Do you have a business or a profitable job?

If you have a business, are you an entrepreneur in the classic sense or are you just your own well-paid employee?

By John Batten | Published:  24 September, 2018

It’s a favourite of mine, and one we ask of all garage owners that join the Auto iQ business development programme...
  
“Do you have a business or a profitable job?” Not sure which one you’ve got? Carry on reading.
    
That question is a doozie and is often met with a few seconds of silence followed by a mixed range of answers whilst the questionee arranges their thoughts. The question is designed to be thought-provoking and entice the garage owner to work through the differences between the options.

Different sides of the coin
What’s the difference between a profitable job and a business? It’s a fine line with a BIG difference.
    
Quite simply if you have a profitable job the income from your work (where you spend your hours in the day) reduces when you’re not doing that work. You might be able to get away from the business for a week or two but longer than that will have you sweating, you’ll wonder if your techs are efficient without you in the building, concerned that your numbers are going south.
    
A business on the other hand will run without you being there for a significant length of time. Which one do you have?
    
I can feel the tension elevating as some of you may be rising from you chair ready to give me a good talking-to. Hang fire though and hear me out. In no way am I saying that having a profitable job is wrong. Quite to the contrary. If that’s what you set out to achieve then who am I to say any different? Here’s the deal though. Most garage owners don’t embark on this amazing journey to be ‘self employed,’ they do it to build a bigger and better future for their families. They did it to have more time with their loved ones, the funds to allow this and probably have early retirement thrown in with the business providing the income. Can a profitable job do this or do you need a business that’ll run without you? I think you know the answer.

What’s the difference?
So you’ve decided that a business is preferable to a profitable job. But is there really that much of a difference? Let’s take a look. It often comes down to nothing more than a state of mind that separates these different sides of the same coin.
    
Let’s compare the owner with a profitable job and the business owner. At first glance I’d challenge you to notice the difference. They’ll both have a business that they’re proud of and rightly so, they’ve worked hard to build it. More often than not they’re both skilled technicians, have the respect of their team as well as their customers. Then how can it be that one earns significantly more than the next. One word, focus.
    
Our owner with the profitable job will be very focused. He’s focused on his own ability to fix the vehicles in his workshop often working shoulder to shoulder with the technicians. The technicians respect him because of his technical ability and work hard alongside him. All admirable qualities.
    
Our business owner also has a laser-like focus, his target is a little different though. His gaze is firmly fixed on a vision of the business he’s building and knows that long term success requires not only focus but patience. He’s acutely aware of the one thing that will bring freedom and the time with his family (the reason he started this venture) is the team he builds and trains.
    
This isn’t to say that he doesn’t roll up his sleeves and lead from the front when required, it’s just that his daily focus is on the strategic functions of the business that drive success, rather than the day-to-day tasks that so many owners get caught up in. There’s a huge benefit to this as well. You get to keep the skin on your knuckles.

Dominant thoughts
It’s a proven fact that we all move through our day in the direction of most dominant thoughts. What does your typical business owner ponder?. Now I can’t read minds (how cool would that be?) but I do know that these are the questions that need to be answered:

  •  What business am I building and how do I know when I’m there?
  •  How can I separate my business so that my customers know I’m different to my competitors?
  •  What do my customers want from our products and services?
  •  How can I effectively put that message in front of them?
  •  How do I price our services so that I offer value with high margins?
  •  What does my ideal team look like?
  •  How can I ensure they produce consistently high results?
  •  What metrics do I use to assess the performance of the business?


These are just a few of the strategic questions in the forefront of a business owners mind. Therein lies the main difference. Our owner with a profitable job will primarily spend their days carrying out task-based activities.
    
In contrast, the business owner will decide on what a desirable outcome should be consider the options and assess each on their merits before documenting this as a plan of action. Once the strategy has been decided upon he’ll then communicate this to his team who will carry out the tactical work to ensure the desired result is met. We could summarise this concisely as ‘More time thinking, less time doing.’

You can’t just flick a switch
You know I said I couldn’t read minds? We’ll that’s not wholly true. If you have a profitable job but would like to own a business you’ll probably be thinking...
    
“Great, I’ve worked my arse off to get here, and as much as I’d love to focus on the strategic aspects of my business I’m never going to be able to find the time to do that. Anyway I don’t really get this branding, marketing, management, metrics and financial mumbo jumbo and do we need all that for a garage?”
    
Am I right? Well, even if I’m close fear not. We hear these ‘thoughts’ from our clients on a very regular basis and I’d be surprised if you didn’t have them. It’s completely normal and of course you can’t do this overnight. They key is in breaking the ‘mumbo jumbo’ in to manageable insights specific to your business.
    
Here’s the deal. If you’re looking to turn a profitable job into a business that serves your life, then finding a little time each day to work on the strategy that drives your business will have you wondering why you didn’t start down this path years ago. You don’t even have to do it all at once. You just have to break the cycle and think differently.
    
What are you waiting for? Why not start now and give Auto iQ a call on 01604 328500 or visit our website at www.autoiq.co.uk we’ll help you turn your job into a business so you can get on with your life.




Related Articles

  • How’s the health of your business? 

    In my line of work I meet a lot of great garage owners. Dedicated men and women,  all committed to repairing their clients’ vehicles to a high standard. They’re intelligent, hard working and persistent people many of which have been in business a good few years.
        
    With all of this in their favour you would imagine that they would be spending their free time pondering the length of their next yacht, or whether they should winter in the Alps or Rockies? Unfortunately this is often not the case, and it’s not uncommon to be asked “How can I increase the financial success of my business?”
        
    We all know that an unfeasibly large income doesn’t buy you happiness, far from it. But I do know this. A healthy business is a profitable business, and a profitable business not only buys you less stress, it buys you choices and options on how you spend your days.  Would you like more options? If so read on.
        
    Back to that question. “How can my business be more financially successful?”
        
    ‘More’ is a dangerous word and it’s often not attained. A better question would be “What is the maximum revenue, profit and personal income that my business can generate in its current form?”
        
    It is something that a lot of business owners haven’t contemplated. But you really should. Only when you know this, can you decide if your current business is performing at it’s best, and is the vehicle to get you to where you need be financially.
        
    The good news is you don’t need to be an accountant to calculate your maximum net labour revenue. Just using the available hours to sell your labour rate and the number of technicians your employ will get you a long way in the right direction. Take an average hourly rate of £55. It could probably be higher but we’ll come to that in due course. This will yield a maximum net income of £422,000 a year from labour sales with four technicians. If your garage is reaching that level of income (£105,000 per tech) at that labour rate, then you should give yourself a rather large pat on the back. Nice one! Not reaching that? That’s incredibly common. In fact if your garage has a net labour revenue of around 54% of your maximum, then you’ll not be alone as that’s the average for a business when we start to work with them on our business development programme.
        
    Why so low? Why are business owners leaving £50,000 per technician on the table? There are a plethora of reasons but I find the most common answer is one of focus. They’re just focusing on the wrong things.
        
    It’s natural. In fact it’s perfectly understandable why a garage owner focuses on the technical aspect of their business. You know that if you don’t fix the cars in a timely manner to a high standard that your income will suffer and your customers won’t return. So of course you’re interested in technical tools and the latest workshop wizardry that’ll enable you to complete a job that you couldn’t without it, or the same job in less time. But let’s be honest (we’re friends after all) is this laser-like focus healthy? Are you too focused on the next tool, the next gadget, the next BIG THING to the cost of your business? All too often I find that a garage owner is and it’s costing you.

    If you’re not measuring it…
    All that is required is a change of focus. The success of your business is in the data, and if you would like to claw back that £50k per technician (or at least a large chunk of it) then learning how to measure the right data and use it to your advantage is essential. After all: If you’re not measuring it, you can’t improve it.
     
    So, you want to increase your income and profit, what should you be measuring? Here are a couple of metrics to get you started.

  • Get to the essentials 

    Marketing can be hard to grasp, even for the most experienced business operator. This made it an ideal topic for Andy Savva to cover as part of his 2019 training course schedule. Andy's one-day Marketing Essentials course provides an overview of what marketing actually is, looks at key approaches and how to apply them to a garage business.
        
    Aftermarket sat in on a sold-out session held in Crawley in February. In front of a packed room, filled with garages owners and staff, Andy dispelled some myths and misconceptions surrounding the discipline: "Marketing is one of the most misunderstood functions found in business. Whatever the reasons for any negative image that marketing may have, it is essential to realise that marketing is vital to ensure the survival and growth of any business. Marketing cannot be ignored and needs to be a part of the culture of any successful organisation.
        
    "Marketing affects everyone. We are all consumers. Most businesses depend on marketing to provide an understanding of the marketplace, to ensure their products and services satisfy the needs of customers, and that they are competing effectively."
        
    Despite running great businesses, Andy has found that garage owners often struggle when it comes to marketing: "Understanding customers and anticipating their requirements is a core theme of effective marketing, yet this is somewhat difficult for garages to fully get to grips with. So too is understanding general market trends and developments that may affect both customers views and the activities of businesses in the aftermarket repair sector. You must also be aware that a business does not have the marketplace to itself. There are always direct competitors, new entrants and indirect challengers.”
        
    Andy added: "Marketing should concern everybody in a business as it sets the context in which sales can take place. Whatever your role, you play a part in setting that context."

    Interaction
    As Andy got into the meat of the marketing matter, he led the delegates through what marketing is, and how they need to approach it and enact effective marketing within their businesses. Even the most experienced business owners and managers can get a little confused when asked to distinguish between marketing, advertising and sales. After asking attendees to pick where they would plant the marketing flag, with a few near misses along the way, Andy went through the specifics:
        
    "Marketing is a systematic approach aimed at bringing buyers and sellers together for the benefit of both. Many people confuse selling and advertising with marketing but they are not the same. Marketing is about promoting goods and services that both satisfy customers and also bring profits to the business.
         
    "Selling is the interaction that takes place on a personal level with potential customers. Marketing on the other hand is aimed at generating those potential customers in the first place. Many people confuse selling and advertising with marketing but they are not the same. Advertising is part of the marketing function, but never the other way around."
        
    For marketing to succeed, there needs to  be a goal and a way of achieving it, which Andy went on to cover: "Any marketing campaign needs to have a clear focus and this is why it is so important to make the right choices. Will the business compete across the entire market, or only certain parts? It is also a good idea to ensure all employees know the strategies being adopted, so that everyone works together to achieve the same goals." Andy then asked a question of the group: "Do you know what your garage business is trying to achieve and how it is trying to achieve it? In most cases the answer is no."
        
    The goal influences the method, and vice versa. From this point, Andy covered the classic four Ps of marketing – product, price, place and promotion – and went from there to the more recent extended marketing mix, incorporating people, process and physical evidence. Beyond this he laid out transactional marketing, which is sales-focused, and relationship marketing, which takes a much broader view including customer service, and quality presentation and results.
        
    Next he took on the thorny issue of branding as part of the marketing strategy, and why a strong brand is so important for recognition, financial value, motivation and loyalty. All of that was just the pre-lunch session. After lunch, Andy went into even greater detail on areas such as the marketing triangle, SMART objectives and SWOT analysis. It's heady stuff, but Andy made it approachable and applicable to the sector.

    Inspirational
    Those in attendance found a lot to take away from the day. Dani Comber from Thrussington Garage in East Goscote, near Leicester said: "I find Andy really inspirational. I think he's brilliant. He can come and work at our garage." Commenting on what she was learning about marketing from the day, Dani said it showed the gap between what they were doing at present, and what they should be doing: "I find it demotivating and motivating at the same time. You want to do everything, you've got the intention to do it, but you've not done it. On the other hand you are motivated because you see what you can do."
        
    Elisa Bramall from Scantec Automotive from Hailsham, East Sussex said: "I have attended several training courses with Andy. I only have good things to say about him of course. His passion being the main thing, and that he says it how it is. No beating around the bush. A lot of his values we stand by as well, i.e use of OE parts, tools and genuine equipment. When you attend his training courses, it aligns with what we want to achieve. With all of his experience, if you think you know it all you certainly don't."
        
    Tina Drayson, Operations Manager at CCM Garage, based in West Sussex and Surrey said: "I have done Andy's financial course before. It is phenomenal. I have learned so much from it. It has certainly changed the way we are doing our business. I am hoping that today with the marketing essentials will give us even more direction going forward."
        
    Terry Roberts, owner at  Witham Motor Company in Witham, Essex said: "I have just become a RAC approved garage in the last few weeks, so I am looking at changing my brand. I am really enjoying it. I am learning a lot and have picked up a lot of things."
        
    Commenting on what he was getting from the course, Billy from  Beacon Hill Garage in Hindhead, Surrey said: "It just hammers home that if your standards slip, and your marketing as well, and you take your eye off the ball, things will go wrong. I will be going back to give a few people a kick up the backside to bring standards back up. "
        
    Brothers Mahesh Vekaria and Pravin Patel own a garage each in Harrow. Mahesh, owner of Cardoc said: "What have I learned from Andy today so far? It has refocused and re-energised my enthusiasm for marketing. We do a fair bit of marketing, but coming today, you see a different angle to it."
        
    Pravin, proprietor at Harrow Service Centre, observed: "Today has been interesting. I have learned a lot. In a sense we already do a bit of marketing, but to understand what it really does mean and the ways we are doing it – is it right or wrong? – is really useful. It is something to implement when we go back to work."
        
    In that the pair are brothers and are based just half a mile apart, Aftermarket was curious as to who would get back and implement new marketing initiatives first. "I would say that I would," said Mahesh. Pravin agreed: "Yes  he would, definitely, having said that, he looks after my marketing for my garage as well. So he has double the work really."

    Information
    Edward Cockhill of Uckfield Motor Services in Uckfield East Sussex observed: "It is quite an eye-opener. I saw marketing as just advertising, whereas it is really the whole perception of my company. There is a lot of cogs that are going to be turning when I get home. "
        
    Peter Bedford of GT One Ltd in Chertsey, Surrey said: "We are an independent Porsche specialist. Our business is in need of a bit of a review in its marketing ideas, and we are looking to freshen it up. I have come along to see another angle of it. Some things I think I know and we have applied. Some I know and we have not applied, so you need a kick up the backside. Some things are brand new. On the whole it is brilliant."
        
    Cieran Larkin from Larkin Automotive in Dublin commented: "It is good to get marketing training from a professional who has been in the garage business as opposed to someone who is dealing with generic marketing. Andy's experience is brilliant in that way."
        
    Nick Robinson from Marchwoods in Folkestone had been to Andy's courses previously and was back for more: "I came to Andy's events last year for garage financial understanding and customer excellence. They were real eye-openers so I have come back for another one. I was badgering him earlier to see what is coming up next. I will be at that one as well!"
        
    Meanwhile, for Edward from Swanley Garage in Swanley, it was his first time: "This is the first one I have been to. It is really good. It is about getting all the information and having the guts to go out and do it. We are all guilty of not doing marketing properly, it is about taking that jump to rebrand yourself or say right we are not doing that any more, or we are not doing cut price work, or we are not going to let the customers bargain with us any more, and seeing where it takes you."

  • The Garage Inspector - Training dates 

    The Garage Inspector a.k.a industry consultant Andy Savva has announced a number of one-day business training course dates.

  • Diamonds in the database  

    One of the biggest mistakes I regularly see within the aftersales garage sector is the constant advertising specifically in local press with ‘come and get me offers’ in order to attract new business. Most of these are by already established business.  
        
    Whether they are large or small, they will rarely measure the actual effectiveness of such campaigns, or analyse the type of customers they are attracting. Indeed very few of these businesses actually understand the ‘diamonds’ that already exist within their database.   
        
    Too little thought is given to how an existing customer may feel if he or she saw a deal that had never been offered to them, despite the fact that they have been loyal customers over a number of years. This could be a real kick in the teeth.

    The perils of transactional marketing
    We’ve all seen the larger corporates like Sky, Vodaphone and, of course the insurance industry to name a few, offering far better terms for new customers than any existing customer can get. In my opinion this form of ‘transactional marketing’ does not work in the independent garage sector as it does not lead to long term loyalty and leads to these potential new customers hopping from one garage deal to the next one.
      
    There is no point trying to attract vast numbers of new customers and provide them with a sub–standard service based on a cheap price which can cause severe damage to the reputation of your business. Another factor is that established customers tend to buy more and are less price sensitive and may be less likely to defect due to price alone.

    Focus on relationship marketing
    You have to focus on ‘relationship marketing’ and yes there are many guises however your own database and the ‘diamonds’ within must always be your starting point. It also builds a platform where the business and its customers are more likely to be able to adapt to each other’s needs and reach agreement quickly and easily. So, by getting emotionally connected and regularly engage with your existing customers will only enhance the trust and loyalty you build with them.
        
    It can be concluded that relationships with customers help a lot growing the revenues/profits for the business. Relationship marketing is all about creating, building and maintaining the relationships with the existing as well as new customers for the long-term profits. Relationship-focused marketing is not something that will happen overnight. It requires a change in thinking and some discipline along the way. Top level management support is needed for introducing such a change.
       
    It's quite obvious that the relationship approach is really successful, because 80% of an organisation's revenues are generated by 20% of the customers. Thus, it is concluded that building strong relationships with customers is very important for any business to grow and relationship marketing is a mantra to long-term success by retaining and delighting the customers.
        
    Simply by reminding customers of their vehicles next MOT due date, or service for that matter is the minimum that any independent garage should be undertaking. Reminding them of specific campaigns such as winter checks or health checks if they are planning long journeys will reinforce that you care about them and keep them safe. By expanding this two-way communication with news of any success stories within the business, such as: charitable fund raising by the business or any employee, training and development that’s undertaken, new services/products introduced will reinforce to your customers that you want to build long term relationships with them.
        
    This strategy will help you constantly create a small influx of new customers through recommendations as opposed to constantly advertising for a field for new ones. You will also greatly improve the chances of providing and exceeding the high level of service they expect, because you will not be swamped with a mass of new customers rushing to take you up on those ‘come and get me offers’. Therefore, this promotes another selection of new clientele that hopefully continue the cycle and improves the long -term implications for continued growth. Your existing customers will become your advocates; your marketing angels.  

    Assets and more diamonds
    Quite simply, customers are the organisation’s most important asset (along with staff too). Without them, it cannot exist. To survive, prosper and possibly expand the business, the independent garage owner must continue to acquire new customers but more importantly must never neglect existing customers or take them for granted.
        
    Constant database management will build-up and trust and personal knowledge with your customers, which create a far more effective customer retention tool, which in turn will find you more diamonds.


    Please visit www.thegarageinspector.com for business training courses and for more business tips.

  • Diamonds in the database  

    One of the biggest mistakes I regularly see within the aftersales garage sector is the constant advertising specifically in local press with ‘come and get me offers’ in order to attract new business. Most of these are by already established business.  
        
    Whether they are large or small, they will rarely measure the actual effectiveness of such campaigns, or analyse the type of customers they are attracting. Indeed very few of these businesses actually understand the ‘diamonds’ that already exist within their database.   
        
    Too little thought is given to how an existing customer may feel if he or she saw a deal that had never been offered to them, despite the fact that they have been loyal customers over a number of years. This could be a real kick in the teeth.

    The perils of transactional marketing
    We’ve all seen the larger corporates like Sky, Vodaphone and, of course the insurance industry to name a few, offering far better terms for new customers than any existing customer can get. In my opinion this form of ‘transactional marketing’ does not work in the independent garage sector as it does not lead to long term loyalty and leads to these potential new customers hopping from one garage deal to the next one.
        
    There is no point trying to attract vast numbers of new customers and provide them with a sub–standard service based on a cheap price which can cause severe damage to the reputation of your business. Another factor is that established customers tend to buy more and are less price sensitive and may be less likely to defect due to price alone.
    Focus on relationship marketing

    You have to focus on ‘relationship marketing’ and yes there are many guises however your own database and the ‘diamonds’ within must always be your starting point. It also builds a platform where the business and its customers are more likely to be able to adapt to each other’s needs and reach agreement quickly and easily. So, by getting emotionally connected and regularly engage with your existing customers will only enhance the trust and loyalty you build with them.
        
    It can be concluded that relationships with customers help a lot growing the revenues/profits for the business. Relationship marketing is all about creating, building and maintaining the relationships with the existing as well as new customers for the long-term profits. Relationship-focused marketing is not something that will happen overnight. It requires a change in thinking and some discipline along the way. Top level management support is needed for introducing such a change.
        
    It's quite obvious that the relationship approach is really successful, because 80% of an organisation's revenues are generated by 20% of the customers. Thus, it is concluded that building strong relationships with customers is very important for any business to grow and relationship marketing is a mantra to long-term success by retaining and delighting the customers.
        
    Simply by reminding customers of their vehicles next MOT due date, or service for that matter is the minimum that any independent garage should be undertaking. Reminding them of specific campaigns such as winter checks or health checks if they are planning long journeys will reinforce that you care about them and keep them safe. By expanding this two-way communication with news of any success stories within the business, such as: charitable fund raising by the business or any employee, training and development that’s undertaken, new services/products introduced will reinforce to your customers that you want to build long term relationships with them.
        
    This strategy will help you constantly create a small influx of new customers through recommendations as opposed to constantly advertising for a field for new ones. You will also greatly improve the chances of providing and exceeding the high level of service they expect, because you will not be swamped with a mass of new customers rushing to take you up on those ‘come and get me offers’. Therefore, this promotes another selection of new clientele that hopefully continue the cycle and improves the long -term implications for continued growth. Your existing customers will become your advocates; your marketing angels.  

    Assets and more diamonds
    Quite simply, customers are the organisation’s most important asset (along with staff too). Without them, it cannot exist. To survive, prosper and possibly expand the business, the independent garage owner must continue to acquire new customers but more importantly must never neglect existing customers or take them for granted.
        
    Constant database management will build-up and trust and personal knowledge with your customers, which create a far more effective customer retention tool, which in turn will find you more diamonds.





Most read content


Search

Sign Up

For the latest news and updates from Aftermarket Magazine.


Poll

Where should the next Automechanika show be held?



Calendar

Click here to submit an event

Facebook


©DFA Media 1999-2019