Skills, bills and jaw-aches

Hannah Gordon looks at how a garage owner needs top level skills business savvy and be a talker to succeed

Published:  27 September, 2018

I knew starting a business would never prove easy but we don’t get anywhere in life without taking a risk or two. Having been in the industry for a few years now I have learnt that the two main attributes a successful car repair workshop needs is the skill to diagnose and repair and the ability to communicate with their customers.
    
Modern car repair facilities have seen a dramatic change in recent years with the huge advancements in computer-related faults. The main tool of repair has seen the demise of the hammer and the growth of the diagnostics fault reader. I am a hands-on mechanic and much prefer older vehicles where I don’t need to locate the OBD port before the bonnet release, but I have to move with the times if I am to succeed as a business and that is why I am looking at hybrid servicing and trying to tap into that market. It is tough for me to admit that as I love working on classics and I will still have a part of the workshop for the golden oldies but it is hard to ignore the impact hybrid and electric vehicles are starting to have on the repair market.

Communication
The car repair industry has a pretty bad reputation – lets be honest. My female friends and family dread having to buy a car or go to a garage. Communication for me is so important, as with any business it is crucial that you are able to talk to customers and listen to their concerns without belittling them. The issue with car repairs is that it is a complicated process that is difficult to explain in layman’s terms and which can alienate an individual if they don’t understand. There is also the problem of distrust. If a customer doesn’t understand the problem and how you are able to fix it you risk confusion and doubt. There are so many horror stories of people being fleeced and conned as they don’t understand how a car works that every customer feels like you are going to do the same, it takes a long time to earn a good reputation and just one bad experience to send your business crashing down.

I always like to explain as simply as possible with the work I am doing, I keep the broken part so that I can show the customer what I have replaced and what their hard earned cash has been spent on, I also take pictures and probably over explain everything. It is important for my business that I gain a good reputation as word of mouth is my main advertisement. As busy as a car workshop is always make time to have a friendly chat with your customers, especially if they have a trade, you never know when you might need a plumber!

So, this month has been busy, productive, stressful and hot (I am writing this in July) but the world of car repair stands still for no-one.

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  • Unfinished monkey business 

    It’s been a while since I’ve trawled the online job pages,  but the other day I was sent a link to a job that had been advertised. A local main dealer who shall remain unnamed was in need of a NVQ Level 3 Technician, nothing too strange about that, but as I read on the salary surprised me. The role was being offered was just £16,000-£18,000 per annum. Underneath this advertised job was a vacancy for a Warehouse Operative with a starting salary of £18,500 and no experience needed.  
        
    This is a huge problem with the automotive industry and its inability to keep skilled and experienced mechanics especially in main dealers. The Level 3 qualification requires a significant amount of work and exams that can take years to achieve, knowledge needed to work on modern cars is becoming vast and learning is continuous to stay up to date with technology.

    Shortage
    Every year I hear the problem about a shortage of mechanics. Every year the industry struggles to fill gaps in its workforce due to the lack of skilled techs. And yet, as I constructed a Twitter post about the job I had seen I found how many disgruntled ex-technicians actually exist. The tweet proved to be a sore point with certain people who explained that they left main dealers to go to independents due to better pay, some even moved completely away from the automotive sector to again be paid more and be treated better.
        
    As an industry we need to retain staff and pay them according to the skills and knowledge required to work on ever more complicated vehicles. A common problem I found was the time restrictions within which techs are expected to complete repairs. From every mechanic I have met they strive to fix issues, they want to solve customers problems and provide a roadworthy vehicle in return.
        
    Primarily I entered the car repair trade because I am addicted to fixing problems and providing a great service to consumers, hourly rates are soaring and I feel customers simply aren’t getting value for money at some establishments.

    Imperative
    As a business owner it’s imperative that the mechanics are all highly skilled and customer friendly, the garage business is all about reputation and that starts with the quality of work. There are no time restrictions, for me the most important factor is returning a vehicle that is fully fixed and safe. I believe that providing a wage that reflects the mechanics skills and the continuous on the job learning they have to complete is vital, as well as this providing them with the tools required for the job.

    I find the salary of £16,000 an insult, to pay that kind of money for a skilled individual is terrible. I hope mechanics in the area know their worth and won’t apply for it, but I also hope that soon the automotive industry can start attracting and retaining more individuals. I will leave you with the saying ‘if you pay peanuts you get monkeys.’  



  • Will power: part one  

    Not all business owners have the foresight of the late Richard Cousins, the chief executive of Compass Group who, along with his family, was sadly killed at the end of December 2017 when a pleasure aircraft he was travelling in while on holiday crashed. Cousins’ generosity led to the charity Oxfam being given £41m in a bequest because of a ‘common tragedy clause’ that he had inserted into his Will.
        
    Some 60% of the UK population does not have a Will, including a third of those aged over 55. For a business owner, dying without making a Will and/or planning your succession can have a devastating effect, not only on your family but on your business too as having nothing in place can lead to an interregnum in your affairs.
        
    Angharad Lynn, a solicitor in the Private Client team at law firm VWV, says that if you die without a Will your estate will be passed on according to the intestacy rules which changed in October 2014 when the Inheritance and Trustees Powers Act came into force. “Under the new rules,” says Angharad, “if an individual dies leaving a spouse and children, the spouse will take the statutory legacy (currently £250,000) and the rest of the estate will be divided equally between the spouse and the children. If there are no children, the spouse inherits the whole estate.”
        
    She warns that for unmarried couples it is particularly important to have a Will as the intestacy rules take no account of such relationships: “If the couple have children, they will inherit everything. If not, the estate will go to other blood relatives. The surviving unmarried partner will receive nothing.”

    Choosing an executor
    It’s an executor who administers estates after death. There is no limit on the number you can name in your Will. However, the maximum number of people who can take the grant of probate is four.
        
    Angharad says it’s quite normal to appoint a spouse or children as executors but suggests that it is also worth appointing a professional who can ensure that business assets are dealt with as you would wish. This can be an individual, such as your solicitor or accountant; alternatively, many professional firms have a trustee company that can act as an executor. She adds that the advantage of this is that while your own lawyer or accountant may have retired (or died) by the time of your death, the trustee company will provide continuity for the appointment of executors, enabling partners from the firm to act. The retirement of your own lawyer will not mean that you need to update your Will.

    Assets that can be left by Will
    In your planning it’s important to not forget a spouse as assets held jointly can be owned in either of two ways. Angharad says that they can be owned as joint tenants or tenants in common – and this is true for all assets, from your family home to shares in your business: “In essence, if an asset is owned as a joint tenancy, it will pass outside your Will, by the law of survivorship. What this means is that if the shares in your business are held with your spouse as a joint tenancy, they will pass automatically to them on your death and not by your Will, regardless of the provisions of the Will.”

    Plan to save on inheritance tax
    Tax planning after death must be a consideration and Angharad notes that one of the reliefs from inheritance tax is Business Property Relief (BPR) which is available for a business or an interest in a business, as well as land, buildings, plant and machinery used for the purpose of the business and shares in unquoted trading companies. “BPR is currently awarded at 50% or 100%,” says Angharad, “it’s a very generous relief and it is possible that its use will be curtailed in a future budget. So, when planning your succession, ensure your business will qualify for BPR by checking it meets the scheme requirements.” To qualify businesses must be trading, and if the proportion of assets held in investments is too high the business may not be able to use BPR.
        
    The charity Will-Aid runs a scheme each November where simple Wills can be written for a charitable donation. Go to: www.willaid.org.uk

  • 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.

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