Detail, Inc., Part XII:
The Series in Brief- From Beginning to End
By Prentice St. Clair
This is the twelfth (and final) in a multi-part series dedicated to the “business” of detailing. Those who have been following this series will expect a brief summary of last month’s column at this point in the article. That summary appears below, amongst the brief abstracts of all installments of the series.
We have come full circle with this word “business.” In the first article,
I noted that automotive detailing attracts would-be entrepreneurs because it seems to be a simple business to operate. Most people only consider the relatively simple process of detailing an automobile (the “operational” side) and do not consider the ramifications of running a successful business (the “administrative” side).
To run a successful detailing business, one must first learn how to effectively and efficiently perform the service. This requires some form of formal training, or at least reading or viewing high-quality training materials. You can’t expect to provide great results to your customers without first learning how to do it.
Secondly, one must tackle all of the administrative issues involved in running any business. These issues were the main focus of this article series, summarized below.
Prepare: Learn to do the Job and Run the Business
One of the first things you need to do to be successful is learn the business. Training is often overlooked for automotive detailing, but it will make the difference between dismal failure and shining success.
Learning “how to” detail can be accomplished by attending one of the many detail “schools” around the country, receiving one-on-one training at your facility, or through one of the many detailing manuals or video packages available today.
Learning how to run the business can be accomplished by reading one of the many “how-to” books on business success, attending community college courses, through programs provided by your local municipalities, working with a business consultant, or consulting with local business leaders.
One of the easiest ways to learn more about the auto detailing business is to get involved in the industry. Talk to your competitors, check out the internet forums, attend the trade organizations’ conventions, subscribe to the many trade publications available to us, and attend workshops and seminars put on by local suppliers.
Employee and Labor Issues
As your business expands, you will find it necessary to hire help. Remember that the responsibility for employee performance ultimately lies with the owner of the business. Inadequate training, inadequate motivation, and poor recruiting can cause poor performance.
Recruiting is a never-ending process; there will always be turnover in a detail business. Once you have a good employee, train the employee well, and treat him or her as you do your customers. Provide a compensation package that discourages leaving, and a work atmosphere that encourages best performance.
Good Bookkeeping Practices
Before your business expands, get in the habit, from the start, of keeping good records. With good bookkeeping practices, you can track the sources of your income, monitor your expenses, minimize your tax liability, and show profitability when seeking future funding or sale of the business.
Start with a separate checking account for your business. Write out
invoices for each job performed, and keep receipts for all expenditures. Use a computer-based bookkeeping system, or pencil-and-paper, to create income categories and expense categories. Check with a professional bookkeeper or accountant on how to do this.
We looked at marketing — activities that encourage the transfer of goods or services from a provider to a consumer — as a multi-step process through which the customer is guided. It starts with promotional activities (advertising, word-of-mouth referrals, etc.) that lead the customer to your business. At this point, it is necessary to convert the potential client into a paying customer.
At the risk of upsetting classic marketing instructors, I like to include the actual service delivery as part of the marketing cycle. That is, the customer is further “sold” on your business when he or she receives spectacular service and outstanding results.
Finally, the customer is encouraged to return to your business and bring friends through follow-up thank-you cards and future mailing campaigns.
Create a Maintenance and Supply Process
Part of running a successful detailing business is creating a process through which all needed supplies are ordered, tracked, and re-ordered on an on-going basis. When starting the business, work with a supplier that can offer you a full range of professional-grade detailing chemicals and equipment. Each day of operation should include a “regrouping” period (either at the beginning or end of the day) during which everything in the shop is tidied, and all chemicals are topped off. At a less frequent interval, perhaps once a month, all equipment should be thoroughly checked, cleaned, and repaired as necessary.
Taking a pro-active approach to maintenance helps prevent costly downtime due to equipment failure and the lack of critical supplies.
Look Professional, Be Professional
A commitment to excellence is one of the most important steps a new detailing business owner can take — a conscious decision to take a professional approach. This involves: creating a professional look within your budget, acquiring training and professional supplies, and setting pricing that can generate a profit as well as investment dollars.
You Can’t Afford to be
The primary purpose of insurance is to protect you from losing your business, and the income that comes with it, in the event of a catastrophe like the shop burning down or an accident while driving a customer’s vehicle. Having adequate insurance can also be used to help promote your business. It is an example of your commitment to professional excellence. It can also help convince customers to do business with you because they know that their vehicles are covered while in your possession.
Important types of insurance that you should have include a “garage keeper’s insurance policy” that covers you in the event of damage to customers’ vehicles, damage to non-customers’ vehicles, and customer injuries. Additionally, your fixed location should be insured with “property insurance, building portion.” Finally, equipment should have coverage against loss or damage. At a fixed location, this is “property insurance, contents portion.” For a mobile operation, it is called “inland marine.”
Image — What your Customers See
What does the customer see when looking at your business? The line between “image” and “marketing” can be blurry — part of your marketing is your image. It’s important to choose an appropriate business name and colors,
as well as perhaps a logo. All of these should be applied to your signage, cards, and other business-related printed material, to start branding your automotive detailing outfit.
The look of your technicians is also important, including their personal grooming habits and your uniform policy. Additionally, how the work is done is important; create a show for the customer. Fixed-location operators need to have a clean and tidy shop, inside and out. Mobile operators must have clean vehicles and keep the work area tidy.
Creating and maintaining a good image will help to attract and retain customers. It will also help your customers feel more comfortable paying your price for your brand of quality detailing.
Choosing the Pricing Cycle that you Want
I introduced the concept of the “pricing cycle,” which, for the typical detail business, begins with the operator setting prices too low, which leads to lack of profit, the inability to fund business improvements, and ultimately to business stagnation or failure.
Why does this happen so often in the detailing business? I believe it is because of the general perception that detailing is a relatively easy and inexpensive business to start. Many new operators move into entrepreneurship from an employment situation and are excited about the first few days of income, not realizing that their low pricing does not account for operational expenses and taxes.
Low pricing also comes from the fear that customers won’t pay higher prices. Yet with the confidence derived from professional training and the use of professional equipment, the detailer committed to service excellence can command a higher price than most operations by offering superior service,
better results, and a commitment to delighting the customer. With appropriate marketing efforts, detailers can find willing customers who have disposable income and desire the best service.
Part of running a legitimate business is to be in compliance with local, county, state, and federal agencies that regulate the operation of your business. Some concerns are the possession of a business license, wastewater reclamation, the need for workers’ compensation insurance if you have employees, differentiating between employees and sub-contractors, and adherence to mandates of the Occupational Safety and Health Administration (OSHA).
Compliance can be a hassle, but it is necessary. Moreover, your efforts at compliance can actually be used as part of your marketing program. Show your potential customers that you make the effort to operate an above-board and legitimate business.
As you can see, operating a detailing business is much more than just washing and waxing cars. Instead, a business requires that you take on several administrative concerns as well. It is my sincere hope that this series of articles will help you accomplish the goal of running a professional and successful detailing business.
Prentice St. Clair is president of Detail in Progress, a San Diego-based automotive reconditioning consulting firm. To contact him, e-mail Prentice@DetailinProgress.com or call (619) 701-1100.