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A New Profit Center: You

Most shop owners pay themselves a salary for their administrative tasks, but how many bill for their “professional” services – for their knowledge of cars that comes from years of experience?

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Note: In the upcoming three-part series,
we’ll show you, step by step, how your business can increase its
net without adding staff, equipment or shop space.

Get paid for your knowledge.

You’re probably asking, "Is this the
new catch-phrase of the month, or does it have a meaning that’s
useful to my business?"

Good question. Well … for hundreds of shop
owners and managers, this has become a very profitable part of
their everyday vocabulary. Why? Because they’re charging for their
most valuable asset: knowledge.

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Who’s paying? Those who don’t possess your
automotive expertise – but need it. According to recent marketing
statistics, the demand is high, and the market is growing at an
unparalleled pace. But the greatest opportunity for our industry
is in becoming a collective alliance; that is, the more of us
who learn to charge for our knowledge, the bigger the market gets.
How big could this be? Hundreds of automotive organizations represent
hundreds of thousands of motorists who will pay for our knowledge,
and these organizations have told us, "Organize this knowledge,
and we’ll buy it."

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This isn’t about a dream; it’s about the reality
of action.

For years, we’ve been rightfully told that
if we want to be paid what we’re worth, we must become professionals
– and most would agree we’ve accomplished this to some extent.
But, to this day, we still charge a certain hourly amount for
our labor rates, which are, for the most part, performed by our
production workers/technicians. Most of us pay ourselves a salary
for our administrative tasks, but how many of us actually bill
for our "professional" services – for our knowledge
of cars that comes from years of experience in our chosen industry?
This isn’t about disrupting your relationships with your clients
or changing your rates or billing habits; it’s about tapping into
a new profit source: you.

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A Father’s Lesson

Being the owner of a third-generation automotive
facility (and starting at the bottom more than 30 years ago),
I, like many of you, have seen a lot of change in our industry.
But it was my late father who taught me a valuable lesson about
making money by using the mind. Many of his clients were well-off,
and he noticed something different about the way they talked and
handled themselves. When they asked for my father’s "experienced
automotive opinion," he would be honored that professionals
would value what he had to say. He would then proudly proceed
at length to answer any questions or offer any advice on a particular
automotive subject. But, when he asked their advice on something
they specialized in, they would say, "Call my office, and
we’ll see what we can come up with."

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My father’s clients weren’t being rude, just
professional. They were taught never to "give" an opinion
"on the spot" for free. And, if the opinion were given
in their office, you can bet you were going to pay for all those
reference books, that big office and, most importantly, their
expertise. After all, it’s just not good business to give advice
for free, unless you’re a bartender. And even then, you’re expected
to tip well for their time.

This difference in my father’s expertise and
his well-to-do, professional clients fascinated my father. In
no time, Dad built a little office near his shop. He filled the
walls with books he had from the shop, and the rest came from
the Salvation Army surplus store. Since Mom was an upholsterer,
she made two expensive-looking chairs for Dad’s new "study."
The total cost for all this was less than $300 (including an old
$10 mahogany desk that just needed some polishing).

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His experiment was ready.

One day, a long-time client who was a doctor
stopped by. He wanted to buy a new Cadillac and asked Dad how
much he should sell his old car for. Dad’s reply was "I’ll
need some time to go over it and do some research. Why don’t you
stop by Saturday, and we’ll see what we come up with." The
Doc came by that Saturday, and Dad took him into his study. "Doc,
the dealer was going to give you about $800 less than what you
could sell you car for outright. I suggest you sell it yourself,"
said Dad.

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The Doc was very pleased with Dad’s findings
and handed my father a $20 bill and a strong handshake. My father’s
consulting business had begun.

And we can learn from it.

Good Advice Isn’t Free

People expect – and are quite willing – to
pay for solid professional advice. If you don’t charge for it,
how do you think the value of your advice will be perceived?

Respect for our valuable knowledge will only
be gained when we consider ourselves equal to other professionals
– and charge accordingly. We’ve already made great strides by
investing in our facilities and in ourselves. Isn’t this the next
logical step in our evolution – to be accepted and paid as professionals?

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Just so you know, I still own and operate
my family’s automotive business, but I have a management team
who runs it. My two other associates and I spend most of our time
teaching others "car consulting" and continue to provide
the service directly to our own clientele, who now number in the
thousands. Our billing rate averages $100 per hour, and we’ve
never been questioned as to the value or quality of our services.

In article No. 2, we’ll teach you, step by
step, how to blend your own car consulting service into your existing
business, no matter what the size, area or volume. And, considering
that the only overhead in car consulting is your own head, it
makes good sense – and good business – to start charging for your
hard-earned knowledge!

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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]

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