There are essential ingredients for a growing business – a solid plan, staff, marketing, and the right tools. What is often overlooked when running the shop is the power of transparency and educating motorists to develop trust.
Is increasing shop revenue by more than $100k per employee too good to be true? Join Adam Bendzick, Uwe, and Bill as they discuss Adam’s journey from a $600k shop with 4 employees to more than $2.02 Mill. per year with just 7 employees.
Episode Transcript
*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].
Bill: Good morning. Good afternoon. I’m Bill Connor. And if you’re watching us here live today, you’ve obviously signed up on AutoVitals.com/radio, and we’d like to thank you for joining live. We’d like to encourage you to chat in your questions as we go along. This particular panelist, Adam Bendzick, that I have here with me today from Pro Service Automotive repair, and Uwe Kleinschmidt, Auto Vitals very own chief innovation officer, both these guys love to answer questions live. Today, we’re going to explore how Adam took his shop from $600,000 a year to $2.2 million a year, when he transitioned to the digital shop. So, there are three key phases that we want to make sure we cover today, and that’s laying the foundation, adding new customers needed to fuel the large growth, and also building a team culture to secure a strong future for the complete staff in the shop. So, today’s focus will be to define and measure process changes in these three key steps and also in a way that you can implement them in your shop. And we’re going to do this by using some data to develop strategies to stay ahead of the competition. Gentlemen, are you guys ready?
Adam: Absolutely.
Bill: Awesome.
Uwe: Can’t wait.
Bill: So, what I’d like to do, Uwe, is I’d like to let you start Adam off by getting him on the hot seat here and grilling him a little bit, and let’s start learning about his full journey and then we’ll get into the digital shop journey, if that’s OK with both of you.
Adam: Sounds good.
Uwe: So, I mean, I have always been super impressed, Adam, with your – from what I knew actually – how you implemented everything in your shop, but it really came to light just this week when you told us the whole story, starting as a high school graduate. And I think this is not uncommon, and so, if you could spend the time to let us all start with you, when you graduated from high school and then to today. I will put in the background for everybody to see, a summary of the timeline, and feel free to use information [from] that. But we will, in the second part, really dive into every single phase.
So, Adam, it’s an immense pleasure and honor to have you on. Your story is highly inspiring, I have to tell you.
Adam: Appreciate that very much and glad to be back. And hopefully, some of the stuff we’ll kind of share, like our story as a shop and my story as a shop, and so many others can relate to it out there. And we’re all kind of maybe sort of the same boat, or maybe as a little bit different in the way we got into this industry, but no matter what we can all learn from each other, no matter where we came from.
Uwe: So, how did it all get started?
Adam: Yeah. So, basically, started the business in 2002. I went to New Prague High School in Minnesota. I was a senior in 2002 and graduated that year. Prior to that, my family owned a farm equipment business. It was my grandpa, then it turned into my dad owned it. And basically there’s a transitional period around our area where the farming industry just kind of was starting to go down, and we needed to transition into something else. Some financial trouble – that I’m not going to get into – at that time frame, but in essence, I learned a lot from those past experiences to then create our own shop. And my dad was involved in it right away. Everything was kind of in my name, as far as that goes, but we did it together initially. It was survival mode right away, and that’s the first phase that we kind of highlighted as the survival mode part of it, where you’re going from no revenue whatsoever to trying to establish a business and roles and organize the chaos, as you have noted on there, and what we were kind of still but not quite as much anymore. We took in anything. [We] never said no to [anyone], no matter what the job was. In our pre-show meeting that the three of us had together, Bill had mentioned about within reason, as far as jobs go, you don’t want to let the customer force you into a discount or this and that. And although that’s our mindset now, initially we were absolutely like, this job, taking it in is the difference of, maybe I’m going to have some money to spend this weekend and go out to eat or grocery-wise and stuff like that. I mean, we started from nothing. Our business was developed off a truck loan for $3,500 bucks, off a truck that I owned, and then we put $2,500 straight toward our first month’s down payment rent. So, we had $1,000 of working capital to use to start this business. And when you’re put in that position, it’s almost like your back’s against the wall right away, because you don’t have a lot of overhead. So, if it’s Monday and there’s nothing on the schedule, and there’s Tuesday, and there’s nothing on the schedule, when Wednesday comes by, even if that job isn’t extremely profitable, it might mean that we at least made a little bit of money this week, and that’s 100% how we started. I didn’t come from a [situation where we] had a couple hundred thousand dollars in the bank to hire other employees to help you and stuff. It was just my dad and myself, and we had to survive that first portion of it. And I think there’s probably a lot other shops that have been in that position, where cookie cutter would say, OK; let’s hire a service advisor, let’s hire a tech, and all sudden we’re going to have all this revenue coming in, but it doesn’t often start that way. You think you want to add these other people, but you might not afford to, so you take all those responsibilities on yourself. So, as I reflect upon how we first started, our biggest thing was organizing the chaos, establishing defined roles, and all those types of things along the way, was that first six years. I wish I could condense it into six months, but nonetheless, there was six years of really tough trying times of, gosh, you’re just trying to get your feet off the ground and develop a revenue stream and a customer base and everything like that. So, part of what we transitioned to over the six years was setting goals for ourselves, establishing roles, knowing that how much do we need make per year to cover our expenses, breaking that down to a month and then breaking that down to a day of what you need to make. And that was that timeframe there. After that, when we went into phase two, is when things started to kind of click a bit. So, as we got into phase two, [we] reflected upon what worked well in the first phase, and there was a lot of things that didn’t. We didn’t have proper parts margins. There was some things like a set of brake pads, we were marking up five or 10 bucks, that type of thing, and just not making smart decisions with that stuff, where instead of wowing the customer on service, our mindset was, hey, let’s give them a better deal than the next shop in town, or whatever it might be. And all we were doing is killing ourselves and kind of not really helping the industry as a whole because we shouldn’t be devaluing our service. So, we had to work through that for the first five [or] six years and start to understand that we can’t just focus on being cheaper. We’ve got to wow our customers with the service level and the care factor that we have, and then, in some ways, in order to do that, you have to make more revenue, so you can start adding things like a coffee thing up in the front waiting room or loaner cars that are free, or whatever it might be. That stuff all costs money, and if you don’t have the revenue to support it, you can’t provide those things. So, what we’re doing in that second phase is really reflecting on upon what worked well. And what ended up happening was [I] actually got out of business with my dad and my brother at that time, because we just had different mindsets of where our business was going to go and different things like revenue and this and that, parts margins. We just didn’t agree on that type of thing and, for me, it wasn’t about totally increasing cost to our customers. It was about really providing a better service and then looking at our future. I don’t want to work for 90 hours a week to make $25,000 a year, kind of thing. I mean, you really have to kind of start weighing out those types of things. So, the second phase was reflecting on the first part, and we really changed parts margins and started charging [for] shop supplies and different things like that.
Bill: So, you went from survival to swapping dollars and then you discovered you really needed to make a profit.
Adam: Absolutely. Yeah. Yeah. Like we kind of talked about a Monday on the pre-show, it was, gosh, I wish I could condense that six years to six months, but it’s what brought me to where we are today. When your back’s against the wall, you really have to fight for your business and fight for your life in those things, and that attitude that I have now has never really changed. It’s the same type of attitude. I’m not ever going to be one to just kind of sit on the sidelines and have like this team that I’m not involved in on pretty much a day to day basis, because when you when you go from having a startup business like that to then growing to a couple million dollar sales revenue shop a year, in my head we’re still back in 2002 and fighting and scratching this and that to be the best, and that attitude has never changed. So, I’m never going to be one that has three [or] four shops and sitting on the sidelines. I was never in that position to just be an owner, so I’m developing more owner traits and delegating responsibility, but it’s not really in my DNA to just be that owner that oversees everything and didn’t actually fight in the trenches growing up and building your business. But that second phase is just basically going through what worked well. We started doing actually inspections. Nick, who is at my shop now – he’s been the most important thing from a business aspect along this way, bringing him on and completely a godsend to our business – he worked at Firestone before he came here, and they did inspections. And it was just a standard paper inspection, marking things off just by hand and everything, and we incorporated that in our business, and then things started to kind of take off by just doing inspections. Then, once you start adding digital inspections and transparency and this and that, that’s kind of that next leap of faith moment where you start really investing into your business, where it might be marketing or whatever it might be. So for us, a big investment to a small shop is AutoVitals, between training your team and buying tablets, and in investing into, gosh, should I do a monthly plan or should I pay the whole year in advance because you get a better rate, and everything like that. All those little things, when you break it down for cost wise, it’s all an investment. And it’s absolutely worth worthwhile investment after it’s all said and done, but it is a leap of faith for a small business doing $300,000 in revenue to, gosh, should we add a website and this and that and spend $1,000-plus doing it a month. It is a hefty investment for a smaller business, but it’s also what jump started a lot of things for us and where we really started to grow our revenue. So, as far as that first real business leap of faith, AutoVitals was in that time frame in 2015. And with doing that, we kind of made a sheet that shows our sales and things that we were tracking before [and] that we weren’t tracking before. So, we were with QuickBooks and just really standardized accounting software in 2019 and 2012, and then in 2013 and 2018, we started using R.O. Writer and things like effective labor rate mattered. When we first went into it, I’m like wow, our effective labor rate is like $52. You feel like your labor rate’s $85 an hour at the time.
Bill: You started finding out what you didn’t know.
Adam: You find out what you didn’t know, and you’re like, we’re not really making $85 an hour. We’re actually making $50 an hour. So, when you start getting in these things like AutoVitals and R.O. Writer, they’re all an investment, but they’re also tools to say, what are you not doing very well and what do you really need to work on, and all those things. So, when we went to R.O. Writer, effective labor rate went from $52 to $54 to $57, then to $65 an hour, then to $75 an hour. So, you start really focusing on these little pieces and then you start seeing your revenue really jump up. In our first period of business and that first phase, I just had a monthly bill list that was rent and salaries and garbage disposal and merchant account fees, or whatever it might be, and as we paid them off, I just checked them off. I just scratched out, OK, that bill’s done for the month. OK. We’re good. Now let’s focus on making a little bit more. Initially, $15,000 a month was what we’re trying to do in sales revenue. Well, then it turned into 20, and then you start adding these other things like AutoVitals, and OK, let’s add $1,000 or whatever it might be to our monthly budget. And, those are the things that I did, was just scratch it off as it came across. But then, once you start really looking at the business of auto repair and the KPIs, so to speak, of effective labor rate and ARO and this and that, that’s the lifeblood of knowing what you’re doing more than just more than just running a personal budget, so to speak. Like at home, like OK, I got my paycheck for whatever it is, and now my mortgage is paid, and my electric bill’s paid and this and that. Instead of running it like a personal business, now it’s like, no, we’d really need to run it like a business and really start crunching numbers. Because if we’re going to build the business, we need to know that information. So, that was a big transition in that 2013 and 2016 phase investing in the company and tracking data. 2017 was absolutely the biggest leap of faith we’ve ever made in business. We were getting to the point of where our customers coming in and the amount of people that we could hire and everything. We were always hiring better people and not necessarily increasing quantity of people. It was, OK; we can afford this level of talent right now and with what we can afford, it was kind of some of the job jumpers that you get – everybody’s businesses these days get resumes that you look at them and it’s like, that person’s worked for three different places for the past year. What makes me think that this is going to be the savior employee that I’m going to hire and they’re going to be with me for 10 years? It’s not going to happen. You have those people come through, but when you can’t afford the better talent, unfortunately, that’s kind of the price bracket that we’re in. So, we’re getting some technicians that we had to pay attention to more. Nick and I were controlling quality control and all those things, so the product out the door was good, but it was really stressful on us, because we were really having to watch everybody along the way. And then, as we started growing revenue, we didn’t increase amount of people. Some people came and went, and we hired a better person, and a better person, and a better person to the team that we have today. I would say – it’s not trying to brag or anything like that – but I have every confidence in our team’s ability, that we’re as good as any team across the country. And there’s a lot of great shops out there. That’s no disrespect to anybody else, but it’s just a matter of that’s what I feel like we’ve grown [to] today. But it’s taken steps along the way. So, in 2017, once we got to that point and we had a solid foundation of.three technicians in the back and then myself as a service advisor, we moved into our new location. And we would have either had to rent a bigger place or put up our own building or do something, because we couldn’t we just couldn’t grow any bigger in our current facility as a four bay shop, and it wasn’t set up the best, the most efficient, and we had to make a change. But with that change is that leap of faith where, OK; now this is a big mortgage payment. This is substantially more investment into our shop. Are we ready for it? Do we want to grow that grow that big?
For us, we did, and we took that leap of faith, but for another shop they might have just said, no, our businesses big enough; let’s start investing into digital marketing or direct mail or whatever it might be. That’s a decision that the individual shop has to make, but for us, we had to move. So, [we] moved in a bigger location [and] ended up hiring more people, better people, and then really started to hone in on the BCP metrics and the point of sale and everything like that.
Bill: So, this is the phase where you got all your processes, procedures documented, all your all your ducks in a row, so to say, and then you started adding more high quality fuel to your machine that you had running.
Adam: Absolutely. For sure. One of the most interesting things as I reflect back on it, and I think this is one thing that Uwe appreciates – because it wouldn’t be possible without some of the tools that we have like AutoVitals and tiles and workflow phases and everything like that – is in 2012 or going back to even 2010, we had one service advisor and two technicians and we’re doing $400,000 in sales in that time frame. Today, we’re doing over $2 million, and we have a service advisor, a production manager, and four techs. So, we added three people, and we went from $400,000 to over $2 million dollars, and that’s simply not possible with the way that we were doing things in 2010 with paperwork orders and the paper shuffle, the walking back and forth, the, hey, what’s going on with that vehicle? Can you write it down on a paper work order, and then I’m going to type it in our point of sale system. All those things that you did along the way, it just wouldn’t be possible. So, a 60-second walk from the back shop to the front shop, or vice versa, all those things just add up to an hour to an hour and a half a day of timeframe. So, when you think about that we multiplied our sales revenue by five times at that time frame, but only maybe doubled the team, it’s crazy to think about.
Uwe: I would even say I have never heard of a small business where this is possible, where you invest in structure and process and tools and team, and create that kind of growth for employees.
Bill: The more interesting thing to me is that there are other people in the digital shop environment that have a very similar story to Adam. They might not have started from the zero line, but they’ve all went through the journey, and they have similar results. So, it’s pretty interesting, and it goes to prove [that] when you’ve got a dialed-in tried and true process that others can use and duplicate and learn from, that’s a great way to look at it.
Adam: Absolutely. Yeah. I feel like it’s a shop culture, surrounded by people that have the same mindset, [which] is, don’t worry; I’ll get it done. Yep, you can give that to me. I’ll get it done. Yeah, I know I got six vehicles on my schedule. Me and Ronnie will help. We’ll get through it. It’s just that’s the mindset. We’ll get through it. Don’t worry. We’ll get it done. Whereas if I told you five or six years ago, we had great people from a personality standpoint and work ethic, and everything like that, just a matter of –. The quality of our work out the door and experience that the customer has had I don’t think it’s changed. I think, if anything, it’s gotten better. But the volume in the efficiency level of the team in back and how well they work together is second to none. There’s no way that we could do that without their work ethic. Even if I went back six [or] seven years and had that team compared to today, I just don’t think it’s possible for us to have done that. It’s all in the individual motivation. Some of the guys in back –. One of our guys in particular, his dad owns a shop. He’s been involved with that shop. He doesn’t work there obviously; he works here. But nonetheless, he grew up around that, so his work ethic is, let’s just get it knocked out and get it done. One of our other guys, his dad was a farmer. Kudos to them, because when you’re out there bailing hay in 100 degree weather and this and that, you learn how to work hard pretty well. Their deal is, are they Supermen? No. They just know that I can’t screw around on my cell phone or I can’t be looking at Facebook, or I can’t take a 20 minute bathroom break, or whatever it might be. They just know they got to get the job done. There’s days where it’s not as busy as others, and yeah, you can kind of let yourself slack off a little bit, but nonetheless, this is not possible without the team upfront that we have and how well they are at scheduling and keeping things efficient, and then the team in the back, working together with that, so it’s truly a pleasure to work with them.
Uwe: Yeah. The ability to find them and attract them to your business, no tool can do that for you.
Adam: Yeah. For sure. That’s a good transition point in that fifth phase. That’s where we’re at right now: You grow the business and you do those things along the way to get to this point, but then the toughest thing is when you have great employees and they move to Tennessee or whatever might be, which we had happen before. Just life happens, and you have to roll with the punches of that, so to speak. Now it’s an extreme focus on employee retainment. Some of the best compliments that I feel like really makes me feel good about our business is when –. One of our guys in back right now, he planned on moving after his kids graduated high school, [and] his kid is a senior in high school this year. They planned on moving down south, like Arizona, Texas area, that type of thing. And no, Johnny’s not eligible for hire. He actually wants to move closer just because how much he loves it here. His wife’s job, she could work anywhere. She can do it from home and everything. But they’re actually looking at houses in Prior Lake area just because of, hey, I found my forever home. And that is so special to me because you get to a point where I feel I’m totally comfortable with the revenue that the shop is making and my work/life balance is getting better, and I want those same things for our staff, and I really want them to understand how much they mean to us and feel the same way. It’s like, hey, there’s nowhere I could go with that has better work conditions. I work in air conditioning right now. That doesn’t happen at very many shops throughout the country, let alone Minnesota. We have a cold season, [and] nobody touches air conditioning for seven or eight months out of the year, but our summers are humid and sweaty and it sucks to be in back. So things like that are perks where do I necessarily gain anything from it working up front in the office and talking to customers or doing bills? No, I don’t, because I’m already working in that type of air conditioned environment, but would I be very good at my job if I didn’t think about the guys back that are sweating their butts off? No. I think that stuff is really important, so our focus is definitely an employee retainment. Compensation is part of it, but it doesn’t mean everything for everybody. Things like air conditioning could be the difference of some person coming to our shop or another one. So, it’s really kind of looking at those things as a whole.
Bill: When you talk about extreme focus on employee retainment, you’re really talking about the things that if another shop approaches one of your employees and says, would you come to work for me, you’re talking about a list of things that would make them say, no, I wouldn’t entertain that for any reason at all because I’ve got this, this, this, and this. And so the things you use for retainment are also the same tools you’re going to use for recruitment.
Adam: Absolutely. We were at Vision before COVID happened in 2020. We had the Vision Conference and went through there, and our most important guy was approached by another place to come work there. And he’s like, what would it take there? His reaction was like, it’s not it’s not gonna happen. I’m sorry. There’s no way. You’re not gonna be able to do it. So, then they kind of throw it out, well, what if I paid you this much, and it was like, it’s just not going to happen. Those types of things — it’s not a brag thing, but I’m happy that we’re able to provide enough things that our employees legitimately would be actually upset that a competitor of ours could think that they could just steal an employee away, where they are really that bound into our company, or our culture, or whatever it might be, where are things are good that they feel that way. Not that we’re never going to lose an employee or whatever might be, because there’s always those things that happen, but it really feels good that we’re making progress to really change people’s lives, so to speak. To John Long’s credit – because I know he’s listening – we were talking either last weekend or the weekend before or something like that, and he had told me — and I don’t think he’s gonna care with me sharing this – is that his goal for himself and business wise is to employ 100 employees. Not because he’s going to make more money for himself or for his shop or whatever might be, but that he feels like he can impact 100 people’s lives with giving them a job and having an employer that cares about them, that makes breakfast for them and makes lunch, and this and that, and truly feel like you’re making a difference within your community and other people’s lives. And that’s definitely my focus right now: How can we make things better for other people? Because I feel like I’ve been blessed with where we were back in 2002 to today, and I think it’s definitely my duty to keep on improving things for other people, whether that be in our community or that be just within our shop and what we can do in each individual employee’s lives.
Uwe: Awesome. There’s one question by Jen before we go into more details on the phases and she said, what’s your effective labor rate now if you don’t mind sharing?
Adam: Yeah. For sure. So, we’re just up over this year $102. So our base labor rate out the door, posted labor I guess you could say, is $114.98, and we’re at $102.30, or something like that. So, one thing to clarify is we do pay inspections for our –. We work on a flat rate system, and this year we’re doing kind of a team structure to see how everything ends up working out, but we’re still giving time frame to the technicians, the same way as we were before, just so we can kind of track their efficiency like we were back then. But basically, they get a quarter hour for every inspection. It’s not a paid inspection from the customer, just that stuff does factor into it, so that’s everything out the door, where I know some shops will have their techs do an inspection, but it’ll just be zero hours. It does include that stuff.
Bill: And that kind of really masks what’s going on in the shop. So, I really like shops that actually put the time on there, track it, and they use that in all their calculations, just like those that have a tendency to say, I don’t want to include any repair order that’s under a certain amount, or whatever the case can be. They’re just kind of masking things a bit.
Adam: Yeah. For sure. So, two big things for us were effective labor rate and then hours per RO. Those things really kind of helped as we’re increasing sales volume and revenue-wise. When those two things went up, sales, ARO, everything went up. Not that it’s the key component they should look at, but if one piece of the puzzle is down, it usually affects every other piece, so if you even just look and harness in on just one or two things, everything else goes with it.
Uwe: We have another question. Carlos is asking, where exactly are you located in Minnesota?
Adam: Yeah. So, our city is Prior Lake, Minnesota. From the twin cities, Minneapolis and St. Paul, we’re about 25 miles south of there.
Uwe: Thank you.
Adam: Yeah.
Bill: Would you call that the average city? It’s not a really high dollar city? It’s not something that’s depressed like downtown Chicago? This is average city USA?
Adam: Yeah. I think so. So, I don’t give you incorrect data, I’m actually looking at Prior Lake’s [information].
Bill: In other words, somebody should be able to duplicate your journey, no matter where they live, is what I’m looking for.
Adam: Our population is 26,365 people, so it’s not a huge city; it’s not totally small. New Prague, it was like 6,000 people there when I was growing up. Those things are a smaller volume of people, but then there’s typically less auto repair shops. I mean, you come here, there’s probably 15 or 20 auto repair shops within a three mile radius that are all solid shops like, without a doubt. I’m not taking anything away from our competitors, because there’s good shops in this town and then, as you go through Savage and Burnsville, our bigger cities, where – I don’t know – there’s probably 80 to 100,000 people in those particular cities, they’re only five minutes away from us, so there’s a lot of options in this area for people to go to different shops.
Bill: Have you transitioned your focus from more or less moving customers through like herding sheep, to correlate your farming attitude, to delivering a quality product to everybody that walks through your door?
Adam: Yeah. One thing I made a note for myself is when getting bigger, customers start thinking like you’re a chain store. I can’t tell you how many –. We just got to review that somebody referred to us as like a chain store again. Most of our reviews are really good, and people will say, oh, for a chain store, I really got great service. And it’s like, gosh, it’s almost like you expect from a chain store that you wouldn’t potentially get great service. And for me, we aren’t a chain store at this moment in time. We probably will have multiple locations in the future, and we’re just not there quite yet. But nonetheless, people still have that perception that we are, and I don’t want to have two or three or four stores and then all of a sudden think that we’re a chain store and the service drops off. So, I feel like that’s the team that you hire at each individual place, and you can hire lower dollar talent, or you can hire higher dollar talent and treat them –.
Bill: I look at what they said as a compliment for a different reason. I like it because they’re telling you that your process is the same every time they come in, no matter who they refer to you. So, they’re defining it as a chain store, but they’re really telling you that you’re doing a [expletive] good job making that experience the same for everybody that comes through the door.
Adam: Yeah. Probably, but I would also say that there’s a lot of –.
Bill: Just say, thank you for the compliment. It’s OK.
Adam: I know, but I’m guessing there’s a lot of chain stores that don’t have the same process [at] every single store.
Bill: I bet they’re supposed to.
Adam: Yeah. They’re absolutely supposed to. It’s just as you start branching out, it’s harder to be involved in the day to day process. When I first started, I was the service manager at that time to every single customer. Now I don’t do that. So, in order for our customers have the same experience, our current service advisor and sales team have to have the same kind of mindset and things that they value, which I do believe they do, because I feel like people do have as good of experience. So, sometimes that doesn’t happen at every chain store, so to speak, that you go to.
Uwe: Adam, I just looked up Prior Lake also to add a few more numbers. You guys are a pretty young community. Median resident age is 40 years.
Adam: Yeah.
Uwe: And there was some growth involved also. So, the median household income in 2000 was $75,000. It’s now 116.
Adam: Yeah.
Uwe: So, you seem to be in a growing, prospering town or area.
Adam: Yeah. For sure. Yeah. One of the great things about Prior Lake is my New Prague roots, so to speak, where people knew each other, everybody kind of knew everybody kind of thing. It’s still kind of that same way in Prior Lake because of the community involvement and different things that we have between our Chamber of Commerce and events that are within the community. Even though the city is a lot bigger than New Prague was, the feel of just the community interaction, everything is the same. As far as household incomes and everything like that, I think that this is an area where you can’t just completely charge whatever you want and be way overpriced or anything like that. But at the same time, people will pay $25 more for a brake job over the other place if they feel like they’re treated differently. It isn’t so price conscious, so to speak, where you can provide a higher level of service and then still not feel like people are going to really be upset about the pricing structure.
Bill: And that’s really good, because you’re after the value conscious customer anyway. That’s the best customer to have. You get on the ultra-high end of the scale, then sometimes they’re swapping cars every couple of years and it doesn’t do any good, so you’ve got a good sweet spot. And if they’re trending upwards, that means continue to deliver a higher value, and then don’t be afraid to charge for it.
Adam: Yeah. For sure.
Bill: That’s a good place to be in.
Adam: Just to reiterate what Bill had mentioned when we were in the pre-show meeting the other night, he is 100% spot on in today’s day and age for where we’re at with our shop. Our pricing structure is, this is what it kind of is, not that we don’t have any discounts or anything like that or run specials, or whatever might be, but nonetheless it’s not allowing the customer to just like, oh, that’s going to be $500 bucks; I’m only going to do it if it’s $300. And you’re put into a position where you have to accommodate in those situations. You explain the value and everything like that, and if it doesn’t work out, it doesn’t work out. But nonetheless, we are in a different position right now to accept and decline client jobs based off of those types of things.
Uwe: There’s another question. Dave is asking your average weekly car count now.
Adam: Oh, yeah. So, we’re about 85 cars a week now.
Uwe: OK. Before we go into more numbers, there’s one thing we haven’t even mentioned. You also developed personally. So, you got a beautiful family. How did that factor in this whole thing, if I may ask?
Adam: Yeah. For sure.
Bill: That was the scariest part.
Adam: Yeah. Timing-wise, it’s been great with that. My wife from day one has been awesome with this. Her involvement in the business kind of started when my dad and my brother were no longer involved in the shop. So, that female presence, I guess you could say, from a customer interaction standpoint –. She wasn’t there every single day, but when she was, people really loved talking to her. But then the other pieces of it, like decorating the waiting room, which I was terrible at, [and] all those other parts that really make a business whole, she was able to fill in. So, that was awesome. She was actually the first person that read about AutoVitals on Ratchet+Wrench and said, hey, we should look into this company. I think this would be great. And she kind of started that process. So, credit where credit is due. That was her initial idea. We were doing inspections, but we just weren’t doing them digitally, and that obviously changed a lot of things. As far as our kids now, I have a five-year-old, Mika. She is my special little girl. Father-daughter relationship is second to none. And then we have Weston, who’s three. And when we first had Mika, she was a year old when we transitioned to our new building, so without Stacy’s help and taking care of the kids at home and everything, that would have been really, really difficult. So, transitional period-wise, it felt like we kind of waited on making our own little family whole, so to speak, and having kids until we were a little bit more solid with the business. I don’t know if I could go back and change anything if it would affect the business or not, but it certainly has helped that we’re at the point at which we are today that I can probably be a better dad than what I would have been 10 years ago and the hours that we’re putting in.
Uwe: Thank you. Thank you for sharing. Let’s check the time. We have like 15 minutes left, Bill. I would love, if you guys don’t mind, go into the leap of faith to growth phase and talk about – especially if we don’t have much time – about how workflow helped you create the process or how workflow supported the process you already created. Because, if I look at the numbers, Bill, do you want me to share them again?
Bill: I got it.
Uwe: It looks it looks like the biggest jump basically happened between 15 and 17. So, there was a there was a an awesome growth before, but there was kind of a jump and, of course, being me I would say it has it has to do with AutoVitals, but if you could talk about what – especially for our listeners who are still focusing only on digital inspection, Our Tool, or another and not doing workflow so much, because it’s a change in process – that would be nice if you could outline how that happened in more detail.
Adam: Yeah. Absolutely. So, pre-Auto Vitals, pre-2015, it was printed work orders with details about what we need to check in a vehicle, what we need to do, and that was put in a binder and dispatched to the technician and just like a folder on the wall kind of thing. And notes went back and forth with handwritten notes and such, and we were using R.O. Writer at the time. Then we added AutoVitals as an inspection process, so now AutoVitals and R.O. Writer integrated with each other, so we didn’t have to use the paper work orders and such. They could just have all the jobs on their tablet. However, what ended up happening is we had these inspections, and we had piles of notes and pictures and everything like that, and I wasn’t estimating every single job from the inspection. With R.O. Writer’s system, it’s kind of cumbersome – nothing against that – but it’s kind of cumbersome in comparison to what we’re using now as far as like adding jobs and all those things. AutoVitals ended up making streamlining that process a little bit [easier] with the update work order button, where it was kind of like a widget, so to speak – that’s best way that I could probably describe it, where you hit a button and then all sudden, it didn’t just come right over like Protractor does now; it would just do the process and you’d see things moving on the screen, and all of sudden here’s this work, which made it faster, but the computer systems still had to do all of those steps, so sometimes updating the work order would take 25 or 30 seconds. And now with Protractor, it happens in five to 10 seconds at the most. So, what AutoVitals really helped us with is streamlining the process of now we can really be efficient with estimating every single job from the inspection and presenting all of that to the customer. And now with Protractor, it’s made it that much smoother, where it’s easier to estimate the jobs for the customer and get all that work out there. Whatever that whole cliche quote is about you miss every shot that you don’t take or whatever that might be, now that’s 100% what inspections are. You have to get all that stuff over to the work order, present it to the customer, estimate it in detail with pricing and how long it’s going to take to get parts from vendors. And with our old point of sale system that was not very easy to do when you start having four technicians in the back that are all doing inspections 100% of the time. There’s a lot of steps there, and then you have one service advisor, and I actually have two service advisors that are individually not working as a team with a production manager and service advisor – were separate at the time. So, that was a big transition, I guess you could say, how we got the inspection points in the customers’ hands as far as dollars and cents.
Uwe: So, how did it work from a –. There’s always a rush, and now you have to estimate more. That’s a time investment. And you have to present it to the customer. That’s not only a time investment, that’s also something where you could create, I didn’t come in for this, why are you telling me this, kind of potential hurdle. How did you overcome both the additional time and then maybe a potential customer perception trying to sell them more?
Adam: Yeah. Yeah. For sure. So, best way of doing it would be like, once the customer is at check in is saying, hey, with your oil change today we’re going to be doing an inspection. Once that’s completed, we will be going through at the end, giving a heads up on that, leading up to it. Can I say that we’re perfect with that? Absolutely not. I’m not perfect with it. Even when I was working as a service advisor, I didn’t always take that couple minutes potentially to explain the process every single time a customer went through the door. So, to now expect our team to do it, I wouldn’t be a very good boss if I was that way. Instead, what we end up doing is our customers are kind of conditioned into it now. They expect it. They kind of know that, hey, when I go in for an oil change, this is why I want to go to Pro Services because of how thorough they are with inspection. So, most of our customers these days anticipate that’s coming. John, our service advisor, does a really good job of saying, hey, Andy’s just about finished up with your oil change. He went through; he’s got the inspection. Would you mind if I go through that with you? And then, most of the people are not going to object to learning about the vehicle. And then he’s also very good about, this is just information. I just want to kind of give you a heads up as to what things are needed, what things are good, what things are potentially needed for future service or today’s service, and then just help them make a decision, as opposed to, hey, I’m trying to sell you this stuff. There’s a big difference there.
Uwe: And how about the additional time investment? How was that transition? Because I assume your production managers also build estimates.
Adam: Yep. Production managers build estimates. Yeah.
Uwe: So, you took that away from the service advisor so they can have more time to present to the customer. I see. So, you invested consciously in additional head, so to speak, specialized on building estimates and dispatching techs. Is that correct?
Adam: For us it wasn’t an extra head, so to speak.
Uwe: I see.
Adam: It was a defined role, so kind of reflecting upon what’s working, what’s not, and all of those individual steps that we were [taking]. Nick and I were each individual service advisors, not working together, per se. We had a couple technicians assigned to each of us. So, instead of doing that, we transitioned into where he was the production manager, I was a service advisor, and he built all the estimates and controlled all the workflow, and I just talked to the customers.
Bill: So, you put the right butt in the right seat is what you did.
Adam: Yeah. It was a transition for us there, and Nick is awesome with that. He still is our production manager right now, and controlling flow-wise, schedule-wise, estimating jobs, he does a great job with that. And then, John is really great at talking with customers, so it was a really pretty easy [and] smooth transition for them, too, working together that way to have that be a separated role. It does sometimes come with its share of differences between the old process, and the only reason that is, is because there’s just a handoff that ends up happening, where if I’m editing an inspection and building an estimate and sending it to the customer or whatever, all those things can go bang, bang, bang because I’m the one that’s solely doing it. Where now if you have a production manager that’s editing an inspection, building an estimate, there has to be handoffs there someplace, so where does that handoff happen? How long does it take in between? What’s the communication level? Those are the only hurdles, so to speak, of having a separate roles.
Bill: Do you find having the production manager takes the emotion of pricing away from the person that’s actually getting the approval from the customer?
Adam: Probably. Yeah. I worked in the back as a technician, and Nick worked in the back as a tech before we turned kind of service advisors. For me, it was service advisor, technician at the same time. For Nick, it was just technician then turned service advisor. And when you work in the back, and you think about how long a job is going to take and pricing and everything like that, all sudden you’re like, gosh, a thousand dollars for that job; that seems kind of expensive. I could probably shave a little time here and there, do it for $925, or something like that. So you start knowing the job, and then you start getting a little bit more price conscious where, if you have a service advisor –. John is different than your average service advisor where he does have a fair amount of mechanical knowledge but not working in the back tech experience. So, for him, he doesn’t look at $1,500 dollars as too expensive for that job or potentially too expensive or anything like that and think he should make it $1,400. He looks at it as $1,500; I’ll estimate it at $1,600, so I have a little buffer in case something happens. And it doesn’t affect his mindset going into it, because he doesn’t have, and probably doesn’t want to have, the tech experience knowledge in the back to influence the pricing structure that he’s talking to the customer about.
Bill: Do your service writers and your dispatcher use the Technician View to understand the load as it goes through your shop, how much can I squeeze in here and there, and so on?
Adam: We don’t use Tech View at all.
Bill: So, you just go off of the workflow?
Adam: We go off workflow and then we have our separate scheduler. It’s been kind of a hot button topic over the last five, six plus years or so, within trying to make something work that works for several different shops, but we use our Google calendar. We can block out at times, stretch, shrink it, pending on how things are flowing and working. We feel it’s more customizable for our shop to know when things are going to happen [and] when things should be done. It gives you the customization to say, I know that says five hours booked time, but our guy’s probably going to take three, just because he’s done them how many times before and we know how long it’s going to take, or potentially that’s a five hour job that might take six, or whatever it might be. So, where we feel it’s a little more customizable to use the Google calendar at this moment in time.
Uwe: If I may, that’s the next frontier to me. Tech View is great for the particular day, but not for any day later. Adam is one of those shops who would like to extend the scope, and for me, the opportunity is if Adam doesn’t use tech view nor the Protractor schedule but Google calendar, that’s a huge opportunity for us to build a scheduler which –.
Bill: Goes on out into the future. Yep.
Adam: It’s the dumbest thing for me ever that we have to duplicate notes in Google calendar. If there’s anything that’s inefficient with our process right now, it’s having to duplicate it in the Google calendar. However, we feel we are so much more efficient because we track time that way, that it’s worth the loss, trade off kind of thing.
Uwe: Yeah. That make some sense.
Bill: Do you feel what the shortage of technicians that we’re going through now, that it’s probably not going to change for a long time, that scheduling weeks and months in advance is going to really be something that everybody has to look at versus just handling whoever happens to walk through the door?
Adam: Yeah. It’s one thing that bothers me right now, just because the customer service end is like, gosh, I want to take care of your issue right away, and I want to get you in today and get it taken care of because that’s when you want [it]. It makes my mind explode thinking that, hey, it’s Tuesday and, gosh, we got to tell you next Monday. But that’s the reality of things right now. And we do try to adjust, get into loaner cars, and if we can move an appointment back, some are flexible and everything like that, but I hate to bump things back on account of a new appointment after somebody else called after the prior person made [an appointment]. Even if they have flexibility for two or three days, I still don’t like to use up that two or three days, because you never know what’s going to happen. So, we don’t like to bump things back, but it’s a definite reality right now, where things like shuffling schedule around us is definitely happening a lot. And going back to the way that we scheduled things, I don’t know how we would handle it. Some shops dispatch work off of first in, first out kind of thing, and I don’t know how that would work for us and be able to do what we do with four techs in the back and having a scheduling situation like that.
Bill: So, if you started from when you actually were full AutoVitals, what are your top things that somebody can do to reduce that time frame it took to from when you first got into AutoVitals to where you are today?
Adam: Interesting question.
Uwe: We have three minutes.
Bill: No pressure.
Adam: The things that may help other shops is that our shop and John’s shop and Frank’s shop and all these other people that have been with AutoVitals for so long like we have, have definitely streamlined the software as a whole. [We are] not specifically taking credit for it, because AutoVitals has obviously made things happen along that transition based off of what we kind of dreamed up and everything like that. So, as far as that goes for a new shop, joining on AutoVitals is understanding that some really good shops have been through all this. So, if there’s certain features or requests or anything like that, that you don’t feel are valuable, they probably are because we started with it for six years now, and this is what we feel is valuable and we’re doing pretty good. So, potentially looking at that as a new shop, there’s things that are more helpful for them today that we didn’t have five or six years ago, and that’s to no fault of AutoVitals. It’s just the progress of the way that the software has taken from before to now.
Uwe: And and we learn from each other. Right?
Adam: Absolutely. Absolutely.
Uwe: It was an amazing process of learning and Facebook chats at 10 a.m. or 10 p.m. It didn’t matter.
Adam: Absolutely.
Uwe: And iteration too until it worked.
Bill: And because the industry’s always changing, we’re still learning.
Adam: Exactly. Exactly. So, embracing new ideas and new concepts, things like having a production manager or whatever it might be. Just try it. Try it for a month, those types of things, instead of being resistant to some of those things that might be helpful to you as a shop that I was probably resistant [to] for five or six years in a lot of different aspects. The pricing structure that my fellow business partners, or whatever you want to say, for the first five or six years of our business, things that kind of slowed our growth down there, for any shop today is like learning that, OK. Embrace these differences, even if you don’t think that you could benefit from it. Just try it. If you find out in a week or a month it’s not going to work for you, that’s fine, but at least give it a chance.
Uwe: Wow. Isn’t that an awesome closure. Unfortunately, we have to [close this episode]. I would love to take another hour. Maybe we do something like the following: if John and Frank and you are OK, we just do another meeting, and what have you learned over the last five years, how is you today’s workflow, so we learn the differences but also how the fundamentals are the same. Maybe we turn that into another episode.
Bill: Or how having people like that network together as a group to understand what they’re doing, that’d be highly valuable.
Adam: Yeah. For sure.
Bill: Adam, we’re at the end here. I’d really like to thank you. There’s a lot of really great information there. I would like to encourage you to go to AutoVitals.com/radio to join us live if you can, and you want to listen to us on a podcast, just search for the Digital Shop Talk on your favorite platform and download it and use it. And then, I always say this, find somebody else in your trade area that might be struggling a little bit that could really use some of the information we have. There’s a whole warehouse of episodes to work with there. Share one with them, or have them join you live, and let’s see if we can’t help them out also. So, once again, thank you, everybody that’s here attending with us, and go out and make some money.
Adam: Yeah. Absolutely. If I could add one thing, guys and gals aside is, the shops that kind of feel like they just can’t get past some of those hurdles, whether it be a financial situation where you can’t hire another person, those are the shops that are very much like us and what we’ve been through, so there’s a soft spot for me for sure. So, reach out, because we were no different than a lot of shops that are potentially struggling with different things today, and if we can be a soundboard to bounce different ideas off of or anything like that, without a doubt, we would be certainly happy to help.
Bill: So, if Adam can do it, anybody can do it. Right?
Adam: Yeah. For sure.
AutoVitals: There you go.
Adam: As long you’re motivated and –.
Bill: Never give up.
Adam: You can’t expect it to happen. You’ve got to be motivated [and] never give up and that back against the wall attitude that we had, that survival mode attitude, and where we took it from where it was then to today sometimes gives you goosebumps when you think about it.
Bill: Awesome.
Uwe: Oh, yeah. Thank you, Adam. It was awesome.
Adam: For sure. Absolutely. Thank you, guys.
Bill: Bye, guys.