BUSINESS PLANNING
Part one
By Andy Savva |
Published: 25 August, 2020
In a two-part article, Andy considers how business planning is the source of success for any garage. First, he considers the role of a solid process
Recent turbulent and unprecedented events across the world have put all of us, especially those running garage businesses, under extreme stress and pain from losing family, friends and associates to this evil disease. My heart goes out to all of you who are suffering in your own situations. What’s for sure is no one is immune to this crisis; we are all in the chain somewhere.
What this has highlighted for many of us is the critical importance of good detailed business planning. However, even if you had the best detailed business plan you would still have found it a struggle during COVID-19.
Planning is at the heart of good management. We all know that change initiatives in our non-business lives, such as re-decorating our homes or planning a holiday seem very natural and most people are very good at it. That said, in our garage businesses it may not be so straightforward and is challenging for most to be able properly plan.
Process
As planning is such an important part of management, a thorough understanding of planning approaches and documentation is vital. In the latter part of my own career I have used three simple questions to guide me through the business planning process:
- Where am I now?
- Where do I want to be?
- How am I going to get there?
What I have learnt over time can be summarised in the second question above – Where do I want to be? – which is why business planning is at the heart of leadership. Most people in any business are mainly involved with completing their daily and weekly tasks and usually prefer to follow someone who has a clear vision which has been effectively communicated.
They want to believe that ‘someone up there’ knows what he or she is trying to achieve for the organisation and that he or she is being broadly successful in getting there. In the modern world, the plan is the description of and rationale for the vision, and the basis for the communication.
Leaders who pursue a clear vision believe in themselves and usually achieve a huge amount. They are able to create a team with a common purpose. This provides a rising above current difficulties and should at least go some way in dealing with the most extreme circumstances. Leadership cannot operate in a vacuum. If a leader tries to lead without understanding his or her situation, then he or she will usually be described as reckless or hopeless. The “where am I now?” question was the foundation for my plan. As well as knowing where I wanted to go, it was also vital to understand where I am coming from, why I am where I am, and what assets I have in my armoury.
The “where am I now?” stage of planning is one which often, in my experience visiting garages or meeting delegates at my business courses, does not get the proper level of attention, and is where it is often quite difficult to get people to be really open and honest.
Those involved often assume that they know their environment and that they understand aftermarket sector trends, but in practice people often find it difficult to see the wood for the trees without a formal process. It will often need careful questioning to establish the truth and to determine the main threats and opportunities. However, it is essential to be honest and to help that honesty by comparing your garage business frankly with your competition and contemporaries.
I never gave up on my vision – or dream just because of the time it may have taken to accomplish, the time would have passed anyway even if I did nothing!
Detailed
Once I knew where I was and where I wanted to be, I moved on to the detailed task of deciding all the things that I had to do to achieve my vision or dream, which in fact was to open an independent garage and be a true alternative to a main dealer for BMW-Mini and the VAG range of vehicles. We would also to be passionate about everything we did as a business, be progressive, reliable, determined and trustworthy. Most importantly, we would deliver an honest value for money personal service with an integrity for complete peace of mind, with a team of extremely knowledgeable and capable people.
Knowing what I wanted is what business planning is all about. It is fundamental to business success. The other important submission is that when you know what you want you will have a useful management tool to help you manage the process.
Attributes
I had three attributes that helped me immensely. First, I knew about planning. My time at Loughborough University studying for my Automotive Retail Management Degree and the time spent at the Nissan manufacturing plant in Sunderland where I did my Lean training went a long way in laying the foundations towards my vision. Also, I believe the second attribute that I had was being a visionary. I had to be one, in order to turn a concept like mine of going head to head with a main dealer into reality. The third attribute was my passion and it was this ingredient that you cannot learn or buy off the shelf. You either have it or you don’t. My passion to succeed helped me jump over the most challenging hurdles that I had to face.
I looked long and hard at the marketplace and identified areas where my future business could be developed. Vehicle owners were willing to pay over £140 plus VAT per hour to have their servicing and repairs carried out by a main dealer even though in most cases the service and experience was sub-standard.
I just worked through a logical process using some of my market intelligence and arrived at some solid conclusions one for instance, that customers would be happy to pay £100 plus VAT per hour for an exceptional service and a positive unmatched experience at an independent garage. However, I had to make sure we could provide everything that a main dealer in terms of physical characteristics but even more importantly to have the technical ability to deliver our promise of being a true alternative to a main dealer. Understanding my business, competitors and marketplace helped me develop a view of where I could go in the future with my plan. It enhanced my vision, and made it far easier for me to develop a strategy in realising my dream. Turning a strategy into an operating plan is not complex.
Immense value
Planning is a worthwhile exercise and there is immense value doing it well. Business plans will contribute to the success of your garage business. A business plan sets out where you are. It shows you where you are going. It identifies landmarks so that you can check your progress. And it helps you in steering around the inevitable obstacles. It can help you to shape your vision and make effective use of opportunities and resources such as people and equipment which are of course great importance in our repair sector.
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- BUSINESS PLANNING
In part two of his look at business planning , Andy looks at what the objectives should be for your garage in the short, medium and long-term
- 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."
- Do you have a business or a profitable job?
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:
- TMD Friction launches workshop platform: GaraShield
TMD Friction has launched GaraShield, a new software platform designed to help garages document their work.
- Wow or WOAH factor?
Do you work in a quality business? Or a quantity business? Is it possible to have a garage business that has both? How do we define quality for that matter? You see everyone’s perception of quality is different, which makes it difficult to work towards a particular grade of quality.
If you examine the excellence and quality movements in detail as I have in the last 15 years or so, you will see that what the really offer is to turn back the clock, applying the standards of bygone days to today’s profit-based material age. The premise is that if you get back to product or service supremacy through quality you cannot fail. Sadly, it is an entirely false premise.
Customer satisfaction is no longer enough. Satisfied customers are not loyal customers. They shop around – they may like you, but not enough to resist the temptations of your competitors. Truly loyal customers can’t imagine doing business with anyone else. They become advocates for your garage.
Companies who have such customers have managed to create a customer experience that is consistent, intentional, differentiated, and valuable. To do this they use all aspects of the business, marketing, operations, and the most important factor the human element.
Superior service
You could have a quality product or service but if not matched with a superior WOW factor service experience you have no hope in succeeding. Let me give you an example, Curry’s sell quality products, yet the service in most cases and what I have experienced is really lacking. These stores are huge, selling hundreds of lines yet hardly anyone works in them, and if you do find someone to assist you they have very little product knowledge.
Now, take off your business hat and ask yourself, as a consumer, how many genuine quality businesses do you know? If you can think of one, perhaps even two or three, where you are constantly and consistently super-impressed, not just with what they do but how they do it, you are doing well. You have seen the WOW factor at work. You may even have glimpsed a miracle. My guess is that you will be thinking of a business that puts its relationship-building substantially in front of making the next sale.
These are the kind of businesses that share one of my philosophies about customers: that it’s far better to concentrate on what you do for customers than what you do to customers. Despite all the new technology, and the mind-blowing rise of call centres which in my view do very little in increasing the customer experience and other magic customer service-enhancing devices, companies still frequently fail their customers.
The reason is not so often that the computer system has gone down, although that happens frequently enough!) it is mostly because the culture, philosophy and ideals do not exist. When this happens, it’s a people issue.
People power
For those involved in selling, and that’s what we do in our garage businesses, this is a mammoth task. Selling has, it seems, been quantity-driven since time began; but, in the last 20 years, it has become quantity-obsessed. This obsession has, in my view, led to practices and standards in our garage sector that can barely be justified. There is no mitigation. We are all to blame. We have all seen the £99 service, MOT, three-course meal and the kitchen sink deal. Someone please explain to me how anyone can charge so little and offer a quality WOW Factor experience?
Given the choice – and they will be – no customer in their right mind would want to deal with a person driven by quantity objectives. Customers already know that, so often, quantity objectives work against quality objectives. Look at the classic high-commission businesses and the reputation they have: double-glazing or perhaps even office equipment. There are many more, including, sadly in our garage sector.
What next?
Find where you and your business are, and remember it well. If you do nothing to give your customers the WOW Factor, the future has some difficult and frightening times ahead, times of uncertainty and high risk.
Far be it for me to put the fear of God into you about the future, but that’s exactly what I think might need to happen. I, and many others before me, have pointed to change being the cause of this fear. Not just change itself, but its rate and frequency and scope. In such circumstances you must look to make yourself and your business stronger, more resilient. I have two suggestions for this.
The first lies in your business process, I witness so many garages lack of processes that do not consider the customer journey and the impact it has on them.
The second lies in the quality objectives you need to create that are understood and breathed by everyone in your business. For one aspect of the quantity/quality discussion we have not considered is this; quantity only builds immediate sales; quality builds friends. Friends, in the long term, build greater quantity, which yields the miracles that create the WOW factor.
Lastly, just before I end this article, Id like to point something out. It may seem obvious, but don’t look for a switch. There isn’t one. You can’t turn a miracle on. There is nothing anyone can flick to change your environment from quantity driven to customer driven. It is truly a pendulum. The only thing you need to know about this pendulum is that its relentless: It was for me running my last garage business it was actually unstoppable.
