Slighly rural, slightly northern ADG Autotech

Aftermarket drops in on Scunthorpe's ADG Autotech and its owner, 2015 Top Technician winner Andy Gravel

Published:  30 May, 2018

2015 was a big year for Andy Gravel. Winning Top Technician put him on the national stage, and also made him a local celebrity: "It had a very positive effect, " says Andy, "even to the extent of going into the local paper shop and the woman behind the counter saying 'I've just been reading about you.' She didn't know I was a mechanic - she didn't know anything about me, but she saw the picture and recognised me. It's free publicity. I wouldn't be the best at selling myself, but it made people aware without me having to jump up and down and shout about it."


This was good timing, as just six months before he was crowned 2015's Top Technician, Andy opened his garage, ADG Autotech. This was his first business as proprietor: "It was a massive learning curve in terms of running the business. It's not just about fixing cars anymore which is what you enjoy doing and how you ended up here in the first place.


"Now, things from a business point of view are going very well. I've never advertised, but through word of mouth and natural progression and doing the job right and aiming for that first time fix, I've got busier and busier to the point where the diary is full two weeks in advance.


"I have managed to stay on my own, but I was so busy in January that I said to myself if things stay where they were, I would look at taking someone on. But then I had some quiet weeks. I enjoy fixing the cars, and I enjoy being hands-on and doing it myself.”


Space is the place
ADG Autotech is based across two purpose-built modern units on an industrial estate outside Scunthorpe, and serves a customer base from the town and surrounding area:


"I've got three ramps at the minute with a view to putting in a fourth, so I've got room for staff," laughs Andy. "I've  got the 1,000 square foot unit that I started with. Later on I took the one next door which I've still got. I've put another lift in, and another one ready to go. This has given me flexibility. If  I have another job come in or I am waiting for parts, I'm not stuck with one lift that can't move.  A vehicle can be on the lift all week if need be."


Having eschewed advertising, Andy relies on peer-to-peer recommendation to grow the business, a strategy that seems to be working: "I like that as word of mouth means they will come if they trust you. I get a lot of jobs where people have been elsewhere and they are not convinced it's been done properly or even been done at all. When you get somebody that comes and trusts you. then you get their wife and then their son and then his girlfriend, and then her grandmother comes. If someone trusts you then you get the rest of the family follow. I know people are coming to find me.


While Andy won Top Technician because of his diagnostic prowess, it's not what he does all day: "The focus has changed. I get a lot of service and repair work, which I am quite happy to do. When I was employed I loved it when engine management lights and ABS warning lights came on. Now the tables have turned and it's quite nice to just stick those discs and pads on. You know when you start it how long it is going to take, it's going to go right, you're going to get paid and you don't have to think about it."


General vs. special
ADG Autotech provides a general service, in the best sense, but in the long term Andy sees specialisation as a necessity: "I think it will be necessary to specialise in a brand, because of the tooling you will need you can't cover all the vehicles. I have managed with the tooling I've got. I invested where I needed to and bought in services that I need that I can't do on the odd job. You only want some things once in a blue moon. If you haven't got it you can get it."


Even then, geography will have an impact: "Just because of the location you are limited to your market, and to how much you can charge as well. Living where we are, slightly rural, slightly northern, the labour rates aren't massive, which is all relative to the area you're in. To start specialising in one brand, you're going to have to charge a little bit more, and you are isolating yourself slightly as well. It can be a difficult one."


Top Technician
Making the right choice is always easier if you have confidence: "Confidence in repairing vehicles and talking to customers was already there and is still there.”


As we said earlier, Andy won Top Technician 2015 just after opening ADG Autotech. He'd been gradually moving closer to the top spot over the years, which must have helped in the confidence stakes: "I was in the finals the year before, and knowing you are chipping away at it and are at that level, you are consistently passing the test, getting into the final, you are talking to like minded people, knowing you are moving in those circles does give you confidence, absolutely. You feel you are doing the right things, and things are going in the right direction."


It helped Andy realise his potential: "Working when I was employed, with the lads you can't always gauge your skill level so you don't really know where you are or what you are.


"I guess that's why you keep pushing as well as you don't realise what you know then all of a sudden you start coming to the semi finals and finals, and then you win. Talking to people you realise you are doing the right things and you must be learning. It's a nice recognition of the level you are working at.


"It's nice to win, but without winning, the people you meet, and the things you learn, it's all valuable. Even the questions you get wrong are an opportunity to learn. I've learned so much through doing it. In fact once you win, you miss not being involved in the testing."


Andy has come a long way over the last few years. In the end, it all comes down to him knowing what kind of garage business he would like to see, and having the confidence to create it: "I didn't have a massive desire to be self employed or run a business. I was in my previous job for seven years, and I enjoyed it but was ready to move on to the next stage."
Andy concludes: "If you want to do things the way you think they should be done and at the level you'd like to do it, I found there was no option other than to invest in yourself, and do what you felt needed to do be done."


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     A phone call came from a local parts supplier, a visiting rep was having issues with a DPF. They believed it needed a simple regeneration to get it back on the road and asked if I would be able to do the job. After checking the Blue Print G-Scan, the function for a forced regeneration was available, I believed I would be able to carry it out and booked the job in.

    Basic beginnings
    After traveling from two hours away, the vehicle arrived. The customer was questioned, ‘Why do you require a DPF regen?’ Being a parts rep within the motor trade, her garage visits were frequent; various attempts had been made to resolve the issue. With conflicting advice being given and quotes between £600 - £1200 to fix the vehicle, the customer was obviously confused and unsure about what to do.
        
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    What’s wrong?
    One area I wanted to check was that the pipes were not connected the wrong way around. I decided to use the Mity Vac to apply pressure to the sensor pipe connected in front of the filter. This showed a positive rise in voltage, further proving good sensor functionality and confirming the pipes to be correctly connected. Connecting the Mity Vac to the pipe after the filter and applying pressure, simulated the negative voltage which was seen when the vehicle RPM was increased, simulating the fault. The sensor pipe in front of the filter must be blocked.
        
    I located the steel pipe that is fitted in the exhaust in front of the filter to reveal soot marks, it had been leaking exhaust gasses. On a closer look it was unscrewed from the exhaust while still located in the hole due to the pipe bracket allowing the slight leak of exhaust gasses. Once the pipe was removed it was clear to see the soot had built up and blocked the small hole in the end of the pipe. I unblocked the pipe, checked to make sure the mounting hole on the exhaust was clear and refitted it.
        
    Using the Pico Scope again on the signal wire, it now showed a positive rise in voltage when the RPM was increased. The live data now showed a small pressure increase, the filter was not blocked. With all fault codes cleared, an extended road test was carried out, the pressure reading stayed low throughout and no fault codes reoccurred confirming the fix, the vehicle did not require DPF regeneration.

    With no parts required to fix the vehicle the repair cost was far lower than the customer expected due to the previous attempts. The vehicle was returned to the customer who was surprised by the
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    TT Archives:  Top Technician issue nine 2016 | www.toptechnician.co.uk

  • Top Garage 2018 winner named – Cedar Garage 


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  • part TWO: Succeeding with succession 

    Businesses change hands for all manner of reasons, but crucially for family businesses, change has the potential to damage family harmony as well as destroy the future wealth of all concerned. But what happens should no family members want to take on the business and the business has to be sold?
        
    In this instance David Emanuel, Partner at law firm VWV and head of its Family Business team, says the family should take advice on the options. He advises seeking recommendations and says to “think hard about engaging people who work principally on a success fee percentage commission-only basis – the overall cost may be higher, although you may be insulating yourself from costs if a deal doesn’t go ahead – but there can be a conflict of interest for people remunerated only if a deal goes ahead.”
        
    One step that will ease the process is to undertake some financial and legal due diligence as if the seller were a buyer, to identify any gaps or issues that may affect price or saleability.

    Seeking a valuation
    Businesses will generally be valued on one of three bases – the value of net assets plus a valuation of goodwill; a multiple of earnings; or discounted future cash flow.
        
    Nick Smith, a family business consultant with the Family Business Consultancy, sees some families seeking the next generation pay the full market value for their interest, and other situations where shares are just handed over.
        
    “In between the extremes,” says Nick, “there are a raft of approaches and solutions including discounted prices and stage payments. There are also more complicated solutions such as freezer share mechanisms, where no sale takes place but the senior generation lock in the current value of their shares to be left to the wider family and the next generation family members actually working in the business receive the benefit of any growth in value during their time in charge.”
        
    What of an arm's length sale? Here David says: “The family will ideally want to be paid in cash, in full, at completion, rather than risk the possibility of deferred consideration not getting paid because the business gets into difficulties under its new owners, or a dispute arises over what should be paid.” However, he says that may not be possible, and there may be many good reasons why the retiring shareholders keep an equity stake or agree to be paid over time or agree that some of what they get paid is subject to future performance. Even so, he suggests starting with the idea of the ‘clean break’ and working back from there if you have to.
        
    It’s important to remember that in a succession situation, where one generation is passing the business to the next, and the retirees are expecting a payment of value to cover their retirement ambitions, deferred payment risks may be looked at differently depending on the circumstances – families will be more trusting.
     
    Tax planning and family succession
    As might be expected, tax planning is important and should always form part of the decision-making process but it should never be the main driver. That said, no-one wants to hand over, by way of inheritance tax, 40% of the value of what they have worked for.
        
    Both Nick and David consider tax planning key. Says Smith, “the most important point is what is right for the family members and the business itself.” He believes the UK offers a fairly benign tax-planning environment for family business succession so that most family businesses can be passed on free of inheritance and capital gains tax to other family members. However, the risk of paying a bit of tax pales into insignificance if passing on the family business to the next generation means passing on a working lifetime of misery and a failing business. David points out that if Entrepreneur’s Relief is available, the effective rate of Capital Gains Tax is just 10%.

    In summary
    Family businesses are peculiar entities, caught by both the need to compete in the marketplace and the need to keep familial factions onside. Whatever course is taken to secure the future of the business, one thing is certain – everyone needs to keep the lines of communication open.



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