Running a Shop Operations

8 Steps to Take Before Expanding Your Shop

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Setting Up Your Shop for Expansion
Here’s how to set up your shop internally ahead of expansion.

A long, extensive timeline is plastered across Jason Stretch’s office wall. March 2018, June 2018, September 2018—in three-month increments, the dates build all the way to December 2020.

And between March 2019 and June 2018, a big blue arrow runs down from the top of the board, labeled with a goal Stretch set for himself when he purchased Legendary Automotive And Truck Service just one year earlier: Shop No. 2.

“We’re going to duplicate this store in store No. 2,” he says. “We’re moving everything into a cloud-based shop management software. We’re creating facility-wide emails and communication lines.”

As you look around Stretch’s Fort Myers, Fla., office, it’s clear his plan is more intricate than that three-year timeline. On another wall, another board details a much more detailed one-year timeline (which he resets every three months) that segments out sales goals, training sessions and local car giveaways month by month.

And on yet another wall, on yet another board, you’ll find the key to everything: an organizational chart. From Stretch at the executive director position, to Joe Billias as regional manager, to Jason LaBonte as lead technician, these are the people that will oversee seven divisions he’s determined necessary for his growing business, from sales and marketing to finance to production.

This isn’t just an office—this is the future of Legendary Automotive, a shop that nearly doubled its revenue to $1.38 million within the first 12 months of Stretch’s ownership. This is the foundation of a plan to open six shops over the next 10 years, and Stretch knows he needs employees invested in that growth to pull it off.

It’s the kind of outlook you need if you want to expand your operation, says Dave Erb, who started the six-location Dave’s Ultimate Automotive in Austin, Texas, 20 years ago. And now as a consultant at the Automotive Training Institute (ATI), he’s training shop owners like you to think like Stretch, to look further than the four white walls that surround your office and build a team across several locations. Here’s your guide for building that infrastructure.

 

The Philosophy

1. Step Into the Executive Position

Before Erb started working for ATI, he had his own coach who instilled a core mindset for a future multi-shop owner: be an executive, not an employee.

“He grew me off the counter,” Erb says. “That’s key when growing multiple shops. They need to operate without you being there. You need a culture that aligns across everything. To do that, you need a playbook that will grow your brand across six shops. And you can’t build that playbook if you’re too involved in the day to day.”

 

2. Educate Yourself

Being in this room is like being on an episode of Shark Tank, Bill Orsborn says.

“There’s just so much to talk about: acquisition, evaluating businesses, acquiring property,” he says of the room filled with multi-shop owners. Orsborn is describing his Transformers Mastermind group, which features high-level operators who meet regularly to discuss what drives their thriving MSOs.

It’s what’s allowed his Washington operation, Gateway Transmission, to hit $1.2 million between two facilities with 12 employees. At the core of every Mastermind meeting is that ever-present question he asks each day: How do you get multiple facilities to operate as a single unit?

“What do you do when one shop is dominating and two are dragging you down?”
Orsborn posits. “You learn to treat them as their own thing, but also as part of a larger organism.”

Having those discussions with your management team is key, but conversing with other shop owners can be even more beneficial, Orsborn says. He encourages anyone eager to expand to find a coach or networking group through which to glean ideas.

 

3. Establish Your Philosophy

Do you prefer Chili’s or Applebee’s? Lowe’s or Home Depot? Maybe you prefer the burger at Chili’s, and perhaps you believe Home Depot hosts a better selection of furniture—but without even realizing it, Erb says you simply respond to one brand’s philosophy over the other.

“Some customers like my philosophies and how I deliver a product, and some are Pep Boys guys,” he says. “You have to understand what you’re offering to people.”

For years, when Stretch was a shop owner in New Hampshire, he studied executives who built MSOs in order to gauge what actions made them successful. And through those actions, he encountered several philosophies that didn’t appeal to them, but also found a select few that clicked with his vision for auto repair.

“Many models I’ve seen are lacking. They try to keep labor costs low. They buy the cheapest parts and want to be the cheapest service,” he says. “I don’t believe that’s what my ideal customer wants. [They] want to know they're being taken care of. They want exceptional service, and will pay for it.”

In order to embody that philosophy, Erb says to envision the ideal attitude for every touchpoint during the repair process:

  • How does your shop intake a customer?
  • What body language is ideal for service advisors?
  • Should you always answer the phone before the third ring?
  • How much do you charge for diagnostics?
  • How often should technicians and service advisors communicate?
  • Do your employees participate in community events?

 

The People

4. Lock Down Your Key Players

After Stretch sold his New Hampshire shop to a budding MSO, he moved to Florida and bought out a new shop. And while he had inherited a new staff, he wanted to bring in former teammates who understood his vision—and yes, he means the people from his New Hampshire days.

Although hard to believe, both the manager and the lead technician from his former facility—Joe Billias and Jason LaBonte (from the organizational chart mentioned earlier)—moved down to Florida to join his operation, all because Stretch was “offering a future,” he says.

“I gave them skin in the game,” Stretch continues. “I gave them more than a paycheck.”

Essentially, from the get-go, Legendary’s manager and lead technician were given a percentage of the company. To further entice them, Stretch laid out a plan that would put both men in position to buy him out within 10 years.

With a long-term future intact, Stretch obtained two lifelong employees that would not only follow his model, but voice his philosophy to others as the company continued to grow, as well.

He plans to offer that investment option to future key employees as well. That way, as more shops open and Stretch is pulled further and further away from the day to day, he’s built a pipeline of influence.

 

5. Detail an Organizational Chart

Stretch may only currently have eight employees, but by the end of his 10-year plan, he plans to segment his staff into seven different divisions.

As noted, both Billias and LaBonte are featured at the top of that chart, and several arrows point toward the divisions and personnel they oversee. And within those division, specific responsibilities for the future of the company’s growth are outlined.

Here’s how Stretch breaks down his organization:

 

INSERT IMAGE HERE

 

6. Cross-Migrate Your Employees

In Mount Vernon, Wash., rests Orsborn’s first Gateway Transmission location. And then 30 miles away, across Skagit Bay on a neighboring island, rests his second Oak Harbor location.

Two different facilities, two different customer bases, two different workloads. And, of course, two different staffs to manage. As you can’t be in two places at once, it can seem daunting to fully utilize—unless you’ve planned ahead, of course.

Case in point: Orsborn had a promising transmission rebuilder set up at his original location, but not enough work to keep him on full-time. But when Orsborn opened his Oak Harbor facility, he could then load-level work between both shops and maximize the tech’s profitability.

This captures a key mindset Orsborn, Erb and Stretch all claim is crucial for expansion: Don’t just hire an entirely new staff—cross-populate your shops with your most trusted employees.

“When opening a second shop, your team has to be reliable,” Orsborn says. “You might be overstaffed at first, because you’re going to bring key team members to the new location.”

For “Shop No. 2,” Stretch’s plan is to duplicate everything that allowed Shop No. 1 to double annual revenue in its first 12 months, and a huge part of that will be utilizing his lead technician for the first couple months of the new facility’s tenure.

“My goal I set to have first facility fully built with a little extra labor,” he continues. “Then I can use those extra guys to get the new store going. I’m staffing the organization from the top down, and those top employees will get new guys trained.”

 

Another Kind of Acquisition

While Bill Orsborn only owns two Gateway Transmission shops, he did acquire a third location—sort of.

“Two years ago, we bought out another business,” he says, meaning he didn’t acquire a new facility for shop operations, but instead acquired a new customer database, a few more technicians and an array of tools and equipment. He was then able to fold those new employees into his current facilities comfortably.

Orsborn coordinated with the former shop owner and a newsletter team to inform the existing customer database of the change. He vowed to embody the former owner’s ethical concerns and took over the shop’s old website and social media pages.

“It was pretty seamless,” he says. “Acquiring other businesses can be a profitable way to go.”

 

The Processes

7. Standardize Processes

When forming the processes and procedures that will make your business provide exceptional service and hum with efficiency across multiple locations, Erb says it’s easy to put pen to paper and construct myriad SOPs.

“When building processes, you can’t just write it down and shove it in their faces. You have to get people involved,” he says.

When deciding how a courtesy check should be performed, get out on the floor and brainstorm with your lead tech. What makes sense for the test drive? What’s the process for racking up a car? The same should go when forming processes for service advisors.

“As you build those procedures, they will own it more that way,” Erb continues. “Then they sign off on it, which makes it easier to manage people. If someone isn’t following procedure, you can show them the signature” and ask where the disconnect lies.

Being in the executive position has allowed Stretch to focus on developing his SOPs, which are key to his expansion plans. He evaluates every aspect of the business that he will not be present to control once the operation stretches to six locations—everything from proper customer communication to dress codes to tracking diagnostic times is covered. Heck, Stretch has even designated a section for bathroom cleanliness.

Stringent, detailed SOPs are no small task—but it may be the most important task when laying the seeds for growth, Erb says. And you won’t find the time to build those SOPs unless you remove yourself from day-to-day operations and observe what does and does not work about your current procedures.

 

8. Educate Employees on Processes

He means no offense by it, but Stretch likes to keep everything at a sixth grade reading level. That way, when his employees are quizzed on a shop procedure or policy, they’re ready with an answer.

“If I ask, ‘What is purpose of Legendary Automotive mean to you?’ or, ‘When can you take a personal day off?’ they have to explain,” Stretch says. “If the general manager has someone who got a 70 percent, we address the 30 percent and get them up to 100 percent.”

Before anyone can step into a role at Legendary Automotive, they must understand the SOPs that have been written for their particular division. It’s what Stretch refers to as getting the “hatting in place.”

Just to narrow the focus, here’s a snapshot of the SOPs for Division 4—the Production Division:

 

Mini Hat

This is the basic SOP for any new employee, whether it’s a technician, a service advisor, or a bookkeeper. This SOP is split into several sections, including:

  1. The Company and its Purpose
  2. Hours of Operation
  3. Employment Classification
  4. Compensation Policy
  5. Benefits
  6. Ethics and Honesty
  7. Disciplinary Policy
  8. Staff Appearance and Business Image

 

Technician Basic Hat

As a technician stepping into Legendary, specific tasks are expected if he or she wishes to move up in the organization. Here are some of the sections into which it’s broken:

  1. Technician Levels
    1. A Level: Master Technician
    2. B Level: Journeyman Technician
    3. C Level: Apprentice Technician
  2. Technician Organizational Chart
  3. Statistics and Expected Benchmarks
  4. Cleanliness and Organization
  5. Technician Policies and Procedures for:
    1. Training
    2. Comebacks
    3. Safety
    4. Warranty Work
    5. Diagnostic Time
    6. Retrieving Repair Information

 

Technician Workflow

When a vehicle is dispatched for service, technicians must follow this flowchart:

  1. Technician is notified of a vehicle on his or her tablet.
  2. Retrieve key from keyboard.
  3. Get mat and seat cover.
  4. Get all the vehicle information.
  5. Take profile pictures of the vehicle.
  6. Test drive vehicle (if necessary).
  7. Perform courtesy vehicle inspection.
  8. Mark inspection as “done.”
  9. Message service writer that inspection is complete.
  10. Performed any approved diagnostics or labor lines.
  11. Message service writer about moving vehicle outside.

 

Once those processes are understood, technicians that show the most promise will be moved to other succeeding locations to coach new techs about the policies.

“If I didn’t have all of the hatting in place, that would be a major obstacle,” Stretch says. ”That’s what would keep me from expanding to my second location.”

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