Issue link: http://undercardigest.epubxp.com/i/532830
26 Undercar Digest Management Matters Management Matters By Thomas M. Langer Jr. Business Editor Do I Specialize or? • Identify the steps to complete the job(s). • Hire to enhance those steps. • Build your teams. • Train. • Review and tweak. Depending on the size of market and area, there are many different possibilities for specialization: • By vehicle type – import, Euro, high perfor- mance, others • By customer type – seniors, nearby executives, etc. • By job type – transmission, exhaust, heavy en- gine, alignment, brakes, etc. • Others There are many pros to becoming a specialist. These include: • You become one of a few known for something in a field of generalists, and news travels fast. You are no longer one of the many. This is a huge advantage since, marketed correctly, customers, local news out- lets, other shops and more will see you as the expert. This often brings an entirely new level of customer since they tend to be more fanatical in their support. • Specialists tend to get paid better for their work than generalists. It takes you away from competing in the low-margin jobs or allows you to charge more than others. For example, you choose to specialize in brake work. You have plenty of competition, especial- ly in the form of franchise specialists. However, once you're known for tackling the tough stuff, the odd stuff and the like, along with the more standard work, you will find you're able to price higher and generate better margins. • You may be in a much better position to market your services to other shops. Many alignment shops, for example, generate a great deal of business through collision-repair shops, generalists who either cannot or won't offer the service due to cost and complexity and others. One person interviewed handles two to five vehicles a week for a local municipal fleet. You are limited only by your imagination. • Marketing is typically very focused, and as such, costs less. You don't need a full-page phone-book ad or an Internet site of many pages. You may not need near as much print or other advertising since the mar- ket handles the word of mouth. You will find it bene- ficial to do clinics, write articles, provide newsletters and other creative approaches to your chosen market. You knew the cons were coming, and here they are: Your specialty can dry up due to technology, mar- ket or fad. For example, carburetor shops had to morph into new products or dry up when fuel injec- I n the past we've briefly made reference to specializ- ing one's shop in a given area. This could include by make, maybe by import vs. domestic (but the differ- ence can be tough anymore) or by service type. It may even be by customer type. For example, one shop I visited caters their business directly to seniors who make up the largest population around their place. So, is specializing the right thing for you to do in 2015? We'll take a look at some who have, the pros and the cons, and look at some businesses outside our industry. I thank everyone who assisted with this re- search effort. As mentioned, as part of this project I looked at other businesses. One is a garage builder in our geo- graphic area. He builds garages. Period. He does them well. He does them quickly. And he gets paid very well. The key to a specialty business is to have a process. The garage builder, for example, has established teams. One comes in and does demolition of the exist- ing structure if needed. The next preps for cement and foundation. Another team comes in and handles the cement work. Usually, right after this, a local-builder supply truck appears and offloads all of the needed materials. About a week later the next team shows up and, in short order, there's a garage constructed. Lastly, a door team comes in and installs the garage door. Next, a brief price comparison was completed. Price advantage for this business appears to range from 5% to 25%+ as compared to generalists who did little more than advertise "garage packages." Is it suc- cessful? Hugely. Drive through any neighborhood in the area and you are likely to see at least one of their signs in a front yard. As mentioned, the key is process. For this business they identified six steps that were required to com- plete the garage. They hire people for each step, meld them into teams, train them very well and then stand back. Not very different when you consider a trans- mission shop. One technician gets the transmission out, the builder builds it, the technician reinstalls. Or, for an exhaust operation where there may be two or three identified steps. Success as a specialist is rooted in a few basic points: • Identify your market. • Identify the image and mission you wish to por- tray.