Q&A: Why Good Shops Stop Growing
A shop can be busy, generate strong sales and still be standing still. Jim Saeli, senior speaker, workshop instructor and shop inspector manager for DRIVE, has more than 40 years of automotive industry experience, including owning his own repair shop. He now works with shop owners on management, marketing and employee relations.
In this Q&A, Saeli discusses how owners can recognize when their business has plateaued—and what they can do to move forward.
Ratchet+Wrench: How can an owner tell the difference between a busy shop and a growing shop?
Saeli: A busy shop can look chaotic. There may be cars everywhere and people running around, but that doesn't necessarily mean anything is getting done.
In a growing shop, there is organization and flow. People know what they're doing and what they need to do next. They're not constantly waiting for information or running into the same problems. You can see the coordination in the shop, and the numbers should support what you're seeing operationally.
Ratchet+Wrench: Can a shop have strong sales and still be stagnant?
Saeli: Absolutely. I've seen shops reach $1 million in sales and then stay there. They may have reached the revenue number they were chasing, but they're not necessarily profitable.
Owners should look at gross sales, repair orders, average repair order and build hours, along with gross profit and net income. If sales and net income are both growing, that's a good indicator that the shop is becoming more productive and efficient.
Ratchet+Wrench: What are some of the hidden ceilings that keep shops from growing?
Saeli: A lot of times, the owner becomes the bottleneck because everybody goes through the owner for decisions and information. A shop will grow to the level of confusion the owner can handle.
Owners can also hold on to responsibilities because they enjoy them or feel they have to be involved. But there are only so many things one person can do in a day. At some point, you have to delegate and allow other people to take ownership.
Ratchet+Wrench: What should owners do when they realize they've hit a plateau?
Saeli: First, ask yourself what you actually want from the business. What's important to you? What do you enjoy doing?
I've seen owners get so focused on growing the business that they lose sight of what they want their life to look like. The goal isn't necessarily for every owner to completely step away from the shop. It's to build a business that allows the owner to do what they want to do.
Ratchet+Wrench: What should owners stop doing?
Saeli: Stop micromanaging people. If you want people to become better at what they do, you have to allow them to learn and grow.
People won't necessarily do something exactly the way you would. That's part of developing a team. You have to give people room to improve while still having appropriate safeguards in place.
One good test is to leave the shop for a week. See how many phone calls you receive and look at the numbers while you're gone or when you return. I had a point in my career where I had a good crew in place, and when I went away, the shop actually did better.
Ratchet+Wrench: What's the biggest thing owners should understand about growth?
Saeli: You have the ability to do what you want with your business. Keep your eye on the ball and keep moving forward.
One of the biggest myths about growth is, "There's nobody good enough to do it like I do." If owners can move past that mindset, delegate more effectively and continue looking for ways to improve, they can build a business that works better for everyone.