When I moved into my home, I wanted a tangerine tree. I love tangerines and bought a Satsuma tangerine tree to plant in my yard.
Planting a tree requires digging a hole, of course, so my buddy and I ran to the hardware store to get shovels and pickaxes to bust through the fossilized coral that sits under the hard soil here.
I knew that buying the cheapest tools wouldn’t work out, but I couldn’t see the benefit of buying the most expensive tools. So, I did what almost anybody would do in that situation: I bought the middle-of-the-road tools. I didn’t ask anybody, I didn’t read reviews. I didn’t factor in any information besides price.
We weren’t an hour into digging the hole before the first shovel broke. The wood split in two right where it met the head of the shovel. Then the pick came off the end of the pickaxe. And so there I was, with a third of a hole dug, the day half-over, back at the hardware store buying the more expensive tools that would have gotten me the best results I had originally intended to achieve.
Looking up the wrong end of the horse cost me time, money, frustration and even that first tangerine tree because it sat out of the ground for too long.
This story has a lot of applications for shop owners.
Running a shop is hard, and it gets harder every year. Inflation eats your retirement. Regulations eat your freedom. Taxes eat your profits. Shortages of parts and labor threaten your livelihood. Everywhere you turn, new threats lurk in the shadows, just beyond the light of your campfire.
Given this reality, it makes sense how we wound up with this current situation in the automotive industry. There have never been more challenging aspects to running a successful shop operation.
There have also never been as many cheap tools available for purchase by shop owners.
In my shop, we have a simple rule for purchasing new equipment. Before we make the investment, there must be a plan for how the new purchase will pay for itself within 90 days.
If it’s a new flush machine, that means there has to be a marketing plan for teaching customers about the importance of preventive maintenance flushes, tools for the advisors so they can educate customers, a spiff plan to reward flush sales, and more.
Having this rule in place keeps us from making impulse purchases. By ensuring we can make our money back in a strict and clearly defined time period, we prevent ourselves from being sold a bag of magic beans. It forces us to consider the results we can expect, the impact it will have on the business and culture, and how the shop, the employees and customers will all benefit.
You’ll notice price is notably absent from that entire calculus. That’s because being cheap isn’t a feature. A small price tag isn’t reason enough to buy something if it doesn’t produce results. In fact, my first tangerine tree that died for lack of proper tools is evidence that cheap tools aren’t worth it in any situation.
So, how do you make the right decision when it comes to purchases for your shop?
First and most importantly, start with results. By ensuring our equipment purchases will pay for themselves within 90 days, we know the results we need to achieve to make that purchase worthwhile.
Sometimes that means reality gets in the way. A couple of years ago, we very nearly made the investment of equipment, space and personnel to add ADAS to our shop offerings. We drew up plans to take over adjacent office space, finance equipment and create marketing campaigns to drive customers.
At the end of the day, however, we couldn’t satisfy our own rule of making the investment pay off within 90 days. The results weren’t going to be worth the investment.
No matter the investment – be it marketing or software or tools or equipment – always start with the results. For marketing, a proper result is “driving new customers who are of a higher quality than your current customers.” If you’re talking software, a result would be “bill more hours per technician each day.”
By starting with the result, two things are guaranteed.
First, you’ll avoid making purchases that relieve symptoms. For example, if you hate the way your current shop management software forces you to check-in your customers, and your only goal in your next purchase is to alleviate this problem, you are likely to end up with another mediocre software that lets you check-in customers your way but that also introduces a whole different set of problems. By focusing on results, you’ll fix the root causes of issues instead of the symptoms.
Second, by starting with the results, you’ll avoid being CONvinced to buy something inferior. In an ideal world, a salesperson would seek to understand your needs and your pain and help you honestly evaluate whether their solution is a good fit for your shop. Most salespeople do not sell like this, of course. They make promises, they use peer pressure, they throw out discounts…in short, they work to CONvince you to buy. By focusing on results, and how the shop, employees, and customers all benefit from this purchase, none of their sales tactics will work.
The goal of this, I want to be clear, is not to avoid change. Far from it.
As I said, owning a shop is hard, and it gets harder every year. If you stand pat and never change, you’ll get run over. Inflation alone means that if you’re not growing your annual sales by more than 10% year over year, you’re shrinking and dying.
So no, the status quo isn’t the answer.
Instead, your goal should be to find solutions that help you identify problem areas of your shop so you can proactively fix them. You should be seeking out marketing, software, tools, and equipment that accelerate your growth in a measurable way. Rather than focusing on purchases that make it easier to own a shop, look for solutions that make owning a shop more profitable and more successful.
When I started to dig that hole in my yard, my goal wasn’t to own a shovel, or to dig a hole, but to pluck delicious, juicy tangerines from the branch and eat them right in my yard. It took the right tools to produce the right results, but that tree continues to bear fruit for me to this day.
When you started your business, I assume the end goal wasn’t to own a shop that slowly gave ground to inflation year after year. So, what goals do you have? What does your best year ever look like? And, most critically, will the marketing, software and tools you’re paying for now get you there?
Start with the results in mind and you’ll stop settling for cheap solutions. This is how top operators create highly successful operations!