Mentoring a Newer Owner Outside Your Market

Why this matters

Most owners who have run a shop for fifteen years remember the person who answered their phone call in year two, when payroll was due and the receivables were not in. Being that person for someone else costs a few hours a month. It pays back in ways that are easy to undercount: explaining your systems to a newcomer forces you to see which ones you never wrote down, you gain a peer you can call when you hit something new, and every badly run shop that learns to price its work properly is one fewer shop teaching customers that the job should cost half what it does.

The reason to mentor outside your market is not only courtesy. It is what lets you speak freely about the things a newer owner most needs to hear, prices and pay among them, without walking into the antitrust problems that come with discussing those things with a competitor. This card is about doing that well, and about the parts of "outside your market" that are less obvious than distance on a map. The legal line itself is owned by see related: Antitrust Lines for Associations and Owner Groups; this card spends one sentence on it and then applies it.

"Outside your market" is three questions, not one

Shops compete in more than one market at a time, and each one has its own boundary.

The customer market. Do your service areas overlap, or could they within the next few years? Compare each shop's service radius and the distance between them, and leave room for growth: a shop that serves 25 miles today may serve 40 after its next hire.

The labor market. Could the same tech work for either shop? Techs commute farther than customers expect a truck to drive, often 30 to 45 minutes each way. Two shops 60 miles apart may not share a single customer and still hire from the same trade school.

The supply market. Do you buy from the same distributor branch, under account terms one of you has agreed to keep confidential? Your pricing agreement with a distributor is a contract, and many include confidentiality language. That is a contract question rather than an antitrust one, but it is a reason to keep vendor terms private either way.

Sharing current prices, future price plans, pay rates or hiring plans between businesses that compete in any of these markets is the conduct the antitrust card describes. Outside all three, the risk is much lower, though it is not a license to coordinate anything with anyone.

What you can share freely

Methods travel safely; they are what a newer owner needs anyway.

• How you build a price, not the price: how many hours your common jobs take, how you load labor with burden, how you set a markup, how often you review it.
• Your own numbers as ratios: labor as a share of revenue, your callback rate, how many calls a tech runs a day, what share of revenue goes to vehicles.
• Your hiring and training system: how you interview, what a new tech's first 90 days look like, how you decide who is ready to run calls alone.
• The mistakes: the year you grew too fast, the account you should have dropped, the partner you should have bought out sooner. This is often the most valuable thing you have.
• Introductions: your accountant, your insurance agent, the association that was worth joining.

What stays out, and why each one earns its place on the list

This is the part most mentoring relationships never write down, and it is where they go wrong.

• Your actual price list, wage scale and pay plan, whenever any of the three markets could overlap. The reason is legal, and it applies even to a friendly, informal exchange; the method behind those numbers covers almost everything the mentee needs.
• Anything about a third shop. "Neither of us should work for that home warranty company" or "let's both stop buying from that supplier" is the beginning of a group boycott, the same category of agreement the antitrust card covers, even when it is said in sympathy. Talk about how you evaluate a warranty company, never about what both of you will do.
• Each other's people. Do not agree not to hire each other's techs, and do not recruit from each other while mentoring. The first is a no-poach agreement; the second ends the relationship.
• Customer information and employee personal information. A customer list is your asset and may carry privacy obligations. An employee's pay, discipline or medical situation is theirs, not a teaching example.
• Confidential vendor terms, for the contract reason above.
• Legal and tax answers stated as answers. "Here is what my attorney told me about my situation" is useful context. "You don't need a lawyer for that" is not yours to say.

Finding someone to mentor

Newer owners rarely ask; they assume nobody has the time. The places they surface are predictable: the new-member list of your state or national trade association, the counter staff at a distributor branch in another town who know which young shop is struggling, instructors at a technical college whose graduates have gone out on their own, and the owner from two counties over you met at a training class. Look for someone a year or three in, past the first scramble and before the habits set.

The opening matters because a newer owner may suspect a pitch or a buyout feeler. Say what it is and what it is not: a monthly call for six months, no fee, no interest in buying their shop, no recruiting their people, and no talk of either shop's prices if the two of you could ever end up competing. Naming the last item up front sets the boundary before anyone has to enforce it.

A structure that holds up

Informal mentoring tends to fade after three calls or slide into an open-ended favor. A light structure keeps it useful for both sides.

• A stated term. Six months is a good starting point. At the end, both of you decide whether to continue, change shape or stop, and nobody has to quit awkwardly.
• A fixed cadence. One call or visit a month, 60 to 90 minutes, on a recurring date.
• The mentee owns the agenda. They send two or three questions a few days before. You answer what is asked rather than delivering your talk on what they should care about.
• One written commitment per session. The mentee leaves with one thing they will do before the next meeting and reports on it at the start of the next.
• Confidentiality both ways. What either of you says about your shop stays between you.

Worked example

A fifteen-person plumbing shop owner, Owner A, agrees to mentor Owner B, who runs a three-person plumbing shop in a different metro area 110 miles away.

The three-market check, at the start.

• Customer market: A serves a 30-mile radius, B serves 25 miles. The two areas' nearest edges are 110 minus 30 minus 25, which leaves 55 miles of gap. No overlap.
• Labor market: neither shop has ever hired someone who lived nearer the other. Techs in both areas rarely commute more than 45 minutes. No realistic overlap.
• Supply market: both buy from different branches of the same regional distributor. A's account terms include a confidentiality clause, so A will not discuss his discount structure.

Six months of sessions. In month 1, B asks why he is busy and broke. A walks through how he builds flat-rate prices from hours and burden, and shows his own labor-to-revenue ratio. B's commitment: time his last 20 jobs. In month 2, B finds his drain calls average 1.8 hours on site, against the 1.0 hour his price assumed, so his drain price covers a little over half the time he actually spends (1.0 over 1.8). He rebuilds that price from his own hours. In month 3, they discuss B's first hire; A shares his interview questions and his 90-day plan, not his wage scale, even though the markets do not overlap, because B can learn his own local wage from the job posting responses. Months 4 and 5 cover cash flow and a warranty company that is slow to pay B; A explains how he decides whether a warranty account is worth keeping, and B makes his own decision.

Month 4 changes the picture. B mentions he is considering a satellite location 40 miles toward A's city. Rerun the check: the satellite would sit 70 miles from A's center. With B's 25-mile radius there, the nearest edge is 45 miles from A's center, and A's own radius is 30, leaving a gap of 15 miles. Two growing shops could close 15 miles in a few years, and the labor market at that distance plausibly overlaps now. A says so directly and narrows the conversation: no more specifics on pricing or pay, even as examples, while they keep talking about systems, hiring process and cash flow. B decides against the satellite for other reasons in month 6, and the term ends with both agreeing to switch to a quarterly call.

What would have gone wrong. Had A kept sharing actual price points after the satellite came up, a pair of shops about to compete for the same customers would have been exchanging current pricing, which is the exact conduct the antitrust card describes, and an informal friendship is not a defense to it.

Where mentoring goes wrong, apart from the legal line

• The mentee stops deciding. If B starts asking A what to do rather than how A would think about it, A should hand the decision back. A mentor who makes the calls owns the outcome without owning the shop.
• It becomes free consulting forever. The stated term is what prevents this. Ending a term is not ending a friendship.
• The mentor's shop becomes the template. What works at fifteen people often does not work at three. The question to keep asking is what the mentee's numbers say, not what the mentor's shop does.

References

• See related: Antitrust Lines for Associations and Owner Groups
• See related: Being a Mentor: The Give Back
• See related: Mentoring vs Managing: The Difference
• See related: Peer Groups and Owner Roundtables