Auto Repair Shop Stays in Business by Educating Employees on Cost of Doing Business 

Let’s face it – going to an auto repair shop is a lot like going to the dentist.  You know you have to go once in a while, but there is always somewhere else you would rather be spending your time, and your money.

For auto repair shop owners, starting one can be difficult – many close within the first three to five years in business.  And, auto repair shops are one of the more regulated businesses in the U.S. today.

Sudley Car Care Center in Manassas is an exception to this rule.  The company, owned by Craig Ginther, and his wife Sandy, has been in operation for 23 years.  Today, the company has a roster of about 4,000 customers and has received several community awards for customer service and technical expertise.

Ginther recently offered to share about the success of his business, and what advice he would give to those starting out today.

Have a clear vision of the type of business you want to start.  This includes the culture, values, and target market.

Prior to starting Sudley Car Care, Ginther was employed at a local gas station, working his way up from mechanic to state inspector.  He then moved on to work at several dealerships in the area.  When Ginther decided to start his own business, he was determined to take the best practices from his previous employers and apply them to Sudley Car Care.  He also had a very clear vision of the type of company he wanted to own.

“Customer satisfaction was key,” said Ginther .  “I didn’t just want to do car repairs, I wanted to develop long term relationships and friendships with my customers.”

Because Ginther knew what type of culture he wanted for the business, he also knew what types of people he wanted to hire.

“I’ve always focused on hiring people who are very customer service oriented and have strong family values,” said Ginther.  “I want someone who strives for excellence and takes great pride in their work.”

Ginther also knew what types of automobiles he wanted to service.

“We have always focused on cars and light trucks only,” he said.  “We service about 50% domestic and 50% foreign manufactures.  However, on the foreign side we stick primarily to Asian manufacturers.”

This is because many of the high performance European manufacturers require specialized computer diagnostics and highly specialized training.  Having this type of focus kept Ginther from investing in expensive software and tools without a guarantee that he could get enough business from this niche market to make it profitable.  It also helped with sales and marketing – he knew exactly who to target with his marketing efforts.  This enabled him to get maximum value from his marketing dollars.

Have experience in the industry before you go out on your own, be realistic about the financial requirements, and never stop focusing on expenses.

Those years spent working at the auto garage and dealerships gave Ginther a priceless education on how to run his own business.  Most importantly, he didn’t just focus on what he needed to do for his own job.  He broadened his education to learn as much as possible about financing, marketing, business operations, cash flow, inventory management, and customer satisfaction.  As a result, when he launched his own business, he had realistic expectations of what he could expect in terms of growth, operational demands, and cash flow.

“What you often see in this industry is someone who is an excellent mechanic deciding to start his own auto repair shop,” said Ginther.  “While he has great mechanical skills, he has very little experience in business finance, operations, and marketing.  He also underestimates the amount of cash he will need to start and keep the business operating for the time it takes to become self-sustaining.”

Ginther and his wife, Sandy, funded Sudley Car Care with their personal savings and a home-equity loan.  While they considered several auto franchises, they ultimately decided to be an independent shop.  In the beginning, Ginther made the decision to lease both the building and the equipment he needed to start the business.  He started small and ran the business very conservatively, a practice he continues today despite his success.

“You have to keep an eye on every expense,” says Ginther.  “It is so much easier to control $1 of expense than it is to get a whole new car into the shop to repair.”

Teach your employees about the realities of profitability. 

As an employee, it is easy to make assumptions about the profitability of a business based on the size of a company’s inventory, the number of customers going in and out every day, and the value of the invoices that are processed daily.  Any business owner will tell you, the reality of that profit is a heck of a lot less.  Craig takes a pro-active approach to educating his employees on the realities of running a business.

“I take the new mechanics and show them a repair bill,” says Ginther. “Let’s say the bill shows we charged $400 for parts and $200 for labor.  Of the $600 total, I ask them to guess how much will be net profit.  I explain this is profit that will be reinvested into the business to buy better tools, more equipment, pay for employee training, etc.”

“Most of the time, they guess the amount to be about $250 in net profit.  This is when I start the exercise.  I show them where we deduct the cost of the equipment and their labor.  Then I deduct the appropriate percentage for taxes and insurance expenses.  Then I explain about fixed costs, like rent, utilities and lease payments.  So we deduct a percentage for that.  By the time we are finished, they realize the net profit is a lot closer to $25.  This is a real eye-opener for them.”

Ginther does this so his employees will be more actively engaged in expense control.

“After the exercise, they understand that every time they waste materials, or use a wrong part that cannot be returned, they are eating into that very narrow profit margin.  It makes them a lot more responsible,” commented Ginther.

Don’t expect all your employees to share your passion for the business.

One of the biggest lessons Ginther said he learned during the first few years of the business is that not every employee was going to have the same dedication to the business that Craig and Sandy had.

“I’d get frustrated with employees who did not seem to be as emotionally invested as I was in seeing the business succeed,” said Ginther.  “They didn’t seem to care that it was my house on the line, and my family’s security at risk if we failed.”

What Craig came to realize was that for many employees, their job was just that – a job.  They wanted to come into the shop, work hard, do a good job, and then go home to their family.  They were not ever going to be emotionally vested in Ginther’s vision.  And that was okay. As long as they remained dedicated to excellence, serviced the customer and honored the values of the business, it was enough.

Be just as clear on what you don’t want in the business as you are about what you do want.

About 13 years ago, Ginther opened a larger shop on Central Park Drive, several miles away from the original location on Sudley Road in Manassas. For about three years, he kept both locations running.  However, Craig realized that he didn’t want the additional burden of running two shops and driving back and forth between the two locations every day.  He also felt that by dividing his time between the two locations, he wasn’t able to attend to his customers in the way he wanted.

Many business owners are seduced by the idea of expanding, driven more by ego than solid business reasoning.  They jump into opening a new office or branch long before the business can support the expansion.  Ginther waited a decade before deciding to enlarge his operation.  His conservative approach toward corporate finances ensured that the expansion did not jeopardize the company’s cash flows or its ability to service the customer.

When Craig realized he did not like running both operations, he made the choice to close down the smaller, original shop.  His clear understanding of what his business stood for – servicing the customer – made the decision an easy one.

Don’t be afraid to say “no” to your customers.

You can’t run a successful business if you have unhappy employees.  The old adage, “the customer is always right” really needs to be tempered with, “but remember that some customers are just not worth keeping.”

When Sudley Car Care first opened its doors, they were open for half a day on Saturday.  However, most of Ginther ’s mechanics had families and on any given Saturday, kids needed to be taken to sporting events or practices of some sort.  The half-day of work made it difficult for the mechanics to meet these family demands.  Ginther decided to close the shop on weekends to allow his employees to enjoy the time with their friends and family.

“It upset quite a few customers at first,” said Ginther.  “But the type of work we did on weekends was mostly oil changes, and it didn’t seem fair to demand that our mechanics lose time with their families for work that could easily be done during the week.  We offer shuttle service for our customers that work locally, and I just had to hope that our customers would understand why I made this decision.”

The chance of tempers flying and customers yelling is higher in an auto repair shop than in other industries just by the nature of the business.  Ginther will be the first to tell you that most of the time the problem is not over costs, but some other type of misunderstanding.  While he counsels his employees not to take an angry customer personally, he also won’t tolerate a habitually abusive customer.

“About 99% of the time we are able to resolve the issue just by talking through the misunderstanding,” says Ginther.  “I have customers that may have been angry with us at one point or another, but have since become loyal clients and good friends.”

But on a few occasions, Craig has made the decision to “fire” a customer that he knows will never be happy, no matter how hard he and his mechanics try.

“In those few cases I have simply taken the person aside and had an honest talk about how it doesn’t look like we’re a good fit for his or her auto repair needs,” says Ginther.

Make sure you love what you are doing.

The longest vacation Craig has taken in 23 years is one week.  Despite this, he still gets up every morning eager to get to work.  He enjoys the camaraderie he has with his employees and the relationships he’s built with his many customers.

“People ask me if I have an exit strategy,” says Craig.  “I will most likely sell the business one day, but I still love what I’m doing so I’m in no hurry to stop.”