How would you like 19 other automotive repair experts on your Board of Directors? Do you really know what a well-managed auto repair business gross profit on parts and labor should be? Do you really know what experienced technician productivity and efficiency ratios should be? How would you like to receive 40-60 tried and true business ideas, in writing, per year? Where can you receive help with an issue from other well-qualified and successful shop owners?
You can receive all of the above from belonging to a well-managed 20 Group. A what? A 20 Group. What in the world is a 20 Group?
A 20 Group is a group of business owners of similar interests who share their financial data and management styles, and meet two or three times per year to discuss their mutual concerns. A professional company, whose business it is to make these groups successful, moderates the group. I will share more details later, but let me first explain how our group got started.
Over 14 years ago, the first truly national independent auto repair shop 20 Group got its start. Bosch Authorized Service Center (BSC) Council members held their first meeting near Atlanta to discuss issues relating to Bosch. Each of the 10 members was a successful shop owner and represented Bosch Authorized Service Centers across the U.S. Having been exposed to 20 Groups in my former life with Ford Motor Company, I recommended that the 10 of us meet a day before the Bosch meeting to discuss strictly business issues that were of interest to all of us.
Before the meeting, I mailed out a page of topics and each council member ranked them in order of importance from one to 10. A meeting agenda was compiled starting with the topics of most interest. Each member also brought his or her latest financial statements for reference. This one-day meeting was a huge success.
The idea remained dormant for a year or so until the BSC national meeting was held on a cruise ship in the Caribbean. Most of the members from the first BSC council meeting were present, and expressed how informative that meeting was and suggested we do it again and again.
One of the council members, Steve Beckley from Des Moines, volunteered to investigate the possibility of hiring a professional moderator for our group. He found NCM Associates in Kansas City, the company that was the developer of the original “Twenty Group” in 1947, made up of Ford dealers.
NCM had never moderated an independent automotive service group, but was more than willing to give it a try. A pilot meeting was scheduled and several of the original BSC council members attended, as well as other successful shop owners invited by them. A total of 14 shop owners met with Morley Sellons from NCM during Industry Week in Las Vegas. He spent an afternoon explaining what was involved, what NCM would bring to the table and the costs of maintaining a successful group. Those present voted unanimously to go forward, and the “Service Center Scholars” 20 Group was born.
One of the difficulties in bringing several independent shop owners together was the fact that there were as many different methods of financial accounting as there were shop owners. Most 20 Groups involve franchised new vehicle dealers of one brand and similar sales volumes (for example, Ford dealers with a sales planning volume between 350 and 750 vehicles per year).
You would not want a dealership that sells 6,000 vehicles a year in a group this size for obvious reasons. The dealer would be in a 20 Group of large dealers with similar sales volume. All of these Ford dealers would be using the same financial accounting system, making comparative financial analysis much easier.
The same holds true for independent auto repair shop owners. A shop with annual sales of $350,000 has similar, but also very different, issues than a shop producing $2,500,000 in annual sales. Mixing these two shop owners in the same group will not adequately serve the interests of either business owner.
GETTING ON THE SAME PAGE
One of the first challenges of our group was to design a standardized accounting system, and NCM was a tremendous help due to its 50+ years of experience in this area. We have been “fine tuning” it once a year for 10 years and NCM has printed a detailed accounting manual for us to follow.
Each member submits an electronic financial input sheet to a member of the Conformity Committee to review and then forward on to NCM. This sheet is completed no later than the 20th of the month for the previous month. NCM then produces a detailed 11-page spreadsheet with all members’ numbers arranged from left to right across the top, and the accounting numbers down the side.
There are pages for YTD, current month, productivity, net profit, liquidity and year-to-year comparison. You name it, it’s on the composite. It’s a virtual gold mine of reliable financial information.
The member with the best percentages for each page is listed at the top of the page on the far left and the other members are listed at the top of the page to the right in descending order. The objective is to be on the left side of the page or at least moving in that direction.
Submitting accurate financial information on time each month is a requirement for continuing membership. The three-member Conformity Committee reviews all member input and coaches members when necessary.
STRIVING TO BE BETTER
Belonging is all about improvement, positive forward movement and sharing. If a member is not interested or willing to improve, then our 20 Group is not the place to be. If a member needs help, all he or she has to do is ask. Any member may request an in-depth, in-house review by up to three other members of his or her choosing. This is a no-cost benefit other than travel expenses for the visiting members.
This review would cost several thousand dollars if executed by an outside consulting firm, which would not know the business as well as the three members doing the review. The financial numbers are already known, so the reviewers can concentrate on the facts behind the numbers. After all, the financial numbers are a reflection of an operation, either good or bad. The opportunities for improvement lie in what constitutes the numbers.
The reviewing members have full access to any and all things and dig deep within a business with the sole purpose of helping the requesting member improve. A review typically lasts two full days from opening the front door to locking up at night. Any and all employees, as well as customers, may be interviewed.
An exit meeting is held with the reviewed member and preliminary recommendations are covered in writing. A detailed PowerPoint presentation, with color photos, is then presented at the next 20 Group meeting and the reviewed member commits to an implementation timetable. A progress report is then due at the following 20 Group meeting and all meetings thereafter.
Speaking of meetings, we have two three-day meetings per year. One is at the end of February to review the year-end data, and the other is at the end of September to review June YTD data. Considering the intense member participation, preparing for more than two meetings is deemed excessive.
The meetings are planned, produced and presented by the members themselves, based on the desires of the members at the prior meeting. A member who has been on the meeting Agenda Committee for the two prior meetings chairs each meeting. He starts as a junior member of this committee, progresses to the senior member and then acts as chairman. A junior member thus joins the committee each meeting to replace the outgoing chairman. Every member is eventually a chairman.
Meeting locations are voted on at each meeting, with dates planned for three meetings in the future. A variety of locations are chosen with the time of year taken into consideration. Normally a warm climate is chosen in February and a northern climate is chosen in the fall. Once a meeting location is voted on and approved by the members, NCM takes over and makes all the meeting arrangements. A member does not have to be concerned about booking a hotel with meeting rooms, breakfasts and dinners. With literally thousands of past meetings under its belt, NCM has a long list of great meeting locations and facilities from which to choose.
We don’t schedule meetings at a member’s shop, unless a member happens to be in or near a city the group chooses. We’ve found that 20-30 people descending on a member’s shop at one time can be very disruptive and counterproductive. However, a short visit to a member’s facility is very beneficial in order to see the physical layout and understand the challenges he might face.
Membership has been very constant over the past 10 years, with the original core group still participating as members. A few have dropped out for different reasons, including the sale of their businesses. Three members have successfully and profitably sold their businesses, and business succession is an ongoing topic of discussion. The departed members were replaced with new members.
Present members are always on the lookout for qualified potential new members, but turnover is low. Potential members may also apply to NCM directly and submit a four-page application with photos and financial data. If the Executive Committee thinks a potential shop owner is a good fit, the members are asked if anyone knows the candidate and, if so, to give input. It is recommended that an existing member visit the shop if no one has already done so. If there are no objections based on locale or other factors, a candidate and his wife are invited to attend the next meeting to see if he fits into the group and the group meets his expectations.
Most members bring their wives or significant others to the meetings for social time, plus the wives have their own meetings to discuss various topics. As you can see, joining is like being part of an extended family.
One very important note on membership in the “Service Center Scholars”: A prospective member must receive a 100% unanimous positive vote to become a member. The reason for this stipulation is due to the fact that each and every member must agree 100% in order to share sensitive financial, and sometimes personal, information. As you can imagine, over a 10-year period, members become close friends as well as business associates.
So, if you are dedicated to becoming a better business person, and can and will dedicate the time and money to complete and analyze the monthly reports, along with two three-day meetings at a great hotel or resort each year, a 20 Group experience may be just the ticket for you and the future success of your business. If you can’t locate one to join, consider starting one yourself.
The time and money invested will be the best business decision you will have ever made.
It certainly was, and is, for me.