REACHING THE 'NEXT LEVEL'HOW RYAN CLO TURNED HIS FLEDGLING BUSINESS INTO AN INDUSTRY STANDARD
Ryan Clo used to be concerned about marketing. He used to worry about his shop’s reputation. And the long waiting list for appointments that seemed to grow and grow every hour of every day threatened to burn him out and turn off his customers.
Dubwerx, Clo’s Cincinnati European specialty shop, wasn’t always the pristine, precise and efficient example of industry professionalism it is today. Far from it, Clo says, and Ratchet+Wrench actually highlighted Dubwerx’s early transformation in a May 2013 story. That story, Clo says, was similar to many he hears throughout the industry: a shop operator struggles to fully control his or her business’s future and success; then a light goes off and the shop makes drastic changes to reach a point of profitability.
But what comes next? How does a shop go from good to great? Or, more specifically: How did Clo take what in 2013 was a suddenly thriving million-dollar business, build on that success and turn it into one of the Midwest’s most respected shops, one that will approach $2 million in sales in 2016 without having significantly expanded its staff or facility?
Reaching that “next level,” Clo says, isn’t as complicated as many think. You simply have to put yourself in a position to allow it to happen.
“People ask me all the time: How do you get X , Y or Z? How do you get that out of your business?” Clo says. “You have to create an environment where it can be built over time. You need to start by creating an environment where all of these things can be possible.”
HOW CLO DID IT:
For the past several years, Clo has adopted the “three-legged stool” philosophy when measuring his business’s success: “That’s a big differentiator for any business,” he says. “You need to focus on having a high level of customer [satisfaction], profitability, and employee satisfaction—and not necessarily in any order.”
That’s the foundation, he says, the starting point where true business building can begin.
“If any one of those three isn’t there, the others suffer,” he says. “There isn’t a silver bullet to any of it. It’s about creating that foundation, and then building from there.”
The right environment. A strong foundation. It all sounds a bit whimsical, Clo admits, but there are tangible ways to create this. He has already. With four full-time technicians, Dubwerx will top $1.7 million in total sales this year, and Clo has expanded the business to include an additional shop, Just SAAB Cincinnati, which he recently acquired and is in the process of overhauling. Clo now also works as a business coach. But what he’s most proud of is the stack of résumés that keep coming in—dozens of qualified techs clamoring to work for him—and his slew of five-star reviews from his ever-growing, loyal customer base.
“It doesn’t all happen by accident and you can’t fake it,” he says. “If you create that foundation and have that environment, you can reach that point and do it the right way. There are some simple ways to do it.”
Here are four of them:
1. ALWAYS REINVEST IN YOUR BUSINESS.
Keep pushing, Clo says. Never be complacent and never be “satisfied” with where your business is.
“It’s not about being overly intense or unhappy or anything,” he says. “It’s understanding that you can always get better and always improve, and that it takes significant effort and investment to do that.”
When Clo’s shop first started turning a significant profit in 2013, he was determined to shore up any other issues it might’ve had. He took those profits and reinvested them into a full redesign of his brand and shop (more on that in a moment) and increased training for his four technicians. (Equipment purchases and upgrades, he says, should be part of your regular budget.)
“Making a profit doesn’t mean you can now relax,” he says. “It’s an opportunity to see real change and growth in your business. You now have the means to do it.”
2. FOCUS ON DESIGN
A quick look at the Dubwerx website (dubwerx.com) might sum up the business’s transformation better than any words can. If you took a look, here’s what you’d see: a consistent, modern and recognizable logo; photos of people (the actual people who work in and have vehicles serviced in the shop) and the impressively revamped facility; more than 140 five-star reviews; bios of each team member; information on the business’s green practices and hiring strategy; and an overall brand image that displays the shop’s focus on high-end work in a comfortable, local environment.
This was all by design, Clo says.
“A focus on shop and brand design is one of the things truly missing in a lot of shops,” he says. “All of this plays into the environment your team works in and that your customers are attracted to.”
Most notably, Clo says the shop doesn’t look like a typical service center; “it’s more like a coffee shop or a Chipotle,” he explains. Even the uniforms (button-down shirts) aren’t “traditional automotive style.”
Clo encourages others to “think outside” the norm of the industry. Be different. Stand out. He spent more than $300,000 in the facility upgrade. He added bays (each technician has two now), upgraded lighting and invested in new lifts and equipment.
“You need to make your facility a destination shop—not just for customers but for employees and potential employees,” he says.
3. NEVER STOP RECRUITING
That ever-growing stack of résumés Clo has? That didn’t come overnight. It’s a constant effort, he says. He has a tab on his website that reads “We’re Hiring!” year round, even when there are no openings. He regularly has job postings throughout the industry, and networks with others to meet the most talented people in his area.
“Profit and productivity start with the techs,” he says, and that was a big reason for the facility upgrades. “Your shop needs to be a step up for anyone who comes to work for you, no matter where they worked before.”
Keeping your team staffed with high-caliber people is the top job of any shop operators, he says, and if you look at those that are best at it in any industry, Clo says they have one thing in common.
“They are great at selling their ‘vision’ for the company,” he says. “If you don’t have one, that’s a big problem. And if you’re not getting that across effectively to current and potential employees, that’s a problem. Everything we do should demonstrate the vision of this company. It needs to be clear to everyone involved.”
4. DROP THE EGO
Success, Clo says, shouldn’t shut people off from learning more. If anything, he says seeing his business thrive has only shown him how much he still doesn’t know.
“I’ll work with other shops, or see the way others do things, and I’m blown away,” he says. “There’s no one way to do things, and no one has all the answers. There’s a lot of ego in this industry, and it [stifles] growth. Don’t be afraid to ask questions. Don’t be afraid to try new things. Stay open-minded.
“We’ve done a lot of things to change this business. We’re not worried about those little things as much anymore. But it’s not like I just figured all this out. I can’t claim any of this is very original. I learned from others.”
BECOMING AN EXPERT
How Seth Thorson Developed His Business’s Reputation and built customer loyalty
Here’s an easy fix to customer retention issues: “Don’t send them away,” Seth Thorson says.
“We do a great job of marketing and it’s a big differentiator for us, but the real key is to keep people there once you get them,” he says. “We can fix anything on their cars. We don’t ever have to send our customers away. That’s what everything else—customer service, warranties, a nice facility, our marketing—it all builds off that.”
Eurotech in New Brighton, Minn., has a lot going for it; from its sleek, modern facility to its highly trained staff to its various community outreach projects, Thorson’s shop has earned a reputation in its market as a go-to facility for BMW, Mini, Audi and Mercedes vehicles. All of that, Thorson says, stems from the trust that his customers have in his team to perform work at a higher level than any competitor in the area, dealer or independent.
And the numbers back it up. Four years ago, Thorson bought out his partner and began a business revamp that he felt would take it to new levels of success. Sales have grown 80 percent over that time (from just around $1 million in 2012 to over $1.6 million in 2016) with adding just one technician.
HOW THORSON DID IT:
Thorson has a large marketing budget (normally between 5 percent and 9 percent per month), much of which goes toward a fleet of seven loaner vehicles (all late-model German cars). He pays close attention to the upkeep of his building, and his two service advisors are both attuned to the needs of his customer demographic.
Still, he says, none of that matters if the basic necessity of this industry isn’t fulfilled: work is completed correctly, at the time it was promised. How does Thorson ensure that happens each time? Standard operating procedures—including one for the shop’s thorough (and high-margin) diagnostics process.
THE POLICY: Eurotech charges a diagnostic fee on every vehicle that it works on. “We don’t work on anything unless the customer is willing to pay for it,” he explains. “It not only helps qualify whether your customer will be willing to pay to fix any problems, but it also puts a standard on the value of our service. We’re selling our service and our expertise.”
THE FEE: A standard hour of diagnostics costs $130. For most jobs, Thorson’s team charges an hour of diagnostic time. He also has a half-hour and 0.3-hour charge, as well, for smaller work. “Because we mainly work on four models, our team is very sharp on those,” he says. “Even large problems can be diagnosed in an hour.”
THE TOOLS: Eurotech has three factory scan tools—one each for Mercedes, BMW and Audi—and then five additional aftermarket diagnostic tools. The shop also pays for OE licenses and subscriptions for key coding and repair information from each, a total of nearly $8,000 per year. “We’re one of the very few shops that can do key coding in this area,” he says.
THE RETURN: Charging for diagnostics is no different than charging for labor, Thorson says. It’s a necessity, and it’s how you get a return on not only your techs’ salaries, but also their training, equipment and data subscriptions. Thorson invests heavily in his team to make sure it is equipped and trained to properly repair every vehicle that comes into the shop’s bays. And that $130 diagnostic fee goes a long way to recouping those costs. If just half of Thorson’s 190 AROs per month include an hour of diag work, that’s nearly $150,000 in annual revenue. “Bottom line is that it ensures that we keep our customers and don’t send anyone away,” he says. “That right there is invaluable.”
LEARN TO TRULY LEAD
HOW JACK CHEADLE OVERCAME A SHOP OWNERSHIP SHAKEUP TO STEER HIS TEAM TO GREATER HEIGHTS
It’s all right there in the document. Right now, it stretches to 17 pages. Everything that has led Integrity Auto Repair from its humble beginnings just three years ago to the $1 million shop it is today is outlined, in detail, right there in that document.
In actuality, it’s the Savannah, Ga., facility’s employee handbook. In practice, it serves a larger purpose.
“This is who we are,” Integrity Auto Repair owner Jack Cheadle says. “What we believe, what we do, how we do it—we want it all in there for everyone to know and understand.”
The document is also a prime example of Cheadle’s growth as a business owner. He started Integrity Auto Repair in 2013 with $30,000 in personal savings. No loans. No assistance. No more funds left in his bank account.
“This was it,” he says with a laugh. “And that’s a pretty shoestring budget to open a shop. There were some pains.”
He bought an existing facility, run down and with just a smattering of modern equipment, and he went to work. At first it was just him. Then he brought in a couple friends to help as a technician and service advisor. After the first year, he was able to start adding staff, fixing up the facility and adding necessary equipment. But he quickly realized that with “more” (more people, more customers, more vehicles, etc.), his problems only grew.
“I was running the shop on what I’d learned from previous shops, and that was basically things I didn’t want to do,” he says. “I didn’t really know how to lead people or manage people or hire or fire. I was pretty lost.”
Fast forward to December 2016, and Cheadle’s seven-person team (which includes both him and his wife) will top $1 million sales with a 15 percent net profit (and that’s including his and his wife’s pay). How’d he do it? Well, it’s all in that document.
HOW CHEADLE DID IT:
The key to it all, Cheadle says, is transparency. Be open and honest and consistent; that’s how he leads his team.
“We’re very transparent about our numbers,” he says. “Our team understands where we’re at. We meet about it often and go over our numbers, results and goals.”
Cheadle says he tries to put as much trust in his team as possible, allowing them to make their own decisions that will benefit their work and the company overall. He doesn’t want to micromanage.
This is where that document comes in again.
“The first seven, eight pages of it are all about ‘who we are’ as a company and what we stand for,” he explains. “It goes over our vision and our mission, and we have eight commandments that we adhere to in our daily work. Then, the rest of it goes over policies and procedures.
“The idea is that with this, if we’re trained with it for incoming employees and everyone has access and understands it, there’s no need to ever micromanage. This acts as a sort of ‘what-would-Jack-do’ document.”
Cheadle has used it to train in his last two team members, and he says the transition for those employees was much quicker than any in the past.
There are some critical elements to the document, and Cheadle says it’s something that every shop in every market, regardless of size or scale, can complete on its own.
SECTION 1: 'THE INTEGRITY WAY'
Cheadle opens the document with an explanation of the document’s structure: “We have learned that it is wiser to teach new teammates the ‘why’ before we talk about any of the ‘hows,’ because once you understand the ‘why,’ you will be able to understand the reasoning behind the ‘how.’”
In all, Cheadle says “The Integrity Way” comes down to a list of eight “commandments,” outlined in detail in the document:
- Treat customers like family.
- Love and serve other team members in word and action.
- Never deceive customers or other teammates.
- Constantly get better at what you do.
- Go the extra mile.
- Get the ball out of your court.*
- Communicate clearly and consistently.
- Do more with less.
*Refers to a speedy work process that moves vehicles quickly through the shop
SECTION 2: STANDARD OPERATING PROCEDURES
After outlining the company’s vision and purpose, Cheadle details each of the shop’s standard operating procedures (SOPs), from items as mundane as how to stick the cash register (they keep $335 in cash when fully stocked) to how to open and close the shop each day to its 20-step inspection process.
“There can’t be any gray areas in terms of this stuff,” he explains. “It’s always evolving and we’re looking for better ways of doing things, but this helps to get everyone on the same page and limit down time to ask questions.”
Cheadle also works to ensure that each position’s duties are carefully explained to them. For example, he has job “duties” for his techs listed in detail:
Shop Technician Duties
- Confirm the customer complaint
- Take proper steps to diagnose the problem
- Make sure we have proper diag time
- Research online
- Inspect the vehicle
- Ask for help if needed
- Make recommendations
- Complete inspection
- Turn in inspection with all recommendations to the service writer as soon as possible
- Perform necessary repairs
- Confirm Repair
- Double check vehicle for tools, trash, parts, clipboards, finger prints, etc. (i.e., make sure the vehicle is both mechanically and visually in better shape than when it arrived
- Park vehicle in one of the finished spots if customer is not present or out front if they are waiting
- Return keys and work order to the service writer
In-between jobs
- Clean shop
- Educate and train yourself
