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November/December 2014 Earning Employee Loyalty Shop ‘Sellability’ Part 2 Year-End Tax Planning Centering On Trust, Talent, Truth & Teamwork [atc] AutoCenter It’s more than just fixing cars

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Shop Owner brings independent repair shop owners a wealth of management information to help grow their business acumen and shop ­profitability. Founded: 2010 www.ShopOwnerMag.com

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Page 1: Shop Owner, November 2014

Novem ber/December 2014

Earning Employee Loyalty Shop ‘Sellability’ Part 2 Year-End Tax Planning

Centering On Trust, Talent, Truth & Teamwork

[atc]AutoCenter

It’s more than just fixing cars

c1 shopownernovember 11/19/14 7:46 AM Page C1

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Here’s a sneak peek of:

See page 32

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Customer Service: WinningOver Tough Customers

Shop Profile: [atc] AutoCenter

Shop Profile: Clark’s Car Care

Features

32 [atc] AutoCenter, Augusta, GA

46 Clark’s Car Care Naperville, IL

6 Technology: The Paperless Shop

22 Buying/Selling: Sellability Score, Part 2

42 Customer Service: Winning Over ToughCustomers

Sponsored by:

Shop Profile

®

November/December 2014

42 46

32

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Departments

14 Executive Interview: Robert Sanford, ACDelco

18 Shop Management: Earning Internal Customer Loyalty & Trust

38 Finance: Year-end Tax Planning

Shop Owner Staff

Publisher Jim Merle330.670.1234, ext. [email protected]

Editor Mary DellaValle, ext. [email protected]

Graphic Designer Cindy Strubbe, ext. [email protected]

Advertising Services Cindy Ott, ext. 209Director [email protected]

Contributors Chris Crowell, ext. [email protected]

Tim Fritz, ext. [email protected]

Andrew Markel, ext. [email protected]

Subscription Services Maryellen Smith, ext. [email protected]

Babcox Media, Inc.3550 Embassy ParkwayAkron, OH 44333-8318

President Bill [email protected]

Vice President/ Greg CiraChief Financial Officer [email protected]

Vice President/ John DiPaolaGroup Publisher [email protected]

Controller Beth [email protected]

In Memoriam

Founder of Edward S. BabcoxBabcox Publications (1885-1970)

Chairman Tom B. Babcox (1919-1995)

4 |Shop Owner|November|December 2014 www.ShopOwnerMag.com

14

®

�2014 by Babcox Media, Inc.

18

38

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The rumors are true. Manyshops realize a more than 20%increase in average repair ordervalue (ARO) using Digital Inspections and WorkflowManagement. The use of cer-tain procedures and policies, inconjunction with SmartFlow,resulted in these incredible increases in ARO and techni-cian productivity.

How Gradual ProcessChanges In The ShopMake A Huge DifferenceAutoVitals invited four owners,who run shops of different serv-ice specialties and varying sizes,to share their formula for successat our monthly Service AdviserHuddle webinar in October. Ahighlight video of the broadcastcan be found at www.ServiceAdvisorHuddle.comon the AutoVitals’ website.

The owners, Bill Connor,Craig’s Car Care; Bill Bates,Eagle Automotive; Dan Gar-

lock, Silverlake Auto; and RussHilliard, Tires Too (all NAPAAutoCare Centers), introducedpolicies and procedures in theirshops that are tailored to theirtype of business and specific tothe interactions between motorists, service advisers andtechnicians.

The excerpts below give youan idea of how they all increased their ARO by morethan 25%.

Four Shop OwnersEmbrace The Drive ToEliminate Paper AutoVitals’ goal is to get dealer-ship professional-grade educa-tional information to the motorist and dramatically in-crease consistency and produc-tivity for service advisers andtechnicians. All of you have a“work in progress” screen inyour shop management soft-ware, but you also have thepaper rack. We identified that

6 |Shop Owner|November|December 2014

|Technology|

Change Is Good & ProfitableWhen Done RightHighlighting The Value of Digital Inspections AndWorkflow Management

Many shops across the country have introduced Digital Inspectionand Workflow Management on tablet devices in the back shop andinternet browsers in the front office. A significant number of theseshops scored such incredible productivity and efficiency results thatit begs the question, “What have they done differently than otherswho are still trying to find their mojo?”

by Uwe Kleinschmidt, CEO, AutoVitals

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missing information is a major sourceof unnecessary busy work becausetechs have to walk back and forth toget that information. We eliminatedthat so all the important informationneeded by the service adviser is onlyone click away.

The best analogy I have is that every-body used a landline phone in thepast, but many of us have switchedfrom that basic technology to a smart-phone. For some of us this switch wasinitially not easy, but new features cre-ated a whole new experience with awhole new level of quality.

The same holds true for digital inspection and digital workflow man-agement. So, let’s dig in as four shopowners discuss digital inspections, detailing what route they’ve taken andwhat’s going to come next.

Russ Hilliard, TiresToo, Londonderry,NH:We spent most ofthe winter playingaround with it andgetting our inspec-tion format downasking our service advisers and techs to develop that. Wewent full bore on May 1 and sincethen we’ve seen a 27% increase inour AROs, and gross profit marginsare up by almost 4%. We’ve seen$1,700 a week in additional business.

Dan Garlock, SilverLake Auto,Oconomowoc andHartland, WI:Really, the biggestresult that we’veseen is our cus-tomer competence

has just gone through the roof. Beingable to show them and educate themabout what’s going on with their vehi-cle with pictures and a professionalinspection is really giving them theconfidence that they can trust us beyond anybody else right now.

We’ve seen ARO improvements ofabout $50 in our Oconomowoc location, and we’ve seen even greaternumbers in our Hartland location.We’ve also been seeing about a halfan hour increase per average repairorder.

Brian Bates, Eagle Automotive, Littleton, CO:It’s been a great pro-ductivity tool for us,especially owningmultiple shops. It’snice to be able togo to the computerinstead of calling another location andasking, “Hey, how’s the day going?”Instead, you can go to the computer,and you know which cars are in theinspection process, which cars arewaiting for authorization, which onesare being estimated, which ones arefinished, which technicians haveflagged how many hours, and whichadvisers have the work in the shop.You can answer a whole lot of ques-tions without disrupting anything inthe process.

Garlock:We basically just quit paper inspec-tions. We told the guys “alright, we’requitting paper inspections, and we’regoing to do digital inspections.” Wealso provided some parameters aboutwhat we expected them to do, likewe wanted a minimum of four photos

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on each inspection, and one of thosefour had to be of something “good”on the car so we could still buildsome value in the car.

We also asked our service advisersto get an email address from our cus-tomers. Now that we’re not going toprint these inspections anymore, weneeded a way to get it to them. So,we had to train our service adviserson how to educate our customersabout what we’re doing and whywe’re asking for their email address.Once we did that, we got very littlepushback from our customers.

Patrick Egan, AutoVitals:Can you walk us through and discusshow you set up the day with SmartFlow and how you queue up thejobs for each one of the techs?

Bill Connor, Craig’s Car Care, Allen,TX: We look acrossthe top of it sowe can see exact-ly how manyhours our techshave agreed to dofor today, andthen the service advisers make surethey’ve got enough hours approved togo ahead and actually meet their goal.And then all day long, the techs canbe efficient at what they do.

And, based on the promised time(because a promised time actuallyshows right up on the technicianview), we can basically drag and dropthe tile, in the order that we want thetechnician to work. So we’ll just dragthings around first thing in the morn-ing, and if anything was left over fromthe day before, it automatically showsthe hours that are remaining. We’ll

then drop whatever we need to foreach technician and then keep opti-mizing the technicians’ ability to workon the vehicle effectively and in syncwith our customers expectations.

Bates:It’s a change in process just likegoing from mailing letters to sendingemails. It was a major culturalchange for most of us. Just as most ofus wouldn’t go back to sending letters through the mail now thatwe’re on email, that’s how we feelabout the digital processes. It was abit of a change; a transition. It took alittle while for everybody to get usedto it, but if you asked my guys nowwhether they’d rather go back to thepaper inspections or stick with thedigital, they’d all say that they wouldn’t want to go back to paperfor anything.

Garlock:Right now, I don’t think any of ourguys would want to go back to paper.It has really made our shop and ourinspection processes much more con-sistent. It’s taken that guesswork awayfrom the service adviser. “Does thevehicle really need this? Am I sellingthe right thing?” There’s just beliefright away.

Hilliard:None of us are looking back. We areterribly excited about it. This is agame changer as far as I’m con-cerned. It just raises your credibility,and your level of professionalism, andtakes your market to a whole newlevel. Shop owners who aren’t lookingto move in this direction are going toget left behind.

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Involvement Of The WholeStaff Is KeyGoing from a paper-based shop to afully digital operation is a task involv-ing the whole staff. Just as when newtools are introduced to the shop, newpolicies and procedures are neededso everyone can fully benefit. Using alandline phone doesn’t even tap 10%of the smartphone’s capabilities. But,as with other big changes in process-es, small steps can help bridge thetechnology gap and yield better andfaster results in the overall transitionprocess. A typical point of resistancefrom initial technician feedback ispaper is what they are used to and itworks, so why change?

Connor recommended letting thetechnicians select the tablets andmake sure the advantages of the tabletare immediately obvious to eliminatepain points. Speech-to-text is support-ed natively by recommended tablettypes and not only shortens the (oftenunpaid) technician time, but also cre-ates technician notes without typos.

Bates couldn’t emphasize enoughthat developing the inspection sheetas a team effort results in 100% “buy-in” by all involved, and even if ittakes a few iterations, it pays off significantly.

Hilliard realized that he was the last

one of the staff to embrace the newway; everybody was convinced itwould be a game changer when hepulled the (paper) plug.

Garlock introduced a procedure ofpicture taking, specifying precisely“what” and “how many” images totake during the inspection.

Once process adjustments aremade, and a few iterations are appliedto finetune the new process, nobodyactually realizes how far they’ve already come. By instituting smallchanges at a time, and with buy-in bythe staff, you can make a huge differ-ence in how fast the new process canbe implemented. Everyone empha-sized that nobody in their shop would

go back to paper.Connor summarized it this way:“We can see exactly the time each

technician has been committed to.The service adviser will now makesure that enough approved hours areavailable and use the promised timeto the customer as a management toolfor prioritizing the vehicles for thetechnicians in the back shop.”

Watch the whole recording atwww.AutoVitals.com, and sign up forthe next Service Advisor Huddle webinar at www.Recipe4Shops.com tojoin the transition to the digital shop.SO

Switching from paper to digital is like switching from a landlinephone to a smartphone.

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TechPRO®, a new diagnostic scan tool fromMAHLE Service Solutions, is the most advancedtechnology available for professional techni-cians. This versatile, software-based, laptop ortablet-enabled device helps analyze, diagnoseand repair today’s sophisticated computer-controlled vehicles faster and more accuratelythan anyother toolon the market.

Withdecades ofproviding diagnosticsto OEM’send-of-linemanufacturingtest systems,MAHLE Service Solutionsnow brings this speed and stability to an after-market scan tool for the first time. TechPRO fea-tures the ability to decode a vehicle identifica-tion number (VIN) in one second with one click.Plus, the speed of diagnosis is measured in seconds versus minutes for competitors’ tools.

The new device was engineered so the vehicle communication interface (VCI) andsoftware can be used with a technician’s current desktop, laptop or tablet, making it unnecessary to buy or lease extra hardware. Inaddition, regular vehicle data and software updates are downloaded automatically and

seamlessly via the Internet.Among TechPRO’s features is J-2534 pass-thru capability for reflashing and reprogramming.

TechPRO also features an

ergonomically engineered VCI with a

bright LED light for high visibility and confirmation that the VCI is connected and

communicating. Other useful functions includecylinder balance tests, compression testing, keyrelearn, misfire graphing, customer reports, andfull-time data recording

The MAHLE Service Solutions TechPRO diagnostic scan tool will be available for salein 2015.

12 |Shop Owner|November|December 2014 www.ShopOwnerMag.com

Corporate|Spotlight|

MAHLE Service Solutionswww.servicesolutions.mahle.com

ADVERTISEMENT

MAHLE Service SolutionsIntroduces TechPRO®

The Industry’s Most Advanced Diagnostic Scan Tool

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You’ve been in this role afew months — have you hadan opportunity to meet with

shop ownerswho partici-pate in yourProfessionalService Center pro-gram and, ifso, what arethey tellingyou?

Among thefirst things Idid when I ar-rived was visitwith a num-ber of our distributorsand PSC

program shop owners. Whilewe have an extremely construc-tive and honest relationship

with our advisory committees,it’s no substitute for face-to-facevisits and talking with themabout their business challengesand opportunities — and learn-ing how we can add value.

I appreciated their generosityof time and feedback. I waspleased to learn we’re doing alot of things right — includingthe quality of our parts andfield and business support. Butthey told us there is room forimprovement on other issuesand we’re addressing those as amanagement team.

In your view, what is ACDelco’s biggest challenge?

We need to accelerate ourgrowth. The automotive after-market will soon be a $150- billion-a-year business and wewant to be a much bigger piece

14 |Shop Owner|November|December 2014

Executive|Interview|

Robert SanfordGeneral Director, ACDelco

Robert Sanford is general director of the ACDelco channel of GeneralMotors and is responsible for its business strategies and overallperformance. He joined GM in 1982 and has served in a variety ofservice, sales, aftersales and management roles with the company.Sanford’s previous assignments have included: director of GM

Mexico/Central America/Caribbean Aftersales; regional servicemanager for GM’s Northeast Region; zone manager in Memphis andSan Antonio; Chevrolet distribution manager and customerassistance manager. He has received the General Motors HighAchiever award numerous times. Sanford earned his bachelor’s degree from the State University of

New York.

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of that. I’d like to reach more inde-pendent service centers outside of ourPSC network because there is tremen-dous potential there.

We have a strong brand rooted intechnology and innovation, great distribution partners and a significantproduct offering of nearly 90,000parts across 37 lines. We are the onlytrue provider of GM OE parts, as wellas premium aftermarket parts for mostother makes and models. We regular-ly leverage the engineering technologyleadership of GM.

We can bring value to these shopswhile still honoring their desire for in-dependence and upholding the quali-

ty that distinguishes us from our competitors. So that will be a priorityas we focus on our growth plan.

You seem to be focusing on millennials lately – why?

Quite simply, millennials are thenext generation of our partners in thetrade. They will inherit this businessand we want to enhance theirawareness and usage of the ACDelcobrand. What they need is a solid

foundation: We offer industry-leadingtraining, great products and greatmarketing support. We’re profiling afew promising young techs-in-train-ing in a series of videos called “ThePart That Built Me.” Their stories areunscripted and authentic, and theyare on our YouTube channel, syndi-cated on websites where the nextgeneration of trade go and spreadvia social media.

We want to entice young people toconsider careers as technicians be-cause there will be a shortage in thenext few years. We’re providing freeaccess to introductory courses throughNATEF-accredited programs and our

support for the GM ASEP technicianprogram. This helps the industry and itpromotes the ACDelco brand to anew generation of technicians.

Last year you introduced a RegionalService Chain program. How is itgoing?

Fantastic. We have nearly 400 storesin the network and we’re seeing solidsales growth. A lot of consumers areturning to RSCs for maintenance and

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certain minor repairs, so this diversi-fies our presence in the market. We’llmake an announcement soon that willfurther enhance our partnership withRegional Service Chains.

What new products and serviceshas ACDelco introduced this year?

We are always looking for ways tokeep ACDelco fresh and relevant.We’ve released hundreds of SKUs toour customers this year, including GMOE emission products that are new toACDelco.

We continue to emphasize a “repair” strategy rather than just sell-ing parts. Shop owners tell us theirtechs are happier — and more effi-cient — when they have everythingthey need to make the repair. Thatmeans more activity in the bays andsatisfied consumers.

This strategy extends to software,too. Shops can access our TIS2Webdiagnostic soft-

ware by theday, month or year so

they can keep more diagnostic workin-house. At AAPEX, we sponsored aclinic where shop owners could learnhow to diagnose, replace or repro-gram GM Transmission Electro Hydraulic Control Modules, the heartof more than 8 million GM six-speed automatic transmissions on the road.

We have also released OE key fobsto the aftermarket. Again, we want ourshops to be able to provide one-stopsolutions to their customers.

And we have made our trainingmore accessible with the introductionof short “TechTubes” that tackle indi-vidual topics, as well as half-day sessions that help techs take advan-tage of important training without taking time away from the bay.

We just finished redesigning ouraward-winning Knowledge is Powercar care educational seminar to helpindependent service centers better connect with all of their customersthrough education and empower-ment. There is a lot of updated con-tent, especially in the area of hybridtechnology. When we first introducedKnowledge is Power, we thought itwould appeal just to women. But ithas resonated with everyone whowants to be better educated aboutmaintaining their vehicle.

Our updated ordering system,ACDelco Connection, makes it easier

to do business with us.The Connection is a B2B online parts ordering tool that

offers automotive profession-als quick access to theirACDelco supplier’s full inven-

tory of parts, real-time availabil-ity, price and labor for all makes

and models. The Connection providesexclusive access to GM Specialty Catalogs, including the Illustrated Cat-alog that contains system illustrationsfrom engineering data for GM vehicles from 1992 to present.

Your readers can learn more atacdelcotechconnect.com. SO

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With all due respect, I wouldargue, why does it need to beone or the other? From mypoint of view, this debate is likehaving two children and beingasked which one we love themost, because both your cus-tomers and your employees areequally important.

Since it’s becoming increas-ingly difficult to find and hirethe superstars, I would like touse this article to help you con-tinue earning the trust of youremployees, who at Elite werefer to as our internal cus-tomers.

Putting first things first, asbusiness owners we need torecognize that our internal cus-tomers are much like our exter-nal customers. In your case,your external customers cometo you with transportation prob-lems that you solve, and thenthey pay you with their hard-

18 |Shop Owner|November|December 2014 www.ShopOwnerMag.com

Earning TheContinued TrustOf Your Internal Customers

Many years ago, I read an article that featured an interview withHerb Kelleher, the co-founder of Southwest Airlines. In the article, hestated that he and his mother (who was a Harvard graduate) wouldoften debate who was more important. He argued that it was theemployees of a company, and his mom argued that it was thecustomers.

by Bob Cooper, president, Elite Worldwide Inc.Shop|Management|

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earned money.Your internal customers

come to you with needs as well.Those needs include being able tosave enough money to buy a home,or having the funds available thatthey’ll need to educate their children.Simply put, you should provide themwith the right opportunities and helpthem fulfill those needs. In return,they pay you with their work effortsand their contributions toward yoursuccess.

So the question is, what can you doto keep the stars you have, not just for

a few years, but for the length of theirworking careers? Although there is no

formula that will guarantee results,there are a number of things youcan do to keep your stars as yourstars.

Winning Employees’ HeartsFirst, and most importantly, never for-get this cardinal rule of managingpeople: We have to keep (win) thehearts of our employees, becauseonce we lose their hearts, their mindswill follow. I actually coined this rulelong ago and have lived by it fordecades. Now, here is how you canimplement it:

With every superstar who workswith you, you need to look beyondthe employee component of your rela-tionship, and consider them as a per-son, just like you. This means that youneed to truly care about your employ-ees as people, and the things that areimportant to them need to become important to you. Once they realizethat you really do care about themand their families, as well as theirgoals, they will then care about youand the goals of your company.

Secondly, you need to be a great

20 |Shop Owner|November|December 2014

What can you do to keep the stars you have,

not just for a few years, but for the length of

their working careers? Although there is no

formula that will guarantee results, there are

a number of things you can do to keep your stars

as your stars.

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listener, you need to pay close atten-tion to their suggestions and you needto always thank them for their input.

I’ve also learned that you need tobe a shoulder that your employeescan lean on. By being sympathetic totheir personal struggles, you’ll findthat if you have the right people, theywill not take your sympathy for grant-ed, but they will go to the ends of theearth for you. You need to let themknow that you recognize their talentsand strengths, and you need to give

them praise for jobs that are welldone.

Beyond that, you have to showthem the humility that all employeesseek. This means you’ll need to setyour pride aside to let them know thatthey are much more gifted than youin many ways, you’ll need to admit toyour mistakes, and you’ll need to giveheartfelt apologies at the appropriatetimes.

Lastly, if you plan on keeping theirhearts, you’ll need to constantly shareyour vision of the future and paint aclear path to their success in the coming years.

Over the years, I’ve discoveredthat people don’t leave companies.They never have, and they neverwill. People leave people, not companies. If you’d like to continueearning the trust and confidence ofyour employees, then I would en-courage you to apply the principlesthat I’ve shared with you. If you do,then I’ll make you a promise: Beyond being a great role model foryour employees, the morale of youremployees will go up, your shop’s

productivity will go up and any employee turnoverproblems you havewill disappear. SO

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You need to truly care about your employees as

people, and the things that are important to

them need to become important to you. Once

they realize that you really do care about them

and their families, as well as their goals, they

will then care about you and the goals of

your company.

Since 1990, Bob Cooper hasbeen the president of EliteWorldwide Inc.,www.EliteWorldwideStore.com, an ethics-basedcompany that helps both struggling and successfulshop owners take their businesses to new levelsthrough one-on-one coaching from the industry’s topexperts. The company also offers shop owner sales,marketing, and management seminars, along withservice advisor training. You can contact Bob at [email protected], or at 800-204-3548.

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The need for drilling down deep-er into the Sellability Score iswhy I created a two-part ques-tionnaire, consisting of Parts Aand B. While Part A provides youwith a score that ranks the sella-bility of your business withinbusinesses of all industries, Part Bsupplements the results of Part Aand drills down deeper to rankthe sellability of your businessspecifically within the automo-tive aftermarket service industry.

If there is any question of theneed to drill down as deeply aspossible when establishing yourown shop’s Sellability Score,there is one thing you can counton – 100% of potential buyers ofyour business will drill down asdeeply as possible before decid-ing whether or not to place anoffer.

The Sellability Score is onebeing utilized by a growing num-ber of prospective business buy-

ers to determine whether or notan asking price is justified andtheir corresponding resultantoffer.

Are You Running a Valuable Aftermarket Business?It’s fun to imagine how muchyour aftermarket business isworth. It’s not as much fun whenyou find out that for all the ener-gy you poured into it, a businessbroker or potential buyer can’tsee the value you can, or thinksyour number is unrealistic.

Issues which may be adverselyaffecting the Sellability Score ofyour aftermarket business areprobably the same ones causingmounting frustration for you —the feelings of being over-whelmed, working too manyhours, dealing with inconsistentcustomer experiences, and thedifficulties of managing cash flow.

Whatever your personal and

As discussed in Part 1 of this two-part article in the Sept./Oct. 2014issue of Shop Owner magazine, “sellability” is a powerful indicator ofthe value of your business, regardless of whether or not you have anyintention or even interest in selling your business today. A highSellability Score may confirm or surpass the value you have in mind. Alower Sellability Score may point directly to the underlying issues in yourbusiness which undermine its value.

Do You Know Your Shop’s‘Sellability Score?’

If The Sellability Score Is A New Concept To You AndYou Plan To One Day Sell Your Business, Read On…

Part 2 of a 2-PartDiscussion

Buying & Selling|An Aftermarket Business by Art Blumenthal, MBA, CBI

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financial goals are for your aftermar-ket business, as a responsible busi-ness owner you simply have to beable to answer these questions:• If you wanted to, could you sellyour business today for a numberthat you’d be happy with?• Is there anything that you could bedoing each day to make your busi-ness more valuable?• What steps can you take to reducethe number of hours that you work,while simultaneously boosting theprofits and the sellability of yourbusiness?

The “Sellability Score,” both Parts Aand B, can assist you in answeringthese questions.

Whether you want tosell next year or a decadefrom now, or pass thebusiness to a family mem-ber, you strive to build abranded asset that some-one would value monetari-ly – otherwise, you just have ajob, not a business.

The Sellability Score is aninteractive tool offering acomprehensive assessment ofthe “sellability” of yourbusiness. In just 26 min-utes, 13 minutes for eachof the two parts, this absolutely free and confi-dential self-assessmenttool will score your busi-ness in a number of key areas andtell you just how sellable your business is.

Since the publication of Part 1 ofthis article last month, many after-market business owners nationwidehave gone online to my websitewww.art-blumenthal.com and com-pleted both Parts A and B of the Sell-ability Score and are already realiz-

ing the benefits of focusing on areasof their aftermarket businesses thatneed attention in order to maximizevalue.

What Does Part B of the SellabilityScore Provide?The aftermarket Sellability Score pin-points key elements most attractive toaftermarket business buyers. Your responses, as well as other publiclyavailable data about your area andlocation, will be analyzed to providean assessment of how your businesscompares to other automotive busi-nesses in terms of sellability. The

aftermarket sellability key factoranalysis is based on my 37 years inthe automotive aftermarket and suc-cessfully selling dozens of automotivebusinesses.

The scoring system is based upon azero to 100 scale and those shopowners achieving scores higher than75 are well on their way to achieving

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a hoped for value of their businesses.Very recently, some aftermarket shopowners who completed Parts A and Bof the questionnaire were surprisedand delighted to find that their busi-

nesses are actually worth much morethan they thought. Many others havelearned that they have areas that require their attention if they want tosell at the price they have in mind.

Either way, ultimately the higheryour Sellability Score, the less timeit will likely take to sell your busi-ness and the more money you willget for it.

Once you have your SellabilityScore, you can…

• Do nothing — your curiosityabout the Sellability Score for youraftermarket service business has beensatisfied. I promise you that no onewill bug you to do anything furtheror spend any money.

• Post your Sellability Score onyour office wall as a daily reminderof the drivers that determine sellabili-ty and the concrete actions that youcan take on a daily basis to workfewer hours and raise your score andthe value of your business when thetime comes to sell.

• Take the next steps to obtain ano-cost, no-obligation broker’s opin-ion on the most likely selling price ofyour business, so you can decide ifnow is the time to sell. If not, then atleast you have learned about theconcrete actions that you can take toincrease the sellability and value ofyour business.

How Deep Are We Drilling?The aftermarket specific question-naire evaluates your business com-pared to similar automotive business-es. The results are ranked using thefollowing key factors commonly employed by buyers when analyzinga potential purchase of an automo-tive aftermarket business. The sellabil-ity scoring also factors in geographicand demographic criteria to predictthe number of qualified entrepreneur-ial buyers that are actively shoppingfor a business in your area.

Key factors include: 1. Your Products and Services:Most buyer prospects will havecertain preferences for the type of

automotive aftermarket businesses forwhich they are looking. For example,

If there is any question

of the need to drill down

as deeply as possible

when establishing your

own shop’s Sellability

Score, there is one thing

you can count on –

100% of potential buyers

of your business will

drill down as deeply as

possible before

deciding whether

or not to place an offer.

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3

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buyers with no automotive back-ground may gravitate to a franchisebrand because of the perceived train-ing and support that is provided to

newcomers to the industry. Buyerswho wish to avoid the technicalcomplexity of today’s vehicles maylean toward a quick lube operationor one focused more on tires andtire-related services. A business thatis very specialized, such as transmis-sion repairs, air conditioning serviceor large truck and fleet service mayscare some buyers who believe thatthe operation requires more special-ized knowledge or that it will bemore difficult to recruit experiencedtechnicians. On the positive side, agood broker with aftermarket industryexperience should be able to portraya specialized business as one withgreat potential to increase revenue inthe future by broadening the breadthof service offerings. The broader theappeal of your business is to buyersin the marketplace, the more sellable

it is, and the more likely that youwill attract multiple buyers with competing higher offers.

2. Your Business Location and Facilities: Buyer prospects willscrutinize your physical facilities

much the same way as a prospectivehome buyer might check out a housefor sale. A well maintained and or-ganized building, with an attractiveand comfortable customer waitingarea and up-to-date automotiveequipment will help make a goodfirst impression on a buyer.

A sophisticated buyer is interestednot only in your asking price, but isalso factoring in how much moneywill have to be spent on building repairs, cosmetic improvements and replacement/upgrading of equipment.The higher their estimate for capitalexpenditures, the lower they will bewilling to spend to acquire your business.

Visibility and access to your build-

3

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ing, bay capacity and adequacy ofparking are also key factors that buy-ers will evaluate in comparing yourbusiness to similar ones on the mar-ket. A business that can handle thecapacity to service more vehicles willbe more sellable among buyers withaspirations to grow revenues.

3. Your Competition: Competitionis less of a factor if your business

is solid and showing sales growth.Most buyers will be confident thatthey will be able to retain your grow-ing customer base. However, if yourbusiness is struggling and you havelost business to new competitors inthe marketplace, then you will havemore of a challenge convincing abuyer that your lost customers willcome back just because there is newownership.

Buyers are increasingly looking atthe Internet reviews of businessesthat they are considering. A businesswith below average reviews on Yelp,Google, Yahoo and Angie’s List willbe of concern to a buyer prospect,especially one who sees the value ingrowing a younger consumer basethat is increasingly using Internet re-views when first-time shopping for atrusted service provider.

If you don’t have a five-star ratingon the Internet, then taking action toimprove your online reviews increas-es the sellability of your business. Ifyou are not Internet savvy, then con-tact a specialist in this area who hasthe expertise to work with socialmedia companies on reviews, rank-ings and advertising. You may be intimidated by the mysterious innerworkings of the Internet, but at leastunderstand that there are affordableexperts out there who know the toolsand tricks to improve how your busi-

ness is perceived by potential firsttime customers.

Improving your sellability with afive star online rating may take sometime to accomplish, so it is better tostart now and make it an ongoing effort!

4. Your Property: Most buyerswill have a preference of either

leasing a building or purchasingthe real estate. If you do not own thereal estate, then your lease terms arecritical to buyer prospects. Most buyers, as well as the banks thatmight be financing the business acquisition, will want to see thatthere are at least 10 years on yourlease, including options to renew.Obviously, the rent during that periodimpacts your cash flow and hencethe value of your business.

If you only have a few years remaining on your lease, you can enhance the sellability of your busi-ness by talking to your landlord nowand getting an option to renewadded to your lease. If you wait untilyou have a buyer in hand to go toyour landlord, then you are not in agood negotiating position to get themost favorable terms.

If you own your real estate, then itbecomes a personal and financial decision on your part whether to sellthe real estate to the purchaser ofyour business or to lease it. There aremany factors that can enter into thatdecision, so it is a good idea to review the pros and cons with youraccountant, attorney and broker.

5. Your Employees: All buyerswill perceive your employees as

critical to their future success.Being able to boast several long-term,loyal employees will make your busi-

33

3

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ness more sellable and increase itsvalue. It also helps if your employeesare well trained to act independentlyand follow the customer serviceprocesses and quality standards thatyou have established, especiallywhen you are not there to watchover them.

You may have worked very hardover the years to build a strong busi-ness and have great relationshipswith your customers that keep themcoming back. However, to a buyer,your business is far more valuable ifthere are reasons for customers to return for future service other thanyour personal honesty, technical abil-ities or great personality.

A dependable crew of experiencedtechnicians and service advisors thatcontinue to deliver excellent cus-tomer service and quality workman-ship when you are no longer on thepremises will make your business sig-nificantly more sellable and help youachieve a higher sales price.

6. Your Business Trends: Nothingenhances the sellability of a busi-

ness more than a steady growthcurve up to the present time. Tryingto convince a buyer that a sales de-cline is due to the owner being ab-sent or losing interest in the businessgoes only so far. Buyers formulatetheir offer price based upon the pres-ent performance of the business, notbased on how much money you mayhave made two or three years ago, oreven what the business may do inthe future if the market turns aroundor if an energetic new owner takesover and does all the things youhaven’t had the time, expertise or firein your belly to implement.

Every business has a sales cycle,and the natural reaction is to want to

hold on to your business when it ison a growth curve. When it comes tosellability, a growth curve is the besttime to sell in order to maximizeyour sales price. Far too many own-ers unfortunately wait too long andthen are faced with the challenge offinding a buyer for a business that ison a downward sales cycle.

To compound matters, banks arevery hesitant to finance the acquisi-tion of a business with a double digitsales decline, so the likelihood of theseller having to offer financing increases.

“Main Street” BusinessesIt’s important to point out that in designing the aftermarket-specificSellability Score, I took into consider-ation that most automotive serviceshops I work with are “main street”businesses. In other words, they arebusinesses or franchises that areowned by an individual or an indi-vidual with partners or family mem-bers, as opposed to larger corporateentities with much greater annualrevenues.

As a result, I am able to pinpointand develop comprehensive resultsand action plans based upon the“real world” factors that affect yourshop’s value in the eyes of potentialbuyers.

Of course, the ultimate sellabilityof your business is also dependentupon several important factors:

• Your business has a positive cashflow attractive to buyers;

• Your business is priced fairly toenable a buyer to earn an attractivesalary and receive a reasonable return on investment;

3

Main Street, U.S.A.

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• Your business can be purchasedwith a reasonable down payment;

• Your business will qualify forbank/SBA financing or the seller offers financing;

• There are buyers in your marketactively looking for your type of busi-ness or willing to relocate to yourarea; and

• The quality of the marketing ef-forts, including advertising, Confiden-tial Business Review and financialpresentation, pre-arranged financingand the professionalism of your bro-ker and/or your own selling efforts.

Building An Exit Plan UsingThe Sellability ScoreWhen you spend a lifetime trying tobuild a successful business, it leaveslittle time for much else, includingthinking about an exit plan; but evenif you are planning to pass the busi-ness on to family, you want to ensureyou are offering them a valuablebusiness. Whether you are creatingan exit plan for the short term or foryears into the future, it’s never toolate or too soon to start understand-ing — and increasing — the value ofyour business.

Seventy percent of all businessowners in today’s market plan to sellor pass their business on within 10years. But 76% don’t have an exitplan, and many do not know thevalue of their business.

A well thought out exit plan can: • Protect the legacy of your

business;• Build value for your business;• Provide financial security for

your family and your stakeholders;• Make it easier to deal with any

unexpected events (illness, accidentor death); and

• Help to prepare you and yourbusiness for the future.

Both the standardized SellabilityScore questionnaire and the cus-tomized, aftermarket specific ques-tionnaire can be key tools in buildingyour exit plan and are available forfree at a link on my website home-page at www.art-blumenthal.com.Each is easy to use and takes about13 minutes to complete.

After completing the confidentialquestionnaires online, you’ll immed-iately be provided with a raw scorefor your business and a summary ofwhat the score means. Meanwhile,based upon your questionnaire answers, I’ll develop and provide acomprehensive report for your busi-ness which we can later review together, usually within 72 hours.

My future case study articles appearing in Shop Owner magazinehighlighting the successful sales ofselected shops will include somespecific Sellability Score factors thataffected the value of those business-es. Both the challenges of selling aspecific business with a lower Sella-bility Score as well as the opportuni-ties realized as a re-sult of a higherSellability Score willbe discussed as appropriate. SO

Leveraging more than 30 yearsof experience as both an after-market business owner and af-termarket technology executive,Art Blumenthal LLC provides business intermediaryand advisory services to both buyers and sellers of in-dustry businesses of all sizes. Art is a member of IBBA(International Business Brokers Association, Inc.). Formore information, or to initiate a no-obligation confi-dential consultation, visit www.art-blumenthal.com.

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“We ran the business for a yearbefore purchasing it,” Chris explains, adding that they mustbe doing something right, hav-ing just celebrated their 15-yearanniversary as shop owners.

“Both Brian and I went toSouthern Polytechnic State University, where we both grad-uated with bachelor’s degreesin mechanical engineering intechnology. Not that that makes

us good businessowners — everythingwe’ve learned up tothis point has beenself-taught.”

Focus On Training[atc] AutoCenter’s fourtechnicians as well asthe independent repair shop’s two serv-ice advisers all benefitfrom required contin-uing education. As aNAPA AutoCare Cen-ter, [atc] AutoCenter isalso eligible for thecompany’s Autotechclasses offered

throughout the year.Elite Worldwide also has

been instrumental in helping

32 |Shop Owner|November|December 2014

Shop|Profile|

[atc] AutoCenterA Family Tradition Of Quality & Service Excellence

When brothers Chris and Brian Weeks purchased [atc] AutoCenter inAugusta, GA, back in October 1999, they did so knowing theyneeded to live up to the expectations set by the previous owners.This wasn’t just any business transaction — Chris and Brianpurchased the shop from their father, Carl, and their uncles, Allenand Larry, upon their retirement in 1998. As the original owners, theyhad set the bar high since opening the doors in 1972, building astrong customer base and consistently delivering quality repairs.

by Debbie Briggs, contributing writer

[atc] AutoCenter owners Chris (left) andBrian (right) Weeks.

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Chris and Brian take theshop to the next level interms of production andprofitability.

“Elite Worldwide’scoaching program has helped ustremendously,” Brian says. “In thecoming year, our service advisers willattend Elite Worldwide’s Master’s Pro-gram. It’s a six-month commitmentthat is really a lifetime commitment tochange for the better.”

In addition to paid training, as wellas reimbursement for ASE certifica-tions, [atc] AutoCenter employeesenjoy performance bonuses, paid va-cation and holidays, short- and long-term disability coverage, as well as asavings plan.

“We treat our employees like peo-ple, not a number,” Chris says. “Wedon’t look at ourselves as ‘the boss’—we all work together.”

While transmissions are the shop’sspecialty, [atc] AutoCenter techs alsoperform everything from routine main-tenance to advanced diagnostics on

almost all makes, both foreign anddomestic, and occasionally even aFerrari or Aston Martin. Each tech hasa laptop, and assigned bays help keeprepairs on track and productivity up.

“We have started setting goals forthe technicians to hit based on theprevious year’s numbers, and we postthem weekly,” he explains. “All techsclock in/out on each job through ourmanagement software, Mitchell Enter-prise. We’ve also assigned bays forour techs so they don’t have to dragtheir tools from one end of the shopto the other.”

Focus On Shop AppearanceWhile continually improving process-es is critical to success, Chris is quickto add that customers also need tofeel welcome and comfortable while

www.ShopOwnerMag.com November|December 2014 |Shop Owner|33

Brothers Chris and Brian Weeksjust celebrated 15 years asowners of [atc] AutoCenter, andwill open a second location in2015.

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Chris and Brian Weeks firmly believe that a shop’s appearance should convey professionalism andorganization, and customers need to feel comfortable while waiting for repairs.

[atc] AutoCenter techs specialize in transmissions, but performeverything from routine maintenance to advanced diagnostics onboth import and domestic vehicles.

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waiting for repairs. Shop appearanceshould convey professionalism and organization.

“We have created a warm atmos-phere in our waiting room, completewith Keurig coffeemaker, cold bever-age cooler, TV, newspapers andsnacks to help customers feel athome,” Brian says. “We also offer ashuttle service to customers who needa ride.

“I think the biggest thing about customer service is to treat people likewe want to be treated, and to let themknow that you empathize with whatthey are going through,” he continues.“Our goal is to change the way peo-ple think about the automotive serviceand repair industry and to develop relationships that last.”

Focus On CommunicationWord-of-mouth has worked for the

Augusta-based shop since the doorsopened in 1972, and satisfied cus-tomers continue to send friends andfamily to [atc] AutoCenter. So muchso that Chris and Brian are able tofocus on creating brand awareness inthe community, rather than more tra-ditional marketing such as direct mail.

More than ever before, people arealso searching for independent repairshops online, which is why Chris andBrian have allocated resources to keep[atc] AutoCenter’s website up-to-datewith options such as scheduling ap-pointments online.

And fresh content on the shop’s siteincludes not just your typical blog, butvideo posts that showcase how customers can save money by check-ing tire pressure, as well as how tobudget for maintenance.

“We’ve just gone through a redesignof our website and are constantly

www.ShopOwnerMag.com November|December 2014 |Shop Owner|35

[atc] AutoCenter’s goal is to change the way people think about the automotive serviceindustry and develop customer relationships that are based on trust.

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trying to change con-tent so that it doesn’tget stale,” Chris says.“Most people will research you online andcheck out your website before theywill even consider doing businesswith you.”

Focus On The Future[atc] AutoCenter’s signage includesbrackets around the name for a rea-son. They serve as visual reminders ofthe company’s priorities, representingthe past and the future of the shopand showcasing what’s “at the center”of everything they do.

“Our care and attention goes beyond the car and beyond the cus-tomers’ expectations,” Chris says. “Atthe center of our business, you’ll find aunique mix of trust, talent, truth, team-work and, of course, transmissions.”

Adhering to thosevalues, while alsopartnering with outside training likeElite has helped Chrisand Brian continue topush [atc] AutoCen-ter toward continued

success in today’s fast-paced world.“The single biggest thing for us was

to get out from under the hood and instead focus on our business,” Briansays. “Partnering with companies suchas NAPA, Elite and Jasper’s reman pro-gram have helped us tremendously.

“Success comes in many forms,”Brian continues, “from being a mentorto the people around us and trying tomake a difference in someone’s life,by adhering to what Bob Cooper withElite says: Do the right things for theright reasons and your business willbe successful!”

Chris and Brian are definitely on theright track, with their success allowingthem to start construction on a secondlocation, coming in 2015. SO

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These trusted advisers couldhelp you focus on your customers and your business,while also ensuring you operatelegally, effectively and prof-itably.

Seasoned shop owners know

that to have long-term successthey must have efficient accounting and shop manage-ment systems, but they alsoneed to maintain and utilizethem. This is where the expertiseof your CPA can be a big help.

Keep your business and per-sonal income and expensesapart; this starts with setting upseparate bank accounts andyour banker can advise you inthis area.

Always retain your taxrecords and support documentsfor as long as they may beneeded to support your tax returns. This is usually threeyears after the filing due date orwhen the tax return was actual-ly filed (whichever is later).

Remember, some recordsneed to be retained indefinitely.

38 |Shop Owner|November|December 2014

|Finance|

Now Is The Time To Planfor 2014-’15 Tax SavingsEnd Of Year Tax Strategies Can Reduce Your Tax Burden

Shop owners who are focused on serving their customers andoperating efficiently are taking a little extra time to also get theirfinancial house in order. They realize the value of the ABCs of a well-managed business: A for attorney, B for banker and C for CPA.

by Vic Tarasik, owner, Vic’s Precision Automotive

ABAttorney

Banker

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Examples would be copies of originaltax returns, legal documents, assetpurchase confirmations, asset purchas-es and real estate sales.

Become a cash manager by learn-ing exactly what your cash posi-tion is at all times and whatyour daily, weekly, monthly andannual cash requirements are.You can do this by properlyusing your accounting system.Ask your CPA to develop yourbusiness model so that you understand the effects of priceincreases, labor cost changes,and the mix of labor and partssales that maximizes your cashflow and profitability. You maywant to consider using an accrual basis of accounting toensure you know your futurecash requirements at all times.Determine what your optimal cashposition is and pay your vendors on atimely basis, taking advantage of discounts when available.

If your business is growing andyou’re ready to consider limiting yourlegal liability, you should consult yourattorney about possibly creating a corporation or operating a limited liability company.

Plan to file all tax returns on a time-

ly basis including paying over-with-held payroll taxes when due. One ofthe most difficult problems to over-come is a failure to pay them. Thepenalties and interest on the taxes can

overwhelm a small business.The tax rate for Social Security

remains the same, but the maximumdeduction has been increased for2014 to $117,000. Your CPA canagain help with changing tax laws ifyou stay in frequent communicationand describe potential changes inyour business before they are sched-uled to take effect.

Remember that if little things likeW-2 and 1099 forms are not filed ona timely basis, they can trigger signifi-cant penalties.

Section 179 ExpensingIn 2014, businesses can elect to expense (deduct immediately) the en-tire cost of most new equipment up toa maximum of $25,000 for the first$200,000 of property placed in serv-ice by Dec. 31, 2014. Keep in mindthat the Section 179 deduction cannot

www.ShopOwnerMag.com November|December 2014 |Shop Owner|39

CCPA

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exceed net taxable business income.In addition, unless Congress reau-

thorizes it, the bonus depreciation ex-pired at the end of 2013 and is notavailable for 2014. If assets are re-quired that exceed your resources,consider financing or leasing yourequipment. Your banker can help youwith a loan and your CPA can deter-mine the best alternative for you.

Tax laws change each year and2014 and 2015 are no exception. TheIRS standard mileage rate has changedfor 2014 to $0.56 per mile, and willchange again for 2015. Be certain youand your employees use an expensereimbursement system that documentsthe number of miles and purpose ofthe business travel.

Having operated effectively all yearand realizing a profit, consider stepsto legally minimize your tax liability. Accelerate expenses

and defer in-come

if you are a cash-basis taxpayer. Acquire assets that you know you’llneed next year anyway, and placethem in service to utilize your avail-able Section 179 deductions.

Consider an IRA or SEP if you’re asole proprietor and invest in a 401k.When funded, these retirement ac-counts will reduce your current tax liability and provide a future taxableincome stream when your tax bracketcould be lower in retirement.

Consider your attorney, banker andCPA as essential parts of your businessteam. Each can bring a level of ex-pertise to you on an as-needed basisthat will give you an edge in manag-ing your business. Successful shopowners know their knowledge limitsin these areas and seek the help ofsubject-matter experts. The really goodones are team builders with dedicatedemployees, appreciative customersand trusted business advisers.

On a personal note, Istarted my shop out ofmy garage, and shortlyafter, I relocated to a

dedicated building. Backthen, I met my first adviserwho is still my CPA today.In the 27 years we’ve

done business together,he became the mostvaluable and trustedmember of my ABCteam. He has helped

keep me on the right pathover the years, and with

his help our business continues to thrive. It was

also with his help that Ipenned this article. Thanks Pat!I hope you all have a successful

and profitable 2015! SO

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Each of these kinds of toughcustomers can put a kink in ourday if we let them. I know because I’ve lived it. When Icame to work for Terry Keller, Ididn’t start as his chief operat-ing officer for Keller Bros.; Istarted as a service writer. So,

I’ve been on those frontlines.

When I say that we canwin over each of thosetough customers in thesame way, I say so from

experience. But as we’ll see, there’s

more to this topic than justwinning over tough cus-tomers, because the samethings we do to help the individual tough customersare the things we can do tomake real, lasting, sustain-able changes in our shopsthat truly set us apart.

But I’m getting ahead of myself. First, let’s look at thesetough customers and how (andhow not) to win them over.

42 |Shop Owner|November|December 2014

Customer|Service|

Winning Over A Tough Customer

If you close your eyes and picture a tough customer, what imagedo you see? Is it a price shopper on the phone? An argumentativecustomer at the front counter? A Yelp reviewer who went directlyto the Internet instead of giving you a chance to address his or herconcerns?

by David Rogers, president, Auto Profit Masters

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“How Much Will A WaterPump Run Me?”

I saw a service writer training videorecently on how to win over priceshoppers. The advice? Lie to them.Trick them. Convince them that theirrepair might not be as bad as theythink. Above all, get them into yourshop. (Strangely enough, the videodidn’t go on to cover what to do ifthat customer’s repairs were morethan they originally thought.)

It’s patently bad advice, but there’s anugget in there that I want to dig out:it’s easy to get burned out. Whenyou’re on the front counter, dealingwith tough customer after tough cus-tomer, it’s natural to want to get themoff the phone and into the shop nomatter what.

But whetherwe’re talkingaboutprice

shoppersor anyotherkind oftough cus-tomer, we’rejust talkingabout people— people whoneed our help.They don’t knowwhat we know.They don’t haveaccess to theequipment andinformation wehave.

More thanthat, they’relooking for somebody who they canentrust with the safety, welfare and financial well-being of their family.Sure, the question may have beenabout the cost to do a water pumpjob, but the thought behind it was:“I’m trying to take care of my family’sfinances.”

Which is why our job in this moment isn’t to close the sale. It’s notto give them a price, or to persuadethem to your side. It’s not to tell themthey are wrong for asking about price.It’s not the time to worry about get-ting the car into your bay. And it’sabsolutely not the time to sell them.

www.ShopOwnerMag.com November|December 2014 |Shop Owner|43

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Now is the time to stand up forthem.

At Keller Bros., I teach our servicewriters to think of their own grand-mother. If she were in this situation,how would you want somebody totreat her?

The people we consider “tough customers” really just feel betrayed.I’m using the price shopper as thestand in so far, but it’s true of any ofthe tough customers that I brought up.

A price shopper feels betrayed bythe person who sold the car to themor by the last repair shop that workedon the vehicle, and they’re just tryingto protect themselves. An argumenta-tive customer feels betrayed by the in-formation they had before the repair.The Yelp reviewer feels that their trusthas been so betrayed that they don’t

have a better optionto deal with it.

And viewedthrough that lens— this is some-

body whoneeds our

help,our re-spect,ourcareand

attention and expertise becausethey’ve been betrayed before. It’s clearthat the solution isn’t to lie to them orto get frustrated that they’re angry orto be annoyed that they’re looking fora price.

The solution is to take responsibilityfor them.

Consider this approach: put every-thing else to the side so you can focus100% on that customer. Get every-thing that is between you and the cus-tomer out of the way — including thecounter or even the phone. Don’tworry about the car or the money oranything else except: “there’s a personhere in front of me who I am respon-sible for.”

Everything that comes next shouldflow from that place.

If the tough customer is a priceshopper, offer genuine advice. Whatshould they know about the jobthey’re asking about? What might theynot typically think to consider whenthey’re choosing this job?

If they’re upset with the job you performed, learn why. This person canteach you better than anyone whereyou have a breakdown in your systemsand processes. Be their advocate andlet them teach you how to be better.

These same lessons apply even tothe Yelp reviewer. Remove the obsta-cles, and move the conversation off-line and into your shop so there are no

obstacles betweenyou. And thenlisten to them

and treat themthe same wayyou’d want aservice writerto listen to andcare for yourgrandmother.

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Taking responsibility for the people who trust you doesn’t start andend with the tough customers, ofcourse.

In part, I mean that this extends toall customers. It’s why we worry abouthiring ASE-certified techs. It’s why wecreate procedures for proper inspec-tions and hold the team accountable.It’s why we set clear policies on adjusting parts pricing so that one unlucky out-of-towner doesn’t getraked over the coals in the name ofhitting our parts gross profit target.

But it’s bigger even than being responsible for our customers.

Being responsible to the peoplewho trust us is why, at Keller Bros.,we set targets for our team and meas-ure them daily. Our employees trustus to run a profitable business and toprotect them against bad employeeswho might otherwise try to sabotageour mission.

That responsibility doesn’t start orend during business hours, either,

because it’s not just people who trustus to protect them — it’s our entirecommunity. The classes we teach inthe community and the charities wesupport may not directly win over“tough customers,” but they’re part ofa bigger mission that does: when wemake it our constant focus to protectthe people who trust us, when ourdedication to customer service spillsinto every area of our business, all ofour customers will feel it — even thetough ones.

That’s yourwinning differ-ence. SO

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David Rogers is chief operating officer of KellerBros. Inc., president ofAuto Profit Masters andcreator of the RPM ToolK-it™, which integrateswith shop POS software to help owners identifyproblems in their shop and get one-click trainingsolutions. Reach him via email at [email protected], toll-free at 1-866-826-7911,or online at ww.AutoProfitMasters.com.

The BottomLine

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But Matt Weber, co-owner ofClark’s Car Care, has a very different back story, one thatstarts with a detour from an accounting degree to take a lesstraveled road to shop ownership.

“The road that led me toClark’s Car Care began when Iwas an 18-year-old college stu-dent majoring in accounting,”Matt explains. “I got a job as a

part-time porterwashing carsand doing oddjobs at a cardealership. I enjoyed the automotive busi-ness and eventu-ally went on towork in almostevery depart-

ment — detailing, parts, carsales, finance — and, ultimate-ly, I left school and settled inthe service department.”

For the next five years, Mattworked in the service depart-ment at several dealerships. Despite the long hours, Mattsays he loved the work andlooked forward to solving eachday’s problems.

“There is a unique thrill to behad when you have an upset orangry customer and turn the situation around to make themhappy,” Matt says.

While he enjoyed the workitself, Matt says the long hoursbegan to take their toll, and hestarted to wonder if he neededa change. He changed jobswith the goal of one day goinginto business for himself.

46 |Shop Owner|November|December 2014

Shop|Profile|

Clark’s Car CareOvercoming Challenges To Find Success

Many shop owners get their start the old-fashioned way: Their dador uncle owned a shop, and they grew up learning how to fix cars.Essentially, it was “in their blood” so to speak.

by Debbie Briggs, contributing writer

Owners Matt and Laura Weber, with their sons, Parker and Trent, opened Clark's Car Carein 2001.

Owners Laura and Matt Weber

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“I started to think, ‘I could do thisbetter,’ ” he says. “I could help peopleand honestly fix their cars and stillmake a decent living. I got a job at adealership closer to home earningway less money, but with shorterhours so I could begin to focus on

going into business for myself.“While walking around that dealer-

ship one day, I noticed that a lot ofthe cars in for service had followedme from my previous job. That waswhen I first realized that my businesswould focus on customer service andthe business of people, not just fixingcars. Those customers followed mebecause of my passion for helping

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Laura attends business expos periodically to promote community awareness about Clark's Car Care.

In college, I earned the nicknameClark Griswold (the main character inNational Lampoon’s Vacation movies)for my habit of accidentally runninginto doorways and narrating scenic

vacation spots in a very dad-like andcorny manner. Who better to name your businessafter than the iconic hero played by Chevy Chase?”

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people, my friendly service and my automotive expertise.”

Humble BeginningsWhile still working full-time at thedealership, Matt says he used his connections with quality technicians

to begin repairing family mem-bers’, friends’ and neighbors’cars right out of his driveway.

“I would pick up the cus-tomers’ cars at their houses,bring them to one of the techni-cians’ home garages, get theparts and then deliver the fin-ished vehicles,” he explains. “Iwas the customer service middleman, explaining what the vehi-cle needed and why it was important, and the customers

loved my services. Friends and familystarted telling their friends and family,co-workers, etc., until my neighborsstarted wondering if I was opening aused car lot.”

Matt and his then wife, Laura, whonow co-owns the shop with him,

48 |Shop Owner|November|December 2014

At Clark’s Car Care, our goal is todevelop an on-going relationship

with our customers based on trust.We want you to feel the satisfaction

that enables you to recommendClark’s to your friends and family.

We accomplish this by providing youwith an honest evaluation of your vehicle’s needs and fixing it right

the first time.

Your expectations are high. We hope to exceed them.

The waiting area at Clark's Car Care is deckedout with a massage chair, XBOX, cable TV,free popcorn & soda, and kids' toys.

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decided to order business cards. Butto do that, they needed a name fortheir business, and Weber’s Car Carejust wouldn’t cut it. Matt says peopleoften wonder how they arrived atClark’s Car Care, and he always

replies, “Funny you should ask.”“I can’t tell you how many times

I’ve been called Clark or Mr. Clark,”Matt says. “In college, I earned thenickname Clark Griswold (the maincharacter in National Lampoon’s Vacation movies) for my habit of accidentally running into doorwaysand narrating scenic vacation spots ina very dad-like and corny manner.Who better to name your businessafter than the iconic hero played byChevy Chase?”

Serious BusinessAll joking aside, Matt and Laura knewopening their own shop was a hugestep, one that could mean success orfailure. But Matt knew he had to takethe chance, despite having a young

family at the time — go big or gohome, he likes to say.

“We started getting more seriousabout opening a location,” Matt explains. “It was much tougher thanwe ever imagined. Two kids in their20s with no money, no credit and nobusiness experience trying to rent abuilding to turn it into an automotiveshop. Not many owners were willingto rent their building for automotiveuse. People were worried we weretoo big of a risk and it seemed like

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Through its Cars for Cares group, Clark’s partners with other shops and NAPA Auto Partsto provide extremely low-cost repairs for struggling families.

On our journey, we encountered the bumps in the

road faced by most businesses — expansion, slow

seasons, staffing problems and budgets.

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50 |Shop Owner|November|December 2014 www.ShopOwnerMag.com

the odds were againstus.

“We searched and wesearched and while wesearched, we applied fora home equity loan andgot approved for$20,000,” he continues.“That wasn’t going to be enough. Wehad no other collateral. The SBA basi-

cally told us that we needed to be inbusiness to get money for a business.

“But, our dedication was strong although our solution was insane; we

applied for a lot of credit cards. Wecollected applications from many different banks and filled them outand mailed them all in the same day.We simultaneously got approved for$100,000 in credit. We used thiscredit to live on as we started Clark’sCar Care.”

They leased their first location froma shop owner who wanted to down-size, but he didn’t have much faith inthe couple’s dream either. However,Matt and Laura had a plan.

“The buildingowner was skepti-cal, and the othershop owner waspretty open aboutthe fact he thoughtwe had no chance,”Matt says. “We con-vinced the ownerthat we would notjust be one moresmall business thatfailed, but that wehad plans thatwould ensure oursuccess. We signed

a lease purchased from Office Depotwithout the presence of a lawyer,

ordered a small sign for the door andpurchased a motorized car lift. I putmy two-weeks notice in at the dealer-ship, and we were all in.”

We handled these situations by discussing our

possible solutions, asking our management company

and fellow shop owners for advice, and implement-

ing policies that addressed each issue.

Rick Robertson, ASE Master Tech, hasbeen with Clark's since it opened 14years ago!

Matt having fun in technicianMike Heineman's servicebay. The Webers promote afun, family atmosphere atthe shop.

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Learning How To Be BusinessOwnersClark’s Car Care opened in November2001, and initial marketing efforts included oil change flyers and ads inthe local newspaper. Their customer-centric approach soon attracted moreand more business, and they began toadd employees. But Matt and Laurasoon realized they really didn’t knowhow to run a business.

“We were feeling stressed andgoing deeper and deeper into debt —$80,000 in credit card debt,” Mattsays. “We got a flyer in the mail abouta $200 seminar that promised to helpautomotive businesses that were feel-ing the same way we were. We decid-ed to attend, and that seminarchanged our lives.

“The seminar was basically a snap-shot of a comprehensive managementsystem that involved intense trainingand coaching and was automotive-in-dustry specific,” Matt explains. “Wewere in awe and couldn’t wait to getstarted. We were convinced this pro-gram was going to solve a lot of our

problems. But the program was veryexpensive, and we had no money, sowe decided it was sink or swim timeand charged the $20,000 fee to ouralready high balance credit cards. Weneeded to figure out how to run thebusiness productively and profitably,or we were going to fail, despite our passion.”

That persistence paid off as Mattand Laura focused on training sessions

that helped them developan advertising budget andcreate systems and poli-cies to track key perform-ance indicators.

“We started to becomeprofitable, and throughcareful accounting andstrong discipline, in ourthird year we had paid offour debt and had a partyto celebrate the last payment,” Matt says.

Since then, Clark’s CarCare has continued togrow, currently includingeight bays and eight em-

ployees. It hasn’t always been easy,but with a clear vision, Matt andLaura have managed to come out ontop.

“On our journey, we encounteredthe bumps in the road faced by mostbusinesses — expansion, slow sea-sons, staffing problems and budgets,”he concludes. “We handled these situations by discussing our possible solutions, asking our managementcompany and fellow shop owners foradvice, and implementing policiesthat addressed each issue.”

A million dollars in sales, complete-ly debt-free and always profitable —what more could any shop owner askfor? SO

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The Weber family swagger wagon in the shop.

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