How to stay in business 50 years: 5 tips
Dalziel's Autobody in Sherwood, P.E.I., has just celebrated 50 years in business — a rare feat now, when half of all new enterprises come and go in less than five years.
Founder Bill Dalziel — pronounced dee-ell — started repairing and painting cars in a shed in his parents' back yard in 1967. His younger brother John joined him shortly after.
Now, after 50 years of working 10-hour days, six days a week, Bill is ready to sell the business — the largest independent autobody shop in Atlantic Canada, he said — to John and John's son, Chris Dalziel.
"They'll beat a path to your door, wherever you're at, if you can do the work," was the good advice Bill received from his instructors. Now, he's ready to share his advice for entrepreneurial longevity.
1. Spend money on good advertising
Many Islanders can sing the jingle for Dalziel's Autobody: "D-A-L-Z-I-E-L spells dee-ell's autobody!" sang a young Lennie Gallant in the early 1980s. Dalziel's still uses the song in most of their radio and television spots.
Dalziel started advertising on CBC Television in the early 1990s, he said, and favours slots during Hockey Night in Canada. "I think that's the best advertising for your buck," he said, admitting it is expensive.
"You have to keep your name up there. People have a fender-bender, and say 'oh yeah, I just watched the commercial last night, I'll take the car out there and try them,'" he said.
He doesn't believe he can spend less on promotion, even though most of Dalziel's customers are repeat customers. "We're into third-generation people here now," Dalziel noted.
2. Invest back into your business
The way cars are repaired has changed dramatically in the last 50 years, and Dalziel admits keeping up with automotive technology has been challenging and expensive, as it quickly becomes obsolete.
"It's 100 per cent changed... computers and technology of the manufacturers," he said.
Cars are made mostly of plastic and aluminum now rather than metal, he said, and Dalziel's has had to purchase specialized equipment to work on them, including new welders and riveters.
And the cost of replacement parts and materials such as paint has skyrocketed. "You need half the materials that you used to use years ago, but it's twice as expensive," Dalziel said. For instance a typical headlight, which cost $7 in 1970, now cost up to $3,000 each, and a pint of paint that was $7 is now up to $90.
Dalziel's also computerized its business early on, and Bill took courses to learn how to use them. He now emails photos of damage to insurance companies, and keeps an eye on security cameras at the shop via cellphone.
Another investment is an owner's time, Dalziel notes — 7-day weeks and 10-hour days are common.
3. Have great customer service
One of Bill Dalziel's favourite quotes, written on the wall at the shop, from Henry Ford: "It's not the employer who pays the wages. Employers only handle the money — it is the customer who pays the wages."
The shop handles 2,500 to 3,000 jobs a year, from tiny (painting a tricycle) to large (painting a motor home).
"The customer is always right — sometimes they might be wrong, but you don't want to let on that they are," he said.
One of the best investments Dalziel's made, Bill said, was a bright, roomy office building a few years ago. People want fast, hassle-free customer service in a clean environment, he notes.
4. Be good to your employees
It's tough to find people interested in working on vehicles nowadays, Dalziel said, noting, "Our main asset is the staff that we have."
That's why, he said, they're offered a fair wage and steady work, as well as free training.
"The average age in our shop is 47 years [old]," he notes. "It's right across Canada, the whole situation." He'd like to see more women on staff, he said.
Fifty years ago, Bill made $1 an hour at his first job. "With taxes off it, you went home with $36," he recalls.
5. Have a good banker
A good banker will listen and "cuts you slack," Dalziel said, and will give you a heads-up if payday is looming and your payroll account is short.
Having a bookkeeper and an accountant in your shop that won't let you get into that position are also important, he said.
He advises maintaining a personal relationship with your bank, and having a line of credit.
Dalziel recommends small business owners invest early in RRSPs or savings which will allow entrepreneurs to retire with something in their pocket.
Your banker can also help you with a succession plan, he said, which can include a lifetime capital gains tax exemption for entrepreneurs on the first $800,000 of the sale of their business.
Having someone who is skilled at making sure customers pay their bills on time isn't as vital as it used to be, said Dalziel — with online assessments, insurance companies often have bills paid before the vehicles are even in the shop, he shared.
Bill Dalziel is tapering off his work at the shop, and said he'll soon be taking up a part-time job as a fresh air inspector in the Stanhope area, where he and his wife have a cottage. He's also looking forward to having his knee joints replaced.
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