THA 051: First Moves When Opening a New Shop

 

Your Learning Curve Never Sounded So Good!

Helping automotive aftermarket professionals improve; one lesson at a time.

Talking Points:

• You need to know your why. (Must read. Start with Why. Simon Sinek)  (SP)
  • Are you unemployable?
  • Do you have a written plan, written goals, and a vision that explains why you are doing this?
  • The best mechanic in town does not necessarily make a great business owner.
• A great way to start is to buy an existing shop.
• To run a successful business, it is like having a second family. (Rick White)
• Rick White: To be successful you need to be hungry, have the energy and be resourceful.
• What does success look like to you? It is individual. Many do not know what success means to them. Which is why defining what success looks like to you is important.
• Location, Location, Location is important. Very important.
• Tom Ham: You are better off on in a two-bay location in the center of town than a five-bay location at the outskirts of the town.
  • Demographics are also very important. What is the income of your marketplace?
  • Find a document on the AMN to help you score a location. Download it here.
• Financial: (much of this is tough for new business people to know and understand)
  • Rule #1. You never have enough money. Invest carefully where there is always an ROI (Return On Investment)
  • Make money. Need to make money to sustain.
  • If you wait for marketing and work to come in you’ll need money in the bank to sustain startup months of zero or negative profits.
  • You need a spending plan. (Just like a budget)
    • You can adjust but need to have a plan and your odds of being successful go way up.
    • List your intake, list your outflow. Subtract them. There is your profit.
  • You need a debt retirement plan to be sure you have a plan to pay off the money you owe. Debt kills.
  • Profit and Loss statement. (P & L)
    • You need to know what is coming in and what is gowning out.
  • Cash Flow is as important as a P & L.
    • This shows where your money is tied up and how it flows into and out of the busienss.
• Mentor(s)
  • You need a mentor. You may need even two.
  • Many in the industry are willing to help.
  • Understand what a mentor does.
  • It will help you see what is around the next corner.
  • You need to take their experiences and blend them into your vision and talents.
  • Be careful on your choice.
    • No everyone who wants to help will bring you what you want.
    • They must have the right mindset, positive thinking and they have what you need so you can model what they are doing so you can get there quickly.
    • If your Why’s align that is a good sign you may have found the right mentor.
  • A good mentor shares their experience and helps you relate to your relationship and you decide.
  • You’ve got to be able to have fun at work.
    • You must create the right attitude and business culture to sustain a great place to work. Be excited.
• Business coaches and consultants can help in a very big way.
• A peer group, in person, and on social media can help.
  • The in-person peer group brings eye-to-eye value.
• Don’t be afraid to ask for help or say you don’t know something.
• Independent shop owners are not each other’s competition. It is out there but not independents.
  • The competition is the customer.
  • How good we depend on how we hold a relationship and can solve their problems.
• Finding customers is not a shotgun approach. Spraying for customers will not help you focus.
• You’ll need to have a marketing budget. You could spend 3 – 5 % of sales but not immediately. But retaining and growing customers is a hard cost.
  • Rick White takes 8 -10% of sales and subtracts rent as a shops advertising budget.

• Join community groups. Get involved in your community as the expert is vehicle safety. You are in the transportation business.
  • Car groups.
  • Rotary type groups.
  • People need to get to know you.
  • Speak about car care at schools or the chamber.
• If you bought an existing shop you’ll need to promote to the existing customers.  Be prepared that you may lose some based on the change of ownership but some may be the wrong type of client.
• Work hard on getting referrals from your customers.

• Rich White: The business owner has four primary responsibilities to his business
  • Create and protect your brand. How does it feel to do business with you? Consistent.
  • Generate awareness of your business. People need to know about you.
  • Grow your staff. It is core to your success.
  • Set the pace of the business. The CEO responsibilities.
• Continuing education is an important discipline to running your business
  • Technical training.
  • Service training.
  • CEO training.
  • Know your key numbers. Stay in the range of industry averages.
  • You cannot rely on your current education level or training level. You must be a perpetual student.
  • Learn from your mistakes. Try not to repeat them.

• Never model your business after the boss you previously had unless they are a superstar operator and leader.
• You can never undercut the competition as a strategy to start or grow your business.
• Know your daily breakeven number. Break even is where profits are equal to cost.
  • Take all your monthly expenses plus a cushion and divide by your gross profit. That number is your break even for the month. Take that number and divide it by the number of days you are open. You can even divide it by the hours you are open to realize the sales you need to do, just to break even.
• You will hit the wall.
  • It happens to everyone.
  • Expect it. It will happen. You must be prepared for the wall so it doesn’t break you.
  • The Last Lecture: Randy Pausch 18,905,787 views. https://youtu.be/ji5_MqicxSo
• You must network. It is not about the meeting but the people you meet during the breaks.
• The management software is the hub of your business where all other spokes are connected to.
  • AMN is in the middle of an SMS (Shop Management System)
• Rick White: 3 D Planning:
  • Plan for the dest.ination.
  • Plan for detours
  • Plan for disasters.