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When A Shop Closes

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By Allen Markowitz and Allan Gerber

While we go about our daily business lives, buying, selling, collecting and most importantly, satisfying our customers’ service needs, every now and then, we see a shop close. This is not a new phenomenon, but it seems to be happening more often and most likely, it is happening in your neighborhood.

Recently, two shops closed near one of our former stores and we would like to take a look at their stories. The first was in business for 40 years. Not a bad run you might think, but there was no happy ending here. The owner never re-invested in his business, did not follow a prudent business philosophy and basically just did everything wrong. The two techs were a ragtag bunch and the equipment was not quite up-to-date. In addition, there was no exit strategy — no succession plan. This business paid their bills, but in the end, the owner simply could not make enough profit or keep up with the fast pace of change in our industry.

The second shop in our story was only in business for about five years. I actually worked with this shop when they first opened. It was a three-bay service station with lots of potential, if run properly.

Unfortunately, they took the price-is-everything approach, did not even come close to understanding customer service or what is required in running a profitable business and started showing signs of stress within the first two years.

The last three years were filled with a deterioration of the facility, multiple changes in techs, virtually the disappearance of any usable inventory and the general sense that the end was coming.

While we have all seen these scenarios, could something have been done to prevent these two shops’ ultimate demise? Additionally, what is the cost in lost and possibly irreplaceable business to the servicing jobber?

These two shops combined purchased approximately $50,000 in parts from local jobbers. This is a good deal of business. Somehow it does not seem that this amount of business will be made up in any short time frame or ever.

Do we, as independent jobbers, have a responsibility to assist this type of customer? The answer obviously is yes, we have to do everything within our grasp to make certain that our customers remain in business. After all, this is where we actually make a good amount of our profits — the independent repair shop.

The problem is that many of our customers will only let us into their world to a certain point. While we may surmise the issues they are having, whether it be lack of business, the need for a better marketing plan or improved financial management, they simply will not allow us to be part of the solution.

Partly, this is because we are always trying to sell them something, but today there are alternative methods available to assist our customers. Business training is available to our independent technicians. Jobbers who offer modern business training, whether it be a service writer seminar or a financial management business analysis seminar are looked on as the leaders in their markets. These jobbers become the innovators in their markets as they find better methods to work with their customers and offer training other than a tech class.

This is a great way to build additional relationships with your customers and while you may feel that only your top customers will attend these seminars, you may be pleasantly surprised by how many of your overall customers will actually sign up, show up, benefit and actually thank you. What a relationship builder.

Allen Markowitz and Allan Gerber operate Auto Biz Solutions, which provides training, marketing, management and business consulting services to both the automotive jobber and independent repair shop.

For more information, go to: www.autobizsolutionsllc.com or e-mail [email protected].
 

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