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What is an Auto Repair Shop Supposed to Do?


What is an Auto Repair Shop Supposed to Do?

by Rick White, President 180BIZ                                                             (Estimated Read Time 6 minutes)

I this episode, I’m talking about what your business is supposed to do and not supposed to do.  It’s not supposed to wear you out. It's not supposed to beat you down. It's not supposed to make things harder for you. The business is there to help you grow. The business is there to refine you. The business is there to challenge you and show you where your weaknesses are. It’s supposed to give you the opportunity to get better at doing the work. There are three key functions or three key areas of your business.

The purpose of any business is to create and keep a client.

The purpose of any business is to create and keep a client. And I don't care what business it is, whether it's auto repair or it's a body shop or a doctor's office or a plumber or a bakery or a pizza place, the goal is to create and keep a client.

Why? If you didn't have clients, you'd have a hobby because no one is paying you to do something. You must clients to have a business. You could have a whole bunch of people that come in one time and never come back again. That is a very ineffective, inefficient, and expensive business model. It costs about seven times more to get a new client as it does to keep ones you have. So, you must create and keep a client.

You're never going to do that on price. You're always going to do it on relationships. Now, how do you do that? It's by recognizing a problem they have, showing them that you have the unique solution for it, and then delivering on that promise over and over and over again. It’s by showing them that you care and that you are concerned and that they get to see your character and they get to see your competence.  And over time, that relationship builds so that you're not even just their car guy, you're their kid's car guy and their kid's car guy. That's the goal. So the purpose of any business is to create and keep a client.

The goal any business is to generate a profit.

Then we have the goal of any business. I ask this all the time, what's the goal of your shop? Many answer to fix cars. No. The goal of your business is to generate a profit. I was talking to a client today who has been in business 19 years. He admitted that he doesn't look at his numbers. He's running his business based on a sales number, a bank balance, and a gut feel. That’s a scary thought.

Instead, you want to understand your numbers. The baker is not in the business of baking. That's not their goal. The goal is to generate a profit. Remember that profit is the byproduct of the value that you give, the solutions that you give to your clients to help them with their problems. I once heard it said that profit is the applause from your clients for a job well done. So, is fixing cars is the vehicle that you are using to generate the profit? No, again. You're using fixing vehicles as a way to build relationships where the byproduct is profit. You must have profit in order to pay your bills, invest in new equipment, to advertise, to hire top talent. You can't do that if you don't have profit.

The function of any business is to thrive without you.

Now let's talk about the function of a business. Many of you have some type of entity wrapped around your business, an LLC, an S corp, and sometimes even a C corp. What is that there to do? Now, when I ask a class that typically the answer I get is to protect the company from liability, and that is absolutely correct, as long as you don't pierce the corporate veil.  The company, in the eyes of the state and federal government, is seen as its own separate entity. But that's not why you create the entity. You are creating an entity like a child. You and your spouse get together, you create an entity, and we call that a child.

But let me ask you a question. Do you want that child to be dependent upon you to make every decision in its lifetime for as long as you live so that you can never get away, never get any freedom, never get to the other side, and you're just stuck? Is that what you're looking for? And the answer is a wholeheartedly no. What do you want your kids to do? You want your kids to learn, you want to teach them values. You want to teach them rules and ethics and the right way or the best way to be a human being. You want them to grow up and become their own person. And that's exactly what you want your business to do as well.

You are not the business.

You are not the business. You never have been. You birthed a business and when you recognize that the business is over here and you are over there, it is a separate entity. When that happens, your self-esteem is no longer tied to the business. What do I mean by that? When the business is doing great, you feel like a million bucks. It's awesome. But like everything else, there are seasons. Sometimes the business is not doing so well. What happens? You feel like crap. You feel terrible. And It takes longer for you to turn the business around because you're emotionally invested. It's a part of you and that's why it's so hard to figure out how to fix it. If you recognize that it's not your sole being. You care for it and you want it to do well, but that is the business and this is you. You are two individuals. Realizing that makes it much easier for you to be objective and work on building that business back up again. It’s easier to see what the issue is and correct it.

Get your business in shape to be sellable at all times.

You want your business to thrive without you. As shop owners, many of us build the business around us because it makes us feel significant and important and valued. But it's not sustainable and it wears you out. You want to build a business you can go away from for six months and say, “Hey, send the checks here.” That's the goal.

That's what I work on with each one of my clients. I work with them so that their business is sellable all the time. That's what I do. I put them on that path and get them to a point where they don't have to be in their business.

If you'd like to hear more about exit strategies, please feel free to sign up for our Pocket Business Genius webinar series.  It has over 70 recorded webinars and one live webinar each month. I’d love to see you there.

Check out our Shop Owners’ Round Table on the second Thursday of each month at 7PM Eastern Time.

God bless. stay safe, have some fun, and go make some money.

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