Key Points to Small Town Survival
For Tony Tatich, general manager at TMT Automotive in Bremen, Ind., being creative is a big deal.
But why does a general manager (soon-to-be shop owner) need to be consistently creative? Well, when your business is located in a 2.7-square-mile town of less than 5,000 people with two stoplights, Tatich says you have to ask yourself, “Are you getting every single car from every single person? Are you just getting the husband’s car or are you getting the wife's car or are you getting both of their cars?”
For TMT, a shop that’s been around for 33 years, capturing market share has become a speciality. In fact, the shop has grown 8–12 percent annually every year for 10 years, including during recessions, with a monthly car count of roughly 200.
Not to mention that with only three techs, Tatich’s team raked in more than $1.1 million in sales last year and is on track to grow around another 18 percent this year, all while preparing to take over the shop from his dad, whom he works side by side with now.
And he’s done it all by focusing on three key areas—creative marketing, efficiency and a well-designed facility—that have not only helped the shop grow, but sustained that growth despite its location.
Creativity is Key
The creative part comes from TMT’s approach to marketing. A big point of contact is the shop’s advertisement of free loaner cars—it has six loaners on which the tagline, “Home of the Free Loaner Car,” is advertised. The theory is that when a person drives that car, it catches the eye of other drivers, drawing them to the shop.
“A lot of my customers may drive 30, 45 minutes just to see us so we have to be able to get them a loaner car to where they can get back to where they’re going,” Tatich says.
Another big marketing tool for Tatich is talking to factory owners and employees in town. Because manufacturing work is common in Bremen, TMT makes it a point to cater to those that work and live in town.
For Tatich, there are some standard questions that he asks himself to ensure that he is covering his bases: Are we able to get flyers into factories and provide specials for its employees? Are we able to cater to not only those living in our town, but those who work in our town?
He even offers another fairly uncommon service: Because the town is fairly safe and small, customers will hide the keys and the shop’s staff will go and pick up the cars in the morning to fix them. This service is so popular that Tatich says they pick up anywhere from two to three cars per day with this method. This service allows flexibility for customers that work, and still emphasizes that small-town feel.
For Tatich, growing in a small market has its benefits and challenges. He emphasizes that because there are only so many people, it’s important that you make the most out of each opportunity. And because smaller shops like Tatich’s don’t have the same budget as dealerships, it’s important they build long-lasting relationships with their guests by thoroughly checking and taking care of each vehicle. It’s Tatich’s 300 percent rule: 100 percent of the cars are inspected, 100 percent are quoted and 100 percent are presented to the client.
Most importantly, he encourages his staff to tell the story of TMT, which will help perpetuate the brand.
Efficiency: the Foundation to a Sturdy Business
According to Tatich, he has the million dollar model: three techs, one advisor and one customer service rep. And recently, he added a general service position that handles tasks such as tire rotations and oil changes.
Because his goal is to ensure a bigger revenue increase this year, he staffed up to do so. And while he says the shop can probably increase another 30–40 percent over where they’re at now, instead of recruiting another tech, he’d rather maximize productivity with the employees he has.
And so far, the system is working. Last year, each tech brought in roughly $375,000 in service, parts and labor, with an average repair order of $500.
The shop has also made some minimal changes to make daily operations run smoother in the shop:
Upgrading hoists and moving fluid tanks: The upgraded hoists have helped with the shop’s efficiency and safety by allowing them to lift all sizes of vehicles. For Tatich, it was completely worth the money.
The fluid tanks placement before made Tatich feel like the techs were spending too much time walking back and forth. And for him, “while it’s good for your Fitbit, it’s not good for the bank account.”
“If you lose 15 minutes per guy per day, you’re losing a lot of production,” he says.
In addition, there are air hoses in all bays that are overhead and reel based.
Better inspection process: He and the team also made it a goal to do an inspection on every vehicle that comes into the shop and created a new process to ensure that. Because they had troubles staying consistent, the shop now does one of two inspections for every vehicle that enters the shop: a full inspection or a minor inspection.
The full inspection: This is conducted when a vehicle has taken over 30 minutes of labor time to complete the service for which it came in. The full inspection, which takes 30 minutes or less, includes but is not limited to: all fluid and trouble light checks; everything under the hood, such as belts and hoses; brief check on heating and cooling; battery test; brake check; steering and suspension; tires and axles.
The minor inspection: This is conducted when a vehicle takes 30 minutes or less of labor. The minor inspection takes 10 minutes or less and includes, but is not limited to, basic under-the-hood inspection, a brief check of light bulbs, fluid levels, tire check, and brake check if it is possible to see through the wheel of the vehicle.
“It’s been a work in process in the fact of making sure of when to do the minor inspection versus when to do the full inspection,” Tatich says.
Going paperless: This was a change that was done during a recent renovation. Each tech has a tablet and completes all paperwork through the device since the shop has Wi-Fi throughout the facility and in the parking lot.
In order to produce his best year yet and take the shop to the next level, Tatich decided in January 2016 that the shop needing a sprucing up after the 33 years of life really started to show.
The back of the shop had bare concrete floors, poor lighting and no cohesive color scheme.
One of the biggest priorities for Tatich was maintaining his brand, so he did just that by keeping his shop open during all renovations and allowing his clients to take part in seeing the entire $140,000 process.
The most important part of the renovation was upgrading the back. He upgraded the light fixtures, going from 47 lights to only 26—which are much brighter—and the floors are now a light gray. Tatich claims that the combination of the updated lights and bright colors makes it feel lighter and brighter.
Other renovations included cutting the showroom size down in half to build offices and conference rooms equipped for training.
“It’s amazing how much of a difference it makes your customers feel, but it’s also amazing how much it makes you feel as the owner and the employees working in the facility,” Tatich says.
Now that the goal of making the back have a dealership feel is completed, he says that he can bring customers to the shop floor with confidence.
The other benefit of the updated facility is that it has helped Tatich appeal to future employees. He says that while he is not looking now, he wanted his shop to look like a dealership because he wanted future techs to see themselves working there. During an interview, if the tech can envision himself working in the facility, it’s a great first step.
“A lot of dealership techs have really, really nice facilities they work in and if we want to get them over to the independent side, we have to have similar types of facilities and similar types of equipment and everything,” he says.
And while the renovation has made the shop look good, it has also made the staff perform better.
In March 2016, the month that the renovation was complete, the shop hit record-breaking sales, increasing by 34 percent over March 2015. Since then, it has topped even those sales.
SHOP STATS: TMT AUTOMOTIVE Location: BREMEN, IND. Operator: Tony Tatich Average Monthly Car Count: 200 Staff Size: 7 Shop Size: 6,000 sq ft; Annual Revenue;$1.3 million