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Road to Green: HD Shops Must “RE & RE” Their Business

Road to Green: HD Shops Must “RE & RE” Their Business

Posted By: Robert (Bob) Greenwood, AMAM.

Studies of the HD sector are confirming that Independent HD shops are losing the struggle to retain the clients’ on-going business versus the growth in bay service business that New HD Dealerships are experiencing.  In close examination as to why this is happening, the main reason is due to a lack of business focus by Management of the Independent HD shop.  Too many business owners and managers are “too busy” not making money instead of slowing down and preparing their business to meet the client’s real needs and wants for their commercial vehicles.

Consider that weak shop owners focus on “cost’ to save money, whereas the most successful shops focus on “value” to make money.

Consider that new business standards are required for this new heavy duty aftermarket sector that most shop Owners/Managers have not addressed within their business operation.

It is time to “re & re” the Independent Heavy Duty shop.

Review each of these items within your own operation to ensure your business is heading in the right direction to retain all your clients business.  If you ignore these items, there is a real possibility that you are already, or soon will, lose your clients to the dealership(s) within your area.

1. Re-New the Business Format:   The “same old, same old” does not work anymore.  Shops cannot “bang them in and bang them out” ONLY doing what the client asked for.  The math does not work anymore with that format.  In fact, Independent HD shops that concentrate mainly on “volume” to keep “the boys busy” do not know that, on average, 60% of the work that they do does NOT create $1 of NET profit for their business.  It only creates sales and gross profit. They do not know how to measure this.  They are working very hard to stand still and in many cases actually move backwards in their business. Today, your business must be very focused on each individual client, one client at a time and deliver value.  Management’s number one job is to build relationships; therefore Management must slow down at the front counter and take the proper time to meet, understand, and council individual clients as to what the manufacturer recommends to ensure safe, reliable and efficient driving with their vehicle.  Service maintenance and service intervals must be discussed with the client. That is YOUR professional responsibility to the client. Client vehicle technology and maintenance education is more critical today than ever before.  The average rig owner today is not “stupid”; but they are uninformed! Slow down!!! and define the value you are prepared to deliver to each client.

2. Re-Learn the Business: Continuous technical and business training and development is mandatory today.  Professionally operating an Independent heavy duty repair shop is the most complex business in this new aftermarket, requiring not only a great deal of capital, but also higher in-depth skills than ever before. Consider technical development of the vehicle now requires highly skilled technicians who embrace vehicle knowledge with a tremendous amount of personal pride.  These technicians are highly skilled professionals. The depth of knowledge they must completely understand, and stay on top of, is mind boggling, and it is the shop’s Management’s responsibility to ensure these professionals have all the right training and tools to execute their skill.

Management (shop owners) must also continuously visit “classrooms” to stay on top of all business issues, and there are many.  It is a new world order today and this new order affects the very profitability, and potential future viability, of an Independent HD shop. Management must learn and measure the business in a totally different format today.  Just measuring parts and labor sales and following the shops bank account up and down, doesn’t work.  Management must stay on top of the business numbers to ensure they are measuring NET PROFIT on each repair order before the invoice is closed off, one R/O at a time.  Businesses that are only interested in sales and price of commodities don’t get it yet.  The question that must be asked is “do these shop owners have any desire to get it?

4. Re-Certify the Business: Management must establish “standards of execution” throughout the shop.  Define your standards in print.  Each staff member from the front counter, to the back office, to the back shop must completely understand and “believe-in” to “how” to execute their function that in turn exceeds the clients expectations. Certification today is just not a piece of paper or experience.  Certification is an Attitude!  “We will not let the client down”. “We care!”. We will take the “responsibility” to make sure your vehicle maintenance and your experience within the walls of our shop, exceeds your expectations. “We will be second to none.”

5. Re-Professionalize the Business: Management must establish on-going reviews with each staff member to ensure they are continuously aware of the importance of their personal day-to-day execution of their particular function within the shop and how it affects the clients perception of the shops professionalism.  Management must also continuously review the systems within the shop.  The systems are not only the software systems but also includes the “processes” in “how” the shop delivers its services to the commercial client.  

To “Re & Re” your shop today is simply not “knowing what to do”.  You must become proactive.  Consider this statement; “It’s not what you know, it is what you do with what you know”.

Too many HD shop owners today are very apathetic and act like “deer staring into the headlights”.  Their actions seem to be advertising “I don’t care about that stuff (above) and I have no desire to get it.” It is very unfortunate that these shop owners insist on hanging around in our industry as they are definitely affecting the image of the Independent sector which in turn hurts the best Independent HD shops within the country.  Consider also that these weak shops work to the benefit of the new HD Dealers in that individual commercial clients do not enjoy the experience at the weak shops and too many are assuming all Independents must be the same.

The challenge in front of the HD Independent sector is not an easy one; however, it is possible to turn things around when all HD Independent shops start to communicate with each other about the importance of raising the shop operation bar. Consider discussing the above issues with your parts supplier who sells to these weak shops and all of your HD shop peers to see if your market area is interested in “taking the market back”.