On Friday, February 23, AutoLeap held its second annual Amplify virtual conference. Here's a look back on some of the sessions featured throughout the daylong event.
Finance
Expense Management: Best Practices for Shop Owners
In a session led by Joe Marconi, he emphasizes that understanding your financial status will not only affect the experience of your customers and staff but also allow you to spend more time improving other aspects of the business.
There are three types of financial statements business owners should be familiar with: balance sheets, cash flow statements, and income statements. A balance sheet helps to provide an overview of your business’s financial health and is an essential piece of information for things like acquiring loans.
A cash flow statement, on the other hand, tracks how much money is coming in and out of the business. After calculating how much money came in for the month, and how many expenses were paid out, whatever is leftover would be a positive cash outflow. If it doesn’t equate to a positive net at the end of the month, it can be a red flag.
Finally, an income statement compares the business income with your cost of sales. The difference between the two numbers represents the business’ growth.
These three financial statements account for some of the most vital information about your business, and Marconi recommends sitting down and reviewing it at the end of every quarter, at least–along with meeting with an accountant.
Besides maintaining regular communication with your company’s financial department, there is much to be gained from implementing a business management system and becoming familiar enough with it to generate reports, granted that it is set up properly with all the relevant information it needs to create accurate reports.
To understand how well your business is doing, it isn’t enough to simply look at the sales you’re making: all the other expenses associated with the business have as much to do with how much money you’ll see remaining at the end of the day.
“You can have a million-dollar shop that has a $200,000 net profit; you can have a $1.5 million shop in sales doing $50,000 profit. Which would you rather have? The one-million-dollar shop,” Marconi explains. “Just because you go from 1.1 million to 1.5 million–that’s great, that shows growth, but doesn’t really relate to the success of the business.”
The difference between your revenue and the cost of sales is gross profit, but that gross profit goes toward operating expenses and loans. What is left after that is net profit. If that increases with your sales, it’s a sign things are going well–and putting some time toward constructing a budget can help achieve just that.
Most business owners put their earnings into an operating bank account, but Marconi suggests opening separate accounts for payroll, sales tax, other taxes, equipment, and profit, and distributing funds into each of those accounts each week.
If you don’t have the money to put into those accounts, you need to look at what is preventing you from abiding by a budget. Are your sales too low? Does your gross profit not exceed your expenses? Are you spending money on inventory or equipment you don’t need?
Besides creating separate bank accounts and developing a budget based on your business’s cash flow, an immediate step business owners can take toward improving their finance management is sitting down and looking over all their expenses, line by line, and having a solid understanding of where your business stands right now.
Operations
How to Run Your Shop Without You
Maryann Croce of Small Biz Advantage kicked off AutoLeap’s Amplify 2024 with a charge to auto repair shop owners: let go and let grow.
Croce, who reiterated throughout her session that her mission was to guide owners to work smarter to prevent overload, said shop owners often face overwhelm from lack of experience running a business. Since most shop owners are former technicians, they’re trained to independently solve problems instead of delegating tasks to capable team members. This can create a bottleneck at the top of the chain.
Croce pointed out that there’s more to a shop than repairing cars and maintaining vehicles. While most shop owners have the technical skills to keep the shop running, it's the business and leadership skills that need attention. She said a lack of confidence in leadership and finance keeps shop owners from fully understanding their businesses' health.
Croce said once shop owners get comfortable with understanding financials, they will make better decisions quicker. “Know your revenue, expense, and profit and loss statements well,” she said.
She added that shop owners need not try to do it all. Running a shop should be enjoyable and when it is, it becomes attractive to people. “Culture helps attract and retain top talent. That begins when shop owners own their role as leaders” she said, adding, “(But) you will only grow (your shop) to the level of your leadership.”
Croce encouraged shop owners to get better at delegating responsibility to trusted and capable members of their team. She said shop owners should begin this process by writing standard operating procedures for every facet of the business to clearly define how the work should be performed. She said SOPs will reveal what aspects of the job will be improved, the roles it affects, and it creates a step-by-step walkthrough of the process. “It’s important to share and communicate your core values,” Croce said. “And be clear on the non-negotiables.”
She said that by becoming a better leader, learning to manage using data, and setting up processes, shop owners will begin seeing their businesses operate without their need to do it all or be on-site daily. These strategies take time, and she said often owners want to get bigger before they get better which doesn’t create a profitable and sustainable shop. In time, if your shop is neither of these, she added, when it comes time to move on from the business, owners will find they have an unsellable business on their hands.
Enhanced Communication for Auto Repair Shops
For any efficient business, communication skills aren’t optional. In a session featuring Sara Fraser of Haas Performance Consulting and Tracy Capriotto of the Remarkable Results Radio podcast, they share how communication affects a shop’s performance and how it can be improved.
For anyone leading a team, communication must be seen as a two-way street. The only voice in the room being yours is not a sign of a thriving workplace. Foster an environment that encourages employees to make their thoughts heard. The platinum rule–treating others how they want to be treated–is a solid foundation to build a successful team on. But everyone is different, and taking the time to actively listen to your employees’ experiences and feelings lets you know how you can best help them.
Meetings are a regular part of day-to-day business activities, but when little thought goes into them, they can be unmotivating. When planning your next meeting, ask yourself what the ‘three Ps’ are: its purpose, process, and payoff. What is the purpose of the meeting, and are your employees aware of what it is going into it? Have you told them how long to plan on it being? Will they walk away from the meeting feeling that it was worth their time?
When looking at customers, it’s important to strive for every interaction to be positive and helpful to them in some way. Something as simple as complimenting a customer on the health of their vehicle can make them more willing to come back.
Bad interactions with customers can be a bit more difficult. While it’s important to respond to online reviews, walking away for a day or two before replying to negative reviews can help avoid harsh reactions. Even in the face of bad reviews, it’s important to maintain a positive attitude for other customers to see.
For your customers to feel taken care of, your staff needs to be taken care of. Having employees who feel valued and satisfied with their positions creates a positive atmosphere that customers can’t help but feel as well, making a healthy, communicative company culture an invaluable asset for a shop.
Building a Talent Pipeline
ShopPros COO Greg Marchand begins his session with a reminder that there is no short-term solution to finding technicians. It’s a complex issue that will require you to work on several aspects of your business, but there is one thing businesses should be doing: always be hiring.
That doesn’t necessarily mean hiring everyone that walks through your doors. Maybe you have a longtime team that you’re satisfied with. But good people come and go, and when you find yourself suddenly in need of a new staff member, it can be difficult to find the person you need when you’re under pressure, as opposed to having a pool of people you’ve already spoken with.
One opportunity available for many shop owners is school advisory boards. Any school that teaches about automotive work will require someone with experience in the industry to offer insight and guidance. Though it can be a big commitment, it can be hugely beneficial to your business, putting you in direct contact with young people looking to enter the industry.
Working at your business may seem more appealing to burgeoning technicians if you offer tuition reimbursement programs for your staff. It can cost just as much, or even less than frequent turnover, all while keeping a talented tech that you already have a relationship with.
Part of improving your hiring process includes examining your company culture. Define the values and ethics of your business and seek out employees that encapsulate that. Happy employees will speak highly of your business, attract other talented individuals, and learn how to run the business without your guidance.
When you’ve found someone that you’ve decided to bring onto your team, be attentive as they’re learning the ropes. Don’t rush the onboarding process, have a structured plan for their first week, and be sure to check in with them often on how things are going.
Many of the steps outlined by Marchand can require lots of time and effort–but you get what you give. If you put in the work of building a solid foundation, you’ll see the return with loyal, dependable staff members.
Trends
Challenges and Industry Outlook Panel
In a panel tackling some of the most pressing conversations in the automotive industry today, Carm Capriotto of the Remarkable Results Radio podcast is joined by Doc Duggan, owner of Sin City Performance located in Las Vegas; “G” Jerry Truglia, owner of Automotive Technician Training Services; and Cindy and Russell Reason, owners of FrontLine Automotive in Fairbanks, Alaska.
The discussion begins with Truglia commenting on the importance of keeping technicians up to date in an industry that is rapidly changing, which can be achieved through resources like webinars or local training programs.
Local dealerships sometimes offer training programs that independent shops can benefit from sending their techs to, as Cindy Reason notes, but resources can also be found from other independent businesses in the community. Duggan has built relationships between his shop and other auto businesses in the area to turn to when he lacks the knowledge or resources to do a specific kind of job.
For those who are in more rural areas, such as FrontLine Automotive, online resources can be especially helpful in making knowledge easily accessible, as well as services that offer on-call technicians who are available to help with questions the shop’s tech may have.
Some shops may deem technologies like ADAS to be essential for them to understand, but when it comes to technologies that are still emerging, such as electric vehicles, many may need to stop and reflect on how profitable it is for them to invest in training in the area or not. Not every shop can perform every job out there, and that’s okay.
Though the industry’s supply chain has improved, parts are still harder for shops to acquire than they were before the COVID-19 pandemic. Even though there has been some progress made in the availability of parts, inflated costs and a decrease in quality continue to be issues shop owners including Russ Reason are facing.
