Let me introduce you to my friend John. He's a shop owner who's currently enjoying a thriving business. His shop is always bustling with activity, and his technicians are working at full capacity. However, John refuses to hire additional staff because he believes he can step in and handle the work himself when things get overwhelming. Although he's capable of filling in, it takes him longer to complete tasks because he must deal with employees and customers, often leading him to work late. As a result, he often forgets to fulfill important obligations like reporting bookkeeping to the accountant, returning phone calls promptly, and following up with customers to ensure their satisfaction.
Sound familiar? Are you a shop owner who's trying to be the jack-of-all-trades, from backup technician to assistant service advisor, parts runner, shuttle driver, and even janitor? The hard truth is that these roles aren't meant for you to fill. While you might think you're saving money by taking on all these responsibilities, it's actually the tasks you neglect that yield the highest return on your time investment. Your focus should be on the duties that only a shop owner can perform. When you fail to fulfill those responsibilities, it ends up costing you a significant amount of money.
Opportunity cost refers to the loss of alternative options when a particular choice is made. For instance, if you choose to eat fast food for lunch instead of packing healthy leftovers, the opportunity cost is the money, nutrition, weight loss, and time that could have been spent on other activities. Similarly, if you choose to be the backup technician rather than the shop owner, you miss out on the benefits of working on your shop instead of working in it.
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There are three key areas that you should devote much of your time (around 80 percent to 90 percent) to, along with the opportunity cost associated with spending your time on other tasks:
1. Vision and Strategy:
Where do you see your shop in the next 2 to 5 years? Business coaches will tell you that having a clear vision of your shop’s future is crucial to determining the strategy needed to achieve it. What’s more is that employees enjoy working for leaders who give them a greater sense of purpose for their role and therefore are more likely to be motivated and stay employed with your shop.
Opportunity Cost: Without a solid plan and a clear sense of direction, it will be more difficult to make informed decisions, prioritize, and lead effectively. This could lead to slower than normal business growth, employee turnover due to lack of direction, and difficulties keeping up with your competitors.
2. Processes and Procedures:
Your vision and strategy provide the "why" behind certain actions in your shop, while your processes and procedures determine the "how." By clearly documenting and defining the way things should be done (or creating SOPs), you ensure that the critical responsibilities in your shop are performed exactly the way you want them, no matter how often, or if you are present. This means that your customers will enjoy the consistent great service, every time they come in, and therefore will be more likely to return.
Opportunity Cost: Without established processes and procedures, you increase the risk of employees making mistakes, providing inconsistent service, operating inefficiently – especially when you’re away. This could lead to wasted time and money, not to mention the increased feeling that you can never leave the shop.
3. Accounting and Finances:
As the shop owner, it's your responsibility to ensure the financial health of your business. This includes understanding and closely monitoring inventory, payroll, accounts receivables, accounts payables, operating expenses, taxes, key performance indicators (KPIs), and more.
Opportunity Cost: Without a clear understanding of your financial health, you may miss out on identifying cost-saving opportunities and optimizing your cash flow. It's like flying blind, not knowing where your money is going and how well your business is performing.
By focusing on these three areas, you can maximize your shop's potential for success. Remember, trying to be a one-person show might seem cost-effective in the short term, but it ultimately hampers your ability to grow your business and achieve long-term profitability. So, prioritize your role as a shop owner, and watch as your investment of time and energy pays off in the form of a thriving, efficient, and profitable shop.
The Automotive Training Institute (ATI) is one of the leading coaching and training company in the nation, with more than 1,600 active members who represent the best shops in the US and Canada.
