The Impossibly Profitable Shop

“I’m what you might call ‘fiscally conservative,’” he says with a laugh.

In making any purchase for his business, he follows the same process: Thoroughly research it (including all options available, the shop’s desired purpose and outcome from it, and the purchase’s likely effects on the shop); then he saves until he has the cash to do it; and then he reevaluates, going through his same research process one more time. If it all checks out, he then pulls the trigger.

“It’s actually amazing how many times you get the money set, look back into it, and realize that you don’t need that,” he says.

“It’s really hard, but patience is the number-one key for me in running my business.”

Patient decisions are profitable decisions. 

Krans knew right when he opened his doors in 1982 that he wanted a bigger facility and one that he owned outright. But he waited until the time and situation was right—16 years later.

“We were profitable every year, and I kept putting money away for it,” he says. “I knew what I wanted in a facility and location, and I wasn’t going to compromise on that.”

The facility itself had to be just right in terms of size, appearance and layout. It had to be in the correct market demographic of Tulsa and it needed to be easily accessible. He eventually found it, when a friend of his was looking to sell his printing business. The building was formerly a repair shop, a unique, two-story facility with 10,000 square feet of what would be completely empty space that Krans could retrofit in any way he wanted. It is on a main thoroughfare near major roads, and it’s in the heart of Tulsa’s more affluent community. Because of the time he spent saving, he didn’t need a business loan for the purchase or the renovation. 

“Saving is difficult, but I factor it into my overhead,” he says. “Saving for the business’s future should be an expense of running the business, because it is absolutely essential. If you set an amount aside every month, and treat it as overhead, and factor that into all of your finances, you can maintain that.”

2. Specialized Service

Carve a Niche

When Krans opened his shop, he had a handful of friends that owned repair facilities in the area. When he told them about his business plan, which included a narrowly focused niche of European vehicles, they laughed at him.

“They said there’s no way I could make a living working only on those vehicles,” he says. “Those are the same type of people who said they’d never have to work on fuel injection. They’re also out of business now.”

Krans says that he saw the way the industry was heading, and he felt he had a pathway to longevity. 

“I remember sitting on my couch watching a Formula 1 race,” he says. “And the car pulls into the pit, and a guy runs out and hooks up this giant plug to it, runs back to a counsel and is sitting there checking things through a computer. I just said to myself, ‘That’s the future right there; that’s where we’re heading.’”

“Computers have become more and more prevalent in cars and diagnostics have become so much more advanced,” he adds. “I don’t know how you can keep up with it and invest in the right training, equipment and tooling without have some sort of specialization.”

Specialization allows a shop to become an expert on its particular focus. Krans isn’t saying to adopt a three-make approach like he has (BMW, Mercedes and Mini), but he says one thing is clear today: You can’t be everything to everybody.

“There are some shops that do that well, but I can’t,” he says. “I don’t know how to do it and be as profitable as I want to be.”

Krans was an early member in BIMRS, a worldwide network for BMW repairers, and his shop puts a priority on not only being prepared for any vehicle issue that enters the shop, but also on being prepared for what’s coming down the road.

3. Customer Relationships

Create Ties that Bind

Here’s another one of Krans’ core philosophies: Every business should be like a family, and included in that is the customer. 

“People want to do business with people who know them,” he says. “And by that, I mean, they want to come into a shop and have the staff understand them and understand their concerns.”

To this day, Krans still writes all the service for his shop—dealing with customers is what he loves about the industry. And, for 33 years, he’s always approached customers with the same mindset.

“I try to get one thing across: Auto repair is humans versus machines,” he says laughing. “It’s a team effort. Customers don’t know everything about their cars; we do. They come in with the feeling that it’s them against the car and against us; the shop and the car are a team out against them to take their money.

“I do everything I can to get across the idea that it’s us—our team and the customer—against the car to make it run well for as long as possible at the best price. It’s humans versus the machines.”

If that relationship can be established, Krans says the rest falls into place. 

“You do that and follow the Golden Rule, and treat each vehicle and customer as you would yourself, and you’ll have customers for life,” he says.

Krans’ shop does nearly no marketing. It’s almost entirely word of mouth, and his retention rates are above 90 percent.

4. Staff Management

Build a True Team

Every shop owner has an outline for their ideal technician—the key attributes, skill sets, personality traits and work habits that not only make the tech efficient but also help create a company culture that allows everyone to succeed. 

“It’s so difficult to find experienced techs that meet your ideals, though,” he admits. 

That’s why Krans doesn’t even look for them. He creates his own.

Krans is heavily involved with both the Tulsa Technology Center and serves on the steering committee for Oklahoma State University Institute of Technology. At OSU, he helped create a “real-world” experience program for students in which they alternate semesters in the classroom and applying that knowledge in full-time shop roles. He nearly always has one student-tech working in his shop, and he trains them on the European Autospeclialist systems and processes.

Of his three current, full-time technicians, one was from that OSU program, another was from the Tulsa Technology Center program, and the third was a former machinist that Krans helped train. That third tech is now the shop foreman.

“We really, truly grow our own technicians,” he says. “I’m a blank check to training and education opportunities. And we’d rather train the right people to learn the skills than to try to turn these experienced people with the skills to be the right people.”

The training and tooling expenses can be steep, but, as Krans points out, “If you think a qualified technician costs a lot, imagine how much an unqualified tech costs your business.”

5. Workflow Management

Put Productivity First

There are three factors that lead to technician productivity in a shop: properly trained and equipped technicians, a properly scheduled work mix, and a work environment that is conducive to productivity (processes and systems). 

Just as he’s a “blank check” to training opportunities, Krans says he follows the same philosophy for tooling. The shop pays for all but the smaller hand tools. And, as long as that purchase meets the requirements of Krans’ aforementioned purchasing process, he pulls the trigger. 

He also calculates ROI much differently than most do. 

“It’s based on the productivity the tech has on the fifth or so job he completes with that piece of equipment,” he says. “There’s always a learning curve with a new tool, so those first few jobs will be a little unproductive, but we’ve found that, by the fifth or sixth one, the tech usually has it down. So, on that fifth job, how much has productivity and efficiency improved?”

Productivity is paramount for profitability, he says. As a team, European Autospecialist averages 109 percent productivity. Krans says he doesn’t worry about efficiency, because if his staff is well tooled and properly trained, that takes care of itself if they’re very productive. When pressed for a number, he guesses his three techs average between 150 and 200 percent efficiency.

Scheduling, though, might be one of the shop’s biggest keys, in that every job is scheduled. European Autospecialist is an appointment-only shop. It allows Krans to truly control the work mix. It often allows them to order parts in advance, and helps the team have full production meetings at the end of each day, planning out the next day’s work mix for ultimate efficiency.

“Communication is the key,” he says. “We’re all on the same page, we’re all focused on the same things, and we’re all just going on these very simple rules.

“It doesn’t need to be complex. Running a business can be as simple as you make it.”