase cash flow or simply enjoy more free time.
Some of you are motivated to learn new best practices to stay the best shop in your area. Many of you are facing challenges at this point in your career centered around money and are looking for ways to increase your number of clients. A few of us would like it to be like the ’80s when vehicles were breaking left and right, making the business much easier to survive in. Whatever floats your boat; I will try to help you succeed in business because I am passionate about helping shop owners grow.
Question of the MonthQ: How do you measure gross profit?A: Because increased employee costs are mostly responsible for the shop owner’s erosion of profits, we put them in costs of goods. The formula is sales minus parts, tech cost fully loaded and service manager costfully loaded. The goal is 54.5 percent; however, the smaller the shop, the harder this number is to achieve. If you have a question for Chubby please e-mail him your question at [email protected].
In this first article, I will share with you my story and how I ended up CEO of the Automotive Training Institute (ATI). ATI is an 84-person training and coaching company dedicated to independent shop owners – not new car dealers. We will teach you proven strategies to compete with new car dealers.
I get to sit in the catbird seat watch-ing financial data from thousands of shops every week. I know what is working in rural and metro areas for big and small shops.
Winning Strategies I am sure that many of you have tried strategies from other shop owners that didn’t work in your area. The strategies I share with you will have been executed over a thousand times each week by our capable coaching staff. I also will introduce you to some of my coaches who are more knowledgeable than me in certain areas. I am lucky to have expertsthat spend their time designing compensation plans for technicians and managers, for example. We also have our own marketing and advertising department so I can share with you what is hot and what is not. We will take a journey with my instructors to help you with your leadership skills so your people follow you into battle.
Above all, since many of you know what to do but can’t seem to get everything to work in concert, I will share some of our coaches’ implementation strategies that will make your life easier.
Personal Passions My other passions are fishing and muscle cars, which led me to take 300 shop owners to this year’s Barrett-Jackson Auction in Scottsdale, AZ. Every year we have a client appreciation Super Conference. That is where we show off our new ideas and get feedback from our clients: it helps us stay sharp.I have been in business for myself since 1971. However, I have never owned a shop, so you will decide if I am worthy to be one of your coaches this year. Many of my 84 associates were shop owners like Billy Craven, our agent partner from Florida, who will be sharing his secrets of success with you. I have spent my entire life walking in and out of at least 10 shops a day helping owners grow.
For those of you old dogs, I was an original Sun man driving
a red van demonstrating engine analyzers for the first four years of my working life. When some of my co-workers thought I was servicing your equipment too fast, causing discontent from
other owners out of my area, I decided to start my own equipment business.
I found Allen Test Products in Kalamazoo, MI before most shop owners had ever heard of them and was given distribution rights in several states. I believed in 24-hour service, which was rare in those days, and for more than two decades enjoyed involving shop owners in over 100 million dollars in test equipment.
Beginnings I started ATI in 1974 to train technicians in drivability courses for all OEM products. In the ’80s, many shop owners asked me to teach service managers how to sell diagnostic time; this is where ATI began teaching managers.It dawned on me that most shop owners were too busy working in their businesses, which made change almost impossible to implement. Over the last four years, more than 11,000 service managers have visited ATI. They have received training in relationship based sales and leadership skills, so their owners could work on their business – not in it.
Then in the late ’80s, Allen came out with the first shop management system to write computerized tickets and count cash with a full-blown accounting system. The boys weren’t too excited about tracking cash in the ’80s, but we still involved over 1,200 shop owners with the Smart Management System. The challenge was the bookkeeping end, so I had to hire non-industry bookkeepers to teach “Ma” accounting while “Pa” turned wrenches.
The first week on the street they asked me why some shop owners were getting rich and some were not. I thought that was silly because my idea was that some just had bigger shops. What I learned was there were some $500,000 a year shops where the owner made $150,000, while others only made $50,000 on the same sales. There were many $1 million shops where the owner’s personal incomes were very different.
So I spent much of my earlier career learning how the rich were getting richer in their shops. I began to spread the word through seminars in the hope that if I helped you make more money, you would invest your equipment dollars with me and it worked like a charm.
Everyone Needs a Coach In the ’90s, the equipment business began to change as the industry giants bought and sold many good products. I began to reposition ATI by performing week-long management courses for shop owners. However, I didn’t realize the average adult has to read, write and say something six times for a 62 percent retention rate, only to forget it all in less than two weeks. I thought it was just me, since in my previous life three of the best colleges in the United States had asked me to leave. My Dad was not happy but boy did I have fun. I was reading a book by Don Shula, “Everyone Needs a Coach,” and it dawned on me that most shop owners were too busy working in their businesses, which made change almost impossible to implement.
We have had the honor of coaching industry greats like Mitch Schneider and beginners in new shops. I began personally helping owners and managers change by being their mentor. I certainly didn’t know everything there was to know at that time but we have evolved into coaching over 1,000 shops every week and having our fingers on the pulse of what works in various areas.
At this point, I work on my business, which allows me time to share winning strategies with you. It helps keep me focused on the changes in your business whether you specialize in tires, imports, domestics or transmissions.
The Hardest Thing to Change My plan is to take us on a journey by focusing on industry challenges and how to cope with them. Then we will study different financial, staffing, marketing and advertising models. The goal will be to re-engineer your shop, make you more money and give you the free time you deserve. The journey will not be easy because most of us have very strong belief systems. Some may even be misguided ones that hold us back from having the shop we really want. I don’t necessarily agree with the common notion that “knowledge is power,” because I have met a lot of smart people that cannot fix their businesses. Action is real power, so as we take this journey together, please realize that most of us do not like change, but without it you are doomed to your present situation. That’s OK with me if it’s OK with you.
Next month we begin the journey by focusing on how to net 20 percent to 30 percent cash profit in your business.
You can reach Chubby at [email protected]
