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For god’s sakes Define Yourself and Your Business, for success

January 3, 2013

Define Yourself and Your Business

By Bob Greenwood

The average Independent machine shop owner has experienced a great deal of stress and anxiety over the past number of years. Technology, personal self-discipline to get everything done, staff issues and training, uninformed/misinformed customers, commodity issues, productivity issues, and a rapidly changing economy are just some things that “attack” an owner each day. Some of that stress comes from the fact that too many machine shop owners and managers continuously run their business to please everyone that walks through the door. In reality this cannot be done and still remain a profitable enterprise. These shops are focused on top line activity and not bottom line net income management.

Consider that it makes sound business sense to determine what you really want to accomplish over your career and determine what kind of business you really want to run to achieve that objective.

When you define your business you are really telling people “what” you stand for and at “what level” you will service them. This truly is defining the “culture” of your shop. Culture is the way things are executed. Culture is an attitude. Culture is a philosophy. Culture is an image. Culture are ethics. Culture defines YOUR business in your industry and community.

Today it is important to create an image in the customer’s mind of “what” you are and “what” you stand for. Consider that if you run a machine shop based on “price” only, and market the business that the best price is always “here” then this becomes the culture of the shop. The shop is always dealing with price conscience customers who “shop around” for the best deal. This is the customer’s culture and the “price” focused machine shop fulfills their need. It may work for the customer, but over my years of study it does not create enough net income for the business, in fact, our studies show that these machine shop owners buy themselves a job. If that is what you are satisfied with, then this article is now over for you.

Consider “price” is a culture.

Now consider that “service” and “quality” are also a method of running a machine shop. Consider that we are the “Independent Sector” of the industry. The average machine shop operation is NOT a chain store across the country. They are one Independent business in their community. Now how does a “little shop” compete against the “big boys”? Consider one very important difference; the Independent machine shop is in the “people” business. In other words the Independent owner gets to know their client base by name, and by history of the business they have done together. In many cases the Independent machine shop even knows the customers family and kids names. They are in the “relationship” business. The true quality Independent is NOT in the volume, activity, bang them in and bang them out business. The true quality Independent understands the words “I will not let you down.” The best Independent machine shops in this country understand this and are building todays and tomorrows successes on this “culture”.

There are many machine shop owners that I have met over the years who actually believe this type of “culture” does not exist and can not exist for an Independent machine shop business because the marketplace is driven by the customer. These shop owners that make these statements are “experts” in their marketplace as they have been in business in excess of 10 years. They know “how this game is played”.

Very interesting statements but I must respectfully disagree.

Consider the following factual statements made over history:

In 1898, Charles H Duell, Commissioner of the U.S. Patents Office said, “Everything that can be invented, has been invented”.

In 1943, Thomas J. Watson, Chairman of IBM, predicted that there was a world market for “about five computers”.

In 1977, Ken Olsen, President of Digital Equipment Corp., authoritatively stated that “there is no reason for any individual to have a computer in their home.”

The fact is that all of these men, who were all experts in their respective fields, based their statements on their past experiences and the realities of the time. Had they stopped to consider the innumerable factors that could be expected to impact the pace and scope of change in the future, they would likely have made very different predictions.

The Independent machine shop sector in this country must understand it can determine its own future. Look at the many factors the WILL impact our sector such as, to name one, technology development. This sector is capable of defining itself BUT too many shop owners have never looked at what they are doing and HOW they are doing it. They just follow everyone else and follow the loudest in the industry, due to their massive advertising budgets, that volume and price is the only way to run the business. Why does the Independent machine shop follow this “culture” which for the average machine shop is a “sink hole into oblivion”? What may work for them does not work for the true Independent.

Look around and see where opportunities lie to serve your clientele and marketplace. Ask them outright, “Is there anything else you would like to see our business do for you?” Listen and document responses. You just may be surprised what you here that could lead to new opportunities for your business.

I would encourage every Independent machine shop owner not to take the shallow view of the “experienced” leaders of 1898, 1943, 1977. Stretch your mind into new territory where perhaps you have not been before. Don’t be afraid of it. Embrace the opportunity. More and more of the industry, and society in general, are looking for that “personal service” because their lives are so busy and they really don’t understand the technology development of the vehicle, therefore, they require someone, or some business, they can trust! This is where Service and Quality is the right “culture” to embrace. The timing is right for the true Independent machine shop to surge forward as the right alternative in todays and “tomorrows” marketplace.

Developing or changing a “business culture” does not happen over night, however, by defining who and what you are, explaining it clearly to the staff and asking for their “buy-in”, the shop can really start to move forward over the course of a year. Consider the next year an opportunity to define your business. Consider from this day forward what real message you want to put into your marketplace when you advertise. Consider from this day forward what message you want to talk about with your staff each day. Consider from this day forward, Management WILL “walk the talk” to the right culture for this shop. Do you want to be known for “best price” or rather be known for very personal service and high quality for what you do. I can assure you, the latter will outlast the former and that will be proven on the bottom line and client retention.

Consider…you are the architect of your own future…no one else.

 

Robert (Bob) Greenwood is President and C.E.O. of Automotive Aftermarket E-Learning Centre Ltd. (www.aaec.ca) providing shop business management resources and interactive education through the internet. He also delivers live industry specific business management courses. Bob writes monthly articles for Canadian Technician Magazine in Canada and Aftermarket Business Magazine and Engine Professional Magazine in the United States. He can be reached at 1-800-267-5497 or e-mail him greenwood@aaec.ca.

For a PDF of this article (complete with photos), go to: 
http://www.aera.org/ep/downloads/ep4/EP10-2008_38.pdf

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