STANDING GUARD: Scott Osborn carefully watches over every aspect of his business, which led him on a quest to create an all-new vehicle inspection system. Photo by Korbin Bielski
The data spanned several years of his shop’s work—more than 3,000 documented vehicle inspections in all. It sat, stacked tall on his desk, and Scott Osborn began by sorting the papers into piles.
At this point in late 2011, Osborn looked at numbers as the lifeblood of his business. All of the answers to every problem at Osborn’s Automotive—a month-long sales slump or a dip in gross profit margin, for instance—could be traced to some metric.
And Osborn religiously tracked and analyzed those numbers.
It was one of the reasons his shop had nearly tripled its sales over the previous decade, and it was why he spent nearly three days sorting through that pile of inspection forms, trying to find a tangible answer to a burning question.
“I’d been told over and over that I should be able to run my business from a beach in the Caribbean with a coconut drink with an umbrella in it,” he says. “But, at the same time, everyone preaches that getting good inspections from your technicians is the key to success, the key to more sales and doing a better job for customers. Well, how can you know for certain that every technician is inspecting every single car according to your policies? How do you know they aren’t missing things? How do you know they aren’t biased or overlooking things they don’t like doing?”
The answer, Osborn hoped, was sitting in that pile of papers, in all the data collected from every inspection over the previous three years at his shop.
“The idea was to change the way we look at inspections,” he says, “to take it from a subjective thing based on the technician’s biases and skills and make it into something that’s objective and repeatable—and something that we can monitor with ease.”
If you’re simply looking at physical size, Osborn’s Automotive hasn’t changed a whole lot since he first purchased the former gas station on the Pacific Coast Highway in Redondo Beach, Calif., in 2003. It’s a nondescript, three-bay, 1,400-square-foot facility on a busy road in a nice area. And it generates $1.2 million annually in sales.
“It’s small, but we get a lot out of it, and that’s by doing everything through systems,” he says.
Osborn has focused heavily on processes in the last six years, implementing standard procedures for every aspect of his shop and tracking progress daily. His shop, which did roughly $40,000 per month in sales starting out, now regularly tops $100,000.
The simple fact of auto repair is that customers don’t know what they don’t know. It’s the shop’s job to inform them. That’s where the inspection comes in, Osborn says.
INSIDE THE NUMBERS: Osborn’s new inspection system found a way to link his shop’s data with his staff’s work habits. Photo by Korbin Bielski
Like many shops, Osborn had a simple inspection checklist for technicians to run through during the process. It broke the vehicle down into categories, such as under hood, under car, safety, etc., and then into tasks like “check fluids” or “check hoses.”
“It was pretty standard,” Osborn says, but it didn’t leave enough room for making full recommendations. Also, when the customer left following the repair, the shop’s copy was simply put in a file, then likely moved to a box, which was then eventually put in storage.
“We had information on these vehicles and weren’t using it to our advantage the next time the customer came in,” he says. “You’re starting from scratch every time.”
So, Osborn set up an inspection file on his shop’s computers. The techs would fill out inspection forms electronically, and the shop could then store them for future use.
That improved the availability of the information, Osborn says, but it still didn’t do anything to improve the accuracy of it.
“The whole time I’m just thinking, ‘This is great, but how do I know the inspections are any good?’” he says. “Sales only tell us if my front counter is doing a good job selling what they found. It doesn’t say whether the stuff was really needed or whether we’re missing other things. So, the problem is: How do I ensure a proper inspection every time without having to essentially do them myself?”
It was now 2011, roughly three years after he started keeping track of inspection reports on his computers, and Osborn knew, somewhere inside that data, there was a tangible, measurable way to ensure quality inspections.
He wasn’t going to hover over his techs, and he wasn’t going to just assume things were fine based on sales.
Auditing your courtesy inspections is vital, no matter how far you want to drill down into the procedure. The inspection line is an important service to all of your customers, yet it is one of the first to unravel in terms of quantity or quality. The metrics need to demonstrate quality, training and integrity of the shop overall. It starts with having a workable form—hard copy or soft—and then an exact method laid out on how to implement it. Your analysis results will always be impacted by the attitude, training and experience of your tech team, which are always changing.
Instead, he pulled up all of his reports and hit print, and he started sorting them. He put the reports in piles for each technician. Then, he organized them by vehicle and looked at what problems technicians were finding.
It took him three days of doing little else but pouring over the reports to find his answer.
“I saw patterns and averages and a way to look at it all,” Osborn says. “By doing this, I could see that so-and-so’s average car was a 2002 with 90,000 miles on it. And I could see what he was recommending.”
More specifically, he was able to see the amount of vehicles that received certain recommendations. For instance, he could see one technician recommended cooling system work on 15 percent of all vehicles—very standard for his area.
“I could see which guys were recommending what work, and how often. I now had a way to measure what their inspections were producing. I had tangible numbers to put with it.”
—Scott Osborn, owner, Osborn’s Automotive
“All of a sudden, we have a way to see technicians’ habits over the last three years in the shop,” he says. “I could see which guys were recommending what work, and how often. I now had a way to measure what their inspections were producing. I had tangible numbers to put with it.”
He still lacked a simple way to track it, though.
Osborn used an online program called Active Service Pages to create a Web-based inspection system that could compile the inspection data and turn it into a readable, easily accessible spreadsheet of data. He created an updated inspection form (with added ability to give specifics on issues and detailed recommendations) on the site that technicians filled out with each vehicle. The website then automatically broke the inspections down the way Osborn had by hand.
He now had live, tangible numbers to show his worker’s habits on each vehicle.
The first red flag popped up instantly. Osborn saw that a technician recommended brake-fluid service on 60 percent of vehicles he inspected—a very unusual number in sunny, Southern California.
His sales advisor was skilled enough to sell the work, Osborn says, but something about that high number bothered him. So, the next time he saw one of those jobs come up in the management system, Osborn decided to peek in and observe the tech’s work on it.
“He wasn’t even doing the whole service,” Osborn says. “He was just draining the master cylinder with a suction tube, pulling the fluid in it and shutting the hood.
“He wasn’t doing a good job for the customer. He was stealing from me. He was stealing from the customer.”
And he was fired on the spot.
The next major step is taking your “findings” and having the organizational and training skills to fix or improve the situation. This can be one of the most major challenges for shop owners: “tuning up” employees. I know a lot of owners that have statistics and metrics on every detail of their business, but they don’t have the training to address the human element. This is your next major step to success. Scott has done a very good job taking concepts on service and quality and creating a system that works in the real world. That is the important part. You may have all sorts of ideas about how you expect an inspection to be done, but getting your entire team doing it “your way” is always the challenge.
Another time, Osborn saw that his techs hadn’t recommended any suspension work over the course of 75 inspections. After speaking with them, he realized it was a training issue, and in the following few weeks, their numbers were up to where they should be.
“Sales didn’t necessarily change, but the right work is now being sold,” he says. “My guys are now accountable for what they recommend, and it helps us make sure we’re staying up on training and doing the work we need to.”
Osborn has since partnered with Elite Worldwide Inc. to create an offshoot company, Repair Shop Solutions, to enhance and promote his inspection system.
The lesson Osborn learned, though, isn’t about diversifying his personal business opportunities.
“It just shows how important data mining really is,” he says. “For every situation and every aspect of your shop, it’s so important to measure and look at your numbers.
People and systems are the lifeblood of any business. Steve Osborn did what all business owners/managers should do: evaluate, analyze and implement with an eye toward consistent business improvement. Part of Steve’s success was recognizing the mix of business his repair center offered was not balanced based on what his business goals and objectives were, and he took appropriate steps to correct the condition. He developed training and tracking solutions and trained his entire staff for success. I applaud Steve for his dedication to his clients, community and staff. It’s success stories like Steve’s that make me proud to be in this industry.
“Every area is going to be different, as far as your percentages (of work found in inspections). That’s why you have to keep track of everything, and be on top of it all. The more tangible data you can have to look at your operations, the better and more efficiently everything will run.”
Redondo Beach, Calif.—Scott “Oz” Osborn, ASE Master L1 technician and co-owner of Osborn’s Automotive, started his automotive career in 1974 at a gas station while still in high school.
“I worked the graveyard shift, cleaning floors, workbenches, and restocking shelves,” he said. “And it’s been all automotive since then, including my first business around 1979, specializing in Sunbeam Tigers and anything for street racing.”
Osborn said he soon learned that maintenance and repair was a far more reliable source of income and stability than the customizing and racing field. So in 1986 he bought the first of four Union 76 gas stations with service bays between Redondo Beach to Sacramento.
“I ran those successfully for many years until 2002 when my wife Nancy and I bought our current location on Pacific Coast Highway, a 1,000-square-foot shop with three bays, and got rid of our last gas station.”
It may be small, but Osborn is quick to point out that there is plenty of parking. “Square footage comes at a premium in Southern California, especially along the beach. I pride myself on making every square foot count and providing quality service.”
Over the years, the shop has had steady growth, with annual sales reaching as much $1.25 million, an increase in car count, and more than 80-percent customer retention.
“Car count is up over last year and so is the average repair order,” he said. “When we switched to Repair Shop Solutions (RSS) electronic online inspections a few years ago, our average repair order was around $425. Last year it climbed to more than $600. That’s almost a 50-percent increase in average RO in just two years.”
Osborn attributes the 15-percent growth in the past year to a number of factors, with quality repairs and outstanding customer service topping the list, followed by aggressive marketing, proper shop management, and expanded services.
“In 2015 we started marketing our hybrid service pretty heavily, which is paying off,” he said. “We took on the name of ‘South Bay Hybrids’ at Osborn’s Automotive and have been using that avenue to push the hybrid services. We even created a second website for it that helps us get the message out.”
The shop is doing some aggressive customer retention initiatives including washing cars, phone follow-ups, free shuttle service, and personal reminders, he said.
Osborn has also changed over the shop’s website to Kukui, which he said has proven to be a huge success in tracking advertising dollars.
“With the Kukui system, we can tell exactly how our ads paid off for us. Their dashboard lets me see how many calls came in from each ad source, listen to the phone calls, and even see if it was a new or returning customer and what they spent. I learned that the money I was spending with one online ad company was a total waste, with zero return. That saved me over $200 per month getting rid of that.”
In addition to using Kukui for the shop’s website and follow-up emails, Osborn decided to take it a step further and do a lot of personal phone follow-up calls and setting of appointments.
“Along with the mileage sticker in the windshield, we just let the customer know that we’re going to be calling them when their car is due for the next service to set up an appointment.”
Recently, Osborn wrote a book for consumers titled ”Making Smart Choices - A Helpful Guide to Maintaining Your Vehicle,” which he said is helping position Osborn’s as the local experts.
“We’ve also expanded our TV commercials. We’ve tried real hard to make them something funny so the viewer will remember them,” he said. “We have two commercials now where I either lick the dipstick or fill a wine glass from the oil pan to ‘organically’ sample the oil and tell them what’s wrong with the car. I guess you just have to see it to believe it. They’re on our website too.”
The shop has been heavily into maintenance for years, but in the past 12 months, maintenance has increased another 10 percent over repair and diagnostic jobs.
“Maintenance is much more profitable than repair and it really is good for the customer,” he said. “If we keep this up, we’ll put roadside service out of business.”
Osborn also believes it’s important to always use the correct fluids and he buys a lot of OEM fluids from either the dealer or a local supplier.
“We use Completes Plus in Gardena as our number one supplier,” he said. “They have been there for me for about 20 years now and I know that if I really need something in a pinch, they’re the ones I can count on.”
Last year at AAPEX in Vegas, Osborn said he concentrated on finding updates for the shop’s six scan tools, including a new Toughbook with Toyota software, as well as making some strategic connections for his software business, RSS.
Osborn’s has been the winner of South Bay’s Best Auto Repair award for five years in a row. It is an AAA Approved Auto Repair facility, a Bosch Service Center, and a member of ASCCA.
Jaime Sanders, shop manager, has meetings with the techs every two weeks to go over their inspections and look at their habits, Osborn said.
“We strongly believe in watching the reports in our inspection system to see which techs are recommending each service and making sure nothing is being oversold or missed.”
If Osborn sees a technician recommending a specific item such as a brake fluid service more than 40 percent of the time, he knows something is wrong.
“Either the cars really need it and we’re not getting it sold at the counter or he’s recommending it based on false data, like time and mileage, only without checking the physical condition. That doesn’t work in my shop.”
Excited about buying a “New Used Car”? Don’t get emotionally attached or commit to a purchase without first having a third party pre-inspection done. Regardless of the stunning exterior beauty, the fantastically low mileage or the amazing deal you may be buying a “little car of horrors”. Remember most “New-to-you” vehicles are typically sold “As Is”, meaning you now own all that vehicle’s carefully hidden problems.
No person or business is exempt from the shady business of “Used Car Sales”. While small used car lots are the worst of the bunch don’t let dealer “pre-certified cars”, CarMax or even, the nice person down the street, fool you into a costly mistake.
Ideally, we (Osborn’s Automotive) are doing the pre-purchase inspection for you, but in a pinch locate a trained, qualified technician to do the inspection. Most AAA Approved Repair Facilities offer pre-purchase inspections. If you are looking at a vehicle out of the area, give us a call and we will recommend a shop close to your location.
Vehicle purchases, whether new or used, are investments. Make sure your investment is sound.
Having thrown around a ton of accusations I feel the need to share some of the horrors we’ve seen. Occasionally we will inspect a vehicle that has the tell-tale signs of insurance fraud, a customer had recently purchased a newer used Toyota Camry that he got a spectacular deal on. He brought it in a few weeks after the purchase complaining that the rear lights weren’t working. Upon removing the trunk carpeting we found that the trunk was just a shell of its former self. There were no panels, no area for a spare tire, no brackets or wiring looms for the lighting, to be honest we were shocked and stumped. Long story short this vehicle was involved in a pretty significant rear-end accident. The previous owner of the vehicle took it to a body shop, the body shop quoted the insurance company, the insurance company sent the check, then the body shop made the vehicle look “right” again and the vehicle owner quickly sold the vehicle after splitting the insurance company check with the body shop. The new owner of the vehicle was left holding the bag.
It is not uncommon for used car sellers to clean and degrease engine compartments and undercarriages to mask leaks. One seller went to the extent of purchasing new vanity covers and detailing the engine compartment to the point where the engine almost looked brand new. A few weeks after the vehicle was purchased the alternator went out. During the inspection we found that the alternator was oil saturated (the alternator is one of many parts in your vehicle that does not need oil) and upon a more detailed inspection we found that the new plastic vanity covers were disguising a very bent radiator support. Luckily, the purchaser was able to re-coup his loses by suing under the Lemon Law.
More recently, we performed a road trip inspection on a newly purchased “Pre-Certified” vehicle that didn’t have any major problems but we did find dirty fluids, dirty filters and a torn axle boot. Which begs the question “what exactly does pre-certified mean?”
CarMax is also a fan of “Pre-Certifying” vehicles and we have inspected a lot of CarMax vehicle purchases. The good news is that in most of our dealings with CarMax they have honored the inspection and taken care of their lapses.
Scott “Oz” Osborn, recently wrote the book Making Smart Choices: A helpful guide to maintaining your vehicle. Not to inflate his ego (over-inflate, may be the more appropriate term) but Scott’s dedication and passion for people, not cars, is his true calling. This passion ultimately led to his success in this industry. I share this passion, which is what led me to Osborn’s Automotive in the first place. When Scott published his book it inspired me to finally start writing a blog that could possibly wind up being the best nighttime “bound to put you to sleep” blog available on the web.
Speaking of sleeping here is a quick story that will ensure I have captured your attention. I am currently looking at buying a new car, out of need not want. The ideal car will be safe, fuel efficient, reliable and hopefully sport a bit of power. The car I choose will have to be built to last, at least a little while. I am not a “keep buying a new car and always have an auto loan type of person”. I pushed my last vehicle to 256,000 miles and my other family vehicle had almost 300,000 miles on it. I am determined to buy a new care that will start to lose money the minute I pull it off the lot. I plan on taking complete advantage of that 36,000 mile / 3 year factory warranty, including the free oil change packages. This is not because I am cheap and looking forward to free oil changes, this is because I am cheap, skeptical and a bit witty. Since I don’t believe in 10,000 mile oil change cycles I will have my vehicle serviced in house (at Osborn’s of course) every 5,000 miles or 5 months, at which time our technicians will also document any noted problems or concerns they see during the inspection process. At 36,001 miles and/or 1,096 days when the service manager attempts to tell me of some expensive repair that has to be done I will smartly hand them all my “cover my you know what” documents and be on my way. Does all this seem like a lot of work to go through on a new vehicle? It is a pain, no doubt about it, but it is worth it to me because investing $25,000.00 dollars in a vehicle, carrying an auto loan for 4 years is a big deal.
When we invest in vehicles we expect them to last and we care for them so that they do. There is a lot of thought that goes into buying a car, each person will have their own list of wants and needs, and as repairers of those vehicles we must make sure that we understand not only your wants and needs but also your long term goals. In Scott’s book he wrote “I like helping people with their vehicles. It’s like a puzzle trying to figure out what’s best for them based on how the have cared for their car, how long they want to keep it, and of course their budget to keep it on the road”. Again, Scott and I are completely inline. Helping people is a passion and I am thankful that I have found a career that allows me to truly help people make the best decisions for their vehicle based on their own wants and needs. This blog will be the perfect platform for me to blab on and on about the importance of a good relationship with your automotive shop, the reason we hound you to keep up on your maintenance, the reason we completely violate your privacy and ask personal questions about your financial needs, and most importantly the reason why I become the mean person who tells you it is time to let go of the emotional attachment you have with the car you birthed your first born child in. We at Osborn’s “focus on the “People” part of the business just as much as we focus on the “car” part of the business and we like to consider ourselves experts in both areas.