What is the most valuable asset of your business?
Believe it or not, it’s not your real estate or your equipment, although those items cost you plenty. The most valuable assets of your business are the people you employ. The individuals you trust each day to produce quality work and service your customers are not only important to you but also are critical to a prospective buyer.
Having sold more than 60 collision repair shops generating almost $200 million in annual revenue, our M&A team is keenly aware that one of the first questions a buyer is going to ask us about your business is, “What does the team look like? Is there someone ready and able to replace you, Mr. Owner? Do your managers understand your financial statements? Are they part of the budgeting process? How are they compensated? What types of benefits are they offered?”
I know some business owners are really reluctant to share highly sensitive information with their employees. I get it – it’s like giving away the keys to your kingdom and not knowing if you are going to be robbed in the middle of the night, or more likely in this case, the employee leaves you. Many fear that the employee will begin expecting a higher salary once they see all the money you are making.
However, what generally happens is that the employee will get a greater appreciation for all the expenses associated with running the business that they never considered. It’s OK for you to make money, in their opinion; if you are doing well, they should expect to do well also. Teach them how to read the financial statements, talk to them about the equipment purchases and OEM certifications you are considering, why you are considering them, and what they will cost the business both in the short term and the long term. This can be one of the greatest ways to show your employees how much you respect them and value their contributions.
Retaining talented employees is tough enough, but recruiting new ones may be an even bigger challenge. How do you add talented people to your team during the “Great Resignation”?
According to WrenchWay, less than 5% of technicians are actively looking for work, yet 85% of employed professionals are open to changing jobs. Traditional postings on job boards are not going to capture the attention of this audience. Why? Because if they are not actively looking for a job, they are probably not regularly checking the job boards.
That means you need to be where prospective employees are. So get creative and get social. Good technicians know other good technicians, right? In fact, more than 50% of them are willing to post a job opening on their personal Facebook or LinkedIn page. Do you remember that old saying, “birds of a feather flock together”? Well, it’s true, so remember it.
Secondly, objectively review your pay structure and the benefits you offer. Are they working for your team? Thirty percent of technicians reported that pay was THE most frustrating aspect of their job. Unhappy technicians become easy prey for your competitors. They should not be incentivized to leave you to make more money at a fast-food restaurant.
Another source for finding potential new hires is to get involved with your local schools and help fight the prejudice against students entering the trades. Educate teachers and guidance counselors about the career opportunities in your industry. Highlight career paths, potential earnings, and your own personal testimony about why you entered the industry. You might offer to speak with students, provide tours of your facility, or buy some new equipment for shop class. You may need to offer financial assistance to buy tools for these younger, inexperienced employees, but your reward could be very loyal, quality employees.
I recently met with a multi shop owner and learned he had entered the business as a troubled teen. The work gave him a new purpose and he progressed quickly under the eye of his mentor. Years later, as an owner, he is repaying the opportunity that was bestowed on him.
Finally, take a critical look at your facility and consider whether or not it provides a nice working environment for your technicians. Is it climate controlled? Is it clean and does it have good lighting? Surveys report that the majority of technicians would love to see an unscripted video of the shop and candid conversations with your employees to determine whether or not it would be a good fit for them.
The hard reality is that there will be an estimated shortage of over 640,000 technicians (auto/diesel/collision) through 2024. Competing for the existing talent pool will be tough, but if you want to continue servicing your customers and growing your business, your recruiting efforts will have to adapt. Yes, it takes time and money, but when you are ready to sell your business, it will pay dividends. Buyers are willing to pay premiums for experienced teams that run like well-oiled machines and quick to penalize a shop with unresolved HR issues or staffing deficiencies.