Don't Call It A Comeback

Friday, July 31, 2020 | August 2020

MILLENNIALS AND GEN Z ARE STEPPING INTO OWNERSHIP ROLES AND THE SHOP WILL NEVER BE THE SAME

As Bob Dylan tells us, the times they are a-changin’.

As the last generation of baby boomers fade from the market, the time of the millennials is here. They are taking over independent and family-owned shops, curating entirely new digital marketing plans, and seeking out their competitors and 20 Groups for the knowledge to run fast, run lean, and drive their businesses into the future. Nationwide, we’re at the cusp of 5G technology and the promise of better, faster, more instantaneous communication while globally we’re scaling back our physical activities in lieu of the coronavirus. Never has so much happened so quickly without any road map in sight—never has the calendar been more tenuous.

Nonetheless, cars need fixin’, people need payin’ and most shops have been able to pivot to meet the unexpected and unprecedented demands of new ownership and the shifting market as auto repair continues to undergo tectonic, foundational change amid wireless technology, stringent repair specifications, and anything else the wind seems to throw our way.

OUT WITH THE OLD (OWNERSHIP)

“It’s challenging being a young owner,” says Kyle Arnold of Agee’s Automotive (Lincoln, Neb.).

“It’s challenging when you’re interviewing people older than you—it’s difficult for some to take you seriously and trust that you know what you’re doing. I can’t speak for anyone else but it seems that my age makes gainful employment here harder to see as the future isn’t as clear to them.”

In Arnold’s defense, the future isn’t clear to anyone. Thirty-four years old, Arnold worked as a technician at Agee’s for almost nine years before buying the business in late 2017. The transition plan to sell to Arnold had been in place for a few years, so he moved to a service advisor role to get closer to the customers and to be able to see the business with fresh eyes (and knees), well off the shop floor.

“Most people knew me anyway but it was still beneficial to deal with me every time for a few years. It sets us up to ease the transition,” he says.

“Since it was a slow transition into management over a long period of time, I wasn’t blindsided by much. I’m involved with ATI, the business coaching program, and became involved immediately as an owner.”

Arnold acknowledges that ageism has definitely been something he’s had to confront and overcome with customers and staff, but he knows that’s nothing new.

“I think ageism has maybe always been an issue,” he says. “When you’re in your thirties, people in this industry probably just don’t trust you as much as when you’re in your forties, or older. But that’s true in any industry, not just auto repair.”

Arnold says the best he can do is simply tell people a brief history of his experience, what he’s accomplished thus far with the shop and what the plans are for the future. Most of the time,

he says, peoples’ minds are put at ease.

“The best I can do is be honest,” he says. And that includes being honest about change.

NEW MARKETING, NEW SHOP

“There was a ton of stuff I changed right away,” Arnold says.

“The previous owner hardly had any internet presence and didn’t market much through email or text messages. The whole way he operated was the same for years and years and years.”

Arnold also chose to focus on customer influence, adding that asking for reviews was strange at first, but he soon grew used to it. Today’s word-of-mouth is Google, after all, and as the positive reviews started piling up, so did ARO and the volume of new clients.

“When I changed our marketing strategy, business grew. The former owner invested in marketing but they weren’t good investments—flyers didn’t work. You can’t track print marketing and it never seemed beneficial.”

Looking ahead, Arnold has plans to grow. He just leased the adjacent building to amplify parking and office space and hopes to install a few new lifts before the year is out. Soon after, he’ll hire more people, and begin passing on what he knows.

Which, inevitably, will only change once more.

YOUNG AT HEART, BUT NOT EXPERIENCE

At Custom Auto Care, Justin Calhoun faced many of the same challenges in the transition to ownership.

“The first hurdle was making the leap from a technician making $50,000 per year to buying a $400,000 business,” he says.

Calhoun isn’t alone; many young owners simply have no idea what the first steps are on the business side of ownership. They all know the destination, but it’s hard to get there without a map—or a co-pilot. Calhoun sought help writing a business plan from his alma mater, Southeast Community College, in Lincoln, and then applied for a Small Business Administration (SBA) loan, which took almost twelve months. He was 29 years old at the time, and being a homeowner for six years helped further secure the loan. Still, he had a retirement account after eight years of employment that he had to dip into, incurring withdrawal penalties in the name of the business he would soon steward into the future. The former owner agreed to a five-year lease-to-own arrangement, easing the burden. A little.

“Now I own the business, and I’m still the youngest person here,” Calhoun says. But he knows that won’t last forever—not if he’s successful.

As the youngest in the building, Calhoun says he didn’t face any major issues during the transition. The service advisor he hired was from the service industry and regarded him as an expert despite being 15 years older. Calhoun soon hired a millennial technician about his age, followed by two more. One of those technicians, 20 years older than Calhoun, appeared to “have had some anxiety,” with the age factor, according to Calhoun.

“‘Does this guy know what he’s doing? Is he going to be able to steer the business correctly?’ After a month or so working together, he became comfortable and knew that we’re growing the business.”

Calhoun believes the automotive business is a relationship business. Whether it’s with employees or customers, the ability to connect and forge a bond is key to success.

“I knew many of our clients before I bought the business,” he says, “and building stronger relationships is one thing I’ve continued to do to keep growing. I try to bend over backwards with our employees as well—I probably overpay them, but I treat people as I’d like to be treated.”

Calhoun may be the youngest full-time employee, but he’s not the youngest person working under the roof of Custom Auto Care. That honor belongs to a part-time administrative assistant—she’s 18 years old and works three days per week for a few hours per day. Solidly in Gen Z, Calhoun reports she arrives five minutes early almost every day and that he has no employment problems with her, despite it being her first job.

Calhoun sits on the advisory board of Southeast Community College and also mentors a student from there. He’s 19 and works three days per week sweeping floors, cleaning the shop and attending to whatever needs to be done.

Calhoun admits to some challenges with the shop hand. He’s not always on time, but Calhoun says he’s coming around.

“His uncle is a technician for us,” he says, “and it helps having a family member here to help keep him in check. He’ll ride him hard. He has a comfort level that I don’t; I’m not here to tell you to get off your phone—I don’t want to micromanage. I want this to be a place they enjoy being at.”

If Calhoun can continue to foster a strong culture, he believes he’ll be able to launch Custom Auto Care to greater heights.

“You’re either going forward or backward, and if you’re sitting idle, you’re most likely going backward,” he says.

“I’m never satisfied, and maybe that’s not always a good thing, but I want to keep moving forward.”

TALKIN’ ‘BOUT MY GENERATION

The Who may have said it best, but lumping anyone under the age of 40 into the same generation could cause more headaches than you know. Here’s a handy guide to help you more accurately assess your clients and staff when they walk through the door or email you a resume.

 

Millennials

Gen Z

Life Stage

Well into their adulthood, roughly ages 24 to 36

Either still in high school or recently graduated, under 25

Digital Influence

Maintain vivid memories, skills, and knowledge of a non-connected, pre-internet world

Have not lived in a time without accessible internet

View of the Job Market

Sold a vision that didn’t become a reality and entered the workforce at the peak of the depressed job market

Saw the effects of the recession, entered the workforce during the recovery of the economy, and is now dealing with the coronavirus, yet maintain more realistic expectations than their predecessors

Key Employment Traits

Seeks job flexibility and more readily participates in the gig economy

Seeks solid employment pathways and are more focused on personal and rewarding longterm fulfillment

WHAT TO KNOW WHEN HIRING GEN Z

• Ninety-nine percent of respondents said it is important to have a job that is personally fulfilling, and 43% expect to stay at their first job for more than 3 years.

• Ninety-six percent of respondents believe in the importance of networking even when a company does not have an immediate job opening.

• Ninety-one percent of survey respondents believe recruiters should know professional details about them before reaching out about an opportunity.

• Eighty-eight percent of respondents reported they would pursue an opportunity that is a clear fit for them even if they are unfamiliar with the company, while only 44% are likely to work for a company they have heard of, even if the opportunity isn’t a clear fit.

Source: Tallo company survey, tallo.com

“Changing what you’ve always done will make you more successful. Our ROI on postcards and mailers was low and untrackable. Targeting who you’re after in different ways is necessary to get younger customers in.”

–Kyle Arnold, owner, Agee’s Automotive

CUSTOM AUTO CARE

LOCATION

LINCOLN, NEB.

OWNER

JUSTIN CALHOUN, AGE 35

STAFF SIZE

4

ANNUAL REVENUE

$700,000

Photo: Headshot_Justin

AGEE’S AUTOMOTIVE

LOCATION

LINCOLN, NEB.

OWNER

KYLE ARNOLD, AGE 34

STAFF SIZE

3

ANNUAL REVENUE

$600,000

Photo: HEAD

 

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