Earn six times more revenue by turning your shop into a fleet operation
If you don’t have an auto service store, get one, says Steve Bezner from Corsicana, Texas. Bezner, 70, now retired, is an advocate for the automobile consumer and believes the car business can be simplified, lowering automobile costs by as much as 20 percent to 25 percent. He says the auto service industry can transition their stores into 6X more revenue, and be the first repeatable chain store business model in the car business.
In his high school and college days, Bezner worked in the family used car business. He has a finance degree from UT Dallas, worked for Texas Instruments, and later was a Controller in the oil industry, where they leased all sorts of equipment, and always included service and repair in the lease. He says his specialty was cost accounting, and he also kept the books for large vehicle fleets and observed how the cars and trucks were reassigned to different users.
These experiences have developed into a plan. The story began in 1971. The Bezner family car business was dad, two sons and a daughter. “We leased used cars to local customers, and we always included service and a lifetime warranty in the lease. My dad knew the cost of doing this; it really is minimal, and the customers loved it. It was pretty easy to lease used cars with this business model. We had a great relationship with our customers, and it was a fun business,” said Bezner.
Now in retirement, Bezner wants to revive his dad’s business model and see it become mainstream in the industry. He calls it Full Service Automobiles, or FSA. “I can’t believe after all this time, you still don’t see this in today’s marketplace. We serviced and repaired the cars behind the scenes, always striving to keep costs low. Our mechanics did not have to explain repairs to customers, prepare estimates or collect payments for repairs. The customer didn’t want to be involved, and the mechanics didn’t want them involved, so it made a lot of sense,” said Bezner.
“Car dealers are independents. There are no chain stores in the car business. The reason is buying and selling used cars is a difficult, speculative business. With the FSA business model, you control service and repair. The cars can be kept in perfect condition and made to last. They can be leased for their entire useful life. It eliminates buying and selling used cars. It simply becomes a fleet operation. Repeatable. Shoot, even the government knows how to run fleet operations” he laughed.
Bezner said service and repair is about 8 percent to 9 percent of total car costs. With the savings from zero procurement costs for the used cars, consolidating the sale of the car, financing, service, repair, and insurance into one sale, volume purchasing of cars and chain store efficiency, you can throw in service and repair at no extra charge. But he was quick to add that he is a cost guy. Websites, website inventories, phone apps, pricing policies, all of that will be best left to others.
“About 27 percent of new cars are leased and I think a similar number will apply to used car leasing, when you include service and a warranty. Every auto service facility on the planet is a potential fleet operation. Just add leasing personnel and expertise. The stores are already profitable. They can continue their service business while the store gradually builds up a fleet of cars. Each new car added just increases the store’s profitability. Eventually the store will cease servicing cars for the public and it will become a dedicated leasing/fleet operation. Store revenues increase by about 6x,” he said.
“I am an advocate for the automobile consumer. I would like to see happy lease customers like the ones we had in the 70’s. I hope the auto service industry will take notice and see the opportunity that awaits them. I have the plan, the research, lots of ideas, and numbers, and I stand ready to help,” Bezner said.
