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A New Profit Center: You

Now that you understand the theory behind how professionals get paid for their hard-earned knowledge and expertise, it’s time to apply it to your business.

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In part one of this three-part series ("A New Profit Center: You," October ’98, page 70), I explained the theory and application of why and how professionals get paid for their hard-earned knowledge. I also shared how my late father applied this to his automotive business more than 20 years ago and explained why all of us should be doing the same in a collective, consistent and professional manner. The bottom line was this: We in the automotive industry are no less professional than the "entitled" professionals and should get paid for what we know, as well as what we do.

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With the theory of it all fresh in your mind, let’s talk about how hundreds of shop owners and managers are now putting these ideas to work and creating a new profit center.

Is It Worth It?
If you had a dollar for every time someone said, "Hey, you’re into cars, what do you think?" you’d most likely have accumulated a lot of extra cash by now.

But there’s a difference between that scenario and going to see our doctor or lawyer and asking "Hey, you’re in the business, what do you think?" The difference is that most of us don’t charge a fee like our "professional" counterparts do.

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Easier said than done, you reply. Not so. If you set down the rules and follow them, these same professionals — along with accountants, stock brokers, bankers, dentists, veterinarians and just about anyone with a drivers license — will pay you for your advice. Why? If you’re an experienced, honest automotive professional, then who else is better qualified to answer automotive questions?

"I can’t charge for every question someone asks," you say. Once again, stop and think like the professional you are. Follow this simple rule taught to every lawyer, everywhere. Charge only for what you must research. In a lawyer’s case, what he charges for is likely to save his client time and money. In your case, you have the same opportunity. You can also think of it in terms of "is it worth it?" Think about it. To the lawyer, you ask, "Is it worth it?" To the stockbroker, you ask, "Is it worth it?" We’re paying for our pre-conceived notions of their expertise in their respective fields. So now let’s apply this to our world.

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Here are a few examples:

Client No.1: "Hey auto professional, I was looking at this vehicle, and I think it’s a beauty, but I’m not in the business. Do you think it’s worth it?"

You: "Well, I’ll have to do some research but, either way, after I look at it and run some numbers, I can probably save you time and money or help you negotiate a better deal based on my research."

Client No.2: "My insurance agent said before they insure my car/truck/van/street rod/antique/kit car/low rider/ultra custom/etc., they need me find out what it’s worth."

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You: "Well, I’ll have to do some research but, either way, if I at least document its worth, it’ll probably save you and the insurance company a lot of time and money down the road if anything should happen to it."

Client No.3: "This vehicle’s been in the family for quite some time, but it’s time to sell it. What do you think it’s worth? "

You: "Well, I’ll have to do some research, but I’ll be glad to help. Our appraisal fee is only $$, but I think it could save you some time and money. Otherwise, you may ask too much and never get rid of it or price it too low and then really be sorry."

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Client No.4: "My vehicle is going to become a classic soon, but it needs a lot of work. Do you think it’s worth it?"

You: "Well, I’ll have do some research to find out what restoration would cost vs. how much the car would be worth after the work was done. Either way, it could save you some time and money, especially if it would be a bad investment."

In the preceding examples, you’re providing a valuable service and, in the process, serving as a professional automotive resource, appraiser and sometimes an investment counselor. All for a modest fee that thousands of people are willing to pay to save them time and money.

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Customers, Customers and More Customers
Just who are these thousands of people? Let’s start with your client base, your friends, your neighbors, your doctor, your lawyer, your dentist, your investment broker, your insurance agent and so on. Ask yourself, do these people ever buy cars? Sell cars? Insure cars? Get vehicles restored? Get divorced? Have to help settle an estate in which a vehicle is involved? If they’re licensed drivers, they’re prospective clients who’ll pay for your automotive expertise — guaranteed — if you let them know you possess this expertise. "Ahha!" say the skeptics. We knew there was a catch.

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Let’s put things in perspective. Let’s say you just bought a new spraybooth or a state-of-the-art diagnostic system for $100,000. Don’t you think your client market should know about it and how much more professional it’ll make your business? Well, OK then.

Let’s say you’ve read this column and found out you have a new profit center that was just laying around in your mind, waiting for you to learn how to use it. It didn’t cost a cent, but it promises to return more net profit over a longer period of time than any single or combined thing in your business — without adding more space or more employees. Don’t you think your client market should know about it and how much more professional it makes you and your business?

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When properly presented to the media, your existing and new clientele will come knocking on your door. Why? Demand and the fact they now know you offer a service they may need. Let’s go one step beyond your client base, your friends and your contacts. Did you know that members of local and national car clubs contribute more than $20 billion to the automotive industry? Many of these car- and truck-hobbyists already come to you when they’re fixing up their vehicles. Why not grab a share of that $20 billion by offering to be what you are, an automotive expert.

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All of us in the automotive industry are in an incredible and unique marketing position. Collectively, you (every auto facility from the one-person shop to the mega-shops) already provide the general driving public with most of its automotive needs. With such a captive market, doesn’t it make good business sense to join forces and start providing a uniform source for your automotive expertise for a reasonable fee? Once again, keep in mind that my business has been doing this for more than 20 years, and I’ve taught many other shop owners to do the same. It’s not about selling. It’s about providing information.

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Getting Down to Business
If you consider yourself and your company a truly professional organization with enough years experience in this field to prove you know more than the backyard hobbyist, then you’re in. All it takes is your automotive background, some common sense and the ability to fill out a form similar to an estimate sheet. This form lists obvious depreciable items (obvious to the trained eye); appreciable items, like a new engine, paint, upholstery, etc.; and use of a common market-value guide, like the blue or gold book, to make the necessary adjustments in determining the condition and/or value for a client’s vehicle. The equation goes like this:

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Average market value + appreciable items – depreciable items = fair market value.

Earlier, we discussed several scenarios that occur thousands of times each day in what is your potential market — perspective clients looking to buy, sell, restore or insure a vehicle, as well as other cases like the hardship of finances, divorce and estate settlement. But where do you start if you’ve never charged for your expertise and don’t know how to go about it? The first stop is your local newspaper. (Don’t worry. I already have an all-purpose press release done for you.) The press release will contain enough information about your company and it’s new services to start the wheels rolling.

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Now the second step. It’s up to you and your staff to make copies of your newspaper press release and make sure every past, present and future client knows you offer an intellectual automotive service.

The third step is to copy the write-up and send it to every auto insurance agent in your area. Enclose a few business cards, as well as a self-addressed stamped envelope for them to send you a few of their business cards. The power of reciprocal referrals is so intense that this alone could fill your shop. Insurance agents see your potential new clients — car owners, buyers and sellers — every day, and you indirectly help them every time you help their clients. Now do the same for every local or national car club that has a chapter in your market, your parts/material suppliers, and your bankers, lawyers and accountants.

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Feeling overwhelmed? Don’t — keep the task simple by sending a short, hand-written note with each press release. Take a half-hour each day to do this and then watch your results. You’ll be amazed at how many people you’ve contacted who know people who need your existing and new service.

A Professional Makeover
When forward-thinking shop owners and managers across the country begin to add this service to their businesses, they’ll realize the impact of providing an intellectual automotive service. It will provide a tremendous boost to the old stereotype — grease monkey, motor head, etc.

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Also, as the public begins to realize the amount of time and money they can save by tapping into our intellect, the amount of professional respect and accompanying income will increase. And that’s good business for everyone.

Writer John David Lake has 25 years of industry experience and travels the world teaching the art of appraising as a professional income source. He’s also the owner of a third-generation automotive facility in Maryland. Call him at (800) 956-LAKE or e-mail ([email protected]).

Measuring Your Success

All this stuff about getting paid for your knowledge sounds good, but a piece is missing. Once you’ve started this new service, how do you keep the momentum building and how do you track its progress?

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The solution to this is an Internet Web site that’s supported and visited by professional organizations; local, national and international car and truck clubs; insurance agents; lawyers; bankers; accountants; and your extended market. And it’s free to use by anyone anywhere. In its simplest form, it’s a way for people who need your services to quickly find you.

The demand for your services already outpaces the supply of those offering them. (I know because I’m the Web master of this site.) Presently, there are only a few hundred people offering automotive intellectual services — a number woefully inadequate for the size of the market.

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Since this site was built just for you and your new service, you’re free to use it on your business cards, letterhead and advertising. It’s just like the press release, except it’s interactive and accessible 24 hours a day.

Professional Courtesy

When I first charged for my "expert" opinion at age 18, I felt inferior and challenged but, to my surprise, I saved my client several thousand dollars (and untold aggravation) for a vehicle she was going to buy.

After my inspection, I found a number of somewhat hidden problems. First, the car had a new paint job, but the surface under the fresh paint was checked and cracked. For what the seller was asking and what the buyer was expecting, it really needed stripped and painted again (a cost of $2,000 at that time). The right rear wheel was back about 2 inches, and it didn’t have service records. Possible recovered theft? Frame damage? Things didn’t add up to the seller’s claims. It turned out the car was a recovered theft but with no paper trail.

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My client, a very successful real estate broker, was grateful for my service. That same year, I bought my first house. My realtor client found me a really great deal, and I was more than glad to pay her for her expertise.

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