Positive First Impressions
Shop Mobile Devices
Know Your Numbers May/June 2013
European Auto Tech Turns A Supplier Benefit Into A Customer Loyalty Tool
22 European Auto Tech, Tucson, AZ 42 Gross & Stevens, Visalia, CA Shop Mobile Devices
Shop Profile: European Auto Tech
Technology: -Shop Mobile Devices
34 Case Study: Buying & Selling An Automotive Service Business 48 Shop Operations: Customer First Impressions Buying & Selling An Automotive Service Business
Shop Profile: Gross & Stevens
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Tap, Snap And Talk The Electronic Inspection Sheet Traditionally, auto technicians record the results of their vehicle inspections on pre-printed paper forms and, once completed, the inspection findings are re-entered into the shop management software application by a service advisor. And, finally, the motorist is notified by phone to ask them for authorization of an estimate based on the inspection results.
This process’ limitations can be overcome by leveraging tablet technologies. Imagine that technicians don’t need to spend time writing on paper anymore, service advisors won’t need to transcribe the inspection results into the shop management software, and the motorist is not
only impressed about the professional-looking inspection report, but can also educate themselves about recent recalls, and service recommendations specific for the odometer reading of the vehicle.
Leveraging Mobile Devices Too good to be true? It’s getting even better: The user interface on the tablet, in conjunction with the fully customizable inspection sheet, is so optimized that typically technicians can save five minutes or more as compared with the paper version. Service advisors simply copy and paste a link to the inspection results in the estimate and save up to 10 minutes. Promotions can be added to the inspection report before they are sent to the motorist.
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How does this all work? Instead of trying to squeeze as many inspection topics on one paper sheet, the electronic versionâ€™s full customizability allows shop owners to create makespecific inspection sheets in order to maximize technician productivity. Once the inspection templates are built as needed, the technician selects the inspection sheet on the tablet and starts the inspection. As the technician walks around the vehicle, the topics for each section can be tapped (see image at top of facing page), images taken and voice recordings made when things become complicated. The inspection results, including high-resolution photos and recorded voice details of specific findings, in conjunction with an inspection result report, are immediately accessible to the service advisor (see
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bottom image). This allows him to easily prepare an estimate in minutes. By simply tapping the screen, snapping an image and talking to the device, the technician increases productivity and the accuracy of the inspection process. In the event the inspection requires a road test, the application allows him to monitor the strength of the data connectivity. The Electronic Inspection Sheet application even works without data connectivity during the road test. Motorists will then be able to review the results, which includes images of affected vehicle systems selected by the service advisor. In addition, OEM service recommendations for the current odometer reading of the vehicle in question, recent recalls, and promotions can be configured and e-mailed to the motorist.
Typical Pre-Purchase Vehicle Inspection.
What if the electronic inspection results were available in the shop management software and presented to the motorist, together with the estimates, images from the vehicle and educational videos? Exactly at the time when motorists have questions like “Why now?” or “What happens if I don’t do it?” the service advisor and motorist can look at the same screen, even if the service advisor is at the counter while the motorist is at home, work or anywhere else with Internet access.
Introducing the Job Educator If the inspection software is real-time integrated with the shop management software, the repair estimate can be made part of the “Job Educator.” Providing additional information including educational videos about each service, the Job Educator allows the motorist to make an informed and educated decision to authorize additional repairs. It’s that crucial point in time during the visit when the motorist is
The service advisor and motorist can look at the same screen, even if the service advisor is at the counter while the motorist is at home, work or anywhere else with Internet access.
most likely to ask questions that they might not ask in a face-to-face situation at the counter. As one of the shop owners adapting his shop to the new technologies explained: “We have been using the electronic inspection sheet application for over a month now and we see time savings of at least five minutes per vehicle per tech, as well as 10 minutes per vehicle for Frank, our advisor! “The greatest savings is the reduced stress surrounding a last-minute transcription of an inspection on a vehicle that didn’t get finished until the end of the day near pick-up, or that was finished earlier and didn’t get transcribed until the end of the day. That reduction in stress is priceless!” Using tablet and other mobile technologies seems to begin the transition to the paperless shop. What is your experience with mobile devices in your shop?
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Do you want to try the AutoVitals Electronic Inspection Sheet? Just scan the QR code below with your Android or iOS based tablet and test the first 50 inspections for free! SO
Uwe Kleinschmidt is the CEO and founder of AutoVitals in Santa Barbara, CA. The company’s Web-based services focus on the independent automotive repair industry. AutoVitals’ products facilitate highly effective Concierge Auto Repair services, covering all aspects of the service advisor’s interaction with prospective and existing customers. Highly effective and optimized websites, workflow support in the shop, as well as customer retention and social media services are just a few ingredients. He can be reached by visiting www.autovitals.com or calling 1-866-949-2848.
Working Together – The Federated Way Federated Auto Parts’ dedication to building profitable and successful relationships has made it one of the automotive aftermarket’s premier programmed distribution groups. Federated is devoted to providing professional technicians with superior customer service and name brand quality parts at competitive prices along with a full array of training and business support tools. Since Federated was established in 1985, the name has become synonymous with quality in the field of vehicle repair with over 8,000 stores and service centers nationwide. Federated Auto Parts stores are independently owned businesses that serve their local communities and are often family-owned and operated. These stores provide the highest quality replacement parts and accessories at competitive prices but also have the most knowledgeable people that can help with whatever the problem or challenge a customer may face. They also provide training and a host of other technical and marketing support programs including Federated Car Care, which identifies some of the best service providers in the country as being on the Federated team.
helps them have the most up-to-date, state-ofthe-art equipment. Independently owned and operated, Federated Car Care centers are usually managed by the owner so customers can develop a relationship not only with the business but also with a person who will take an interest in keeping your car performing at its best. Federated Auto Parts, headquartered in Staunton, Virginia, is one of the largest auto parts distribution and marketing organizations in North America. Federated is dedicated to supporting its customers with quality name brand parts, programs designed to grow their businesses, and experienced counter sales people who are knowledgeable in today’s evolving automotive technology. For more information, visit www.federatedautoparts.com.
Federated Car Care is a sign of confidence for consumers looking for a quality repair facility. To be eligible to be a Federated Car Care member, shops must meet strict criteria for performance like employing ASE certified technicians that have the proper training to tackle the toughest repairs. Shops also receive on-going training and marketing support along with a program that
Federated Auto Parts 508 Greenville Ave. Staunton, VA 24401 (540) 885-8460 www.FederatedAutoParts.com
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Bob Pattengale National Training Manager – Bosch North America Robert Bosch LLC Bob Pattengale is the National Training Manager for Bosch. Bob has more than 30 years of automotive experience with stops at OE dealerships, independent repair shops, technician training and equipment sales. Bob is a contributing writer for automotive trade magazines, and also served as the SAE Service Technician’s Society President in 2001 and 2002. What are the objectives of Bosch Training, and what does Bosch Training encompass? BP: Bosch Training is dedicated to helping repair technicians improve their system knowledge and problem solving skills, which in turn provides the shop owner with a solid resource to repair today’s ever-changing vehicle fleet. Bosch Training continues to evolve with changes in education technology and with feedback from the Bosch Car Service and Bosch Diesel Service repair networks. The program offers a variety of options including; hands-on training, day-long sessions, evening seminars, digital courses on CD,
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technical manuals and a dedicated training website with the latest list of available courses and materials. What areas does Bosch Training address, and can anyone in the aftermarket get this training? BP: The training program covers a wide range of topics, which are designed to help all skill levels of technicians. Topics range from basic electrical to advanced vehicle networking systems, with a focus on Bosch technology when possible. We regularly solicit and listen to feedback from the members of our Bosch Car Service and Diesel Service networks to help identify the subject matters most relevant to shops today. For a complete list of available courses visit www.BoschTechInfo.com, or call (855) 267-2483. In the past, training was exclusively offered to repair shops in the Bosch Car Service
and Diesel Service networks, but today with a renewed focus on taking training to the street, we are expanding the offering to all repair shops. The Bosch affiliated shops are given the first opportunity to fill the training seats, but after a predetermined time frame we open the event to all interested parties. Are there hot buttons that concentrate on the pressing needs in today’s automotive service? BP: Yes, there are hot topics that demand greater focus as technology changes and unseen repair concerns arise. Emerging technologies are always high interest topics, but in many cases once the system theory is taught the demand for deeper knowledge lessens. For example, advanced safety systems and anti-lock braking system were hot topics, but in reality the systems rarely fail, so the need for deeper knowledge is not required. In the new “Take It To The Street” training program we started with hot topics like Gasoline Direct Injection (GDI) and Passenger Car Diesel (PCD) technology. The “Take It To The Street”
courses are offered in an eight-hour classroom style format, which can be taught in one day or over two evenings. The goal is to make the information as real world as possible. For example, the GDI course has over 30 videos, several graphical animations and a color reference book to fully explain the systems. In 2014, we will continue with Advanced Vehicle Networking and Advanced Evaporation Emissions training. The Evaporative Emissions class is a hot topic based on the number of diagnostic trouble codes (DTC) appearing on these systems. Approximately 30% of the check engine light DTCs are now evaporative emissions related. The percentage is predicted to increase as these vehicles get older, which means technicians really need to understand these systems in order to successfully repair them right the first time. Bosch Training also offers diesel technology training to support the Bosch authorized Diesel Service repair network. The focus is on understanding and repairing the many Boschdesigned components and systems on the road today. Upcoming courses will
focus on vehicle-specific training like the 6.7L Ford PowerStroke and the 6.6L General Motors Duramax engines. These courses offer a comprehensive overview and real world diagnostic strategies for repair. These courses, discussing Bosch and other supplier automotive systems and technology, are taught by Bosch technical specialists well versed on the subjects, and intended to give attendees a solid grounding, utilizing whatever tools and equipment are appropriate. How does Bosch digital and printed training complement the hands-on training? BP: Hands-on training is always the best way to fully reinforce the learning process, but this is not realistic for most repair shops. Many shop owners are not comfortable with sending the technician away for three to four days for this type of training due to the loss of revenue and the cost of travel. In an effort to make the training as real world as possible we will be using every method possible to deliver training: web based, live streaming, self-paced learning modules, etc. For example, later in the year we will begin offering at least one web based training event every month. The topics will vary and will be recorded for those who might not be able to make the live event, and will be posted on a learning management system for review as needed.
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Is there other training, at the field level? BP: At this time the options are limited to the hands-on training events in Chicago and the â€œTake It To The Streetâ€? courses. Bosch does participate in association and parts organization sponsored events as requested. Does Bosch Training emanate from traditional Bosch expertise as a leading automotive supplier? BP: The early Bosch training programs were primarily developed around Bosch technology only and from a pure theory of operation concept, which in many cases did not reflect how the Bosch technology was implemented on various manufacturer platforms. The goal today is to offer a more real world perspective and include as much real world diagnostic information as possible from a variety of car manufacturers. For example, in the GDI class we include information from Ford, General Motors, VW/Audi and other vehicle manufacturers to help with overall system knowledge. What costs are associated with the training? BP: Bosch charges a fee for training and the cost varies depending on the course length and location of training. Bosch Car Service and Diesel Service repair shop personnel are able to attend training at a discounted rate. SO
by Bob Cooper, president, Elite Worldwide, Inc.
Knowing Your Numbers Helps Boost Shop Profitability Over the last 22 years, I’ve been amazed to discover just how many shop owners are lost when it comes to knowing and understanding “the numbers.” In order to build a successful auto repair shop, you are going to need to know two sets of numbers: your “financial” benchmarks, and your “operational” benchmarks.
Without a clear understanding of these benchmarks, it becomes quite challenging for shop owners to pinpoint where they are falling short of their goals, and where improvements need to be made. Far too many times, I’ve seen shop owners finally start monitoring these numbers closely, and quickly
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realize that for years they haven’t been charging enough for parts, have been overpaying their employees, have been operating inefficiently, etc. There’s no doubt about it: A clear understanding of your shop’s financial and operational benchmarks is critical to effective auto repair shop management. Since your parts costs are one of your largest expenses, it’s something you need to monitor continuously. At Elite, our top clients spend no more than 52% of the dollars they bring in through their parts sales, on parts costs. This means that if they bring in $40,000 in parts sales by the end of the month, the cost of those parts should not exceed $20,800 ($40,000 in parts sales x 52% = $20,800 parts costs.) If you find you are spending more than 52% of your parts sales on parts costs, then you need
to take a good, hard look at how you price your parts, any parts that are being replaced at no charge, your warranty failures, purchasing habits and the possibility of theft. When it comes to your direct labor (the cost of your techs), the top shops we work with spend no more than 40% of the dollars they bring in through labor sales, on technician pay. This means that if they bring in $40,000 in labor sales by the end of the month, their technician payroll does not exceed $16,000 ($40,000 in labor sales x 40% = $16,000 labor cost). You also need to pay close attention to the cost of your service advisors, and here at Elite, we like to see that number at no more than 8% of your total parts and labor sales. For example, if your shop generates $80,000 in monthly auto repair sales, your advi-
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sors should not be costing you more than $6,400 ($80,000 total sales x 8% target = $6,400 advisor cost). You’ll need to watch your “operational” benchmarks very closely as well. One key indicator is your labor hours per repair order, and our top clients consistently generate at least 22.5 hours of labor sales with their average repair order. If you are not seeing 2-2.5 hours per repair order at your shop, you need to review your vehicle inspection process, what’s being recommended to your customers and the declined services. As a shop owner you also need to pay close attention to your technicians’ “efficiency” rate. This is a powerful key indicator that will show you just how good your techs are at getting the work done in a fast and effective way. It’s easy to discover your efficiency rate by simply dividing the
As a shop owner you also need to pay close attention to your
technicians’ “efficiency” rate. This is a powerful key indicator that will show you just how good your techs are at getting the work done in a fast and effective way. hours you billed for the repair, by the amount of time it took your tech to complete the job. For example, if you bill a customer 2 hours, and your tech gets the job done in 1.5 hours, he would be 133% efficient (120 minutes billed/90 minutes to complete the job = 1.33, which is 133% efficient). The top shops are typically operating at an overall efficiency rate of 125+%. There are a number of things that can bring down the efficiency of the technicians in your shop, including a lack of experience, the lack of proper technical training, and one of the biggest culprits, the wrong compensation programs. And lastly, after you pay all of your expenses, the money that is left over is for you. In business we call that profit, and the top shops will typically www.ShopOwnerMag.com
earn a profit of 15-20% of sales. So if your shop is generating $80,000 in monthly sales, in most cases, you should be able to earn $12,000$16,000 per month in taxable income. The good news is, if you know your numbers, and if you never put money ahead of people, you should be able to generate these profits in a professional and ethical way. SO Since 1990, Bob Cooper has been the president of Elite Worldwide Inc. (www.EliteWorldwideStore.com), an ethics-based company that helps both struggling and successful shop owners take their businesses to new levels through one-on-one coaching from the industry’s top experts. The company also offers shop owners sales, marketing, and management seminars, along with service advisor training. You can contact Bob at firstname.lastname@example.org, or at 800-204-3548.
â€œThe point is to give the customer the greatest service value. Put yourself in their shoes from start to finish.â€? -John Ranney
European Auto Tech Turns A Supplier Benefit Into An Effective Customer Loyalty Tool Repairing today’s sophisticated cars can be expensive. John Ranney, owner of European Auto Tech, a seven-bay automotive repair garage in Tucson, AZ, understands that. Located near the University of Arizona, he sees how financial pressures affect his business and his customers, many of whom are students and their parents.
Two years ago, the Bosch Car Service network introduced the Bosch Service credit card. As a network member, Ranney immediately signed up for the program, as it provides consumers six months’ no-interest financing, if paid in full on all qualifying purchases — on repairs up to $3,000. A program like that is what he needed to give his customers peace of mind and win their loyalty.
customer gets no interest for six months if paid in full on all qualifying purchases. When they need another repair, that card can be used again and again with the same great offer. Truthfully, it makes me feel as though I am doing a service to the community.”
Helping Out His Customers “For me, it was a no-brainer,” said Ranney. “My customers could have that credit card in his or her possession with our name on it — a constant reminder for shop loyalty. This card can only be used by the customer at a participating Bosch Car Service facility, and only for automotive parts and service. Most importantly, the The Bosch Service credit card sign is strategically located above the front desk. www.ShopOwnerMag.com
University of Arizona Students Amanda Berg (L) and Devon Gregory use the Bosch Service credit card.
The card is very popular with customers who are either University of Arizona students and their parents, or university staff members. Ranney estimates that half of them are using their Bosch Service credit cards to pay for their automotive servicing, and taking advantage of the favorable payment terms. Ranney related a particularly heartwarming story of a young woman whose parent lived in another state and was challenged by personal situations, creating a financial strain on the family. The Bosch Service credit card helped them to take care of the repairs on the daughter’s car with affordable monthly payments and no interest charges or additional fees. Another University of Arizona student needed a lot of work done to her older BMW. Ranney’s staff made a list of work to be performed and priori-
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tized it by safety. With the credit card, she was able to repair her BMW over time, without being burdened with interest charges and fees. “The point is to give the customer the greatest service value,” Ranney emphasized. “Put yourself in their shoes from start to finish.” According to Ranney, parents appreciate the fact that they can give their sons and daughters the Bosch Service credit card and know that it can only be used for car repairs at his shop or any other participating Bosch Service facility. The card promotes responsible, need-based spending. It gives parents great peace of mind to know that if there is an emergency, it can easily be taken care of and without exorbitant interest charges or other fees. In Ranney’s own words, “That’s huge!”
The Story Behind The Man, John Ranney So how did he get into the business of automotive repair in the first place? “I guess it was in my blood — this love for taking things apart and putting them back together,” Ranney said. His father, who worked as a chief engineer in the Merchant Marines, never called in the repairman and, as far as Ranney can remember, he too has always been interested in fixing things that would break around the house. Growing up in such an environment, and later working in the Navy as an aircraft electrician on helicopters, Ranney’s familiarity and comfort with fixing broken mechanical objects developed into a love for and, eventu-
ally, a career in servicing automobiles. When an ad appeared in the local paper advertising a position for an apprentice mechanic at a Porsche-Audi dealership, Ranney applied, and when offered the job, he accepted it at once. “There was no looking back after that,” he said. At that time, he and his wife, Bergit, lived in New Jersey. Tired of having endured the East Coast weather all of his life with its gray skies, rain and snow, they decided to move to Tucson, AZ, where they had visited a number of times and loved. So, they packed their bags …. “Moving from New Jersey to Tucson was like taking off from a black and
Technician Jeffery Haremza is working on a customer’s car.
white landscape and landing in full Technicolor!” Ranney remarked.
The Bosch Service Network Sixteen years later, Ranney runs a shop with seven bays, five technicians, two service writers and a driver. Often working with high-end vehicles with complex electronics, he looked for a partner who could provide the training and repair information he needed to keep up with the ever-increasing vehicle technologies. In 1999, Ranney joined Bosch Car Service, an international network of service centers. By meeting the program’s stringent requirements, Ranney qualified for access to exclusive training, marketing tools, service informa-
tion and equipment from Bosch. There are nearly 1,500 Bosch Car Service centers in the U.S. and Canada. According to Ranney, “Bosch stands for quality of service and professionalism, and I wanted to be part of it. More importantly, Bosch invented most of the technology that makes the car work, and provides outstanding products backed by a rock-solid nationwide warranty. I also liked the network of shops that were in every part of the country that could back up such a warranty — like my shop would. It just felt right to me.” The marketing value of being part of the network, and having tools like the Bosch Service credit card, has been a great asset to Ranney. “We have a powerful company behind us, helping
John and his team at European Auto Tech.
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Ranney’s list of “must haves” for any shop to succeed are: • Excellent customer service, • An employee-friendly workplace, • High ethical standards, • A clean environment, • A well-designed website and • An overall focus on delivering value to all. us finance the customers who need help, as well as the customers who don’t, but want to take advantage of the Bosch Service credit card’s special financing,” he said. Over the last two years, Ranney has seen that the Bosch Service credit card lets his customers improve the quality of service on their vehicle. With the card in their hands, they can now opt for a higher level of service than they normally could afford. In 2012, Ranney reported that European Auto Tech topped in the country in three sales categories for the Bosch Service credit card — the most consumer purchases charged to Bosch Service credit cards, the most processed applications, and the most purchase-activated accounts. “My average sale on Bosch Service credit cards is over $1,000,” Ranney said. On Ranney’s list of “must haves” for any shop to succeed are: excellent
customer service, an employee-friendly workplace, high ethical standards, a clean environment, a well designed website and an overall focus on delivering value to all. When asked about his business philosophy, it’s not surprising that John Ranney quotes Robert Bosch: “I would rather lose money than trust. The integrity of my promises, the belief in the value of my products and of my word of honor have always had a higher priority.” — Robert Bosch “That is me! That’s exactly the way I feel about the way I do business,” Ranney said, thinking about the business he has built. For information on the Bosch Service network, visit www.boschcarservice.us For information on the Bosch Service credit card, visit www.boschcarservice.us/Pages/Bosch ServiceCreditCard.aspx. SO
by Deanna Arnold, president and owner, Employers Advantage LLC
Employer Compliance EEOC Addresses Six Priority Areas of Claims Enforcement With a record number of discrimination/retaliation claims filed by workers with the Equal Employment Opportunity Commission (EEOC) in 2010 and 2011, the EEOC received almost 100,000 in 2012. In December of 2012, the EEOC laid out the details of its Strategic Enforcement Plan for fiscal years 2013-’16 and identified six “national priorities” that focus enforcement efforts in the three general areas of hiring, pay and harassment. The six priority areas of claims enforcement are as follows: 1. Eliminating Barriers in Recruiting and Hiring. Last year, the EEOC made a big impact on hiring practices when it
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released its guidelines around the use of background checks during the hiring process. Those guidelines discouraged employers from using “blanket exclusions” of individuals who have been convicted of crimes, but rather to conduct individual assessments, as to not create disparate impact. The new enforcement plan will broaden that scope beyond just background checks and will focus on all recruiting and hiring practices that (intentionally or unintentionally) discriminate against certain classes or groups of people such as women, older workers, ethnic and religious groups, among others. This will include a review of tools used during the prescreening process, including pre-employment testing and inquiries as to a candidate’s date of birth or disabilities.
2. Protecting Immigrant, Migrant and Other Vulnerable Workers. Here, the EEOC states that it will target disparate pay, job segregation, harassment, trafficking and discriminatory practices that affect immigrant, migrant or other vulnerable workers who may be unaware of their employee rights. 3. Addressing Emerging and Developing Issues. Currently, there isn’t definitive information in this area as it is based on issues in equal employment laws that are expected to come to the surface over time. However, the EEOC has suggested that there are emerging issues applicable under the Americans with Disabilities Act (ADA), which applies to all employers with 15 or more employees, as well as other federal regulations in addition to the ADA. As the demographics of the workforce continue to change, forcing new legislation to be created, this will be a hot topic that employers need to keep an eye on. 4. Enforcing Equal Pay Laws. The focus here will be on pay practices and compensation packages that discriminate based on gender and ensuring that men and woman are paid equally for the same work. 5. Preserving Access to the Legal System. This area of focus will be on company policies and practices that may discourage or even prohibit employees from exercising their rights or which interfere with the efforts of an EEOC investigation or enforcement. These policies or practices would
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include retaliation, overly broad waivers releasing the employees’ rights to file a claim, or restricting their ability to provide information to assist in an investigation or prosecution of claims of discrimination. 6. Preventing Harassment Through Systematic Enforcement and Target Outreach. In the Strategic Enforcement Plan, the EEOC states that harassment is the most frequent of complaints in the workplace, and that claims based on race, ethnicity, religion, age and disability combined significantly outnumber sexual harassments claims. Because of that, the EEOC “believes a more targeted approach that focuses on systemic enforcement and an outreach campaign aimed at educating employers and employees will greatly deter future violations.” The EEOC already has a variety of resources available to em-
ployees as well as employers, particularly small businesses, but with a target outreach plan those resources may make it easier for employers to be proactive with compliance. In addition to the ramped up enforcement efforts of the EEOC, the National Labor Relations Board (NLRB) has increased its focus on the enforcement of Employee Rights and Protected Concerted Activity under the National Labor Relations Act (NLRA). Protected Concerted Activity gives employees the right to discuss working conditions, pay and workplace concerns with other people, whether they are in a union or not. Therefore, the NLRB is paying particular attention to social media policies, workplace investigation practices, and employmentatwill
(in applicable states) and confidentiality policies forcing many employers to revise company documents and update employee handbooks for 2013. Social Media policies, in particular, that restrict employees from bad mouthing or talking about their employer on social media may be found to be interfering with an employees’ right to complain about working conditions with co-workers. There was a big push over the past two years for employers to implement social media policies approved by the NLRB, but now, legal resources are saying that social media policies should be eliminated. So what does all of this mean for business owners and employers? Although compliance is critical for any business and all of the above noted areas of enforcement have always been important to the EEOC and the NLRB, extra effort should be made to ensure that company policies and practices are current, compliant, and practiced and enforced consistently. It is important to understand that the six “national priorities” are not the only claims that the EEOC will investigate, but that it has allocated additional resources to pay particular attention to these areas as part of its Strategic Plan for fiscal years 2013’16. For more details about the EEOC Strategic Enforcement Plan and to access the full report, visit the EEOC website at www.eeoc.org. SO Deanna Arnold, PHR, is the president and owner of Cornelius, N.C.-based Employers Advantage LLC (www.employersadvantagellc.com), which provides practical solutions in all aspects of human resources, including recruiting, benefits, employee relations, compliance, performance management, HRIS, worker’s compensation, safety, facilities/office management and budgeting. She can be reached at email@example.com or by calling 980-422-7953.
by Art Blumenthal, MBA CBI
Buying & Selling|An Aftermarket Business
Case Study: Buying & Selling an Automotive Service Business A Look At The Perspectives of Both Buyer & Seller When A Prominent Auto Service Center in North Providence, RI, Changes Hands “After thinking I should be doing a nationwide search to find the right buyer for my business, it took my broker Art Blumenthal to find the perfect candidate from my own hometown!” –Jim Torres, Seller “For a first time buyer, having a broker involved is definitely a plus. There’s an amazing amount of legwork involved to get the deal done and you need a guide.” –Joe Cunha, Buyer
Seller’s Background & Motivation to Sell Jim Torres had owned a prominent auto service center in North Providence, RI, since 1983. Although still in good health and wanting to remain active in the automotive aftermarket in some capacity, he sought retirement from the daily grind of owning and operating a business. Jim said, “I was a District Manager for Midas for a number of years before owning three auto service shops over a 28-year period. I was fairly successful and, over the years, I sold off two locations myself…one was to a partner with whom I was in partnership at a location, and the other location to another former Midas District
Manager, who had actually approached me looking to buy a location. So, for the next 10 or 12 years I had just the one location in North Providence.”
Buyer’s Background & Motivation to Sell Joe Cunha has a classic automotive service background. Joe said, “I have 27 years of experience as an ASE-certified and factory trained Master Technician. I started off in 1985 as a technician and worked as an independent for nine years at local garages and gas stations. Then, I started with an Isuzu dealership in 1994 and worked there for four years. Then, I went to work for a Buick-Pontiac-GMC-Isuzu deal-
Jim Torres and his wife, Vivian (left) pass the keys to new owner Joe Cunha (right).
ership for another four years and then for a Volvo dealership for eight years after that. Finally, I worked for a Lexus dealership for two years.” When asked if there was a specific date that he decided to go into business for himself, Joe Cunha admitted that he always had the entrepreneurial spirit. “I always wanted to run my own business from years back. Even when I was working for dealerships, I had a side business selling log home material packages when the housing market was good, so I had a taste of what it was all about to run a business. “Once that real estate rollercoaster ride cooled, I decided to start looking around in my real area of expertise…the automotive industry. At first, I looked at some shops and then, by chance, I found Art Blumenthal’s
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website on-line one night doing a Google search. He had hundreds of listings in the northeast, so I contacted him.” Joe continued, “When he told me about some of the locations he had listed and that one of them was owned by Jim Torres, I became more interested. I had known Jim’s sons since I was a kid, and when I worked at a gas station when I was a teenager, Jim and his wife would come in at least twice a week. To add even more to the ‘it’s a small world’ scenario, when I worked at the Volvo dealership his wife owned a Volvo and I worked on it.”
An Overview of the Business As a prominent auto service center, the business is an established, prof-
itable turnkey operation with equipment, inventory and experienced employees in place. Located just north of Providence, the state capital of Rhode Island, this six-bay, fully equipped business offered a buyer a unique opportunity to live and work in a desirable New England community, with excellent demographics and minimal automotive service competition. The business was consistently profitable for 30 years and is located on the 2nd most highly traveled local road in Rhode Island. It is an Official Rhode Island State Inspection Station, performing more than 1,000 state inspections per year. It offers total car care including brakes, oil changes, exhaust, scheduled maintenance, tires, and steering and suspension services.
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Seller Selects a Business Broker Jim Torres said, â€œArt Blumenthal caught my attention when he sent out a marketing mailing that he was in the business of selling operating aftermarket businesses. As a District Manager for Midas, I knew Art Blumenthal back when he himself was quite successful as a Midas dealer. Eventually, he went into the auto service software business for many years, and although I had never met him personally, I did business with his company. â€œI gave it some thought and knew that he had a reputation as being diligent and effective in whatever he does. So I contacted him and we talked a couple of different times to get to know each other and I felt comfortable with his approach. I thought it was important to get more of a national view for the business. I thought we could probably attract people from
other than the immediate area.”
What’s the Business Worth? Establishing a sales price with the guidance of Art Blumenthal included taking into consideration a variety of factors: • Sales were trending upward; • Strong cash flow that supported both the bank payments and significant owner compensation; • Pre-approved for 85% Wells Fargo Bank financing, with a SBA guarantee; and • Excellent demographics in the immediate area with homes, condos and apartments – professional, upscale income levels.
Scope and Timeline of Sales Process Jim Torres said, “Art put together a very comprehensive presentation for potential buyers…I was very impressed with it. Over the next months, we had some interest from people in California, Florida and New England. But, like selling a used car, you get a lot of tire kickers sometimes and they don’t go any further. “And then some months later…I would guess eight months into it…Art contacted me and said he had someone from Massachusetts who was interested. As it turned out, I knew who the young man was…Joe Cunha…because he grew up in our little town of 6,000 people. He played ball with my sons when they were kids. So it took Art, a man in Pennsylvania, to put me in touch with someone I already knew in Massachusetts. After thinking I should be doing a nationwide search to find the right buyer for my busi-
ness, it took my broker Art Blumenthal to find the perfect candidate from my own hometown!” Jim continued, “Plus, I knew the young man was very nice with a very good work ethic. So needless to say, I was very happy that Art had a potential buyer for me and that it was this young man, who I think a lot of and I think will do very, very well. “So Art put us together and we went back and forth and it wasn’t all easy because there are many issues to discuss to come to an agreement on…the financing gets a bit difficult in today’s economy. But I’ve got to say that Art worked very hard on it and was very good in communicating with my attorney and the buyer’s attorney and the banks, and coordinating everything. I was very pleased with what he was able to do. It was handled in a very professional way.”
Scope and Timeline of Purchase Process Joe observed, “My accountant looked over all the financials and we came up with a figure. Then of course, the bank also delves into the financials and bases their opinions and offers on cash flow, which needs to be healthy. Finally, we were able to agree on a purchase price.” He continued, “For a first-time buyer, having a broker involved is definitely a plus. There’s an amazing amount of legwork involved to get the deal done and you need a guide as the months pass quickly. One of the biggest challenges is dealing with the banks, which are now really tough while protecting themselves. “It was absolutely a learning process with a million details to take care of.
“For a first-time buyer, having a broker involved is definitely a plus. There’s an amazing amount of legwork involved to get the deal done and you need a guide as the months pass quickly.” Just one example was the last-minute requirement of the bank that I get flood insurance because there is a small river nearby. I would have never thought of that.”
Post-Sale Activities and Observations A few months after the closing, Jim said, “I am quite pleased with what’s happened…the successful conclusion…and I believe Joe feels the same way.” The sales contract provided that the Seller would provide a minimum of two weeks training after the closing. Jim said, “For two weeks, I was there every day, and for two weeks after that, I was there for a day or two if he needed some assistance. It’s now been three months and I try to stop by once a week to see if there’s any mail, or I give him a call, or he calls me if there’s a question. I want him to be as successful as he can be and I’ll do anything I can to help him.” Joe has welcomed the opportunity to “Be Your Own Boss” and has been able to take a look at the business from a fresh perspective. He has made positive changes, including some new equipment, software upgrades, procedural improvements and fresh paint.
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Win/Win Outcome Jim has been relieved of the stressful day-to-day responsibilities of the business and can now enjoy more time with his family, traveling and exploring other options and interests. He has converted his business equity into cash for his retirement and financial security, without the risks associated with seller financing. Joe is controlling his own destiny. By securing long-term financing, he was able to leverage his investment and purchase a well-established business with exceptional sales and cash flow. His strong work ethic, automotive and business management skills will enable him to further grow the business and create substantial longterm equity. SO
Leveraging more than 30 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Art is a member of IBBA (International Business Brokers Association, Inc.). For more information, or to initiate a no-obligation confidential consultation, visit www.art-blumenthal.com.
Front row, from left: Alonzo Padilla, Al Waddle, Shelly Gist, John McMahan (owner), Herb Adame and Ernest Leyba. Back row, from left: Victor Parra, Larry Vannorsdall (owner), Steve Eoff, Robert Parker and Steven Santana.
by Debbie Briggs, contributing writer
Gross & Stevens
Putting Customers First In A High-Tech World In a day and age where Internet presence is often expected, Gross & Stevens, a preeminent brake and wheel service repair shop in Visalia, CA, is bucking the trend and focusing on something else: good, old-fashioned customer service.
“I know everybody says you need one,” President and CEO John McMahan says of the pressure to have a high-profile website. “But we’re averaging 20-30% increases in sales per year.” While they do have plans to update their current website, John says the success of the shop is really because of his, and business partner Larry Vannorsdall’s, commitment to top-notch customer service. And that really comes down to two things — convenience and honesty. “We’re not on a main thoroughfare, and the shop is on a dead-end street,” John explains, adding that the three acres the shop sits on allows them to have three different entrances, which is ideal for RVs and larger vehicles. “Customers often tell us they love the front driveway that we put in, which allows them to pull right up to the front door.” The shop’s location in Visalia is in the heart of the San Joaquin Valley, a gateway to the Sequoia National Park. As a result, many tourists end up calling when the
brakes burn up on their RV, or the trailer they’re hauling breaks down. “The first question many people ask is, ‘Can I turn around in your parking lot, or do I have to back up?’ John says. “That’s when those three acres, and large parking lot, come in handy.”
Multi-Faceted Business RV, large trucks and trailers make up one division of Gross & Stevens, and started as more of a supplemental or add-on part of the business. Now that line of work has warranted a separate building with two full-time techs. Four other technicians, as well as Larry, focus their efforts on passenger cars and light trucks in the original building. “The RV building also houses our machine shop,” John says. “If we can’t get a part in a timely manner or at a reasonable price, we make it. “We’ve also opened up our parts department for trailer parts,” he adds. “We built up our
“The RV building also houses our machine shop. If we can’t get a part in a timely manner or at a reasonable price, we make it.” -John McMahan
own parts departments and we have local RV dealers buying parts from us. If you walk in and want to buy a part, we’ll sell it to you.” John says word-of-mouth has helped lead to the success of the shop, with fair pricing and free inspections being especially appreciated by customers. While John says he often receives advice that nothing should be free, he begs to differ. “It takes only 10 minutes, and it’s also valued by customers,” he says. “People know they don’t automatically have a $50 bill even before any work
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is done. I’ll do it right in our circle driveway. It’s easy, and they know we’ll be fair, upfront and honest with them.” John says 50% of business at Gross & Stevens is fleet driven, including local utility providers and municipalities in the surrounding areas. Having enough techs — and the right parts on hand — allows the shop to offer fleet customers same-day dropoff and pickup. “We really don’t have much downtime,” he says, adding that as the largest Moog chassis installer in the area, “I can offer big savings to my customers.”
The techs at Gross & Stevens bring various specialties that help get vehicles back to customers in a timely fashion. Techs are ASE certified, but one is a certified welder, one tech’s focus is heavy chassis, while another is regular automotive. John believes in the value of training, and will pay for any local training a tech wants to attend, even if it’s outside of the normal brake and chassis work done at the shop. And while John currently has a skilled group of techs, he says finding new talent can be tricky in this age of technology. “A lot of young people want to wear white coats and work on computers,”
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he says. “I’m sorry, but we do have to get dirty! It’s a lot of manual labor.”
First Impressions Despite the fact that brake and chassis work can be messy, John says he often has customers compliment him on how clean the shop is kept. And that’s no small task when one hammer hit to a chassis can yield what seems like eight pounds of dirt! “We get comments daily on how professional and clean it is,” he says. “It’s hard to do since we’re in a farm
community, and the vehicles we work on get muddy and dirty. But we have a person who cleans in the evenings, and the shop is swept and mopped daily.” Adding to the appeal is a front lobby that looks more like a ’50s diner, complete with a 1953 Coke machine that dispenses complimentary soda and water.
“Drivers like coming here because they can grab a free soda or water,” John says, perhaps adding some incentive to get parts quickly, but more as a way to show appreciation. John says he also likes to give back to his community by sponsoring sports and music programs, including buying uniforms for little league teams. And it’s not just a marketing ploy. “If one of the parents comes in because we bought uniforms, that’s great,” he explains. “But we do it because kids might not get them otherwise.” It’s that kind of care and concern that goes into every customer interaction at Gross & Stevens, from initial dropoff to completion of service. Honesty, professionalism and the true
desire to repair a vehicle for the exact price quoted are the hallmarks of service at the shop. “We ask tons of questions at the time of vehicle drop off to ensure everyone is on the same page as far as customer concerns,” John says. “We do vehicle repair planning to make sure repairs fit in a customer’s budget. We never pressure a customer for immediate repairs. “We’re very personable,” he says in summary. “We’ll walk out and talk to customers like a friend. There’s no pressure, but we say ‘this is what we recommend.’” It’s no surprise that word-ofmouth can be credited for much of the shop’s success since John and Larry purchased it in 1987. John says he’s now seeing second- and even third-generation customers coming into the shop based on recommendations from parents and grandparents. “Parents will call to make an appointment for their son or daughter to bring their car in for maintenance or repairs over spring break,” he says. “We even have a couple of customers who have moved out of state, but they still bring their cars by when they’re in town visiting family.” And while doctors no longer make house calls, John is no stranger to helping out an elderly customer whose caregiver duties prohibit taking their car in for service. “I’ll drive my car to their house and leave it there while I take their car to the shop,” he says. A true testament to the power of getting back to basics: Treat a customer well and you’ll have a customer — and their friends and family — for life. SO
by Mitch Smith, owner, Mitch Smith Auto Service
Invest In Your Shop’s Future Positive First Impressions Will Heighten The Customer ‘Experience’ Fluctuations in the economy are nothing new. There will always be challenges associated with running an automotive repair facility efficiently and effectively, while still delivering top-notch customer service. But, here’s what we’re all missing: You can’t scale back too much and put shop renovations on the back burner. While many shop owners continue to talk about the economy and cutting back, perhaps what you need to do is look to the future — the near future — when business picks up again. How can you cater to your customer base when you’ve ignored facility improvements? That rundown co-ed bathroom definitely won’t. And having a cramped waiting area that has customers practically bumping into your service writers won’t either. As many of us work to provide highest-quality service in this new economic era, there are certain areas of business we need to revisit. Through trial and error, I’ve learned what works, and I’ll share a few of what my staff likes to call “Mitch-isms” with you. These “opportunities to be better” really can make or break your shop and, for the purposes of this article, directly relate to the five senses.
Purchase Influencers It’s a fact that most purchasing decisions are based on our five senses — sight, hearing, taste, smell and touch. In fact, if you break it down, this is how each of them drives buying behavior: • Sight, 83%; • Hearing, 11%; • Touch, 3.5%; • Smell, 1.5%; and • Taste, 1%. As you can see (sorry, pun intended!), sight is by far the most important influencer on this list, and any time a client or potential client drives onto your lot, you have the opportunity to positively impact their view of your facility.
Clients Shouldn’t Dread Your Waiting Area By now, I know you’ve heard
Photos courtesy of Mitch Smith Auto Service
that your waiting room is one of the most important resources that can help grow your business. Don’t believe it yet? According to one recent automotive repair survey, more than 63% of the women in any given household schedule and handle the automotive service for their family. Repair shop owners, know thy customer! And whether your customer is male or female, people appreciate having something to do while they wait. Newspapers, magazines and cable TV all keep clients occupied — and not looking at their watch. It just makes the time go faster. That’s the psychology behind the people in your waiting area, but back to the top dog of all senses, sight. Your waiting room needs to sell you, your image and your business! It’s all about presentation, and one just needs to consider a car show to understand why. We all know what car shows are about — the cleaning, the polishing and all the prep that
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comes before the public can view and admire that classic vehicle. That same attention to detail needs to go into your waiting area, with your clients as the admiring public.
Questions to Ponder Don’t know where to begin? Here are some questions centered on the five senses to ask yourself. Honestly answer them in a way that will truly benefit your shop now and in the future. 1. What do your clients see when pulling into your facility? Is it clean, tidy? Would your mother, wife or grandmother say, “Wow, that place
looks great, they must really care!” 2. What do your clients hear when they enter? Is it a friendly, smiling voice? Are they welcomed with a smile? Does your staff tell them, “We’re glad you’re here! Have a soda, water or coffee. Here’s the remote. Wi-Fi is on, so make yourself at home.” 3. What do your clients touch when they walk in? (Hint: Get those rubber parts mats off the counter!) Are the counters clean? Do you have hand sanitizer on the counter? Are business cards, ink pens and other marketing items available? 4. What do your clients smell when they enter the door? Is it grease and oil, or some great-smelling candle that makes them feel at home? 5. What can your clients taste when they walk in? Is there a large candy dish on the counter? Here’s the bottom line: All of these items are an inexpensive way to secure the clients that we all want today. And we haven’t even serviced their car yet! Sometimes, the small touches make all the difference.
Upgrade Your Facility to Upgrade Your ROI If the clients you want are those who make much of their service decision based on shop appearance, then get a new look for them! Something that makes them say, “Wow!” And I don’t mean slapping on a new coat of paint and putting more car paraphernalia on the walls.
I mean call a professional designer. This isn’t a do-it-yourself project. We’re car guys, right? We should be spending our time doing what we’re good at, and the same goes for interior design. A professional designer can give your waiting area the “for you” image that will impress clients with progressive colors and trendy designs. And don’t forget the restroom! Remember that the majority of people making car servicing decisions today are women, and most will appreciate a tastefully done upgrade. This will definitely cost you a few bucks, but the return on investment is priceless.
The End Result After you make that great first impression with a modern waiting area, you already know how to provide the quality repairs they expect. Add great customer service, and your clients are sure to give your shop glowing recommendations to their friends and family. That’s the sixth sense: The Experience. The only way you can guarantee a great one is if you can answer this question with a whole-hearted yes: If you get the business, can you do it and do it right? SO Mitch Smith co-owns Mitch Smith Auto Service in Anderson, IN, along with his wife Mary. Mitch and his staff have been servicing clients better than anyone else (Mitch-ism No. 1) since 1991.