Evan Smith
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So far--the responses in this thread have touched on addressing several potential "profit soft spots" related to productivity: appropriate pricing for diagnostic/ up-front work (i. e. making sure the shop can cover its costs) (diagnostic pricing recommendation, offered by Tony M, Baldwin Express Lube); cutting down the transition time between performing the (small-revenue) diagnostic work, and performing the associated (larger-revenue) maintenance work (add a service writer recommendation, offered by Joe M, Osceola); improving the clarity and precision with which "diagnostic findings" get translated into a job estimate that a customer wants to buy (service writer rec, Joe); Beyond the suggestions above, and improving the "on the job" productivity of the technician individually - it is worthwhile for you as a shop owner/ business manager to look at what I'd call the "white space" around the direct work on the car. This "white space" is defined as "space where low/ no value is being created"--for you or the customer. Some examples of white space that you might want to think creatively about addressing include: the car-movement/ parking issues around your shop (if your techs are moving cars, they're not contributing positively to productivity); the time you spend going back/ forth with customers on the phone, trying to communicate the details of an estimate, and discover if the customer wants to go forward with it; the ways that you structure your parts/ equipment inventory (if your techs need to search for tools, equipment, or parts, or walk too far to get them, they're not contributing positively to productivity); the precision/ detail with which your tech's diagnostic findings--or other observations about the "street-readiness" of the customer's vehicle) get translated into an estimate the customer wants to buy; ... and others. These and other white-space examples can all be forms of "waste". Some of the highest value opportunities in your business can be removing these types of barriers to productivity, to help you create more satisfied customers, and earn more money.
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MMG is a management consulting firm that has helped small companies to grow successfully to become larger ones... and helped their owners/ leaders to develop the skills/ capabilities, and operating plans, needed to get to the next level. Evan Smith has personally worked in the retail auto business, supporting both sales and service (as a consultant) for almost 10 years – among work for other types of companies. His father was a small-business owner – and he grew up with the processes and the problems “around the kitchen table” of growing the business, managing people, finding cash, adding new products/ services, etc…. ultimately, as a young adult, he worked in the business to develop options to package and sell the business. The work with small companies is generally oriented around “coaching” – to help you as an owner to understand clearly the "critical few" priorities you have, the key decisions you need to make, the plans you need put in place; to challenge/ test your assumptions, and to help you to perform (in a “well-rounded way”) so that you can grow your business successfully. We’ve helped owners to generate the returns they might need to exit or retire, and to position their firms to realize optimal economic value for their “sweat equity.” We focus on helping leaders to grow, and their companies to manage profit and growth.
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Greetings-- I'd like to respectfully put a few ideas out on the table - for your consideration. I believe your assertions regarding how you manage your business would be familiar to many shop owners, and other small-business people – and many would strongly agree with you. HOWEVER... following through on some of your assertions in the long run can put your business at risk. Having done a lot of work in this area - I have a lot to say. I've held off here on a longer response--but the key ideas I'd challenge small business owners to answer for their business are: How do you create profitable growth in your business (because growth “at any cost” will create a “race to the bottom” for you and your competitors)? What differentiates your business in the eyes of your customers – what value do they get from your business that they’re willing to pay for? (HINT: The answer is not “lowest price”. Customers who seek the lowest price are loyal to … the lowest price. They’re not loyal to your business). How do you find more customers like your MOST DESIRABLE customers (the ones who come back over and over again, the ones from whom you make the most money; and/ or the ones who refer others to you…)? How do you change your business cost structure to operate effectively in line with “prices the market will bear” – AND to deliver the value that the MOST DESIRABLE customers find in your business? What is the lifetime value of each of your customers – and how do you extend/ add to that lifetime value your business can capture from your MOST DESIRABLE customers? If you'd like to hear/ read more: please see our pageson small business growth & development... or drop me an email offline: [email protected]
