Profit Margin - Mark SelbstDo this Thing…
Do this One Thing…

Allow others to Do this One Thing and you will Guarantee yourself

Much Pain that you could Do WITHOUT.

I beg of you to ensure that your people, the ones dealing with the customers on the phones quoting and estimating don’t start or continue to cut or trim or discount on price. One in every three conversations I have always mentions that front of house is not quoting correctly or chipping profit of the quote or estimates… this is no time to allow anyone to be sloppy or stupid and one could argue and I will – that it’s probably more important than ever to be accurate and profitable. 

Some folks within your business will be shell shocked right now with all that’s going on and they could in a deliberate and intentional way think that to get and keep car count coming in the door they have to discount just to get the work. This is what I call Price Buying Salespeople who project their feelings onto their customers. This is not as uncommon as you may think! Projection is the key word here… it’s the word psychologists use to communicate the idea that people transfer their ideas, feelings, and emotions onto others. This is why being totally anchored as a business leader is so important right now. 

Salespeople, your people are the ones who say “Mate, I’m just like everyone else, I eat, drink and drive a car and I buy on price. Therefore, our customers buy on price.” But unfortunately, that’s faulty and dumb logic. Just because you buy on price doesn’t mean that your customers buy on price, any more than just because you like buying blue cars, means that I like buying blue cars. I don’t, I like white cars and you may not. Projection! All customers look like price buyers. Why? Well, all buyers look like price – buyers to a price – buying salesperson! 

A price buying salesperson will tell customers to buy elsewhere, you can get it cheaper elsewhere. This actually happened to me at JB HiFi six weeks ago before this sh!t storm started. I went into the store and asked for a phone splitter for my modem and the sale guy says ‘hey they’re cheaper at Bunnings’… Wow! I thought imagine owning this store and having the head of the sales prevention team working for you? This crap is going on everywhere! 

I’m NOT saying to do this… But it is extremely instructional: For example, if you currently have a 40% gross margin, and you are considering a 10% price increase, you can sell 20% less and you will still have the same total gross profit dollars in the end. If you are wondering? YES… This is taking off from where the March R.A.B.S.M.G. Newsletter left off – Page 7 Money Math For Your Automotive Business for your reference. Not nearly enough people are working on this period. 

The Bird Brain Idea that somehow, We Can Make It Up in Volume. Here is the thing, when any business gets into a tight spot financially, it is because some genius – often the smartest guy in the room – gets a bright idea that one can cut or shave price and make it up in volume to at least look “competitive”. 

Right now, none of this should be on the menu; no shaving, no slippage, no discounting, no sloth, what should be on menu though is the word like “Eke” you must without fail! Eke – out profit and margin on every sale. Please ensure you have meetings with your salespeople/team every morning to ensure they understand that they must eke out survival money. “Revenue is for your Vanity; Profit is for your Sanity/Survival.” 

Increase Prices - Gross Profit Dollars - Mark Selbst

How to find Gross Profit,
without a Price Decrease and total unit sales 


If you decrease your prices (a discount, cut, shave price for example), how many more units do you have to sell to keep gross profit dollars the same? What if you’re lowering prices to increase sales? We’ve calculated the impact of a price decrease on profit in the Excel spreadsheet illustration below. 

Find the gross margin of your product or service in the left column, then find the column that shows your price decrease. Where the two numbers intersect is a number that shows how many more you must sell as a result of a price decrease to maintain the same gross profit dollars

<p%EFor example, if you have a 35% margin, and you are considering a 10% price decrease, you must have a whopping 40% increase in unit sales to end up with the same total gross profit dollars. This is important to know if you are considering a sale in an attempt to increase unit sales of a product or service, especially if it has a low gross margin to begin with. 

Decrease Prices - Gross Profit Dollars - Mark Selbst

Folks as you can clearly see, no time is a Good time to tinker/discount. If you have a razor thin 30% gross margin and you drop your prices 20%, you must triple (X 3) your unit sales (i.e., increase 200%) to have the same gross profit dollars. Keep this in mind and show your staff what happens if you’re lowering prices. 

Lastly, DO NOT stop marketing! 

Please ensure that you are “Thanking Everyone” for supporting your business, your staff… Cut a short video and stick up on Facebook! 

Maybe run a Promotion!
Need Ideas from Mark – Email Here
Need a Call with Mark – Click Here

Take Care
Mark Selbst



Lost Customer Tally. 

This is a growing topic of conversation.
(Could it be Buyer’s Remorse?)
Workshop owners DON’T always know what their Lost Customer Tally is.

This is something I measure in any business “like a hawk”.  It is something most workshops and marketers have going on in the background… but few can actually give me a number, and even fewer do anything about it. Often, when customers walk-off, it’s thought of only in relation to bad google reviews and customer complaints about the phone. Who on your list is sleeping around with the competitor?

This is a BIG Issue in most businesses and not just Workshops, and it has a real impact on the bottom line. It is something that a business owner should NOT wait to delve into or find out about when there is a slump from one month to the next, downturn in the economy or when car count dwindles to a halt. There is a “number” of customers who buy but never return. The client who stays a while often without notice seems to suddenly and unreasonably leave with their wallet in hand and Business owners have no idea why. Customers are disappointed for a variety of reasons, often they’ll never utter a word. Perhaps they just weren’t wowed enough, for them it was too much sameness. Surveys and consumer opinions can reveal a bunch of actual faults in the products, service, customer care, poor management of customers’ expectations and lousy follow up after the sale. You’ll hear me say this more than once! But hardly anybody ever becomes a customer via one sale. There is the actual sale of the first product or service. Then there is the sale after that particular sale, of satisfaction – hopefully enthusiasm with the purchase just made. If this sale – after – the – sale is absent from your business’s “stickiness system” you ought to look into it and fix it. It is missing from most businesses.

Two weeks ago, I asked a workshop owner who was keen to increase car-count for his workshop to look at WHO hasn’t brought their car back for an extended period of time. To his credit, he did his homework and came back with the lost customer tally of a little over 200 and he went back approximately 2 years to see who had not returned.  Now if you divide 200 by 45 working weeks, that in-turn calculates to around about 4.5 cars per week. At an average work order of $360.00 and let’s say 170 customers come into the workshop twice a year that equates to $122,400 and 30 customers come in once a year that equates $10,800 add those two amounts together that $133,200 of slippage and if it is not halted over a 5 year period that adds up to a large sum of money being left on the table.

Take the time to look at your Lost Customer Tally count in your Business.

Take Care
Mark Selbst



5 Things to Consider Before Retiring or Selling Your Automotive Business

When speaking with automotive business owners, I am surprised to hear how much Super and income producing assets have been accumulated and set aside. Even though they are mostly quite modest in nature or sadly what I call “smoke and chewy money”, for a lot of folks in the automotive industry their only chance of setting aside a significant amount of money for retirement is by selling their business!

This may not turn out well for many business owners. 
Let’s look at some really important factors…

1. Is my Automotive Business a Business that is ready to sell?

Do you own a business that has a proven system, and operating procedure that the business runs by? All buyers want a turn-key business that has reliable cashflow, profit that will give a “return on investment”. The buyer needs to know they can make money and that they have a loyal herd of customers. They want to know that there is a system to train staff. If it’s all in your head and there is no way to prove to the potential buyers (New Owner) that the business will have the same consistent success after the sale, then you are doomed. The more systemised the business and the less reliant on the current owners – what I call (owner dependency) – the better the multiples of profit and the sale price. Multiples can vary from 1 x, 2x, 2.5x to 3 times depending on the systemisation of the business. Having established an adjusted net profit, you need a multiple. The challenge here is to assess the many variables that can affect the multiple;

  1. Financials: How is the business trading? Are the accounts in good order? 
  2. Profitability / Margin: Is there a healthy margin? Are the profits vulnerable?
  3. Balance Sheet: How do the balance sheet ratios compare with sector norms? Any uncertainties?
  4. Owner Dependency: Is there a strong team in place? Can the business survive the owner’s departure?
  5. Contracts: Another important factor in the stability and therefore the multiple.
    Does the business have any contracted income and therefore, forward visibility of earnings?

2. Who is doing what in the business, who is performing the key roles within the business?

Currently, are you working as a technician, at front of house, as a service advisor or entering invoices and doing bookkeeping? Are you paying yourself the same salary you would have to pay someone to do the job you are currently fulfilling? It is imperative that you demonstrate that the business can still make a great profit even if you were paying another person to carry-out that function.

3. What requires house cleaning?

Are there outstanding liabilities? Outstanding ATO taxes? Outstanding leases? Outstanding warranty issues? Neither you nor the buyer/new owner will want this type of thing on their plate as things move forward, this could potentially cause you to lose the sale.

4. It’s important to show you have A Profitable business!

Some accountants often encourage businesses to spend money at years end to show a smaller profit and in doing so you end up paying less in tax. An issue with that is you basically spend an entire dollar to claim thirty cents back? What? Spend .70 cents to save .30 cents! 

Other accountants will encourage you to have a three to five-year plan to get the house in order and sell, they’ll recommend the size of profit you should be aiming for. You should know up front that this strategy could see you paying larger taxes over a few years. There may be add-backs that come into play… An add back, is an expense that is added back to the profits (most often earnings before interest, taxes, depreciation, and amortisation, or EBITDA) of the business for the express purpose of improving the profit situation of the company. Your accountant may encourage you to pull back on spending habits that can impede on profits. And if you have an up to date business, they might even suggest no new capital equipment purchasing.

5. Is Your Business a Stand-Out amongst all the other businesses out there that are for Sale now and in the future?

I have spoken to owners who think about selling at the 11th hour, when the business is on the way down. The absolute best time, the best plan is to sell out when the business is pumping. It is important to prove to the new owner that it starts, idles, runs and drives well, that it is making great sales, has money in the account, pays all of its employee entitlements, it puts 15 to 20 percent of sales in the owners pocket, this is the best time to sell and retire. If the time is not ripe for you during these times, keep tucking away the profits until you do find a buyer, it’s your call! 

At Automotive Business Coach we can assist with and provide loads of resources which include agreements, mentoring and coaching to automotive business owners to get the most out of their automotive business. For more knowledge and information on how to place and prepare for the sale and retirement plus other compelling business applications, Go To:

https://www.automotivebusinesscoach.com.au/selling-your-business https://www.automotivebusinesscoach.com.au

Take Care
Mark Selbst



Unlike Red-Wine very few things ever get better with time. Facts do not cease to exist just because you ignore them. When emotion goes up, intelligence goes down. The mind, like the parachute works a whole better when it open.

Making mistakes is absolutely inevitable but admitting to them and learning is optional. 

It’s nuts to think, believe that our ability, intelligence, and hard work can overcome a tough economy or a bad business formula. 

Success will not make you invincible or bulletproof, success can and will make you stubborn, complacent and egotistical by themselves this is a cocktail for a major defeat. You get what you tolerate in business and in life. Never wait to address personal or substandard work performance, their either doing a great job or they aren’t. The cost to the business of tolerating an incapable or transgressing employee is far greater than the discomfort of having a tough conversation and a swift sword termination. 

All opportunity comes with a cost.

Just about anybody can make money in good times. Poor cashflow is like Kryptonite to any business. It kills. No cash, No business, Cash is King and Marketing is Queen. It takes three good business deals to make up for one bad one. Put cash aside every week, especially during good times. Someday you’ll be grateful you did. Debt always gives the illusion of wealth. Real wealth is built on great cashflow, assets and very manageable (minimal) debt. The tougher the economic climate, the better capable you will need. It’s impossible to outrun or survive a tough market with weak people. 

  • Every-time you make a hire it should be lift the average across the organisation. 
  • You cannot babysit your way to a successful business, performance or accountability. 
  • Always upgrade your talent base and never be afraid to pay them what they require. 
  • Love doesn’t always get the job done, if it did then why are there so many screwed up people. 
  • Great leaders and coaches guide, encourage and teach. 
  • Not all progress is measured by meterage gain; sometimes progress is measured by losses avoided. 
  • New cars, lots stuff, over expansion, chasing silver lures are all a sign of importance, not real success. 
  • Invest in yourself, it’s the key to growth and wealth. 
  • Plan and run all meetings only on outcomes and for results use scoreboards and scorecards. 
  • Start fewer tasks, finish more things. 
  • One of my mentors long ago said
    “There is hope and there are facts. When these two things collide, facts win every time.”
  • Every time my business said it can’t get any worse, it invariably did get a whole worse. 

The dumbest thing management can do is announce a new lofty target for the year (Our revenue target is 2,00,000 million this year) without a solid working plan of how it’s going to be achieved and then there is the execution… who doing what and by when. 

Having the right answer is smart. But having the right question is genius. The riskiest moments in business is when you think you are right. 
Great cash-flow and profit can fix most problems within a business.

Take Care 
Mark Selbst 




1. Staff – For prospects and customers to buy from your front of house staff/service advisors, there are few things that need to happen: it’s imperative that they like your staff, trust your staff, and view your staff as the go to experts. For that to occur the first thing is your people need to sell is themselves, as the trusted go to person. Not your business or workshop, or the thing that customers want fixed, repaired or purchased. The best way I know… is by smiling, answering the phone with a hello this is Chris, providing the caller with their name and the name of your company, and then ending with a question that invites a clear response.

2. Tonality – This is important without a shadow of a doubt, the tonality on the phone is critical to success. Studies have shown that when it comes to what influences people during a sale, 55% is what the customer sees, 38% is the tonality of the salesperson, and the words used by the salesperson account for only 7% of the decision to make a purchase. Because the caller can’t see the person they’re talking to, they will be far more influenced by their tonality than by what is being said and the words they use. This is why your people need to slow the hell down, smile, and speak with genuine interest and understanding.

3. Customer Concerns – Your people should always bullet point the prospect’s concerns and repeat back the information the person provides to them. This reaffirms to the person calling that your staff is listening and this not only helps start a relationship with the customer, but it shows that your staff are interested in what they have to say, it keeps them engaged, and it causes them to actively listen, rather than simply asking more questions.

4. First-Name Basis – As soon as possible, your staff need to get on a first-name basis with the caller. By doing so, they will be taking the relationship from one between caller and service advisor to one between Andrew (staff member) and Rebecca (the caller). They should typically be able to get on this first-name basis after the first two exchanges. If your advisors need to obtain the caller’s name, an easy way to do so is by providing their name first: “By the way, my name is Andrew and your name is?”

5. Price – Please note – the callers are not always interested in price. The reason most people ask for a price is because they don’t know the questions they should be asking; most callers ask for a price to get the conversation started.

You’ve spent an enormous of money time and effort in building a real business, you’ve spent a lot of money to get the phone ringing, and every lost, mishandled enquiry not only costs you dollars$$$, but as soon as that customer or first-time caller puts down the phone, you can bet your last dollar they’ll be calling your competitor. You should want to share this information with your staff A.S.A.P it will make you a lot more money.

How Vulnerable Are You?

How Fragile Is Your Phone Answering System?

How Much Money Are Leaving On The Table?

How Weak Are Your Fences?

Take Care
Mark Selbst



Business owners struggle continuously or fail for one primary reason:

They are great operators but lousy owners.

Business operators get tired and Business owners get rich…. You cannot succeed at a high level in business without business skills and tools.

Any Business, any Workshop do not function by themselves. The Quality of your team is the single most important component of a successful and efficient operating business, yet it is the one place where business leaders and owners tend to make exceptions and tolerate substandard outcomes and to large degree mediocrity.

The players on your team are highly important to your success… responsible for kicking the goals and winning the game. They are you’re the leverage for you to live life on your terms. Lousy players, poor leverage, more brain damage and the less money you can bank. All A players have six common traits.

1. They have a scoreboard that tells them if they are winning or losing and what needs to be done to change their performance. They will not play if they can’t see the scoreboard. Do you have a score board? All of my high performing mentees have scoreboards in the businesses!

2. They have a deep-seated internal, emotional need to succeed. They do not need to be externally motivated or begged to do their job. They are keen and want to succeed because it is who they are . . . winners. Motivation is for apprentices, bystanders and casual participant. A players and professional rarely need motivating. Instead of trying to design a pep talk to motivate your people, why not create a challenge for them? A player’s love being tested and challenged. They love to win. I’ve even seen B players move from B to A when challenged.

3. They love to be measured and held accountable for their results. Like the straight A student in high school, an A player can hardly wait for report card day. C players dread report card day because they are reminded of how average or deficient, they are. To an A player, a report card with a B or a C is devastating and a call for renewed commitment and corrective actions.

4. They have the technical head and axe to do the job. This is not their first gig or car race. They have been here before, many times over and they are technically brilliant at what they do. And they are humble enough to ask for help.

5. The four most important questions to ask an employee are:

  • What else needs to be done
  • What else can I do
  • What do I need to do
  • What can I learn so I get better and add value to the business

6. “A” players see opportunities. “C” players see only problems.
Every situation in your business is asking a very simple question: “Do you want me to be a problem or an opportunity? Your choice.” You know the job has outgrown the person when all you hear are problems. The cost of a bad employee is more than their wage or salary.

My 5 rules for hiring and retaining “A” players are:

  • Interview rigorously.
  • Compensate generously.
  • Onboard effectively.
  • Ensure that there is high level of support during implementation
  • Measure consistently.
  • Coach continuously.

Here is an all-important and clear distinction: You cannot babysit your way to high performance and accountability. Who you have on your team will dictate whether you have a high performance or high maintenance business and oodles of brain damage.

Take Care
Mark Selbst