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Monday, 31 January 2005 17:00

Control business growth by developing a working formula

Written by Tom Franklin

More and more these days, I hear shop owners and managers say that they feel they're losing control over their business. Reports on insurance company manipulation, worker's comp costs, parts price increases, mandatory equipment and facility costs and more, communicate the fact that making a decent profit in the body shop business gets harder every day. What can a shop owner or manager do to gain more control over his or her own business in order to increase profits? 

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Franklin

Consultants are often criticized for taking pot shots at their clients from a comfortable outside point of view, but a business owner is sometimes too close to his or her business to see some obvious actions that could be taken to gain greater control and profitability. After more than 40 years in marketing, working with many types of small businesses, I've noticed one specific tendency that causes more loss of control than any other factor. That is the tendency for independent owners to carry most of the burden themselves. Even when they share or delegate many of the management responsibilities, they still bear more of the burden than they should have to.

My concern is that this cuts into the time they should be using to market and grow their businesses - something that much of the time only an owner or manager can really do effectively.

Control

The dictionary defines "control" as: 1. To exercise authority or dominating influence over; to direct; to regulate. And 2. To hold in restraint; to halt or check. The owner or manager of a business has to "direct" and "regulate" activities, and when necessary, to "halt," "check," or "hold in restraint" various activities. In this sense, managing a business isn't that different from driving a car. The driver has to "regulate" the movement of the vehicle, and to "halt" it when a destination has been reached.

But it's not common for drivers of cars to concern themselves with making the motor, the transmission or drive shaft work as they're driving. Directing, regulating and halting are all done with a steering wheel, a gear shift, an accelerator and a brake pedal. The actual work is accomplished by the motor, transmission and other parts of the vehicle. Few drivers could drive effectively or control the movement of a vehicle if they also had to regulate every mechanical function while also trying to drive the car. When an owner or manager of a business shifts from being the "driver" to being part of the "driven," he or she is like a car driver also trying to be part of the car. At that point, maintaining completely effective control becomes impossible.

Alignment and tune-up

Managing a moving vehicle isn't difficult if that vehicle is well built and well maintained. Managing an enterprise with human employees is far more complicated, but many of the same rules apply. Doing a wheel alignment or a tune-up on a vehicle is simple for those of us who have worked with vehicles much of our lives. Aligning and "tuning up" people is a different matter. We know the levers to push and pull on a vehicle, but what are the "levers" that make people work more effectively and make the job of "controlling the business" as understandable as driving a car?

A primary factor in aligning a vehicle is getting it to stop pulling in two different directions at once. The perfectly aligned vehicle moves directly forward without pulling to one side or the other. The perfectly aligned employee isn't very different from that aligned vehicle. He or she is aligned with your forward objectives for the business, not pulling the activity off in some other direction.

Similarly the well-tuned vehicle is using the fuel at maximum efficiency, not mis-firing and wasting energy. The well- tuned employee will also use your resources with a maximum of efficiency and a minimum of waste. I'm sure you would agree that it would be a pleasure to be managing personnel who were that perfectly aligned with your company purposes and attuned to the company's financial objectives, but how do you obtain these ideal workers? Like a vehicle that you own that's out of alignment and in need of a tune-up, you may already have the personnel. You may just have to perform some needed adjustments.

Developing a working formula

Before going to the actual nuts and bolts of making adjustments, it's necessary to face the fact that humans are much like the highly computerized vehicles we have to work on today. Adjustments are no longer as simple as they once were. With many vehicles we need computer diagnostics to determine what must be done. Information providers supply us with wiring diagrams, frame measurement CDs, and more. It shouldn't be surprising to realize we may need an effective formula to adjust human performance.

Not many of us fully understand Einstein's famous formula, E=mc2, energy equals mass, or matter, times a constant squared. But if we take a simpler look at the components - the relationship of matter to energy - we can see a part of that relationship we use all of the time. We turn matter into energy when we burn coal, oil or gas. And when times get tough, we may turn some equipment - like a truck, a frame machine, or welder - into cash energy by "liquidating" it and selling it off. In a sense, matter has become energy.

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A control formula

It would seem there should also be a formula for "control." What are factors that put us in control? Making an adjustment on a vehicle requires information, whether supplied by providers, books, or hands-on experience. If you have the information and are willing to do the work yourself, chances are you can make the adjustment. But if you're going to ask someone else to do it, you have to answer some other questions: Can this person understand the information if you provide it? Is he or she interested and motivated enough to grasp the procedure? And then, will he or she actually do the procedure correctly so the vehicle is aligned, tuned, or adjusted properly?

A working formula therefore, could be "C" (for control) equals "I" (for information) plus "A" (for action). This suggests that any time something is out of control, you may just need more information, or need to see that more action is taken. Uninformed action could make things worse. Wrong information could make things worse. Without correctly informed action, there would be less control. Correctly informed action should actually increase control of any situation. A control "formula" for management

An employee "out of alignment" with management may lack the information needed to be "in alignment." Do you post business growth goals for the year? Do you set objectives for the month, week or even day, and make those objectives known to your people? Do you let people know what is needed to reach a break-even point, and what's in it for them when they exceed it? If they don't know what objectives you want them to align with, they're not likely to align the way you want them to.

Two books suggest ways to provide your employees with the kind of information that would increase their alignment with the growth objectives of your business: "The Great Game of Business," by Jack Stack (published by Currency-Doubleday in 1992), and the "Game of Work" by Charles A. Coonradt (1991, Game of Work, Inc., Park City, UT 84060 - game@gameofwork.com). Both Stack and Coonradt show that when employees become willing to align with the productivity and growth goals and objectives of a business - and they are given a chance to really participate in achieving those goals and objectives - their efficiency automatically increases, waste decreases, and resources are put to use in the best possible way.

Exclusion vs. inclusion

While some might debate whether or not this element should be included in a "control formula," I strongly believe another element should be "inclusion." The owner or manager who spends much of his or her time being the car rather than the driver - who performs endless tasks instead of managing - is "excluding" rather than "including" others who could be contributing to getting those tasks accomplished.

It seems to be human nature to "exclude" others. People seem to fall naturally into cliques, ghettos, gangs, clubs, and other exclusive groups. Political parties, many religions and overtly racist groups automatically exclude those with differing beliefs or opinions. Businesses seeking market dominance naturally "exclude" the competition. Most would say that unconditionally "including" others could open the door to being ripped off, exploited, embezzled, or worse. Obviously indiscriminate inclusion would be stupid, but where is it best to draw the line between "inclusion" and "exclusion?"

I've watched shop owners who struggled with inadequate business and financial difficulties who didn't think to call on (and include) many of those around them who could have contributed to helping them regain control. Vendors, of course, may be able to help. And many shop owners do ask their paint, materials, and equipment vendors for help - and often get it. I've found that many vendors actually enjoy being asked and being included in a shop's efforts to succeed (or just survive).

Many owners seem reluctant to turn to their employees for ideas or help. Employees who feel excluded often resent it and may express that resentment by turning out sloppy work, refusing to abide by company rules, or even by stealing or damaging company property. Inviting employees to help solve problems and even promote more business can allow them to feel included and may provide solutions and ideas an owner would never have thought of.

A broader view of who to include

Have you ever noticed who commits the most crimes, or who are most often the terrorists who blow themselves up? They are often unemployed young men who may feel excluded from the work-a-day world, and resent that to the point of becoming destructive. Imagine a world in which every young man had a job when he completed school. I believe that far fewer would turn to gangs or terrorism.

I was pleased recently to attend an I- CAR Foundation meeting, where several schools had adopted a program that would provide young men with many basic collision repair skills by the time they completed high school. Several shop owners were present who had agreed to allow some students to "intern" in their shops. These young people would soon have a feeling of "being included" in a well established trade group. Many might make it a lifetime occupation. I've also noticed many shop owners keep to themselves. They don't get involved in the neighborhood or the community. On the other hand, I know one shop owner who has numerous plaques from religious, trade, neighborhood, and community organizations posted on his wall. He also has a large volume of business from many of them. And when he has a problem, there is no end to the number of people he can turn to for help - and get it.

Next time a situation begins to feel out of control, take a broader look at where you might get the information and the help you need to regain control.

Gaining control over growth

Trying to get significant business growth in an environment as competitive as today's is definitely difficult. But it can become nearly impossible if an owner or manager is struggling to maintain day-to- day control alone without calling on all of the people and resources around him or her. That control can be made much easier if everyone involved is kept fully informed, aligned, and attuned to the company's goals and objectives - and if everyone possible is included to help keep the shop growing.

Tom Franklin has been a sales and marketing representative and consultant for forty years and is the author of the books, "Business Battlefield Marketing for Body Shops," "Tom Franklin's Top 40 Marketing Tactics for Body Shops," and "Strategies for Greater Body Shop Growth." His marketing company now provides marketing solutions and services for body shops and other businesses. He can be reached for questions or comments at (323) 871-6862, by fax at (323) 465-2228, or by e-mail: tbfranklin@aol.com.

 

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