What could I possibly have in common with Jack, as in the Jack of “Jack and the Beanstalk” fame? Not much, you would think. But, we actually have something very basic in common. We both planted something in the ground with almost no idea of what the result might be.
Sure, Jack knew he had seeds and the seeds were supposed to be magical. But, do you really think he had any idea what he was in for? Do you really believe he was prepared for the beanstalk, the giant, the golden eggs or any of that stuff? I don’t. I think he planted the seeds because that’s what he thought he was supposed to do and was pleasantly surprised by how well things seemed to work out.
I did virtually the same thing. I planted some lifts in the ground without knowing exactly what would follow and the results were just about as spectacular. Jack’s adventure may have taken place in a fairy tale, while mine was firmly planted in reality at 607 East Los Angeles Ave., Simi Valley, CA. But, there are other parallels if you look closely enough. Jack’s adventure began in desperation and I’m not altogether sure mine didn’t begin there as well. Not the same kind of desperation, perhaps, but we both shared a certain sense of exasperation brought about by the often mundane, yet not-so-easy-to-deal-with challenges of the every day.
Things weren’t going too well for Jack when he set off to exchange the family’s primary asset (the cow) for a better future. And, realistically, aren’t we all trying to balance the use of our assets against return on equity every day?
Since almost everyone knows Jack’s story and virtually no one knows mine, I’d like to take a minute to share a little bit of that story with you. We are a traditional six-bay shop that has been family-owned and operated at the same location since February 1980 (You might recall that Jack’s was also a family business!). The building is clearly divided between the administrative area up front where the customer lounge, offices and stockroom are located, and an attached 80- x 33-foot metal building where the actual automotive service and repair work gets done.
When we started, we were trying to stretch our resources as far as we could and decided four lifts would be adequate for the six stalls. For the 14 years before moving to Simi, we operated a three-bay service station with a single-post lift planted firmly in the center of each bay.
We never thought much about lifts until we began the design phase of our Simi Valley project, and then we thought about them a lot. We took it for granted the lifts would be “planted” in the ground rather than installed above ground because that was what we saw in the majority of the shops we looked at while trying to find the “perfect” design for our shop.
We placed two single-post lifts in the first two bays, thinking they would be used primarily for quick service or light repairs. And, we placed two, twin-post, side-by-side in-ground lifts in bays four and five because we knew there were times that unobstructed access to the center-line of the vehicle would be necessary, not just “nice.” The third bay would be for tuneups; I’m not sure anyone was calling it driveability back then, and bay six would be for heavy line work not necessarily “requiring” a hoist. It made perfect sense, and because it made perfect sense, we made it work.
Years went by and our model was functional, or at least that’s the way it seemed to us, until we were confronted with the reality of an exceptionally high water table. Like many suburbs, our area was primarily involved in agriculture before it became a destination for disillusioned city dwellers. The farming was good because there were a number of underground aquifers that provided more than enough water for the groves. Unfortunately, this same water was alkaline enough to eat away at anything in the ground that was not organic. How do I know? Because the ground water devoured the plumbing, tanks and cylinders of the first crop of lifts we planted in it!
We were “smarter” when it came time to replace those lifts. The first lift to go was the in-ground double in the fourth bay. Not wanting another premature failure, we replaced it with an above-ground double and added a fifth lift, another above-ground double, to the third bay. By that time we realized, or at least felt, the flexibility a lift provided was worth the investment.
We made the decision to go above ground for obvious reasons. We didn’t have the time, the money or the patience to deal with failures like these while still trying to build a business. Besides, everyone knows failures like these always present themselves at the worst possible moment and there was a significant difference in the cost of both the lifts and their installation.
I’d love to tell you that we measured and monitored productivity closely enough to prove our hypothesis, but I’d be lying. It was a hunch…albeit, a strong one.
The two in-ground singles up front failed next. However, by this time technology made it possible to replace these lifts with in-ground, single-post lifts that were encapsulated in fiberglass and used biodegradable fluids. The plumbing would be wrapped in special tape and all the exposed metal would be properly insulated and grounded to reduce, if not eliminate, the possibility of electrolysis.
How much difference did the extra above-ground lift make? I really couldn’t tell you. Sure, it was easier and, yes, it was more convenient. But, as far as a return on what had turned out to be a pretty significant investment is concerned, I didn’t have a clue. I didn’t have the tools or the ability to track something like that either, at least not yet.
The lift was there. It made things easier, or at least it seemed to, and that was good enough for all of us.
Years went by, more than a decade, in fact. Years of peeking through and moving between and around the forest of columns that had sprouted in the center of the shop. Enough time passed for us to actually wear out the in-ground double in bay five. By now, snaking through or around the obstacle course created by the above-ground lifts had become ‘tedious,’ if nothing else.
Yes, they are less expensive. Yes, the installation cost is nowhere near as much. And, yes, they work just fine! But — and this is a big “but” — the wear and tear on your body can be significant. Getting in and out of a vehicle on an above-ground lift is a special challenge after your body has a little mileage on it and the extra care opening and closing doors in order to avoid damage to both the vehicle and the lift, while necessary, can actually become annoying over time. Set-up on some vehicles can soak up time like a sponge, crippling technician efficiency and impacting service bay productivity in a very negative way.
I decided we would be mixing things up a bit on the next crop of lifts. We would replace both above grounds because we had managed to wear them out by this time, the in-ground in bay five because it would cost more to restore or repair than it would to replace it, and we would place a sixth lift, a heavier duty above-ground, in bay six. Two of the doubles would be heavy enough to handle some of the heavier SUVs and full-ton pickups we work on, and the other two would be for just about everything else.
That was more than a year ago and this time I made the commitment to track the return on the investment we were about to make. The only question was: How? How do you measure the impact different lifts, or any lift, for that matter, would have on service bay productivity and/or technician efficiency? A simple ‘before and after’ comparison should be adequate. But, there are still a lot of variables — some subtle, some not.
How do you track technician efficiency or service bay productivity on one kind of a lift versus another? Do you track set-up time separately? That would mean clocking on and off a job before and after you set the pads. But, it would also mean doing the same thing on the old lift, the one being replaced, in order to create a baseline. What are the chances of that happening in your shop? And, just how are you supposed to capture the increases or advantages enjoyed by placing a lift where no lift had been before?
In the end, I gave up worrying about it for the moment. We were too busy enjoying the benefits the lifts had provided to figure out what to document, when it finally occurred to me that the only thing that really mattered was the bottom line and the bottom line in our business is tied directly to service bay productivity. The only question I had to answer immediately was: Did adding a lift and/or replacing the previous lifts with the new lifts increase productivity and general revenue and, if it did, by how much? If you knew where you were before the lifts were installed and you were someplace else after, you should be able to track the difference without too much trouble. That difference could then be translated into dollars and the dollars multiplied by the service life of the lifts and just like that, the question is answered. We would worry about documenting that difference later on.
It’s been exactly one year since the new lifts were installed and the results are pretty impressive. We are almost 400 hours ahead of last year’s numbers. Gross profit has increased by more than 3% and we are almost $75,000 ahead of where we were the year before the lifts were installed. That’s almost a full month’s sales and almost twice the cost of the new lifts. Unfortunately, however, you don’t get to pay for equipment with retail dollars; you pay for it with profit dollars. Sure there may have been other contributing factors, but none more dramatic than these, and at this rate of return, you can see that it won’t take very long before a significant return on investment is realized.
So, how do I feel about my “Magic Beans?” Was the experiment a success? Am I happy with the result?
I’m happy enough with the return on this particular investment to reinvest in a fifth double to replace the single in bay two. That lift has a 1,500-pound alignment rack on it, and over the years it’s been used and abused. We are going to replace it with something heavier to handle the larger SUVs and pickups we service. Only this time we’ve found a way to document the results.
You wouldn’t be much of a farmer if you just threw some seeds down in the spring without knowing what to expect in the fall. But, that’s just what Jack did. He planted his beans and got a beanstalk; a beanstalk, golden eggs and much, much more.
I planted lifts and got increased productivity, higher revenues, greater profits and happier technicians. I don’t know about you, but that sounds like magic to me!