Top 10 Things Glass Shop Owners Should Know
By Keith Beveridge
From my kid’s perspective, I was born into a prehistoric world. There were no car phones (except for Jim Rockford’s) let alone smart mobile phones. There were no laptops, tablets or personal computers. There were mainframe computers with orange or green-screened monochrome monitors. Email was basic and organization-specific as part of your local computer network. You used a dot matrix printer if you wanted a copy. I was lucky enough to have a friend with an Atari Pong video game from Sears. It only had one game (Pong of course) but we played it for hours on end. We also had broadcast TV. Sometimes, depending upon the atmospheric conditions, we might get five channels—ABC, CBS, NBC, PBS and a local independent. If we wanted to see a recently released movie, we went to the local theater. If we wanted to see a classic movie, we waited for Sunday night and hoped it would be on the Wonderful World of Disney. To get in touch with our friends, we sometimes phoned them but mainly went outside and found them by riding our bikes.
Thinking back, I guess I would have to partially agree with my kids at least in terms of technology. The good old days were maybe not prehistoric, but they were the dark ages when compared to today. I would have to disagree with them when it comes to managing a business. Yes, we need to include technological advances in our business practices, but the actual business elements necessary to operate your auto glass repair and replacement business have not changed.
Here are my top ten things I wish I had known before operating a glass shop.
1 Vehicle Owners. Many vehicle owners do not know the specifics of the vehicle they drive. During one of my first visits to an auto glass shop, a vehicle owner brought his vehicle to the shop for a door glass replacement. When the technician started the replacement, he quickly realized that he had the wrong part. He had a door glass for a 2-door coupe, but the vehicle was a 4-door sedan. Fortunately, the shop’s auto glass wholesaler was able to swap out the part quickly. When asked why the vehicle owner indicated his vehicle was a 2-door, he said, without hesitation, that his vehicle had two doors on both sides. It never occurred to him that when he was asked the question on the number of doors that we were asking about the vehicle body style.
What this story illustrates is even truer today–communication is the key to identifying the appropriate auto glass part. Auto glass is and continues to become more complex. Some of these technical improvements include heated windshields, heads-up display, rain-sensing windshields, and the suite of ADAS systems including lane-keeping assist and/or control,
adaptive cruise control, emergency braking among others. Many of these features come standard or as part of a technology package. Many consumers do not know or remember these systems when discussing their windshield repair or replacement needs.
Fortunately, there are at least two solutions to this problem. The first is to overcommunicate when asking about the customer’s vehicle. Ask probing questions, such as “Do the windshield wipers turn on by themselves when it starts to rain?” You can also ask your auto glass wholesaler what part options are available for that vehicle. The second is to use a point-of-sale system that has VIN vehicle lookup and/or license plate lookup. While these systems are not 100% accurate due to the manufacturer’s data, overall accuracy continues to increase. Please see last month’s issue of AGRR magazine for a current list of point of sale suppliers.
The only way you will know what part you will need for that specific vehicle is when you get access to it and confirm what advanced features are needed. As a last resort, you may need to call your local new vehicle dealer to find the exact part for your customer.
2 Part Proliferation. The number of models and trim levels continues to grow. Statista.com reports that there were 43 new vehicle models introduced in 2020 out of a total of 260 vehicle models. Year-over-year model turnover was just over 16% in 2020. 2020 model turnover appears to be a below-average to average year. Most models also have different trim levels. Consumer Reports indicates that the average model has four or five different trim levels in 2018. Assuming the averages apply, this means there are more than one thousand different trim levels on the vehicles currently sold, and approximately 150-200 new trim levels are added every year.
The old models do not disappear, however, as they are still being driven. The parts for these new models just add to the number of outstanding auto glass parts. AARP reports that the average car life is 12 years. Since this is an average, we can assume individual vehicles may last for 15 or even 20 years. Eventually, as vehicles are scrapped, these parts finally drop out of the system.
In a recent advertisement, by FYG, reported they now produce over 30,000 different replacement parts. This is what they currently produce and does not account for discontinued parts or parts FYG never manufactured.
There are too many parts in the aftermarket for an auto glass shop to manage. Therefore, it is important to have relationships with several different wholesalers as it is unlikely that one particular wholesaler will have access to all your parts needs.
3 Auto Glass Quality. By definition, virtually all parts sold in the aftermarket are aftermarket auto glass. Yes, many of these parts have the logos of the tier one auto glass manufacturer to the vehicle manufacturer but does that make it the same part as the one sold to the vehicle manufacturer? Unequivocally no. The only way to purchase a bona fi de OEM part is usually through your local dealer.
Vehicle manufacturers have specific requirements when sourcing their auto glass needs. So does the aftermarket.
4 Training. Auto glass technology changes continually. The standard installation practice when I joined the industry was to use a butyl set that was backfilled with urethane. This is no longer applicable. With the advent of significant changes to vehicle design and safety systems, installation methods have evolved and continue to change. You and your technicians need to change with them.
Many organizations provide installation training. These include your auto glass adhesive manufacturer, your windshield repair manufacturer, Auto Glass University, AGSC® registered training programs, regional events and the upcoming Auto Glass Week™ conference and tradeshow. You can even take the AGSC training course and the certification test—both online. See www.agsc.org for more information.
5 AGSC, AGRSS and Certification. The Auto Glass Safety Council (AGSC) was founded in the late 1990s by industry participants gathered together to define aftermarket auto glass safety. In 1999, the Auto Glass Safety Standard was developed. This standard was developed to educate the motoring public and provides installation and certification standards for our industry.
The primary benefits to becoming an AGSC Registered company are: 1) lower your company’s risk by following the acknowledged industry standard; 2) instant recognition and credibility with insurance companies, third party administrators, and most importantly vehicle owners; and 3) an independent audit or your organization that will identify operational areas of concern. Similar benefits are available for your windshield repair techs and auto glass replacement techs when they become either qualified
AGSC will have a booth at Auto Glass Week where you can come and learn more about the organization. The AGSC and its National Windshield Repair Division (NWRD) will conduct training and certification testing during the conference. This training is free to all
attendees. Check out autoglassweek.com for additional details.
6 Customer Satisfaction. Several different industry organizations may know more about the company’s customer satisfaction and/or operational performance than you do. This will include insurance companies and third-party administrators. You may never see this information.
However, there are simple solutions for setting up your own programs. Google, Yelp and others may already rate your business. You could work with a search engine optimization or search engine management provider to help improve your web presence including your reputation management. You could also design a simple customer feedback program by using Mailchimp or similar. You send out a simple survey regularly to your customers. Mailchimp will even tabulate your results which you can then use to improve your marketing and operations.
7 Business Coach. Consider hiring a business coach for your business. While you may scoff at this notion, remember most professional athletes hire multiple experts to help them improve. Most professional athletes have a team of fitness trainers, nutritionists, workout partners, performance improvement coaches, and more. If pro athletes, who are at the top of their profession need a coach, so do you. Business coaches: 1) Push you to
perform and look at new opportunities; 2) Understand your business and offer you alternative views; 3) Hold you accountable; 4) Provide unbiased opinions; and 5) Act as a confidant and problem solver.
While a business coach is likely not cheap, they will more than pay for themselves resulting in improved profitability.
8 Financial Advisors. Along with your business coach, you should find trusted financial advisors. These include a business banker and an accountant who will take the time to understand your business and get to know your business and individual needs. You should align yourself with similar-sized businesses to get better advice. Working with a Big 4 Accounting firm is overkill. You should find advisors who will share their network of other professionals and advocate for you. This will grow your network and increase your business opportunities.
9 Financial Analysis. Are you reviewing your daily, monthly and annual financial information? If so, are you also reviewing it with your business coach or financial advisors? Not doing so is like playing golf without keeping score. How do you know if you are getting better? Or if you are going to win?
You should set up your annual budget and benchmark your actual results against your plan. This will help you to determine if you can afford to expand, purchase new equipment or even give your employees a raise.
It is safe to assume that your suppliers, lenders and even your customers are looking at some of your information. They want to know if you are going to get perform.
10 Break-even Analysis. This is the most important in your business. It is a measure of how well the business is performing on a short-term basis. You could look at this on a daily, weekly or monthly basis.
The calculation is quite simple. Look at your annual P&L. Add all your fixed costs such as rent, utilities, office, computer, communications, internet, insurance and similar expenses for the time period. Divide the total fixed expenses by 12. This will be your average monthly fixed costs.
Next, we need to calculate your gross margin percentage. Take your annual sales and subtract your annual cost of goods sold and your annual direct labor. This gives you your annual gross margin in dollars. Divide the annual gross margin by your annual sales and this is your average gross margin percentage.
To calculate your average monthly break-even, divide the annual gross margin percentage into your average monthly fixed costs. The result is the average monthly break-even sales. You can then divide the number of workdays in a particular month to calculate the average daily break-even sales. Or you can divide your average unit selling price into the average
monthly break-even sales and this will give you the number of units to break even in a month.
You can then use these benchmarks to track your performance. You could also share these as daily or monthly goals with your staff during your team meeting. They will also know what the minimum goal is for the applicable time period. You can then incentivize them
to either meet or beat these goals.
Deb Levy, Lyle Hill and I will be presenting on the newcomers topic at Auto Glass Week on Wednesday, June 9th at 1 p.m. I hope you can join us.
KEITH BEVERIDGE operates Beveridge Consulting. He is a former member of the boards of directors of the Auto Glass Safety Council (AGSC) and The National Windshield Repair Association (now NWRD) and a former chairperson of the Repair of Laminated Auto Glass Standard (ROLAGS).
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