Steve Geiling had one simple goal: Don’t close.
Geiling Auto Service has been in business since 1942, spanning three generations of the Geiling family. It took more than 60 years to build the shop’s reputation and loyal customer base in Metairie, La., just outside New Orleans.
And it took just one week to put everything in jeopardy.
Hurricane Katrina ravaged the Gulf Coast in August of 2005, no area moreso than southern Louisiana. Levies broke, houses were destroyed and businesses were literally washed away.
Geiling’s shop was fairly lucky, he admits, as there wasn’t any physical damage but a few broken windows.
The real problem, however, was in the shop’s business foundation—its customer base. Many people in the area had to move away. Of those who stayed, most had to replace their cars with new ones.
Geiling Auto Service lost the majority of its customers and, in that first year following the storm, 75 percent of its revenue.
“We’ve been in business for more than 70 years. I didn’t want to be the one to close it,” Geiling, 53, says. “But there were times when—well, I wasn’t going to be the one to (close). I’ll tell you that.”
To keep the doors open, Geiling would have to re-invent the shop, get new customers and, somehow, figure out how to pay the bills while doing it.
The Backstory
Apart from a few odd jobs when he was younger—and a brief stint selling new vehicles—Geiling has spent nearly all of his 35 years in the industry at his family’s repair shop.
He was a technician for a number of years, and began running the day-to-day business a little more than a dozen years ago.
“Honestly, I don’t like turning wrenches much anymore,” he says. “I much prefer to be running the business end of it.”
The shop had a steady five-year average of roughly $630,000 per year in annual revenue before Geiling bought his father out in 2004, peaking out at roughly $800,000 in total sales—it’s highest year ever.
A year later, disaster struck.
The Problem
Geiling’s shop sits just a couple of blocks from the canal that divides the Jefferson and Orleans parishes, on the Jefferson Parish side. The main levy break was in Orleans Parish.
“I mean, I don’t know anybody that didn’t lose something,” Geiling says. “I lost my house, and everything we owned in it. Thank God we had our business.
“I had friends who lost their house and their business, and they were like, ‘What do I do now?’ At least I had a job, and I could come to work every day.”
Although Geiling Auto Service was virtually untouched, the business was in disarray.
“When that levy broke, I lost in the blink of an eye 60 percent of my customers. Right then, just like that,” Geiling says.
And, for a while, things continued to get worse.
Residents in the surrounding area struggled to collect from the government and insurance companies to rebuild their houses, and, Geiling says, many got tired of fighting and simply moved away.
In the 12 months following Katrina, the shop didn’t even reach $250,000 in sales.
“It was basically starting from scratch,” Geiling says.
The Options
With his business reeling, and the community trying to piece itself back together, Geiling had few places to turn.
For decades, his business relied on its reputation and the loyalty of its customers. Geiling knew that could no longer be the case.
“My dad was pretty old school with how he ran everything,” Geiling says. “He didn’t do much advertising, and I didn’t do it when I took over. And I never really took advantage of any technology or anything.”
Before Katrina, Geiling’s shop didn’t have a website, and with a perpetually steady stream of customers, he never worried much about attracting new ones.
His choices now were pretty simple: He could sit back and hope the shop’s reputation could carry it through these difficult times, or he could be proactive and adopt new methods to attract a new customer base.
The Decision
The first thing Geiling had to do was strip down his operating costs. His nine-bay shop had always employed nearly a dozen staffers, including five technicians. During that first year, Geiling was forced to make dramatic changes.
“My dad came in and worked behind the counter, and me and my brother worked in the shop—that’s it,” Geiling says. “We were bare-bones, just the three of us, and my dad didn’t even take a salary. We did that for two years.”
And while “things started to level out and we could pay our bills,” Geiling focused on increasing the car count.
Much of the area surrounding the shop is “fairly affluent,” Geiling says, so people were regularly moving in.
THE EXPERTS WEIGH IN
Larry Monroe, master consultant, Management Success!
Changing a shop’s business model can be daunting for any shop owner, but if the owner will not face making the right change when needed, many times that decision is taken out of their hands, and usually at a time when it is not convenient. Steve had his hand forced by nature, a situation that boiled down to the most basic formula: Change—or we will not survive! They had a good shop, but its standard operating basis wasn’t strong enough to deal with the new conditions within his community. They made difficult changes, reorganized and today have emerged with a shop that is not only more efficient, but ready for continued expansion.
Paul Seghposs, founding partner, Automotive Information Inc.
Many others would have walked away and blamed their circumstances for the failure of their business but Steve had the resolve to stick to it and to carry it through to a positive conclusion. By cutting back to the bare bones, Steve learned to keep his expenses low and increase his net on a smaller gross. Many shop owners never learn this lesson. With renewed purpose and new image, Steve is in a position to take advantage of the influx of new people as the area rebuilds, and because of the circumstances he is likely one of the few that were able to survive and thrive so he is also likely to be rewarded from the lack of competition.
Photos courtesy Larry Monroe and Paul Seghposs
“We just needed a way to reach them,” he says.
First, he launched a website, set up with a review system to build his shop’s online presence. He began doing direct mail to attract new customers and email reminders to stay in touch with his current ones.
The shop began focusing on promoting maintenance work and worked to educate customers on the importance of upkeep with their new vehicles.
“We changed just about everything,” Geiling says. “It was really just an opportunity to make some big changes, and we had to hope that people would start coming.”
The Aftermath
Despite the dire circumstances, Geiling says he never truly doubted that things would eventually turn around. It was just whether or not his shop could last until it did.
“Sooner or later, it had to get better in the area,” Geiling says. “We needed to just position ourselves for when it did.”
Slowly, Geiling saw all of his new strategies paying off. The direct mail helped bring in some of the area’s new residents, and the shop’s new online presence quickly helped the shop build back its reputation.
“We have over 100 reviews now on our website (geilingautoservice.com), and we don’t have a bad one,” Geiling says. “Most people who come in the shop now as first-time customers say that they just Googled ‘auto repair’ and that we had the best reviews.”
Eventually, Geiling was able to start building his staff back up and send his dad back into retirement.
The shop now has six employees (two technicians, including Geiling’s brother), and in 2011, generated $596,000 in revenue. He expects that number to climb well above the $600,000 mark this year.
“It’s not exactly where what it was before, but it’s doable,” Geiling says. “We’re making money again, and every month, it’s getting stronger and stronger compared to the year before. It’s slow, but I know we’re on the right path.”
The Takeaway
Geiling doesn’t feel his situation is unique. There are often circumstances that are beyond a business owner’s control, he says, and “you just have to figure out how to deal with it.”
More importantly, he says, a shop owner needs to do his or her best to prepare for it. And that means adapting to the times.
Geiling ran the shop for years before taking over full ownership and never made an effort to adopt new methods for growth.
“It used to be that you could just hang a sign that says you fixed cars, and you’d stay busy all day long,” he says. “Now, you really have to work for your customers. If you don’t have a strong web presence, email reminders and marketing program, you can’t hardly make it nowadays.”
In doing all of this, Geiling has dramatically changed his goals. He’s no longer worried about being the one to close down a three-generation-old business. Instead, he’s grooming it for a fourth.
Geilling’s son is a mechanic at another shop in the region and the hope is for him to eventually take over.
“I drained nearly every penny I had to keep this business open—all my savings and everything,” Geiling says. “I didn’t want to be the one to end it; I didn’t want to be the one to close it down. And I’m not going to be.”