The habits that build a successful business in the automotive industry

Eight out of 10 businesses fail within the first 18 months of operation, and only 4% make it to the 10-year mark, according to studies.

What is the secret to longevity in business? The habits and routines that build success are a key factor, says Jim McCann, a well-known motorcycle industry business consultant.

A trainer and facilitator for Spader Business Management since 2006, McCann has facilitated 20 motorcycle industry groups.

On July 28, McCann led the third session of a three-part United Motorcoach Association (UMA) training session with a deep dive into meaningful ways to create the habits that define success.

Improving business practices

Jim McCann

He was joined by UMA members Dan Martin of Karst Stage in Bozeman, Montana; Joe Gillis, of Northwest Navigator in Portland, Oregon; and Scott Richo, of Northeast Charter & Tour, in Lewiston, Maine. The three are also part of a 20-person group led by McMann — made up of operators in various geographic markets — working together to improve their business practices.

“We have to understand economic changes and market changes and things that are out of control. But surely, as leaders of our organizations, we should be able to plan ahead for them,” McMann said.

The key to success is identifying processes that, when done consistently, create high productivity, he said.

“We look at it as building an organization this way: culture first, people second, processes third and strategy fourth. … If we build a strong culture within the organization, we hire the right people, they will help create the processes to execute your strategy.”

Not afraid to make changes

enterprises
Dan Martin

During the pandemic, Karst Stage’s Martin says he learned the importance of not being afraid to make changes. Staff meetings held via video to keep people safe during the pandemic continue to help staff save time.

He has also decided to delegate more responsibilities so he can pursue a better work-life balance.

“I will take the risk of owning a business where I owe more than I will ever make. I have to go out and have some more fun. And so I’m really starting to work … on how to structure the people in my business to make sure I’m covering the basics by working less,” Martin said. He added: “We’re working on our dashboards – which are our scorecards – so people know what’s most important in the business and where we need to improve.”

Focus on the customer experience

Joe Gillis
Joe Gillis

With sales down during the pandemic, Northwest Navigator continues to focus on its customer base.

“We were contacting the customers – not asking ‘can we sell them a bus and can they travel.’ Instead, we asked, ‘how could we help get their company back on track?”’ Gillis said.

Research into UV lights and sprays used to clean and disinfect vehicles from COVID-19 and other viruses created a new revenue stream and led to the opening of a separate company to clean their vehicles and equipment as well as customer vehicles .

“Letting them know that we feel like we’re all in the same boat has been really beneficial for us. And when business came back, it was really fast.”

Gillis added that being part of the Spader Group has been helpful in staying on top of rising costs over the past year.

“We’re constantly evaluating what a mile costs. What are the fixed costs that each bus has to incur before it leaves the yard — before we even look at the costs of mileage, tires, gas, drivers and all that stuff,” Gillis said.

Cost monitoring

Businesses
Scott Richo

Northeast Charter is also keeping a close eye on rising costs.

“There’s not an invoice that comes into this building without my signature on it, and they’re not allowed to pay an invoice unless it’s my signature on it,” Riccio said. “I want to know what it’s for and why we did it. I want to make sure I’m involved in deciding why we spend it so we can manage our cash flow.”

Cost management is key to increasing profit margins.

“If you’re doing 10%, you’re actually surviving,” Riccio said. “High performers always do better than 10%”.

With some key personnel changes, Riccio was forced to temporarily return to day-to-day operations. This extra check helps him see where improvements can be made.

“Our company is busy enough that if you compare our revenue today to where we were in 2019, before the pandemic, I have 76% of that revenue on the books now, and we’re only halfway through the busy season,” Riccio said. “There are opportunities. Let’s hope these are very fruitful opportunities because we work harder.”

The full town hall presentation can be viewed by UMA members here.

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