AutoShopOwner Articles

Mid-Year Reset: What Your Auto Shop’s Numbers Are Telling You

Wed, 03 Jun 2026 12:04:38 +0000

June is a unique and critical month for auto repair shop owners.

Think about where you are right now. The chaotic spring rush is behind you, the heavy summer busy season is building, and the stress of tax season is officially in the rearview mirror.

More importantly, the first half of the year has generated enough hard data to help you make smarter, more profitable decisions for the second half.

For many shop owners, bookkeeping is just a chore done for the IRS. But a mid-year financial review is so much more than that. It should be used to assess the first half of the year, examine patterns, identify what’s working, and spot problems early on.

And most importantly, it’s about improving your profitability while there is still plenty of time to change your year-end outcome.

Your Numbers Are Telling a Story (Are You Listening?)

Most auto shop owners wait until December to review their financials. By then, the year is over. If there was a leak in your profits, the money is already gone, and it’s too late to fix it.

By June, your business has already established clear patterns. The goal right now is to understand what those numbers are telling you. Before summer gets too chaotic and you are pulled back into putting out fires on the shop floor, you need to review these key financial checkpoints:

Sales Trends vs. Last Year: Are you growing, plateauing, or shrinking compared to the first half of last year? Don’t just look at top-line revenue; look at your car count and average repair order (ARO). If revenue is up but car count is down, your ARO is carrying the weight

Gross Profit and Margins: Are your labor and parts margins holding strong? The cost of parts and payroll has been rising across the industry. Have those costs quietly eaten into your profits, or have you adjusted your pricing to maintain your margins?

Cash Flow & Outstanding Receivables: Are your sales incredibly high, but your bank account feels uncomfortably light? Outstanding receivables from fleet accounts or delayed warranty payouts could be the culprit.

Debt Increases: Did you take on new debt for equipment or rely on a line of credit to get through a slow winter? You need to know how those payments are impacting your cash flow now.

Owner Distributions: Are you actually paying yourself what you planned to pay yourself at the beginning of the year?

Operational Problems Usually Show Up in Financials First

Financial problems almost always start as operational problems. Your Profit & Loss (P&L) statement is a diagnostic tool for your shop’s operations. Your P&L can often spot issues long before they become obvious on the shop floor.

If your margins are shrinking, there is always a reason.

Here are a few operational red flags to look for in your mid-year financial data:

Increased Sales with Shrinking Cash Flow: This is a common and frustrating scenario. You are busier than ever, but cash is tight. Operationally, this often points to uncollected invoices, over-purchasing inventory that is just sitting on the shelves, or heavy debt principal payments that don’t show up on your P&L but absolutely drain your bank account.

Slipping Parts Margins: If your parts margins are dropping, you have an operational issue at the front counter. Are your service advisors properly using the parts matrix? Are vendors raising prices, but your team is failing to pass those increases along? Or worse, are advisors quietly discounting parts to close the sale without telling you?

Payroll Creep During Busy Season: Have overtime hours spiked during the busy season without a corresponding spike in billed labor hours? This points directly to technician productivity. If you are paying for 50 hours of a technician’s time but only billing 35 hours to the customer, your labor margin will plummet.

Reopened or Reposted ROs: If Repair Orders are constantly being adjusted, reopened, or heavily modified after the fact, it messes with your financial reporting. More importantly, it signals a massive workflow and training issue at the front counter that is costing you time and money.

Take Control of Your Second Half

Your financials should actively help you make decisions.

If you catch a slipping margin, a cash flow bottleneck, or a productivity issue in June, you have six full months to correct it. You can adjust your parts matrix, have a training meeting with your service advisors, or tweak your labor rate. You are still in the driver’s seat.

Every shop owner tracks gross sales. But is that really the number you should be focused on?

Sun, 31 May 2026 13:13:53 +0000

Let's compare two shops:

• One shop generates $1 million in annual sales and earns a net profit of $200,000.
• Another shop generates $2 million in annual sales but earns only $100,000 in net profit.

Which shop is more successful?

As you can see, higher sales do not always translate into higher profits.

The number you should be watching closely is gross profit—the revenue remaining after paying the direct costs of labor, parts, and sublet expenses. Gross profit is what pays for your operating expenses, including rent, utilities, marketing, equipment, and payroll. Once those expenses are covered, the money left over becomes your net profit.

This is why every shop owner must establish gross profit goals, particularly for labor and parts. Increasing gross profit dollars and gross profit percentages creates the foundation for stronger net profits and a healthier business.

Remember: Sales are important, but gross profit and net profit are what ultimately determine financial success.

Marketing Strategies To Attract and Retain Your Ideal Customers

Sun, 23 Feb 2025 16:44:44 +0000

Marketing Strategies to Attract and Retain Your Ideal Auto Repair Customers

By Joe Marconi

I had one main objective when I opened my repair shop in the fall of 1980: Acquire customers. Being a startup, gaining customers, any customers, was essential. Without them, business survival would not be possible.

With limited knowledge of marketing, I did what many new companies do, I ran mass advertising promotions in local newspapers offering huge discounts. Did this type of marketing work? Well, that depends on how you define success. I can tell you that It did bring in customers, and a lot of them. But what I found out was that it didn’t bring in enough of the customers I wanted. Even early on in my business career, I wanted to create a company that catered to consumers who appreciated the total car care approach. With coupons in hand, most customers wanted only the discounted offer and nothing more.

I remember one particular customer who came in for his discounted oil change that included a free tire rotation. I noticed that his wiper blades were ripped, broken, and digging into the windshield. When I offered to replace them, he shouted, “Don’t touch the wipers, just change the oil, rotate the tires, and let me be on my way!” I quickly learned that while my strategy did attract consumers, marketing to the masses was not going to be the way to grow my young auto repair shop. It’s not that I am against all forms of discounting. I am not. However, the better approach to growing an auto repair shop is to create a business strategy that attracts and retains those customers who are aligned with your business model and culture.

In business, attempting to be everything to everyone is not a sustainable strategy. It is far better to narrow your focus, understand your key profile customers, and do all you can to gain more of them. In this article I will outline strategies to identify and market to your ideal customers, and why these strategies will help you achieve long-term success.

Why Define Your Profile, Ideal Customer?

As mentioned above, trying to be all things to all people is not a business model that works for the long term. If you are a startup company or need to increase car counts quickly, offering discounted services and repairs will fill your bays. And depending on the situation, this may be a viable option. However, in most cases, this should not be a long-term strategy. Kim and Brian Walker, at Shop Marketing Pros, recommend that auto repair shop identify their customer avatar, stating that “The most successful auto repair shop owners have a clear idea who they’re targeting.”

Let me ask you a question. What type of customers do you want to work for? Wouldn’t you rather work for those customers who throw their keys on the service counter and say, “Don’t bother calling me, do what you need to do, and I’ll see you at 5 o’clock.” Well, those people are your ideal customers. They trust you, are loyal, and say YES to your service recommendations! Which also makes them your most profitable customers. And let’s not forget that dealing with these ideal customers is a lot less stressful for you and your entire team.

Defining Your Profile Customer

Defining your profile customer begins with understanding your business model and defining your vision, your mission, and your culture. What are the types of services and repairs you will offer, and the type of vehicles you prefer to work on? Also important is balancing the type of jobs offered to your clientele to ensure that you sell enough profitable work. While we may love what we do, we have a responsibility to be profitable. Knowing your profile customers will help ensure you achieve profitability.

Creating the actual profile of your ideal customer will take a little bit more work. Start with what I call the “key droppers.” As mentioned earlier, those are the customers who don’t question your recommendations or your price, and they trust you. They literally drop their car keys on the counter, preapproving the work, basing their decision on earned trust. These customers will give you the foundation to build your customer profile.

After that, run a report from your business system identifying your top 100 to 200 customers. Most systems sort this list by revenue per customer. In addition to the dollars spent per customer, what you are looking for is certain common criteria. Those criteria include length of time as a customer, visits per year, type of vehicles, where they live, and the type of repairs and services performed on their vehicles.

You will find that your top-profile customers are the ones who follow your service and repair recommendations. Again, it’s the trust factor. For more extensive demographic customer profile building, marketing companies, like Shop Marketing Pros, have tools that can help with this process.

After performing your due diligence with the initial list, you will end up with probably 50 to 100 customers that you will define as your key profile ideal customer. The next step is to build your marketing plan.

Marketing Strategies to Gain More Profile Customers

Once you have your customer profile, do all you can to cater to their needs. Listen to them, speak to them, and find out all about them. Their hobbies, birthdays, community involvement, the local newspapers they read, the local radio station they listen to, and their profession. Also, do they have children and pets? These things are important. Asking a customer about their child or pet, or remembering their birthday, goes a long way in building relationships, a key component in customer retention.

But there’s another reason why this is important; and that is, to align your marketing and advertising strategy around your profile customers. Let me give you an example. Let’s say you find out that most of your profile customers are heavily involved in the community, such as fundraisers, or local youth sports activities. You then need to get involved with these local community events. Let your profile customers see that you are a business that cares about the community. Focusing your marketing efforts in areas where your profile customers will notice you will accomplish two things: it will reinforce your brand to your existing customers and will help you attract more of the same like-minded customers. A goldmine opportunity.

The Rewards of Building an Auto Repair Shop Model Based on Your Ideal Customers

It’s hard to deny the rewards of building a marketing strategy and business model around your profile customers. You’ll save on advertising costs by targeting your ad dollars, rather than using a shotgun approach, marketing to the masses. You will build a stronger and more loyal customer base, improve customer retention, increase sales, and generate higher profits. You will also build a powerful brand. The best part, you will lower the overall stress for your employees.

Conclusion

If you are an auto shop owner looking for innovative ways to enhance and grow your business, Elite Worldwide can help. At Elite, we have world-class, experienced coaches who understand your business. Our coaches have lived in the trenches and built amazing, successful companies. Elite also has sales and management training, and peer groups that can take you and your business right to the top. No matter where you are in your business career; startup, growth mode, or looking to retire, Elite can guide you and help you achieve your goals and build a more profitable and successful business.

About the author – Joe Marconi – With over four decades of industry expertise, Joe is a seasoned professional whose accomplishments include owning and operating one of America’s most successful auto repair companies. A graduate of the Automotive Management Institute, Joe is a recipient of the CARQUEST Excellence Award, served on industry panels, and played a role in developing the ASE Engine Performance Certification test. As a former columnist for Ratchet & Wrench Magazine and co-founder of AutoShopOwner.com, Joe has been a keynote speaker at the Ratchet and Wrench Conference. After selling his automotive company in 2021, Joe now dedicates his time to giving back to the industry as a Top Shop 360 Business Development Coach with Elite Worldwide and serves on the board of directors for the Service Stations Dealers of Great New York. Joe, a Bronx native now residing in Patterson, New York, enjoys family time, community involvement, and pursuits such as tennis, golf, and woodworking.

Five Proven Tips to Improve Your Bottom Line

Fri, 15 Nov 2024 21:17:20 +0000

Five Proven Tips to Improve Your Bottom Line

By Joe Marconi, an Elite Blog -

A recent Small Business Administration (SBA) report revealed that one of the main reasons for small business failure is due to a lack of financial knowledge. Another survey, also conducted by the SBA, found that 83% of failed business owners stated that their failure was due to cash flow problems. While there are many facets to operating a successful auto repair business, one thing that is common to all is that it needs to be profitable.

The fact is that too many auto repair shops struggle financially. The sad news is that most of them actually have a booming business that is clouded by their financial woes. The typical auto repair shop has consistent car counts, a calendar booked out for at least a few days, and in many cases, booked a week or more. Where so many auto shop owners fall short is understanding their financials, more specifically, not focusing enough on generating consistent profit and improving cash flow.

In this blog, I will outline five proven tips to help you increase your bottom-line profit and improve cash flow. Becoming financially stable also improves your personal life and the lives of those you employ.

Understand Your Financial Reports. Establish Your Financial Goals

There are three main accounting reports that you should have a basic knowledge of: The profit and loss statement, the cash flow statement, and the balance sheet. Most auto repair shops either have an in-house bookkeeper or an accountant to generate these reports. It doesn’t matter who updates and runs these reports, as long as they are reviewed by you, the shop owner, periodically.

Have regular meetings with either your bookkeeper or accountant and become familiar with your financial reports. You do not have to understand these reports as well as your bookkeeper or your accountant does. However, the more knowledgeable you are about your financial reports, the better financial decisions you will make, which will make a difference to your bottom line.

Performing an in-depth analysis of your financial reports will give you valuable information on the financial strengths and weaknesses of your company. This information is crucial when establishing your financial goals. Having financial goals is essential to your company’s future. Share your goals with your entire team and brainstorm collectively to find ways to achieve them.

Focus on Gross Profit, Not Total Sales

When shop owners get together they typically share their year-over-year sales increases. While total sales revenue is important, it doesn’t tell the entire story. And it may not reflect the true financial health of your company. If you had a choice, would you rather have a 1.5-million-dollar business that produces a net profit of $50,000, or a one-million-dollar business that nets a profit of $175,000? The answer is obvious. Why? Your bottom line net profit is what truly matters, not the total sales number.

To have a healthy net profit requires that you have a healthy bottom line. Gross profit is the amount of money left over from your total sales after paying your technicians and paying all the costs of sales items for all work performed. The higher the gross profit, the higher the net profit. Gross profit is important because it pays for all other operating expenses and loans. After paying all your operating expenses, what’s left over is your net profit. Depending on your business model, typically, auto repair shops look to attain a net profit of 10% to 25%.

Improving your bottom line requires that you properly establish your labor and part profit margins. While there are benchmarks for the average auto repair business, the margins you set for your company may be different. With that said, we usually want to see 40% to 55% part profit, and a 70%-plus labor margin. A good number to shoot for is a 60% overall gross profit for parts and labor.

One more thing to consider when calculating your gross profit requirement: Your operating expenses need to be in line too. Keeping your expenses in line by cutting excess and waste will lower your operating expenses and increase your net profit.

If you are not sure how to calculate your margins properly or need help with maintaining your expenses, speak to your accountant, or seek help from a qualified business coach.

Improve Quality and Total Shop Production

During the Great Depression of the 1930s, Chrysler gained market share and financial stability by improving production. While other car companies were looking for ways to cut costs, Chrysler made a bold decision to focus on building more affordable cars and improving overall efficiencies. Their strategy was to produce more cars with the same labor costs. This ultimately resulted in increased sales and profits. It also propelled Chrysler to become known as one of the “Big Three” automakers, along with General Motors and Ford.

Improving workflow production in your auto repair shop by utilizing the same direct labor cost will result in increased sales and profits. Essentially, improving productivity by using your current workforce means more work is done in a given period.

Shop owners, take a long hard look at your overall workflow processes. Track all the steps your technicians are taking throughout the day. Are there wasted steps that can be eliminated? Are there bottlenecks in the service advisor process? Are your service advisors properly trained in the art of sales, and in delivering exceptional customer service? Improving your total shop production and quality will result in increased profits.

One last word on the topic of production; look at your shop layout. Are tools, equipment, and information systems easily accessed? And let’s not forget how continuous training for all employees is a key component in delivering consistently high levels of quality and productivity.

Build More Profitable Estimates

Years ago, we used to say that technicians have control over their efficiency. This may have been true to some extent, but today there are too many variables. Let me give you an example. Your service advisor wants to sell exhaust manifolds on a Chevy pickup truck. The published labor time in her business systems calls for 1.7 hours per side. However, all the studs are rusted away which will require drilling and installing new studs, which is probably a 6-hour job, or more. If the wrong labor time is sold, there will be no way the technician can complete this job in the labor time sold to the customer.

Sometimes you need to close the book, and openly discuss with your technicians the true labor time based on experience and the individual scenario. There are too many published labor times that are not correct. Increasing billed labor hours is perhaps one of the best ways to improve your bottom line.

Control Account Receivables and Inventory

Controlling your account receivables will not affect your gross or net profit. However, it will impact cash flow. Essentially, high account receivables reduce the amount of cash on hand. Available cash and profit are not the same. Your shop can generate a net profit of $25,000 for the month, but if your account receivables are $35,000, you will have a $10,000 shortfall of cash for that month.

Most auto repair shops these days do not have an extensive inventory. Exceptions are repair shops that stock tires and shops located in extremely rural areas. Even if your inventory is low, pay attention to it. Limit your inventory to only those items that move fast. Having old stock sitting on a shelf reduces your available cash. Another important task is to ensure that your inventory pricing is up to date. Charging out-of-date prices are losses that go under the financial radar and will hurt your bottom line.

Conclusion

Most shop owners have their vision of a successfully-run business. This vision includes providing a healthy work environment for their employees, providing training and equipment, and having a clean and customer-friendly facility. Additionally, shop owners want to provide a benefits and pay package that attracts and retains the best employees. And of course, the owner must be able to earn a respectable wage too. All this requires profit.

At Elite, we understand what auto shop owners desire from their businesses. We not only provide the business tools, one-on-one coaching, service advisor training, and peer groups that we know will help take your company to the next level, but we accomplish this in the most honest and ethical way.

Isn’t It Time We Rethink What a Master Level Technician Is?

Fri, 15 Nov 2024 21:11:35 +0000

Isn’t It Time We Rethink What a Master Level Technician Is?

By Joe Marconi, an Elite Worldwide Blog -

My roots in the automotive industry go back to the 1970s working in a small 2-bay auto repair shop. As a young technician, my goal was to attain the status of master-level. That meant that I was expected to repair or service nearly anything that rolled into my work bay. However, “anything” really only meant vehicles made by General Motors, Ford, and Chrysler. The Big Three, as they were once known, dominated the roadways in those days. With a limited number of vehicle brands to learn, it didn’t take long to become proficient in all areas of automotive repair, from engine mechanical, drivetrain, electrical, steering, suspension, and all other systems. That was back then.

Let’s fast forward to today. Unless you specialize in certain areas and/or on specific vehicle brands, it is becoming increasingly more difficult to be proficient in a wide range of vehicle models and vehicle systems. The training, technical information, and equipment that is required today to be an all-around master-level technician is too overwhelming.

In this blog, I will explore a few ideas and push the envelope with a few controversial concepts. My goal is to help advance the automotive aftermarket and to improve the perception the typical consumer has of our industry. Everyone employed in the automotive industry should feel proud of the work they do.

The Reality of Modern-Day Automotive Repairs and Service

Is it reasonable these days to expect a technician to solve a complicated check engine light problem on Lexus, then jump to an electrical fault on a Volvo, and then analyze a transmission issue on a Dodge diesel pickup truck? Is it also reasonable to expect that technician to remain highly productive bouncing from problem to problem on different vehicle brands? The belief that the average technician can attain master-level status on a wide variety of vehicle brands and in all areas of auto repair has become unrealistic. We need to define different criteria.

Should There Be a Change to ASE Certifications?

We also need to consider the standards set by ASE (Automotive Service Excellence). Achieving ASE Master Level status requires passing a series of tests in a particular area of expertise. Most technicians consider ASE certifications to be a badge of honor, an achievement of accreditation. There is nothing wrong with this. However, in this modern world of sophisticated automotive technology among a vast array of vehicle brands and systems, does passing a series of tests accurately determine someone’s skill level and proficiency? There is no doubt that the ASE does a great job of creating standards for our industry, and their dedication to our industry cannot be ignored. However, I believe that the topic of what determines a Master Level Technician is something that the ASE needs to take a hard look at.

A Shift in Our Mindset is Needed

About eight years ago, I hired a technician that emigrated from Greece., we’ll call him Pete. When I reviewed his employment application, he noted that he was an Undercar Specialist. In his home country, Greece, he was trained in brakes, steering, suspension, wheel alignment, driveline issues, axles, tires, and wheel balance. I hired him, at first, as a B-level technician. What I found out in a short time was something I never considered before. Pete was so competent in his areas of expertise that I eventually promoted him to A-level technician and paid him accordingly. By focusing on certain vehicle systems, he was able to become highly proficient in those areas; to the point where he was the go-to tech in my shop for any undercar problem. Pete’s work was top-notch, with virtually no comebacks and the highest quality. The question is, why shouldn’t Pete be awarded the recognition of Master Level in his field of expertise?

Here’s another thing to consider. We often complain about finding competent technicians. Techs that can handle everything we throw at them. Again, is this realistic? That may have been a reasonable expectation in 1985, but is it today? We need to shift our mindset and help young technicians choose their area of expertise, based on their strengths and preferences. This will build a larger pool of qualified technicians. This strategy would also open up more jobs for more people to enter our industry.

With the proliferation of technology, diesel, hybrids, and electrical vehicles, doesn’t it make sense to have many areas of master-level status? Perhaps we need to take a page from the medical field. In the medical field, you have surgeons, cardiologists, gastroenterologists, pediatricians, obstetricians, gynecologists, dentists, and more designations. They are all specialists in their particular field, and they are all called Doctors.

The Economic Reality

I want to address the economic impact of running an auto repair shop these days. There isn’t a shop owner today who is not financially affected by the evolution of the modern automobile. The associated rising costs for tools, equipment, training, and information systems are heading into uncharted territories. Can the average repair shop afford to keep current on all makes and models? Buying expensive equipment, for example, has become a challenge. Shop owners often struggle, asking, “Why buy an expensive piece of equipment, only to be used once or twice a year? Where’s the return on investment?”

With respect to being profitable, again I go back to what I stated earlier, can an auto repair shop be productive in all areas and on all makes and models? High levels of production are needed to generate profit. However high levels of production rely on creating processes on a predictable set of operations. What this means is that when a repair shop narrows its focus on what they do best, and on the vehicle brands they train on, those shops become more productive. They also become more profitable than those shops trying to be all things to all people.

My Proposed Solution

The automotive aftermarket industry must adopt a new way of thinking. Just like the medical field, technicians should be able to, and encouraged, to specialize. This would allow someone to achieve master-level status technician in a specific area of automotive repair. Just as in the example above with my technician, Pete, we would have highly skilled technicians proficient in different areas. We would have under-car specialists, transmission specialists, drivability specialists, EV/Hybrid specialists, engine specialists, and other designations. And they would all be considered Master Level Technicians in their field of expertise. Productivity and efficiency would improve, more jobs would be made available, and more people would have pride in what they do, and in the industry they work in.

Conclusion

At Elite Worldwide, we are committed to helping our clients stay on the cutting edge of business strategies. We are also firmly committed to elevating the auto industry, raising the bar for all auto repair shops, and for those working in the automotive aftermarket. From our Top Shop Coaching programs, Pro Service peer groups, and our service advisor Master’s Program, Elite has the business solutions to help you take your company right to the top!

Money Isn’t The Motivator We Think It Is

Fri, 15 Nov 2024 21:09:39 +0000

Money Isn’t The Motivator We Think It Is

By Joe Marconi, an Elite Worldwide Blog -

We often hear that most people are money-motivated. However, when it comes to employee motivation, there’s much more than just financial incentives.

According to Gallup, a management consulting company, when people are looking for employment, money may be at the top of their list of considerations, but once hired, no amount of money can motivate someone if they are not happy in their workplace. Additionally, Gallup’s study revealed that money does not create employee motivation and that there is no direct link between salary and workplace happiness.

Understanding employee motivation is crucial for any manager looking to improve productivity and maintain a happy, high-performing workforce. Without understanding what truly motivates employees, high levels of productivity and profits will not be achieved. People are motivated by different reasons. It’s the job of the manager or shop owner to build strong relationships with their employees to find out what truly motivates them. One of the best ways to find out is to simply ask them. You may be surprised by what they say.

Now with that said, let’s address when money is important. Everyone needs to cover the basic needs of life. People need to pay the rent or mortgage, put food on the table, and take care of their families. If someone worries each week that their base pay will not cover their financial needs, they will work from a position of fear. This will eventually cause them to shut down, produce less, and start to look over the fence for greener grass.

Another area when money becomes a factor is when an employee feels that they are not getting the respect they believe they deserve. For example, you hire a top-level, experienced service advisor and pay that person a higher wage than your current top-performing service advisor. No matter what arrangements you make with the new hire, your current service advisor will find out the pay wage for the new hire, and that will not go well. In some cases, this may cause your current service advisor to quit.

Aside from a few exceptions, money is not a prime motivator. In this blog, I will outline five powerful ways to motivate the people in your company, which will also help you create the right culture, ensure long-term success, and help prevent your employees from looking over the fence for greener grass.

Satisfy The Basic Needs of Life and Career

As I mentioned earlier, when an employee worries each week about not earning enough to cover his basic financial needs, he works in a state of fear. In this state, people cannot function. The stress and worry consume them. When people realize that their basic needs will be fulfilled, they become more engaged with their work, will produce more, and are more inclined to grow and advance in your company.

As a shop owner or manager, you need to sit down with your employees. Find out about their goals, both in their career and in their personal life. Another obligation for shop owners is to create pay plans that offer competitive wages, great benefits, and a career path where they feel secure with their future with you. Financial and emotional security is important, not only for the employee but for the employee’s family too.

Create a Culture of Mutual Respect

Everyone craves respect. This is an area that is lacking in so many workplaces. While employees may be at different experience levels and in different positions, everyone wants to know that what they do gets the attention and respect of leadership. As a shop owner, create an environment of shared and mutual respect. Look to those in your company who have leadership qualities and mentor them so that they can mentor others. When your employees share in their talents and efforts as a team, combined with mutual respect for one another, you have created one powerful motivator.

Have Your Employees Compete Against Themselves

In the workplace, employees are at many different skill levels. For example, a typical repair shop may have two technicians with over 20 years of experience and one tech with under 5 years of experience. It makes no sense to have the younger tech compete against the more experienced techs. When you do this, you create winners and losers. What you want are all winners.

Encouraging self-competition is a powerful way to enhance employee motivation by allowing them to see personal progress and achievement. If you do that, each of them can win. Measure each employee’s production, whether it’s billable hours, sales, gross profit, or other metric. Find a baseline for each employee. Establish a minimum level of acceptable performance, the goals for their position, and the individual goals for each person. Provide the training, support, and a pathway for them to improve and succeed.

When people see themselves improving, by measuring their metrics against themselves, they also see themselves winning. They become more engaged, which motivates them to work harder and want to continue to improve.

Remember, create a shop filled with winners.

MBWA – Management By Walking Around

MBWA is a strategy that was written about in a book published in the early 1980s, by Tom Peters, called In Search of Excellence. The strategy is simple but powerful. It requires that managers get out of their offices each day and spend time walking the shop floor. Engage in conversation with your employees. But here’s the key component that makes this strategy so powerful; engage in conversation that helps you to find out more about them, their hobbies, their family, and what they like to do in their time off. In other words, don’t just make the conversation about business, make it personal, about them.

When you find out what’s important to your employees, you will also find how to increase employee motivation. Imagine this scenario: Through your MBWA you find that your superstar service advisor enjoys taking her kids to dinner and a movie, and you surprise her with tickets and a gift card for the entire family for a night out. Tell me that’s not a powerful motivator!

Praise and Recognition

Praise and recognition are perhaps the greatest motivators of all. There’s not a person on this planet who does not want to be recognized and praised for a job well done. Look for reasons to praise your employees. Let the little mistakes slide. If you want your employees to grow and improve, then praise and recognize the behavior you want to see repeated. For example, you speak to an employee about coming in late. If that employee comes in on time for the next three days, praise and recognize that! After all, it’s the behavior you are looking for, right? What happens all too often is nothing is said when the employee comes in on time for a few days but is handed a heavy reprimand when the employee once again arrives late two weeks later. If you only point out when people don’t perform the way they should, that is what you will get; an endless occurrence of people not performing up to expectations.

There’s a phrase from the book The One Minute Manager, but Ken Blanchard, “Find people doing things right!”

Conclusion

At Elite, one of our core values is to never put money ahead of people. We believe true employee motivation comes from fostering a culture where individuals feel valued and respected, rather than relying solely on monetary rewards. When a company focuses on building the right culture and prioritizing employee well-being, great things happen, and success becomes inevitable.

This concept is woven into the fabric of what we preach, teach, and coach. Whether it’s our service advisor Master’s Program, our Top Shop Coaching Programs, or our Pro Service peer groups, we will never abandon what has made Elite the company it will always be… a company that will never put money ahead of people.

Spring Clean Your Finances: 5 Steps Every Business Should Take

Wed, 06 Mar 2024 14:06:00 +0000

With spring upon us and the weather warming, it’s the perfect time of year to do some good spring cleaning. However, it’s not just our homes that can benefit – our finances can benefit from intentional tidying up and decluttering as well. This can lead to increased efficiency, better cash flow, and improved overall financial health for our businesses if done right and done consistently. In this blog post, we’re sharing 5 essential steps to spring clean your finances each and every year.

5 Steps to Spring Clean Your Finances

When spring cleaning your business finances, it’s important to do this in a step-by-step approach so you know exactly where you’re at, what you can improve on, and what action steps you need to take. Follow these 5 steps to declutter and improve your business finances this spring.

STEP #1: ANALYZE EXPENSES

Start by going through your expenses with a fine-tooth comb to identify any unnecessary or redundant costs that could be cut down. This could be subscriptions to services, softwares, or programs you no longer use, excessive spending on office supplies, or high fees from vendors or suppliers. By identifying areas where you can reduce expenses, you can free up more funds to invest in more profitable areas of your business.

STEP #2: NEGOTIATE BETTER TERMS

After identifying areas for potential cost savings, don’t be afraid to reach out to vendors or suppliers for better terms. Negotiating lower prices, longer payment terms, or bulk discounts is a great way to cut back on expenses and ensure you’re getting the best possible deal. Building strong relationships with your vendors and suppliers can also lead to perks such as exclusive deals or priority service, so be sure to keep those relationships and communication strong.

STEP #3: UPDATE BUDGETS AND FORECASTS

After analyzing your expenses, you’ll have a clearer picture of your current financial status and areas in which you can cut back and improve. Now, it’s time to update your budgets and forecasts for the rest of the year. Review your revenue projections and compare them to your expenses to ensure they’re in alignment for a profitable year. Adjust your budget as needed to account for any changes in your business, the market, etc. It’s a good idea to revisit your budget and forecast regularly to stay on track and make informed decisions throughout the year. This can help prevent you from reaching the end of the year and falling short of your goals.

STEP #4: PREPARE FOR EMERGENCIES

No one likes to think about worst-case scenarios, but it’s so important to be prepared for emergencies as a business owner. Review your insurance coverage to ensure it covers your needs. Consider adding or updating policies as you see fit. Establish an emergency fund for your business to cover unexpected expenses or disruptions to your business operations. The last thing you want is to be unable to pay your bills or your employees should something go awry. Having a financial safety net in place gives you peace of mind knowing that you can weather any financial storms that come your way.

STEP #5: IMPROVE INVOICING AND COLLECTIONS PROCESSES

Lastly, having efficient invoicing and collections processes is essential for maintaining a healthy cash flow and keeping things running smoothly. Review your current invoicing and collections processes to identify any inefficiencies or areas holding you back. Consider implementing software solutions like Wave that streamline invoicing, automate reminders for overdue payments, and provide insights into customer payment behavior. Improving your invoicing and collections processes can reduce the time it takes to get paid and minimize the risk of late or unpaid invoices.

This is the perfect time of year to spring clean your finances and ensure your business is set up for success and efficiency in the months ahead. Take a good look at where you’re at income and expense-wise, update your budgets and forecasts accordingly, prioritize planning for emergencies, and look for ways to make invoicing and collections more streamlined. By following these steps, you’ll be in good financial health and ready to grow for the rest of the year.

Tax Season Preparation: A Comprehensive Guide

Wed, 07 Feb 2024 15:06:00 +0000

Tax season is just around the corner, and for many, this time of year can be both daunting and overwhelming. However, with the proper planning and organization, you can take on tax season with confidence! This blog post will serve as your comprehensive guide to tax season preparation, outlining the key steps you need to take to ensure a smooth and stress-free tax season!

How To Prepare For Tax Season

Preparing for tax season seems like a year-long process at times. From tracking mileage to organizing receipts, there’s always something tax-related to do. However, when the calendar turns over to a new year, it’s time to really start thinking about tax season preparation and the steps you need to take to get ready for filing day. Read on for your complete guide to tax preparation and everything you need to know!

STAY INFORMED ABOUT TAX LAW CHANGES

Tax laws are ever-changing and it is your responsibility to stay informed on these changes, as they can make a significant difference. Familiarize yourself with any updates or changes to tax laws that may affect your filing status or eligibility for credits. You can also reach out to your tax preparer or accountant for more information on these changes and the potential impacts on your taxes.

GATHER AND ORGANIZE KEY DOCUMENTS

This is one of the most daunting parts of the tax season preparation process – gathering all of the key documents needed. This includes tax forms such as W-2’s, 1099s, and other forms. You’ll also want to gather and organize receipts, mileage records, social security documents, bank statements, income statements, expense records, payroll records, tax deduction records, profit and loss statements, balance sheets, financial statements, and any other relevant or requested paperwork.

Take some time to review all of your financial documents and categorize them by income and expenses to make it easier to identify potential deductions or tax credits. You can use an accounting software like Quickbooks Online to make this process simple.

Having all of the documents you need to properly file your taxes in one organized place will save you a lot of time and prevent last-minute searches.

EXPLORE DEDUCTIONS AND CREDITS

With all of your documents and records organized and in one place, you can explore and identify potential deductions and credits that are available to you.

Some common deductions and credits include:

Mortgage interest.
Student loan interest.
Medical expenses.
Startup costs.
Business expenses.
Depreciation.
Child Tax Credit.
Education Credits.

These deductions and credits can save you significant amounts of money, so do your due diligence and explore all of your options.

CONSIDER PROFESSIONAL HELP

While some individuals prefer to handle and file their taxes themselves, it is beneficial to seek out professional help. Tax professionals can provide advice and expertise, help ensure that you have everything you need, it’s all accurate, you are maximizing your savings, and overall, help you navigate tax season with a little more ease and peace of mind.

PLAN FOR RETIREMENT CONTRIBUTIONS

If you’re looking for more ways to positively reduce your tax liability (while planning for the future!), you can contribute to retirement accounts, such as 401(k)s or IRAs. Evaluate your contributions and look for ways to maximize them in order to take advantage of potential tax benefits, thus, reducing your tax bill.

REVIEW BEFORE SUBMISSION

Just like when you were in school getting ready to turn in a big test, it’s key to thoroughly review your tax return before submitting it. Check to make sure that all information is entered correctly, you’ve chosen the correct filing status, and all deductions and credits are accounted for.

REFLECT AND PLAN FOR NEXT YEAR

While you may be begging for a break from taxes once you’ve filed, this is a great time to reflect and plan for next year. Consider ways to make your life easier when it comes to next year’s tax season preparation as well as ways that you can maximize your tax savings. You may look at adjusting your withholdings, organizing your financial documents throughout the year using Quickbooks Online, tracking mileage using a software like TripLog, or managing your receipts online using Hubdoc or Dext. It’s never too early to stay proactive with your tax planning.

By following these steps and guidelines for tax season preparation, you can stay on top of things, take advantage of resources and opportunities to save, and get through tax season with less stress and more confidence.

Understanding S-Corp Distributions and Draws | Are They Taxable?

Wed, 24 Jan 2024 14:56:00 +0000

Understanding and navigating the tax implications and responsibilities of business income is crucial for every business owner, especially those operating as an S-Corp. A very common question that often arises is whether or not S-Corp distributions and draws are taxable. In this blog post, we’ll answer this question and explore the key considerations of S-Corp taxation.

What Are the Benefits of an S-Corp?

First, it’s important to understand the benefits of operating a business as an S-Corp. S-Corps provide a unique level of flexibility with money, as there is a single-level of taxation on income generated by the corporation. This differs from C-Corps, in which profits are taxed at both the corporate and individual levels.

In an S-Corp, income “passes through” to the shareholders, meaning it is subject to tax on the shareholder’s individual income tax return, not the business’s.

Are S-Corp Distributions and Draws Taxable?

Now, let’s answer the burning question of, are you going to be taxed on distributions and draws from an S-Corp? The short answer is… no!

Generally, you are not taxed on distributions and draws, which is one of the most significant benefits that an S-Corp offers.

However, the key to all of this is to pay yourself a fair and reasonable wage as an S-Corp shareholder. The IRS requires you to compensate yourself adequately, and once you have paid yourself a fair and reasonable wage, you are free to distribute or take the remaining profits out in draws.

Avoiding Payroll Tax Pitfalls

Keep in mind that as your profits increase, it’s not recommended to increase your payroll. Why? This leads to higher payroll taxes! However, S-Corp distributions are not subject to these payroll taxes, making this a better option for business owners looking to maximize their income without taking on additional tax burdens.

Distinguishing Distributions from Profit

Distributions are essentially the sharing of profits among shareholders. The benefit is, you don’t pay taxes on the distribution itself, just on the profit that it represents. This is key to remember when understanding the tax implications of S-Corp income.

Before taking out distributions as an S-Corp, you must have actual profits to distribute. Therefore, business owners must track and manage their profits effectively in order to benefit from distributions come tax time.

Avoiding Tax Issues

When taking out S-Corp draws, ensure that you are taking out actual profits, not loan money, such as that from the SBA. This can have significant tax implications that can lead to complications and hassles down the road.

Overall, S-Corp distributions and draws are not taxable. This makes S-Corps a great choice for small business owners looking to maximize their profits and save on taxes. Just make sure you stay up-to-date on the IRS guidelines, pay yourself a fair wage first, and ensure your distributions and draws are based on profits. This can help you make informed and smart financial decisions that benefits both you and your business long-term.

10 Financial Resolutions Every Business Should Make

Wed, 10 Jan 2024 15:06:00 +0000

With a new year upon us, this is a time for businesses to reflect on their financial strategies and make resolutions for the year ahead that contribute to the long-term success of their organization. By adopting sound financial practices, businesses can better navigate challenges, improve their efficiency and workflows, and pave a path towards sustained growth. In this blog post, we’ll explore 10 financial resolutions that are essential for every business to make in order to have a profitable, prosperous year ahead.

10 Essential Financial Resolutions For Businesses

#1: REGULAR FINANCIAL REVIEW

Commit to regular (monthly or quarterly) reviews of financial statements. This includes income statements, balance sheets, and cash flow statements. Doing so will help you better understand the financial health of your business while providing you valuable insights into revenue trends, expenses, and overall financial stability.

#2: INVEST IN TECHNOLOGY UPGRADES

Invest in modern technology such as automotive diagnostic software, customer relationship management (CRM) systems, or accounting software to streamline your operations, save time, and increase efficiency.

Consider tools like Tekmetric, Nifti CRM, and Quickbooks Online to enhance various aspects of your business.

#3: SET ASIDE EMERGENCY FUNDS

Financial stability largely depends on your ability to prepare for unforeseen circumstances and challenges. Therefore, make it one of your financial resolutions this year to build an emergency fund to cover unexpected expenses or economic downturns. This financial safety net can help your business stay afloat during tough times.

#4: BENCHMARKING AND GOAL SETTING

Regularly benchmark your business against industry standards and set realistic financial goals. Use these benchmarks and goals as a roadmap to guide you in making sound business decisions and tracking progress.

#5: FOCUS ON CUSTOMER LOYALTY AND RETENTION

Acquiring new customers is essential for business growth, but retaining existing customers is equally, if not more important to the longevity of your business. Plus, retaining existing customers is often more cost-effective. Develop strategies to enhance customer loyalty, such as implementing a rewards program, providing exceptional customer service, or offering regular maintenance packages.

#6: OPTIMIZE INVENTORY MANAGEMENT

Optimizing inventory is another key financial resolution for businesses. Aim to efficiently manage inventory to ensure that parts and supplies are available when needed, without tying up too much capital in stock. Consider implementing an inventory management system to track stock levels and optimize ordering.

#7: TAX PLANNING AND COMPLIANCE

Staying up-to-date on tax laws and regulations is key for your business’s financial health, especially come tax time. Work with a tax professional to develop efficient tax planning strategies and ensure compliance, thus, avoiding penalties and maximizing deductions.

#8: DEBT MANAGEMENT

Strategize to manage and reduce debt in the new year by prioritizing high-interest debts and looking for opportunities to refinance or consolidate loans for better terms. This can help cut down on loan payments and improve your cash flow and profitability.

#9: REDUCE UNNECESSARY EXPENSES

Reducing unnecessary expenses is a smart financial resolution in both your personal life and your business. Identify and eliminate unnecessary expenditures by regularly auditing expenses and finding areas where costs can be reduced without impacting the quality of your work or customer service.

#10: EXPAND MARKETING EFFORTS

Invest in marketing efforts to attract new customers and retain existing ones. This can include digital marketing, social media presence, local advertising, or community engagement initiatives. Tailor the marketing strategy to target the local market effectively.

By making these 10 financial resolutions, your business will be well on its way to a prosperous, profitable, and streamlined future.

How to Do a Year-End Financial Review

Tue, 19 Dec 2023 23:07:00 +0000

With the new year quickly approaching, it can be tempting to start planning for your future goals and projects. However, it’s important to do a thorough year-end financial review before shifting your focus to the new year. This not only helps you understand the growth you’ve made and areas of learning that you can improve on, but it allows you to celebrate your accomplishments from the past year. In this blog post, we’re breaking down how to do a year-end financial review so you can plan strategically, identify opportunities for growth, and improve your financial management and health moving forward.

How to Do a Year-End Financial Review

Follow these simple steps and answer these guiding questions to conduct a thorough year in review for your business finances.

SET THE STAGE: WHAT WERE THE FINANCIAL GOALS?

To begin this process, revisit the financial goals of the business that were set at the beginning of the year. It’s important to look at factors such as revenue targets, profit margins, and expense management. These goals serve as the benchmarks that you measure your financial performance against, so reflect on how specific, measurable, and attainable these goals were.

EVALUATE GOAL ACHIEVEMENT: DID WE MEET THOSE GOALS?

After reflecting on the financial goals from the past year, analyze how well you performed financially against those goals. Did your business and team meet or exceed the revenue targets? Were expense controls put in place and made effective? Were there any shortfalls? If so, what reasons can you identify for those shortfalls? Celebrate the successes and growth that contributed to meeting or exceeding any financial goals.

CELEBRATE SUCCESS: WHAT WENT WELL?

It’s important to celebrate the financial successes and wins of the year with your entire company. Point out successful product launches, increased sales, or cost-cutting measures that proved effective for your company. Recognize the key players that made these goals a reality and provide insights into the strengths of your team’s financial strategies and operations.

LEARN FROM CHALLENGES: WHAT COULD HAVE BEEN IMPROVED?

Just as it’s important to celebrate your successes, it’s also important to acknowledge the challenges and areas that could have been improved. This may be budget oversights, unexpected expenses, or inefficient financial processes. By accepting and evaluating these challenges, you can make sound decisions for the future based on experience and use this as information to eliminate potential issues in the future.

REFLECT ON YOUR HONEST FEELINGS

Finally, put the numbers aside and reflect on your honest feelings about the past year.

Where did you feel like you made the most growth?
What challenged you to grow in positive ways?
What caused you stress or overwhelm?
What brought you the most joy and pride?
How do you feel about your business currently and what are you excited for in the future?
What do you want to continue in the new year and what do you need to let go to allow for other focuses?

Answer these questions honestly as you wrap up your year-end financial review. It may also be beneficial to have each team member do this to learn how everyone is feeling in terms of the company and financial goals as a whole.

Overall, conducting a comprehensive year-end financial review is a powerful tool for reflecting on the past, celebrating successes, learning from challenges, and making sound financial decisions for the future based on experience and data. This is about both the numbers and the feelings of you and your team. With this year in review complete, you’ll feel more confident moving into the new year with clarity!

Steps to Ensure a Smooth Financial Year-End

Wed, 13 Dec 2023 15:34:00 +0000

As the financial year draws to a close, it becomes important to have a well-organized and accurate year-end process. This ensures that you can close out the year and transition into the new fiscal year smoothly by giving attention to the key financial aspects that impact your bottom line and business as a whole. In this blog post, we’re breaking down the 7 essential steps to take to ensure a smooth financial year-end as well as sharing a Free Year-End Checklist that you can use in your own end of year review and planning.

7 Steps to Ensure a Smooth Financial Year-End

STEP 1: RECONCILE ALL BANK AND CREDIT CARD ACCOUNTS

The first step is to reconcile all bank and credit card accounts, as this is the foundation of a smooth financial year-end. Make sure that your records match the statements provided by the financial institutions that you work with so there are no discrepancies. By reconciling all accounts first, you can uncover potential errors and fix them quickly, maintaining the accuracy of your financial records.

STEP 2: IDENTIFY AND RECTIFY DUPLICATE TRANSACTIONS

If you’ve ever had duplicate transactions, you know just how much havoc they can wreak on your financial statements. This can also paint an unclear picture of your overall financial health. Thoroughly review your records to identify any duplicate transactions and rectify them quickly if you find them. Utilizing accounting software features can help you do this quickly and effectively, ensuring your financial data is accurate and reliable.

STEP 3: GENERATE INCOME STATEMENT FOR THE YEAR

A business’s Income Statement, also known as the Profit and Loss (P&L) Statement, summarizes the revenue, expenses, and profits or losses that a business experiences over a specific period of time. Generating a comprehensive Income Statement for the entire fiscal year provides a clear overview of your financial performance, which is a valuable tool for making decisions for the future.

STEP 4: COMPILE BALANCE SHEET FOR THE YEAR

A Balance Sheet is a snapshot of your company’s financial position at a specific point in time which consists of 3 main sections: assets, liabilities, and equity. It’s important to compile and review a Balance Sheet at the financial year-end to help you get a clear understanding of the overall financial health and position of your business.

STEP 5: EVALUATE ASSETS

Once you’ve compiled your Balance Sheet, assess the value of your assets, including both tangible and intangible assets. Make sure they are accurately valued and organized into the proper categories. When evaluating assets, don’t forget to consider the depreciation of fixed assets and any changes in the market value of investments.

STEP 6: REVIEW LIABILITIES

At the financial year-end, it’s also key to review any liabilities you’re responsible for, including short-term and long-term obligations. This includes loans, outstanding bills, and accrued expenses. Ensure all liabilities are recorded accurately and present a true representation of your outstanding financial obligations.

STEP 7: EXAMINE EQUITY

The final step in ensuring a smooth financial year-end is to examine your equity in-depth. Equity represents the ownership interest in a business. By reviewing and analyzing equity accounts, you can take note of any changes in capital, dividends, or retained earnings. This is key for understanding the financial contributions of the business’s stakeholders.

In order to have a smooth financial year-end and a solid start to the new fiscal year, it requires a systematic approach, careful consideration, and attention to detail on various elements of your overall financial picture. By following these steps, you’ll be able to get a clear picture of where you’re at, where you’ve been, and plan for where you’re going.

If you’d like more support as you close out the financial year, you can grab our Free Year-End Checklist to get your bookkeeping organized for 2023 and end the year with confidence and clarity.

Thankful Reflections: Financial Wins of the Year

Wed, 22 Nov 2023 15:06:00 +0000

Can you believe that another year is drawing close to the end? It really does seem like the older you get, the faster time goes! As we enter into the Thanksgiving season, we wanted to take some time to reflect on our achievements, the achievements of our clients, and express sincere gratitude for all of those who have made this year’s success possible. Read on for some of our thankful reflections as we celebrate financial wins from this year.

Celebrating A Year of Financial Growth

We’ve had the privilege of witnessing several auto shops see significant financial improvements over the course of this year. On average, clients who have been working with us for at least 1 year have seen an average revenue increase of 10.7%. That’s amazing! These financial wins are a testament to their hard work, dedication, and commitment to excellence. Our clients’ successes are our victories, so it is incredible to be able to celebrate these wins together.

How Our Clients Are Seeing Success

So, what exactly have our successful clients been doing to see these improvements in their business finances? Let’s take a closer look at the strategies and systems that have helped drive their financial growth.

PARTS MATRICES

Effective parts matrices are key for accurate pricing and inventory management. Our clients are taking advantage of this tool to optimize their pricing strategies, which directly impacts positive revenue growth.

TRACKING LABOR EFFICIENCIES

An auto shop’s bottom line is greatly impacted by its labor department, which is why tracking labor efficiencies is helping our clients increase profitability and identify areas for improvement.

IMPLEMENTING NEW PAY STRUCTURES

Our successful clients are also implementing new pay structures that work for the culture of their business, whether that is flat rate, hourly, salary, or a combo.

INVESTING IN TRAINING PROGRAMS

Investing in training programs for both techs and service advisors is key to the growth and development of their teams. These training programs have helped them elevate their skills and knowledge of their staff while increasing customer satisfaction and repeat customers.

HIRING BUSINESS COACHES

Many of our clients have also invested in industry-specific business coaches to help guide their companies towards success. Their guidance, insights, and external perspective has been a game-changer for their businesses.

TRACKING KEY KPIS

Lastly, many of our clients who are celebrating financial wins this year attribute their success to the tracking of key KPIs. Tracking and analyzing these KPIs has helped them make data-driven decisions for their businesses and adjust as necessary in the areas that needed more attention.

Thankful Reflections From Three Rivers Bookkeeping

To all the auto shops that we have the privilege of working with each and every day, we want to thank you and express our sincerest gratitude to you. Our primary goal is to see each of our clients grow and thrive. This year has been full of many financial wins, and we are honored to celebrate them alongside you. Your success is our success, and we are so thankful for the trust you have shown us.

How to Set Up a Chart of Accounts to Reduce Transaction Classification Errors

Wed, 08 Nov 2023 13:34:49 +0000

A key aspect of managing any business is keeping accurate financial records. One of the most important tools you can use to ensure your financial data is well-structured and organized is a Chart of Accounts. When implemented correctly, a Chart of Accounts can significantly reduce the risk of transaction classification errors, which can be detrimental to your financial reporting. This makes it easier to track income, expenses, and assets. In this blog post, we’re breaking down what a Chart of Accounts is, why it’s important, and providing a few practical tips on how to set up a Chart of Accounts in your business.

What Is a Chart of Accounts?

Before we get into the nitty gritty of setting up a Chart of Accounts, it’s important that you understand what it is and what purpose it serves in your business’s financials. A Chart of Accounts is a comprehensive index of all the financial accounts used by a business to classify financial transactions. These accounts are categorized into different groups and subgroups, which makes recording, tracking, and reporting on financial activities much easier.

WHAT IS THE PURPOSE OF A CHART OF ACCOUNTS?

A Chart of Accounts serves many purposes, including organizing finances into different categories to allow interested parties to get a clear view and understanding of a business’s financial health.

It also allows stakeholders to quickly locate specific accounts in order to see which transactions are occurring in each account from the general ledger.

A well-organized Chart of Accounts is also helpful for comparing financial data from year-to-year.

How to Set Up a Chart of Accounts

When setting up a Chart of Accounts, there are a few things to keep in mind that will help you reduce transaction classification errors. A common mistake businesses make when setting up a Chart of Accounts is having too many categories and overcomplicating the entire system.

CHOOSE SIMPLE CATEGORIES

We recommend that you choose simple categories that are easy to remember, such as labor income, parts income, truck fuel, insurance, etc. The more simplified and easy it is to remember these categories, the less likely it is that you or your team will make transaction misclassification errors. Plus, this also helps streamline your bookkeeping process.

UTILIZE CHART OF ACCOUNTS TEMPLATES

Most accounting softwares come equipped with sample Chart of Accounts templates that you can use and customize to meet your specific needs depending on your industry. This gives you a solid starting point to build upon. By utilizing these templates, you can ensure the most key categories and data points are included, which will also help reduce the risk of misclassification errors or missing data altogether.

Just make sure that you review the template and tailor it to match your business’s specific needs. Remove any accounts that don’t apply to your business and add accounts that are unique to your industry or company.

AUTO INDUSTRY CHART OF ACCOUNTS

If you are operating in the auto industry, you’ll need a specialized Chart of Accounts designed to meet the unique accounting needs of your automotive business.

This automotive-specific Chart of Accounts can help you save time, effort, and frustration, as it is tailored to the unique categories, transactions, and financial data you deal with on a daily basis.

If you’re looking to improve your financial data and reporting processes, implementing a well-structured Chart of Accounts is one of the first steps we recommend that you take. It will help you streamline your accounting and bookkeeping processes and gain better control over your financial data.

Follow the steps in this blog post to set your Chart of Accounts up in a way that minimizes transaction misclassification mistakes and streamlines your financial reporting.

Shop Owners: Why Do Employees Underperform?

Fri, 03 Nov 2023 11:12:05 +0000

Why Employees Underperform

Joe Marconi - Featured in Ratchet and Wrench Magazine

Four reasons why you may not be getting the best out of your team and what to do about it.

When auto repair shop owners get together, it’s common to hear them discuss their employees. But how often do you hear shop owners talking about their best employees? Not very often, right? Shop owners are usually obsessed with underperforming employees. Let’s explore the reasons why.

Potential

Many shop owners and managers assume that potential, or the desire to excel, will eventually turn into positive outcomes. Unfortunately, having potential or desire doesn’t always lead to high performance. It’s important to note that no matter what someone’s potential is, they may only attain a certain level of performance, which is largely based on their natural talent.

Motivation

Motivation is another factor we need to consider. As a business coach, clients often tell me their employees are money motivated. I challenge this thinking. The technician who is planning to get married, buy a house and have kids knows their future involves money—and a lot of it. But what is the true motive behind the money? Sit down with your employees. Find out why they come to work each day. What really motivates them?

Preferential Treatment

Another reason people may shut down is when they perceive certain employees are held to a different standard. For example, your shop’s starting time is 8:00 a.m., but every day the same two employees arrive late. If you allow some employees to set their own rules, you are sure to have morale problems. Your best employees will eventually question your leadership if you don’t hold everyone accountable to the same standards.

Personal Challenges

Have you ever had a star employee who has performed at high levels, but suddenly seemed indifferent to his job and his coworkers? This employee may be going through personal or health issues. Maybe she is burned out between obligations at work and home. It’s best not to assume anything. Again, sit down with this person. Find out what’s going on. Think about this: are you approachable enough that your employees feel comfortable about telling you what is going on in their lives?

While it’s hard to ignore employees who are underperforming, not recognizing those who are performing at consistently high levels daily can damage overall morale. Failing to recognize your best people will eventually demotivate them, leading to a reduction in their performance.

Creating a shop environment with high performers takes a team concept with strong leadership. If you have employees not performing up to expectations, you need to ask yourself a few things: Are you doing all you can to establish those expectations that everyone must follow? Are you providing the right training for everyone? Are you having one-on-one employee meetings where you learn about your employee’s career goals? It’s also important to realize that no two people are alike. Everyone has different needs and wants, and no strategy works for everyone. Going the extra mile to know your employees will send the strongest message of all by communicating that you recognize them as individuals, not just workers.

One thing worth mentioning: There will come a time when no matter what you do, there will be an employee who will not perform at the level you need. In this case, you’ll have to decide whether to tolerate or terminate. From my experience, to terminate for the sake of the team, and for the individual, may be the best choice.

Let me leave you with this: Expecting high performance from others starts with you. Are you reaching your potential? Are you striving to improve and set high expectations for yourself? What you expect from others you should expect from yourself … and more.

How To Setup A Products and Services List For Auto Shops

Wed, 18 Oct 2023 16:19:00 +0000

Effectively managing your products and services list is essential for auto shops. Not only does this simplify and streamline your invoicing process, but it also ensures that your financial records are accurate and organized. In this blog post, we’re breaking down a simple and practical approach to setting up a products and services list for auto shops that maximizes your overall efficiency.

The Common Pitfall of Auto Shop Products and Services Lists

In our work with auto shops, we often see a common pitfall in their products and services lists. The mistake they make is creating an overly extensive and long products and services list. This happens when auto shop owners add a new product or service to their list each time they make a sale. This leads to a confusing list that’s a million miles long. However, you can avoid this pitfall by streamlining your products and services and using descriptions effectively.

How to Streamline Your Products and Services List

Instead of creating a new product or service for each transaction in your auto shop, consider setting up a small handful of products and services and use the description to enter specific part numbers or details on the service provided.

For example, set up a “Parts Service” item which is linked to the “Parts Income” on the chart of accounts. Then, each time a parts sale is made on an invoice, put the part number in the description with the correct price.

Here are a few key categories that we recommend you include on your products and services list.

LABOR

This category covers all labor charges for various types of automotive work, such as diagnostic labor, repair labor, or maintenance labor.

PARTS

This is the category where it’s important to create a “Parts Service” item linked to the “Parts Income” account on your chart of accounts to avoid a long and confusing parts and services list. Whenever a part is sold, enter the part number and details in the description along with the current price.

DISCOUNTS/REFUNDS

This category can be used to track any discounts or refunds that are offered to customers. This is important to track separately in order to make adjustments as needed.

SUBLET

If your auto shop occasionally subcontracts out work to other service providers, this is the category you’ll use to record the costs of these sublet services.

TIRE

Having a specific tire category for tire sales, installation, and other related services is a great way to keep these invoices separate.

By having a streamlined products and services list, you can ensure your list is easy to navigate, which saves you time and reduces the risk of errors. You’ll also make financial reporting more accurate by using descriptions and properly documenting each transaction. Plus, it will make invoicing and filing receipts more efficient and give you financial clarity to help you make informed business decisions.

There's No One Size Fits All Repair Shop Business Model

Fri, 03 Nov 2023 11:13:00 +0000

Marconi: There’s No One Size Fits All Repair Shop Business Model

Knowing your business and your customers safeguard your shop against trends that may not benefit you.

Joe Marconi

The year was 1973 and, like many from my era, I started my career working as a technician in a gas station. The typical gas station had two to three bays, and at least two to four gas pumps. Part of my job description was to pump gas if needed. Self-serve was not yet the norm. By the way, we were open seven days a week, with half days on Christmas, New Year's, Easter and Thanksgiving.

The automotive repair industry has changed dramatically over the past few decades. There aren’t many gas station/repair shop business models these days. Today, there are franchises, tire stores, off-road shops, specialty shops and other niche businesses. In many markets, the independent general auto repair shop model dominates the typical modern-day model. No matter what business type, it seems shop owners crave benchmarks and guidelines. While there is merit to this, there’s no one size that fits all business model. And there shouldn’t be.

Numbers Vary Between Shops

The reason why I bring this up is that there are a lot of discussions these days about certain standards that auto repair shops should aspire to. Perhaps the most popular is setting a standard for the right KPIs and profit margins. Also, many industry people are promoting the five-day workweek as the standard, with some saying that a four-day work has benefits that outweigh the five- or six-day work model. Additionally, it’s common to hear that technician production and efficiency standards need to fit into a certain range to determine the overall success of the company.

We all understand the value of benchmarking as a way of analyzing what we are doing compared to other similar businesses. However, auto repair shops are like fingerprints; no two are alike. And from my experience as a former repair shop owner and now a business coach, trying to fit your repair shop into a neatly formed benchmark-based model may be more detrimental than beneficial.

If we look at KPIs and margins, for example, it’s typical for a general repair shop to strive for 70% or better on labor profit and a 50% part margin. But everyone reading this understands that percentages and dollars are not the same. Some shops do not fall into the typical percentage range, but their business model produces remarkable results to their bottom line in terms of “profit dollars.”

Customers Trump Trends

Let’s talk about the four and five-day workweek. As I mentioned earlier, back in the '70s, the gas station I worked at was open seven days a week, with half days on holidays. When I started my own business in 1980, I was not about to be open seven days a week, and holidays were out of the question altogether. But being open six days a week was something I felt I needed to do. I had to be there for my customers. Through the years we tried to close on Saturdays, but it just didn’t work for us. This is not to say you must be open six days a week or even five days a week, which is the point I’m making. Some point to employee morale and increased production by not working a five- or six-day workweek. This may be true and probably is for many shops. But can anyone say that this is true for every repair shop, in every area of the country?

Know Your Shop

Here's the bottom line. While there is a benefit to having standards and benchmarks, every repair shop is different. Learn what others are doing but understand your business model and the KPIs that drive dollars to your bottom line. Then decide for yourself what makes the most sense for your business, not someone else’s.

6 Common Financial Statement Issues In Auto Shops (And How To Fix Them!)

Wed, 06 Sep 2023 13:58:00 +0000

As an auto shop owner, one of the most important aspects of managing your business and ensuring it is profitable is effectively organizing and analyzing financial statements in order to make sound decisions for your shop and employees. As an accountant for auto shop owners, I often see financial statement issues arise that cause frustration, overwhelm, and discrepancies in a shop’s finances. In this blog post, I’m breaking down 6 of the most common issues with auto shop financial statements and offering quick tips on how to fix them.

Financial Statement Issues In Auto Shops

Not Understanding Your Financials

The first issue I see with financial statements is auto shop owners simply not understanding their financial statements. They don’t know what they’re looking at, what the numbers mean, or how to navigate QuickBooks. This can make it really hard to make sound financial decisions if you don’t know how to use them to increase profits and make sound financial decisions.

Solution:

The solution to this issue is to set your financial statements up in a way that you can easily access, organize, and understand them. We recommend using QuickBooks for all of your financial statements, as this makes it easy to organize and analyze them.

Shop Management Software Doesn’t Match QuickBooks

The next common financial statement issue is having discrepancies between your Shop Management System (SMS) and your accounting software, such as QuickBooks. This can lead to a lot of confusion and inaccurate financial reporting. Your SMS may offer one figure, but what QuickBooks shows is the most accurate financial recording.

Solution:

The solution to this issue is to make being consistent in your financial reporting a priority. Calculate and record your financial data in the same way each month, at the same time of the month. Err on the side of being conservative with your figures to ensure your shop remains profitable and your financial statements reflect the actual performance of your shop as accurately as possible.

Parts and Labor Income Are Not Split Out

Failing to keep parts and labor income separate in your financial statements is another big issue, which makes it difficult to see where your actual revenue is coming from. With labor, there are so many factors to consider, such as employee wages, paid time off, benefits, etc, so it’s important to keep these aspects separate.

Solution:

The solution for this financial statement issue is to organize your income into separate categories for parts and labor. This will give you clarity in your finances and make it easier to analyze how profitable each aspect of your business is. This will help you make more informed decisions for your business.

Parts and Labor Cost Of Goods Sold Are Not Split Out

Similar to the last problem, if you fail to split out parts and labor costs of goods sold, you can create discrepancies in your gross profit margin. This is a key indicator of the overall financial health of your business, so it’s important that it is as accurate as possible. It’s important to note that technician pay should be classified as a labor cost of goods sold for the most accurate financial reporting.

Solution:

When setting up your accounting software, make sure to create a clear separation between parts and labor costs of goods sold. This will help you see the profitability of each side of your auto shop, allowing you to lean into the revenue streams that bring in the most money for your shop. Be sure to classify technician pay as a labor cost of goods sold.

Not Tracking Warranty Work

Warranty work is where a lot of financial statement issues arise. When you are looking at your financial statements, you must account for warranty work, otherwise, your income will look skewed as well as your expenses.

Solution:

To ensure warranty work is classified and tracked properly, create a simple system to track this work and any transactions related to warranties. This will keep your financial statements accurate.

Misclassifying Transactions

The last common financial statement issue in auto shops is misclassifying transactions. When you set up your QuickBooks, do so in a way that allows you to easily classify each transaction properly right away. This is an issue with a simple fix, but it can drastically skew your financial statements.

Solution:

After setting your QuickBooks up in a way that works for you to keep everything properly classified, make sure to regularly review your transactions to verify they’re accurately classified. This will help you catch any outliers or misrepresentations before it becomes a huge issue.

All in all, by knowing what financial statement issues to look out for in your auto shop business, you can ensure you are set up for success and have your QuickBooks laid out in a way that works for you, that makes it easy for you to manage and understand.

Vehicle Delivery Process: The First Step to Your Next Sale

Fri, 03 Nov 2023 11:14:36 +0000

Source: Feature in Ratchet and Wrench Magazine https://www.ratchetandwrench.com/magazine

Vehicle Delivery Process: The First Step to Your Next Sale

Every fall I have my chimney cleaned. For years, I would search for a reputable local company. Then, 10 years ago, I met Mike at AAA Chimney, and he became my go-to guy. Each year, Mike returns and earns my trust over and over. You may wonder if it's because he cleans my fireplace better than anyone else or if it's the price. While those are reasonable questions, the real reason why he gets my business year after year is simple: Before he leaves my home, Mike takes the time to review exactly what he did, gives me tips on how to best care for my fireplace and then he books the next appointment for the following year. In essence, he performs what we know as a vehicle delivery process, or in Mike’s case, a chimney cleaning delivery process.

Performing a comprehensive vehicle delivery process and booking the next appointment in our industry is nothing new. Many shops have been doing it for decades. However, there are still many repair shops that have not adopted this goldmine strategy. The vehicle delivery process helps to create that memorable experience that gives the customer a compelling reason to return. When combined with scheduling the next appointment, your repair shop stays branded in your customers’ minds, improving customer retention and helping to ensure future sales.

The auto repair business today is not like it was. Even 10 years ago we would measure customer retention with a factor of four, meaning that customers visited your repair shop about four times a year for routine services. Today, unless there’s a breakdown or a warning light, you’re lucky to see your typical customer once a year for routine service. Consumers these days don’t have the same sense of urgency regarding vehicle maintenance as they once did. Just think about all those customers who have traveled over 15,000 miles in their vehicles since their last oil change. This trend has been slowly creeping up for the past 15 years, if not longer.

There’s another factor we need to consider: if the length of time between visits is too long, the average consumer loses some of the emotional connection they have with their repair shop. What you don’t want to happen is when the oil maintenance light does come on, your customer just finds the most convenient shop to get the oil service done. Think that doesn’t happen?

Unless you're fortunate enough to be in a heavily populated area with no competition, and car counts are never a problem, you will benefit from a well-defined vehicle delivery process; a customer touch point that brings the entire customer experience full circle. Vehicle delivery is never a transaction. It is an opportunity to keep building the relationship. It’s also essential that your service staff discusses and books the next appointment. Everyone reading this knows that booking the next appointment is a strategy being done by dentists, doctors, hairdressers, nail salons, eye doctors, pet groomers, and yes, even Mike at AAA Chimney.

Booking the next appointment is not limited to oil change services either. Just consider all those recommendations you make on just about every car you service each day. Why not create a process that helps to fill up your calendar with profitable future services needed by your existing customers? Don’t rely solely on your CRM program either. The impact of an engaging vehicle delivery process is powerful.

Every customer that leaves your shop today will need future services and repairs. The question is: Where will they go? Make your vehicle delivery process your first step to your next sale.

Understanding the Differences Between Employees and Contractors | What You Need to Know

Tue, 22 Aug 2023 16:03:00 +0000

As a business owner, hiring the right people to work for you and serve your customers is a critical aspect of running a successful company. As you look to grow your team, there are two different categories of workers to be aware of: employees and contractors. Both of these types of workers serve essential roles, but it's vital to understand the differences between employees and contractors, as there are different legal compliances, tax obligations, and nuances to both. In this blog post, we’re diving into the key differences between employees vs contractors so you can make the best, most informed hiring decisions for your business.

Key Differences Between Employees and Contractors

Definition and Role Clarity

The most fundamental difference between employees and contractors is their relationship with your business. Employees are individuals who work under your direct control and management, performing tasks assigned by you that are integral to your daily operations. On the other hand, contractors are external workers or individuals who are hired to complete specific projects or provide specialized services, working independently and autonomously from the business.

Work Schedule and Degree of Control

The degree of control that a business has over its workers is another defining aspect between employees vs contractors. Employee-employer relationships typically involve a higher degree of control and direction from the employer. As an employer, you dictate an employee's work schedule, the tasks they perform, and how they accomplish them. Contractors differ because they generally have more independence and control over how they complete their assignments, when they work, and where they work.

Ownership of Tools

The ownership of necessary tools needed to complete a job is another distinguishing factor between an employee vs contractor. An employee will be supplied with the necessary items, tools, and softwares necessary to complete their job. A contractor must supply their own tools and softwares, as they are likely used for more than one client.

Tax Implications

There are vastly different tax implications when hiring employees vs contractors, and understanding these is crucial. When you hire an employee, you are responsible for withholding and remitting income taxes and Social Security from their wages. Hiring contractors is different in the tax sense because they are considered self-employed and are responsible for their own taxes. As the employer, you don’t withhold taxes for contractors, but instead, they summarize their earnings on a Form 1099 at the end of the year.

Employment Benefits

As a business owner hiring employees, you may be required to provide employee benefits, such as health insurance, retirement plans, paid time off, and other benefits, depending on your company policies and legal requirements. Since contractors are self-employed, they do not receive these benefits from your business.

Long-Term Commitment and Dependence

Hiring an employee for your business implies there is a more long-term commitment with the expectation of ongoing work. Employees are likely dependent upon the business for their income and benefits. With contractors, these commitments may be more short-term and have a defined scope and timeline. Of course, contractor contracts can be renewed or terminated depending on the business’s needs or the contractor’s desires. Contractors likely have a roster of clients, so they are less reliant on one single client or business for their income.

Ensuring Legal Compliance

Classifying employees vs contractors correctly is critical for legal compliance. Misclassifying employees as contractors and vice versa can lead to an array of legal issues and expensive penalties. Stay up-to-date on the specific worker criteria set out by the IRS, Department of Labor, or other state authorities in order to ensure you are differentiating the two and classifying your workers properly.

Knowing the differences between employees and contractors is vital for managing your team effectively and ensuring compliance with tax and labor laws. As you expand your business and hire new team members, take the time to assess the nature of the work and the relationship with the individual to make the appropriate classification. Understanding these differences is key for making informed financial decisions.

Top Auto Repair Shop Financial Mistakes To Avoid

Wed, 09 Aug 2023 14:13:00 +0000

Running an auto repair shop is a rewarding career and an integral part of a community. However, it also comes with its fair share of financial challenges. As an auto shop owner, you must understand the importance of implementing the necessary systems and processes to keep your business profitable and sustainable long-term. In this blog post, we’re uncovering a few of the most common auto repair shop financial mistakes to avoid so you can stay successful and improve your bottom line.

Top Auto Repair Shop Financial Mistakes To Avoid

Neglecting Proper Inventory Management

Inventory is one of the most significant expenses that an auto repair shop has. Failing to manage your inventory efficiently can lead to issues such as overstocking, which ties up valuable capital, or understocking, which leads to a loss in revenue and dissatisfied customers. In order to avoid this financial mistake, implement a robust inventory management system that tracks parts usage, orders, and replenishment schedules. This will help you find the right balance and optimize your cash flow.

Ignoring Preventative Equipment Maintenance

Another common auto repair shop financial mistake to avoid is not putting the proper preventative equipment maintenance procedures in place. An auto repair shop relies heavily on specialized equipment to deliver quality services to its customers. Neglecting to maintain this equipment regularly can lead to expensive breakdowns, emergency repairs, and force you to cancel customer appointments (which also leads to a loss of revenue). To avoid this, create a maintenance schedule for all tools and machines, ensuring they remain in excellent working condition, reducing unexpected expenses, maintaining safety, and improving efficiency.

Overlooking Employee Training and Development

Skilled and well-trained auto repair shop technicians are the key to running a successful shop. They are the ones doing the daily manual labor, therefore, you should invest in continuous training and development for your staff to help them improve their skills, enhance customer service, and reduce the likelihood of errors or costly mistakes. Incentivize your team to seek certifications and stay up-to-date with the latest advancements in automotive technology. An auto shop that values innovation and constant growth will see the benefits both in customer satisfaction and in their bottom line.

Inadequate Budgeting and Financial Planning

Many auto repair shop owners are great at the actual manual work and labor involved in running a repair business, but when it comes to creating a comprehensive budget and financial plan, they’re not as skilled or confident. Without a clear financial roadmap, it’s challenging to track expenses, identify areas where you can cut costs, or allocate resources effectively. To ensure your business is running like a well-oiled machine financially, develop a detailed budget that takes into account all overhead costs, labor expenses, marketing efforts, and savings for future investments.

Ignoring Marketing and Customer Relationship Management

While marketing is an ever-changing field, it's so important to embrace modern marketing technologies, such as digital advertising, social media, and targeted promotions in order to grow. Word-of-mouth marketing is great, but it should not be your sole reliance. Additionally, you must prioritize customer relationship management by collecting feedback, addressing concerns promptly, and offering loyalty programs to retain existing customers and attract new ones.

Not Complying with Tax Obligations

Finally, the last auto repair shop financial mistake to avoid is not complying with tax obligations. Tax regulations for businesses, including auto repair shops, can be complex and ever-changing. Failing to comply with tax obligations can lead to penalties, hefty fees, and legal issues. To avoid this mistake and ensure you are fulfilling your tax obligations properly, consider hiring an accountant or tax professional who understands the automotive industry to help you navigate tax requirements and maximize deductions.

Article: When An Employee Brings You Bad News, Say Thank You!

Fri, 03 Nov 2023 11:15:30 +0000

Featured in Ratchet and Wrench Magazine - June 2023

Steve Jobs may have been best known as the co-founder of Apple Computer and a great entrepreneur, but his style of leadership and management was highly controversial. Jobs would schedule meetings with his team, then randomly point to someone and ask, “Tell me what’s not working at this company?” After that person gave their opinion, he would then turn to the group and ask for everyone’s feedback. Then he would point to another person, and say, “Tell me what is working?” While his technique may appear divisive, Jobs placed a high value on getting valuable feedback. Which meant that he had to know the truth, no matter how ugly it might be.

For most people, it’s difficult to receive critical feedback. No one enjoys learning that we dropped the ball, or that something isn’t going right. And how often does an employee walk up to you, and pull you aside to inform you of bad news? Not very often, right? While receiving praise and recognition does motivate us, growth opportunities also exist when things go wrong. How we deal with adversity and bounce back from failure tells us a lot about our mental toughness. Great success is never dependent on everything going right all the time. That’s not reality.

Look at it this way: getting only good news all the time is mostly useless. On the contrary, bad news can be good news. And we should accept and welcome it. If employees are reluctant to bring you bad news, it’s an indication that they may fear confronting you. As the shop owner, you need to do a little self-reflection to ensure that you are a leader that is approachable, and not on the defensive when an employee wants to sit down and discuss things. Be mindful of how you interact with others too. Your body language and the tone of your voice will either draw people to you or push them away.

If you truly want to grow as a business owner and as a leader, you need to allow others to voice their opinions and let you know that your company, at times, may not be the paradise you believe it is. The question is how do you create an environment that gives people the confidence and willingness to confront you with critical issues?

Make it known that you want to create a work environment where feedback, especially when things go wrong, is accepted and welcomed. Remember, if people fear bringing you bad news or only tell you the good things, you may not have an open environment where people feel they can discuss all issues, good and bad. It’s also important to realize that to give critical feedback to others, you must be open and willing to receive critical feedback.

At the start of any team meeting, let your employees know that you will be asking for everyone’s opinions on ways to improve. Emphasize that you want to hear not only what’s going right, but also where the company is failing. People’s opinions may not be shared by everyone, but one’s perspective is their reality. We need to listen to all voices. Be transparent and let everyone know that you will listen to everyone and do your best to act on everyone’s feedback. Another thing to be aware of; don’t allow an atmosphere that encourages gossip or venting. This will promote negativity and bring down morale. You need honest, healthy feedback that everyone can accept and learn from.

The bottom line? The next time someone brings you bad news, look them straight in the eye, smile, and say, “Thank you!”

Extension of the IRS Lookback Period: What you need to know

Tue, 11 Apr 2023 16:30:00 +0000

It’s been 3 years since the onset of the global Covid-19 pandemic, and we are still feeling the side effects when it comes to accounting, taxes, and tax refunds. In both 2020 and 2021, the IRS issued notices under the Tax Code, giving them the authority to postpone deadlines and due dates related to filing tax returns due to the federally declared disaster. However, these notices did not pertain to the IRS lookback period for refund claims filed after April 15th. Therefore, many taxpayers who file yearly after April 15th will not be able to claim a refund as it falls outside of the lookback period.

Now, in 2023, a new notice has been issued by the IRS, extending the lookback period for refund claims.

Here is a rundown of everything you need to know about this IRS extension.

What is a Lookback Period

First off, it’s important to understand exactly what the IRS lookback period for refund claims is.

In general, a taxpayer must claim a refund on their taxes within 3 years from the date the related tax return was filed or 2 years from the date that the tax regarding the claim was paid. This IRS lookback rule allows taxpayers to request a refund in amounts paid within the lookback period.

The Extended IRS Lookback Period

Since the IRS failed to extend the lookback period in 2020 and 2021, many taxpayers who filed after April 15th have been left unhappy and without an option to request refund claims on those payments.

In an effort to remedy this problem, the IRS has issued a new notice regarding the lookback period, Notice 2023-21. This notice disregards the time periods from April 15, 2020 to July 15, 2020 (2019 tax returns) as well as from April 15, 2021 to May 17, 2021 (2020 tax returns), when determining the start of the lookback period.

This notice comes in an effort to realign the lookback periods with the formerly postponed due dates for filing tax returns due to the pandemic.

What Does the Extended IRS Lookback Period Mean for Taxpayers?

While the IRS’s extended lookback period is a positive move for taxpayers, it does not fully fix the problem created 3 years ago. This should be taken as an opportunity to look deeper into tax law and how we can create a permanent solution and prevent this type of misalignment in the event that future disaster filing postponements are made.

People are already weary of the IRS, filing taxes, and making refund claims, and this situation definitely does not help their confidence. It is our hope that necessary changes are made to ensure that all taxpayers have the opportunity to claim credits or refunds moving forward without being denied.

All in all, taxes and dealing with the IRS and lookback periods can be stressful, but the best way to ensure your tax filing and refund claim experience is as positive as possible is to keep your bookkeeping and financials up to date and organized so you always have what you need and can file on time.

If you need help getting your bookkeeping and finances organized and ready for tax season, I’m happy to help with our bookkeeping and financial services. Feel free to browse our services and book a free consultation call with us today!

Why We Do Bookkeeping

Tue, 04 Apr 2023 18:41:22 +0000

Have you ever walked into a room and stopped because you couldn’t remember what you were trying to do?

Forgetting is easy. Especially when it’s something that we don’t actively engage with on a regular basis.

When it comes to the reasons for what we do and the decisions we make as a business, remembering the “why” behind our actions is important.

How It Started

ThreeRivers Bookkeeping started because I wanted to help small automotive businesses overcome a challenge I observed while working with them. I started my career working with mechanics and automotive specialists in a related industry, but I realized that my passion was for helping those small businesses in a different way.

Managing Bookkeeping’s Challenges

Bookkeeping is boring and tedious. Keeping everything properly organized takes so much time, effort, and specialized knowledge that everyday business owners can’t easily handle it. And errors in bookkeeping, which are quite common, can financially ruin businesses. Errors can make it harder to budget correctly. But worse is the damage caused by errors that impact taxes.

My goal in creating Three Rivers Bookkeeping was to help remove bookkeeping as an obstacle for small businesses. Even as I am coming up with new services (coming soon), my goal is to help businesses eliminate obstacles and run their businesses more efficiently and effectively.

Build Wealth Through Business

How much money do you want to make?

In other words, what do you want to do outside of business?

This is a question we ask our clients when we start working with them. What you want to do with your time, will require a specific amount of money. And in order to make the amount of money you want, your business will need to make a certain amount of money as well.

While there are many people who work on books and do bookkeeping, the key difference between them and Three Rivers is our desire to help our clients build wealth through their businesses.

Quiet Quitting: New Phrase, Old Problem. Featured in Ratchet and Wrench Magazine

Thu, 30 Mar 2023 15:47:44 +0000

Employees today will disengage if they don’t feel valued.

by Joe Marconi: Quiet Quitting: New Phrase, Old Problem - Featured in Ratchet and Wrench Magazine

Some people go to work each day with great enthusiasm and believe they can change the world. But then, others anticipate each workday with feelings of despair. These employees do the bare minimum; just enough to keep their jobs and go unnoticed. They are called quiet quitters.

While quiet quitting may be the latest catchphrase, it's not a new workplace disorder. We've called them disgruntled, disengaged and even toxic in the past. But who's responsible for this behavior? Is it the employee? Or is there a deeper problem brewing in the workplace?

Work has Evolved

As a young technician in the mid-1970s, the shop owner was typically at the top of the pinnacle. It was common back then for a boss to run his company with the mindset, "my way or the highway." Was it wrong? Perhaps. Thinking back, I don't think we clearly understood or appreciated the role we played in the workplace or how we fit into the company's structure. We accepted things the way they were, unlike employees today. I also believe we felt we couldn't change how things were.

Today, it's a lot different. There has been a shift in the workplace. Societal changes, the internet and social media have changed our exposure and heightened our awareness of the world and the issues that confront us daily. Today, employees of every generation believe they should have a voice in the company's decisions and direction. It's important that their opinions count and that their job role has a purpose. Of course, earning a decent living is top of mind, but as always, not the prime motivator. At the top of what's most important is the workplace environment and the employee experience. When employees lack the experience they crave, they become disengaged, leading to what we call quiet quitting.

Employees Want Accountable Leaders

Lack of trust in leadership is another factor in quiet quitting. Shop owners and managers must communicate what their employees can expect from management and not only what management expects from them. Consistency in the message and following through on promises contribute to workplace morale. After all, if you can't trust the message, you will not trust the messenger.

Some people will excel in any work environment. However, they are the exception, not the rule. If you want a team of employees where everyone is pulling in the right direction, you should consider the needs and opinions of your employees.

If you are concerned that understanding your employee's point of view and acting on it is giving up control of your company, don't be. Earlier, I referred to shop owners from years back. Most of them had a good business but not a great business. The reason was that they were the business. Growth was difficult because it was dependent mainly on their abilities and talents. This one fact alone causes a business to plateau. However, when a business combines different points of view and strategies from the team, greater growth is possible.

Start Within

Lastly, there will always be employees who won't be happy no matter what you do. If you are confident that you have done all you can to help a quiet quitter, the only hope at that point is for the employee to look within themselves, which may be difficult for most people. Instead, focus more on what you can do. Look within yourself to ensure you are doing everything possible to create an amazing employee experience. Your goal must be to create happy employees. We've all heard the expression, "happy employees create happy customers." Well, they create happy employers, too.

Tricks for Tax Season

Wed, 01 Mar 2023 15:57:29 +0000

Taxes are annoying. They cost your business a lot of money to pay. And then you have to spend a lot of time gathering all the proper documentation. And don’t forget to keep it organized.

That’s where I have a couple of tricks that I recommend for my clients that I would like to share with you.

Use a Receipt Manager

A receipt management system will allow you to collect and organize your receipts digitally. You won’t have to worry about losing the receipts or not being able to access them when you need them.

There are two types of receipt management softwares that I recommend depending on your situation and business needs. While both of these apps have a recurring membership structure, with your financial security at stake, it’s better to get something good that you have to pay for.

Dext

Dext’s primary focus is the ability to snap pictures of your financial documents and receipts while allowing you to split and itemize those receipts. It also has more features that are available at higher tiers of memberships.

HubDoc

Hubdoc does most of the same things as Dext but can’t itemize receipts. It is less expensive and has a different approach to organization.

Whichever of these two you choose, I recommend starting with a free trial and seeing which one is the right fit for your business.

Track Mileage Digitally

Tracking and calculating mileage can be tricky. But you don’t have to do it manually. And with a good software you won’t have to stress about it at all.

TripLog

TripLog has a few key features which make tracking mileage easier. The most important feature is their compliance with tax codes. After that, they offer tools that can track your trips automatically, and help you classify your trips easily.

And they offer good packages for either large businesses or individuals.

In Conclusion

There are plenty of other softwares that can help you avoid wasting time with tracking and organizing your documents for tax season. And using them will not only help you feel less stressed when it comes time to visit your tax preparer. They will make your daily management of your business easier too.

Don’t miss out on using tech to set your business up for success.

Facing Your Financial Fears

Wed, 21 Dec 2022 12:36:57 +0000

I’m not going to sugarcoat things. Times are hard.

And they aren’t going to get any easier.

One of the problems that makes hard times worse is fear.

Fear of the future
Fear of financial issues
Fear of a collapsed economy

We could spend all day writing out lists of the things we are afraid of, but we don’t have time to be that thorough. There are however a few key fears when it comes to your business finances that I believe need to be faced and addressed.

Losing Savings

When your money reserves start to dip, it’s easy to feel the pressure.

Pressure turns into stress which turns into sleepless nights and uncomfortable discussions about money.

Inflation is probably the biggest drain you will face in your finances. But that doesn’t mean your situation is hopeless.

You can slow or stop the losses by eliminating redundant purchases and waste. Unused subscriptions for things such as streaming services are one of the largest sources of wasted money (and they’re easy to find and fix).

Losing Work

As business owners, spending money is less scary when you have enough work coming in to pay the bills.

When work slows down, what you need is a strategy to boost your sales.

Sometimes you need to start or increase your marketing. Other times you may need to seek help from a business coach to help you find where your business is not reaching its potential. Slow downs are unavoidable, but there are ways to handle them.

Losing Investments

The stock market is not fun to watch.

Your money is riding a roller coaster, but you still feel your heart drop when the market turns down. The good news is that investing is a long-term game.

If you miss the best days on the market, you will miss out on a lot of money. That’s not to say that every strategy works for every person. And you should seek out a financial advisor to help you make the best decisions. But just because the market is down today, doesn’t mean that the market will be down forever.

Living Boldly

Once you have recognized and faced your fears, you can start to address the solutions. Most companies that fail to grow or even survive, fail because they can’t or won’t face their fears. You can’t solve a problem you aren’t willing to look at.

Sometimes you need help to get through the challenge of facing your fears, but in the end it will be worth it. If you don’t know how to address your financial fears in your business, I would be happy to speak with you and give you some direction.

Your Business Finances in 2023

Tue, 20 Dec 2022 15:36:00 +0000

I don’t have a crystal ball. And I can’t predict the future.

But there are some things I do know about what is coming in 2023 based on the current direction of our economy. And none of it looks pretty.

Continued Inflation

Inflation has been at an all time high for the past year and it’s not going to suddenly go down.

Thanks to government spending and the printing of money to pay for that spending, inflation has spiked. And normal inflation which comes from increasing costs of goods and services is still a factor.

All that to say, inflation is going to continue to impact the economy and business finances well into 2023.

Less Disposable Income

With inflation and increased cost of living comes a decrease in disposable income. A factor we are beginning to see, even now, is the reduction of unnecessary spending in low income households.

While it starts by affecting low income households, it will begin to affect middle class households very soon. Many local businesses depend on people being willing and able to spend money on non-essential items.

More IRS Involvement

Last year saw the largest increase to the IRS in decades. The number of agents that have been added is a sign of increased focus on small businesses and increased audits.

Expect to pay more in taxes or to be stuck dealing with surprise audits as the government attempts to crack down on errors in filing and those who evade payment.

Preparation is Essential

Local businesses fail first.

When the economy suffers, the mom and pop style stores will bear the brunt of the problems as they don’t have the resources to spread out the losses.

Survival requires preparation. You have to start making decisions now if you don’t want to get caught off guard by increased financial hardships.That’s where a review of your current financial situation can be extremely helpful.

If you want to be prepared, I would be happy to sit down with you and discuss some solutions. Just set up a no-obligation appointment to get started!

Lang Marketing Reports: Shrinking Repair Shop Population

Wed, 23 Nov 2022 16:03:11 +0000

Shrinking Repair Outlet Population

"Vehicle maintenance is becoming less convenient for Americans. There are fewer outlets repairing cars and light trucks, despite the increasing population and complexity of cars and light trucks on U.S. roads. The number of repair (DIFM) outlets fell by nearly 14,000 over the past five years (2016 to 2021), and future annual reductions are likely."

"Nevertheless, not all types of repair outlets suffered losses. Repair Specialists, Foreign Specialists, and Dealers have grown in number, while the four other major types of DIFM outlets have endured thinning ranks. See the all-new 2023 Lang Aftermarket Annual for a ten-year history of the changing number of all major types of auto repair outlets across the U.S."

14,000 Fewer Light Vehicle Repair Outlets

At mid-year 2021, there were over 211,700 car and light truck repair outlets in the U.S., down approximately 14,000 from 2016.

At the same time, vehicles in operation (VIO) climbed by more than 18 million and grew more complex, increasing the diagnostic and repair challenges faced by repair outlets.

Outlet Groups Growing in Number

Although the light vehicle repair outlet population fell by approximately 14,000 from 2016 to 2021, not all outlet types have declined.

Among the seven major types of car and light truck repair outlets, three increased in number between 2016 and 2021: Repair Specialists, Foreign Specialists, and Vehicle Dealers. These outlets groups grew even during the onslaught of COVID-19.

Repair Specialists

Focusing on a limited menu of vehicle repair and maintenance, Repair Specialist locations totaled just over 29,600 at mid-year 2021, up several hundred from five years earlier. Repair Specialists are the second largest DIFM outlet group.

Foreign Specialists

Foreign Specialists concentrate on the repair of foreign nameplate cars and light trucks. They achieved the largest outlet gain over the past five years and the greatest percentage growth in locations.

There were just over 19,600 Foreign Specialists nationwide at mid-year 2012, up approximately 700 from five years earlier.

Vehicle Dealers

Vehicle Dealers recorded a small (less than 0.2%) increase in outlets from 2016 to 2021. This reversed a trend of declining Dealer locations in the years after the Great Recession of 2008.

Asian nameplates have been the most successful in expanding their Dealer counts.

Outlet Groups Declining in Number

Service Stations & Garages, Tire Dealers, Discount Stores/Mass Merchandisers with bays, and Retail Auto Parts Stores with bays all fell in outlet count over the past five years.

Service Stations & Garages

Service Stations & Garages were battered by a significant population loss from 2016 to 2021, down by approximately 13,000 locations.

This represented most of the repair outlets lost over these five years. Nevertheless, Service Stations & Garages remain the most prevalent type of DIM outlet.

Tire Stores

There were approximately 800 fewer Tire Stores in the U.S. at mid-year 2021 than five years earlier.

Small Tire Stores suffered the brunt of this decline as growing competition from large, multi-outlet operations pushed many of them out of the market.

Discount Stores/Mass Merchandisers & Auto Parts Stores with Bays

The closing of hundreds of Sears Auto Centers nationwide contributed to the decline of Discount Stores/Mass Merchandisers with bays, which has been ongoing since 2011.

The falling number of Auto Parts Stores with bays between 2016 and 2021 continued a trend that has been underway for several decades.

COVID-19 Impact

Most of the DIFM outlet loss between 2016 and 2021 occurred over the past two years (2020 and 2021), reflecting the impact of COVID-19 and the resulting changes in consumers’ vehicle repair behavior.

Changes in the populations of the major types of DIFM outlets will continue, creating challenges and opportunities for a variety of aftermarket players.

Six Major Takeaways

The number and complexity of cars and light trucks in operation have continued to increase. Nevertheless, the population of repair outlets handling cars and light trucks fell by approximately 14,000 over the past five years (2016 to 2021).
- Despite the loss of car and light truck repair outlets between 2016 and 2021, three of the seven major groups of DIFM outlets expanded their populations: Repair Specialists, Foreign Specialists, and Vehicle Dealers.
- - The number of Repair Specialists climbed by approximately 350 between 2016 and 2021, and approximately 700 Foreign Specialists locations were added. Vehicle Dealers posted a modest increase in number, reversing a trend of vanishing locations that began during the Great Recession of 2008.
  - - Service Stations & Garages suffered the most significant outlet loss from 2016 to 2021. The populations of Tire Stores, Discount Stores/Mass Merchandisers with bays, and Auto Parts Stores with bays also were battered during these years.
    - - The growing number and complexity of cars and light trucks in operation provide challenges and opportunities for the shrinking population of light vehicle repair outlets across the country. They must become more technically capable and productive to keep pace with the growing volume and complexity of vehicle repairs.
      - See the all-new 2023 Lang Aftermarket Annual for the only ten-year analysis of the population changes sweeping across the seven major types of auto repair outlets in the U.S.

Stop Overpaying for Tires

Wed, 11 Aug 2021 13:38:00 +0000

Whether you only occasionally buy tires for your business or find yourself constantly needing to replace one, two or an entire set, there is a way to start saving money immediately.

Champtires has 30,000+ tires in stock at any given time - in nearly every brand, size and tread depth - at the lowest prices. Free shipping to the continental U.S. is included on every order. Auto businesses can join an exclusive program to save even more.

Why Buy Used Tires?

While Champtires does sell new tires, high quality used tires are our specialty. Buying used tires is:

Safe. When bought from a reputable tire shop, like Champtires. We’ve been in business since 2009, and every tire that enters our warehouse is inspected and air tested.
Environmentally friendly. Instead of the used tires ending up in a landfill, you will be reusing a premium, recycled product.
Much more affordable. Even if you just need to replace one tire, the cost of rubber has increased dramatically and has caused the price of new tires to skyrocket.

Why Trust Champtires?

Since 2009, Champtires has specialized in selling new and high-quality used tires to drivers across the U.S. Every tire that enters our warehouse is inspected and tested, and we offer a 14-day satisfaction guarantee.

How To Save Even More on Every Order

Auto businesses are invited to sign up as a Champtires business partner. This gives you a 10% discount on each order placed through Champtires.com and access to other promotions.

Learn more about the B2B Program.

Shop our inventory.

Business Success is Determined by People, Not Process

Sun, 28 Feb 2021 04:29:38 +0000

When I look back at my 40-years as a shop owner, there is one thing that stands out among everything else: It’s the people we surround ourselves with that will have the biggest influence in determining our success. Think about it, even the greatest NFL coach will never win a Super Bowl without great players.

I have worked with a lot of employees through the years, including technicians at all skill levels, bookkeepers, service advisors, managers, and support staff. I can tell you with 100 percent conviction that the years that were the most successful were the ones that I had assembled the best teams. Now, I am not just defining success by profit alone. These were also the years that were the most fun, with less stress and the years that we made the biggest positive impact with our customers and the community.

Let’s talk about production first. Highly motivated, skilled technicians with the right attitude produce more. They also get paid more, and they should. The right team of techs will average higher labor hours. I learned many years ago, it’s not the hourly rate you pay a tech that matters, as much as the hourly labor dollars produced by that tech.

Next up are your service advisors. Here is where you can make or break your company. The service advisor is the face of the company. They represent you, your company and everything you do. The best brake job in the world means nothing if the service advisor doesn’t deliver a world-class experience that gives your customers a compelling reason to return.

The long-term damage from an incompetent service advisor is hard to recover from. For the most part, you don’t run a transactional business. Your company relies on strong relationships and a strong culture. There isn’t a big-box brand name over your bays. It’s your name. And that means service advisors need to go above and beyond to exceed your customer’s expectations. If not, you lose.

For the success of any repair shop, I put great emphasis and responsibility on the owner when it comes to employee management. All too often, a poorly run, failing shop is the fault of bad leadership. The shop owner’s ability to lead and motivate is crucial with building a winning team and successful business. However, I have also learned that sometimes we have the wrong people. And no matter what you do or how you try to motivate and lead, there are some people that just don’t “get it.” If it’s not in someone to begin with, nothing you do will change that person.

In today’s business world, you need a team of great players. You need to hire people that can produce quality jobs, with minimal comebacks, have the right attitude, self-motivated, willing to attend training and have the willingness to work in a united, team environment. You need to hire people that “get it.”

With regard to your customers, your business hinges more on the customer experience than it does on the equipment you have or the brand of parts you use. Of course, the parts you purchase matter. Of course, your alignment machine matters. But none of that is as important as what the customer sees. The customer sees and judges you on her overall experience. Which is how she was greeted at the service counter, how she was spoken to during the sales process, the car delivery, and the experience driving away with a smudge-free steering wheel.

Lastly, here’s something you need to accept as a business owner. There isn’t a process anyone can create that will make up for mishaps caused by employing the wrong people. You do need to have processes and policies in place. It’s how you build a smooth-running and efficient business. However, we don’t run a McDonalds or a Dunkin Donuts. We can’t make up for poor customer service with a process or with a point-of-sale computer terminal. The processes and policies you create will only work the way they were intended to when you have employees fully aligned with your culture and have the right attitude. You need to have the right people.

There are many components of business. The financials, choosing the right vendors, training, equipment, and advertising are among them. The two most important components of your business are your employees and your customers. However, you have great control over who you hire. And we all know, great employees create great customers. Assemble the right people around you and the rest will fall into place.

This story was originally published by Joe Marconi in Ratchet+Wrench on August 5th, 2020

The Past is Passed

Wed, 24 Feb 2021 03:16:23 +0000

January 2020 started without a hitch. We hit our sales and profit goals in textbook fashion. However, by the end of February, it was obvious that something wasn’t right. Sales for the month dipped by more than 30 percent. It was devastating. What we didn’t realize was that this was just the beginning of even greater losses. By the time Governor Cuomo of New York issued the stay-at-home order on March 22, sales had dropped 75 percent. With most of the country in lock-down, I didn’t know what to fear more—the coronavirus or the impending financial disaster the world was about to endure.

Before we go on, it’s important that we all remember those that have lost their lives due to COVID-19. As in any crisis, there will be suffering. However, as a society, we must not dwell on it or let the crisis beat us. We must find a way to fight it and succeed.

When the impact of the virus first hit, emotions filled my mind every waking moment, mostly due to the uncertainty of the situation. Then, reality set in and all I could think about was my obligation to others. As an essential part of the community and the nation, it was my obligation to keep the doors open and be there to make sure that those that needed to get to work, could. If we were to win, survive and thrive, we had to create a winning environment. That meant that I had to elevate my leadership to a new level, put the health and welfare of my staff before anything else and realign my goals. In the coming days and weeks, I would get a working man’s PhD on how to win in times of crisis.

The first lesson learned in all this is to have the right mindset. We can’t look backward in time or wait around for a return to what we perceived was once normal. Looking forward and building a new future is all that matters. If you tell yourself, “the sky is falling.” It will. Negativity spreads like a virus and infects everyone around you. Your mind shuts down in panic mode, clouding your judgment and mentally and physically paralyzing you. You must remain mentally strong and positive, even when you know the brutal facts of the situation. This is crucial. You, the leader of your shop, cannot lead others if you show fear and negativity. Be human, show emotions, but have the mental fortitude and show your team that we will get through this crisis.

The next lesson is to make sure you have the right people around you. A strong team with the right culture is important in business. In times of crisis, it’s the difference between success and failure. As the weeks unfolded, it became clear to me who my leaders were. It would be those employees that I would turn to in order to maintain morale and lift everyone’s spirit. Leaders cannot succeed without having the right team around them. Take a look around you. Do you have the best employees with the right attitude? If not, begin the recruiting process today.

Realigning my goals and understanding my new key performance numbers was next up. My 2020 business plan, created in December 2019, had little meaning by mid-March. I am not admitting defeat for the year by any means. Rather, we now have new objectives and a clean slate. From this point on, it is critical that we remain profitable: watching every expense, tracking production, keeping payroll within budget, and building for the future. The past is the past, it cannot be changed. What we have now is the opportunity to make each day better than the day before.

Perhaps the biggest lesson learned was more of reminder than a lesson. It’s that above everything else, people come first. All the planning, goal setting, marketing and number crunching mean nothing unless you understand that you, as a shop owner, have the power to achieve great things by your words and actions. Yes, it all goes back to leadership and understanding your obligation you have to others. All of us will have different lessons learned from crisis. Which means, there is great opportunity on the horizon. Use those lesson to make your tomorrow better than yesterday.

My hope is that by the time you read this article, COVID-19 will be well under control. Human interaction is crucial to our overall well-being. We need not only, the emotional touch of another person, but also the physical touch of others. While Facetime and Zoom will get us through, it will never replace a good old fashion handshake and a hug.

This story was originally published by Joe Marconi in Ratchet+Wrench on June 5th, 2020

Is it Really all about Price?

Wed, 24 Feb 2021 03:14:02 +0000

Nick is on the front lines of customer service each day. He is a talented service advisor, with a passion for helping others. Nick and I often debate what’s more important to the customer: price or value? He’ll often tell me, “I know you preach value, Joe, but people care about price, too. In the end, price is a major concern.” I always respond, “Nick, it’s not all about price, it’s really about value. Build a strong relationship, reach the customer emotionally, have them believe in you and they will trust you. And when that happens, price will not be the focus.”

Here’s the reality. I would be lying to you if I told you that price has absolutely no bearing on a person’s decision to buy from you or not. However, are consumers only interested in price? I know that sometimes it may appear that way, but the bottom line is this: being competitive and profitable is a fine line we walk each day. When the perception of value diminishes, price then becomes the focal point. Nick, who debates me on the philosophy of value, learned a valuable lesson recently, which made him a believer that there is most definitely a difference between value and price.

About a month ago, a first-time customer called us to ask if we could take a look at her son’s tire, which was losing air pressure. Nick took the call and said, “Sure, we would be happy to help you.” He took down all the needed information and let her know that he would follow up with a phone call as soon as her son arrived.

When the son arrived, Nick wrote up the car and dispatched it to a technician and then called the mother to let her know that her son had arrived. He also let her know that he would call her as soon as he knew something about the tire.

About ten minutes later, the tech informed Nick that the tire was damaged from riding with too little air pressure and that the tire would have to be replaced. He also said that the other three tires looked new and that it would not be a problem replacing the one tire.

Nick prepared an estimate for the tire and called the customer. Nick explained why the tire needed to be replaced and let her know that we could have the tire installed and have him on his way in about an hour or so. Nick then gave her the price for the job. The mother replied with, “Ok, give me five minutes and I will call you right back.”

Fifteen minutes later the mother called, and said, “Nick, I found another shop that will install that same tire for $50.00 less than you can do it for. So, can you put air in the tire so I can have my son drive it to the other shop?” Nick thought for a second and responded, “putting air in the tire and having your son drive his car to the other shop is not safe. Here’s what I will do. I will have my technician put the spare on the car. He’ll also check the tire pressure in the other three tires. Afterall, we want to make sure that your son is safe.” The mother thanked Nick and hung up the phone.

A few minutes later, the mother called again, asked for Nick and said this, “You know Nick, you were so nice to me from the very beginning when I first spoke to you and right up to now, and you put my son’s safety first. You also didn’t try to force me into buying your tire. Please install the tire at your price.” Nick, now on cloud nine, hung up the phone and told the tech to finish up the job.

Nick learned a valuable lesson that day. He learned that he didn’t sell a tire—he sold something much greater. He sold an emotional feeling. He reached the customer on an emotional level and the price of the job became less important. Does this work with everyone? Of course not. But, if you want to make more sales and build the right clientele, sell value, sell relationships and sell a positive emotional feeling.

Later that day, Nick told me what happened. I could tell that he was proud of how he handled the situation. And he should be. I just listened as he told me the entire story and relived the moment. After he had finished, I calmly asked him, “So Nick, is it really all about price?” Nick just smiled.

This story was originally published by Joe Marconi in Ratchet+Wrench on May 5th, 2020

SBA Issues New PPP Regulations, What You Need To Know Part 4

Fri, 12 Feb 2021 20:02:00 +0000

We ended Part 3 of this blog series with “Second Draw PPP Loan Application and Documentation Requirements”. As this second draw is being distributed, the rules are changing. I encourage you to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

You may also contact me if you would prefer to have a conversation with someone outside the government. My contact information is at the bottom of this post.

Beginning Part 4, we start with expanding on this rule from the New PPP Regulations:

For Second Draw PPP Loans of $150,000 or Less, Revenue Reduction Documentation is Not Required to be Submitted at the Time the Borrow Submits an Application for a Loan:

This section is self-explanatory, but just a bit of clarification for you.

When you apply for a loan in an amount that is less than $150,000, you may disregard the required documentation mentioned in the previous blog. There is a three-letter word that causes a pause here “BUT” “Must be submitted on or before the date the borrower applies for loan forgiveness, as required under the Economic Aid Act.”

A second piece is that IF you as a borrower do not apply for loan forgiveness, you must provide this documentation to the SBA when they request it from you. So, be prepared.

How to Request an Increase for a PPP First Draw Loan if the Borrower Returned All or Part of a Loan, or Did Not Accept the Full Amount Previously Approved:

Here are the categories of borrowers that may reapply or request an increase in the amount of the PPP loan:

If a borrower returned all of a PPP loan, the borrower may reapply for a PPP loan in an amount the borrower is eligible for under current PPP rules.
If a borrower returned part of a PPP loan, the borrower may reapply for an amount equal to the difference between the amount retained and the amount previously approved.
If a borrower did not accept the full amount of a PPP loan for which it was approved, the borrower may request an increase in the amount of the PPP loan up to the amount previously approved.

You may use the SBA’s E-Tran Servicing website to request an increase in the PPP loan amount electronically. After the request, you are required to provide the lender with supporting documents for the increase.

As of this writing, the SBA’s process for collecting information from borrowers was under development. This may be available when you apply for an increase in the loan amount as described above.

Clarification on Borrowers that are Ineligible to Receive a Second Draw PPP Loan:

Here is some language from the Economic Aid Act that describes borrowers who are NOT eligible to receive a Second Draw PPP loan. Read carefully please?

A business concern or entity primarily engaged in political activities or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy, or that describes itself as a think tank in any public documents;
Certain entities organized under the laws of the People’s Republic of China or the Special Administrative Region of Hong Kong, or with other specified ties to the People’s Republic of China or the Special Administrative Region of Hong Kong;
Any person required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (22 U.S.C. 612);
A person or entity that receives a grant for shuttered venue operators under section 324 of the Economic Aid Act;
A publicly traded company, defined as an issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934
(15 U.S.C. 78f).

Pay attention to the punctuation here. At the end of each bullet, there is a semicolon “;”. This means that if the first bullet does not apply to your situation, the next one or the next one, or the next one, OR the NEXT one may.

We’re getting close to the end, but this section has some additional clarification of borrowers that will not qualify for the second draw PPP loan. Check out these are examples:

You are engaged in any activity that is illegal under Federal, state, or local law;
You are a household employer (individuals who employ household employees such as nannies or housekeepers);

An owner of 20 percent or more of the equity of the applicant is presently incarcerated or, for any felony, presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of, pleaded guilty or nolo contendere to, or commenced any form of parole or probation (including probation before judgment) for, a felony involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance within the last five years or any other felony within the last year;
You, or any business owned or controlled by you or any of your owners, has ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted within the last seven years and caused a loss to the government;
Your business or organization was not in operation on February 15, 2020; • You or your business received or will receive a grant under the Shuttered Venue Operator Grant program under section 324 of the Economic Aid Act;
The President, the Vice President, the head of an Executive Department, or a Member of Congress, or the spouse of such person as determined under applicable common law, directly or indirectly holds a controlling interest in your business;
Your business is an issuer, the securities of which are listed on an exchange registered as a national securities exchange under
section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f);
Your business has permanently closed.”

Again, same observation regarding the semicolons at the end of each bullet.

Thanks for sticking with me and welcome to the end of this blog series. Whew, that IS a TON of reading.

Again, I am keeping current of the changes as they happen, so if you want to talk, let’s schedule a time to meet soon.

Natalie Paris

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

SBA Issues New PPP Regulations, What You Need To Know Part 3

Fri, 05 Feb 2021 00:21:00 +0000

We ended Part 2 of this blog series with “Calculation of Average Monthly Payroll Costs for NAICS Code 72 Entities That Qualify as Seasonal Employers or as New Entities:” This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

Beginning Part 3, we start with expanding on this rule from the New PPP Regulations:

“Bankruptcy Prevents Borrowers from Receiving a Second Draw PPP Loan:”

The Interim Final Rules (IFR) state that if your business is in bankruptcy, you will not be approved for a PPP loan. Congress gave the SBA to defer that decision to bankruptcy judges but did not choose to exercise that option.

Again, don’t shoot the messenger please? I was shocked by this decision myself. I encourage you to look at the language from the IFR but will not insert them here.

Here’s a quote from the IFR to give you a taste.

“If the applicant or the owner of the applicant is the debtor in a bankruptcy proceeding, either at the time it submits the application or at any time before the loan is disbursed, the applicant is ineligible to receive a PPP loan.”

There is more that discusses the timing of when you file for bankruptcy and that’s where the hairs start getting split. If you find yourself in this possible gray area, check out the IFR.

There is a new way to account for a 25% reduction in revenue that will qualify you for a second PPP loan. Here’s the language:

“A borrower that was in operation in all four quarters of 2019 is deemed to have experienced the required revenue reduction if it experienced a reduction in annual receipts of 25 percent or greater in 2020 compared to 2019 and the borrower submits copies of its annual tax forms substantiating the revenue decline.”

Here’s the idea. If your shop had a reduction of annual receipts (when comparing 2019 to 2020) while in operation in 100% of 2019 and 2020, then you meet the criteria. Another wrinkle is that you must have already qualified before taking the revenue reduction into account. The IFR does make this simpler than it was before. If you want to find out the reasons the SBA created a variable method of figuring their reduction in revenue, check out the IFR or we can have a conversation. I’m here for you.

Lastly, you can still qualify for the second draw when you have a reduction of 25% in revenue by proving that you had the reduction in one quarter of 2020 when compared to the same quarter in 2019. For example, if you had the revenue reduction in the 1st quarter of 2020 when compared to the 1st quarter in 2019, you qualify.

Here’s the second and last topic for this blog. My eyes are starting to cross so hang in there.

Second Draw PPP Loan Application and Documentation Requirements:

If you are wanting to make application, you should do that as soon as the application is available. It may be available now, so check it out.

The IFR did specify the documentation requirements, so here we go.

The documentation standard is essentially the same as the first draw PPP loan. If you meet these requirements, no additional proof of payroll costs is required. These requirements come straight from the IFR:

If the applicant:

(i)used calendar year 2019 figures to determine its First Draw PPP Loan amount,

(ii) used calendar year 2019 figures to determine its Second Draw PPP Loan amount (instead of calendar year 2020), and
(iii) the lender for the applicant’s Second Draw PPP Loan is the same as the lender that made the applicant’s First Draw PPP Loan.

When you meet the standards from above “Additional documentation is not required because the lender already has the relevant documentation supporting the borrower’s payroll costs.”

Even if you do meet the standards from above, the IFR allows lenders that latitude to request additional documents if the lender “concludes that it would be useful in conducting the lender’s good-faith review of the borrower’s loan amount calculation.” Here some plain language. The bank can ask for more documents to review your calculation of the loan amount.

When you are asking for a second round PPP loan that is greater than $150,000 you have to submit documents that are “adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019.” An example of the documents is:

Relevant tax forms, including annual tax forms, or
Quarterly financial statements or bank statements if relevant tax forms are not available.

Hello Ms. Bookkeeper, do you have a handle on this stuff?

I’m confident I do, so if you want to talk, let’s schedule a time to meet soon.

In part 4 of the series, we’ll start with:

For Second Draw PPP Loans of $150,000 or Less, Revenue Reduction Documentation is Not Required to be Submitted at the Time the Borrow Submits an Application for a Loan:

See you back here for Part 4.

Natalie Paris

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

SBA Issues New PPP Regulations, What You Need To Know Part 2

Thu, 28 Jan 2021 04:41:47 +0000

Hi, Natalie here.

We ended Part 1 of this blog with the SBA’s definition of gross receipts which is consistent with SBA’s size regulation 13C.F.R. 121.104. This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

Beginning Part 2, we start with expanding on this rule from the New PPP Regulations:

“Any Forgiveness Amount” of a First Draw PPP Loan is Excluded from a Borrower’s Gross Receipts.”

Simply stated, you can breathe a sigh of relief. Forgiveness amounts from your first draw PPP loan are not included a gross income when adding up what your gross receipts were. Think of this as a tax deduction taken right off the top of your gross receipts.

Yes, I went there, taxes. As I write this, I’m preparing my client’s books for the tax pros who will be busy from February through April 15th. But, I digress, back to the SBA interim rules

If you want to dive into the SBA rule on forgiveness amounts, check out section 7A(i) of the Small Business Act. The takeaway from this section is that PPP forgiveness amounts are expressly excluded (they don’t count) from being taxed as income. This also makes sure you are not disqualified from receiving the second draw PPP loan because of forgiveness during the first draw PPP loan. Restated, you have a better opportunity to qualify for the second round of PPP loans.

The next line in the interim rules reads:

“Borrowers May Use any 365 Day Period Beginning on January 1, 2019 to Calculate Their Average Monthly Payroll Costs:”

The following is general in nature and not related to your specific situation, so stick with me, please?

The maximum amount any individual borrower my receive from the second draw PPP loan is the smaller amount of two and one half (2.5) months of the borrower’s average monthly payroll costs during that 365-calendar day period not to exceed $2 million. You have two options for calculating the time period.

“The 1-year period before the date on which the loan is made.”
“Calendar year 2019.”

You have some flexibility here as you can choose any 365-day period starting on 1/1/19. It may be an exact calendar year or may be any period of 365 days between 1/1/19 and today. An example based on the federal government fiscal year is starting on 10/1/19 and ending 9/30/20.

Here’s quote from the Interim Financial Rules if you’d like to read the ‘official’ language:

“Subsection (f) of the IFR uses “calendar year 2020” to refer to “the twelve-month period prior to when the loan is made.” Calculating payroll costs based on calendar year 2020 rather than the twelve months preceding the date the loan is made will simplify the calculations and documentation requirements for borrowers because payroll records are more commonly created and retained on a calendar-year basis. Allowing borrowers to calculate payroll costs based on calendar year 2020 is also not expected to result in a significant difference in payroll costs compared to the twelve months preceding the date the loan is made because all Second Draw PPP Loans will be made in the first quarter of 2021.”

To wrap up this blog, we’re going to dive into another section of the Interim Financial Rules:

“Calculation of Average Monthly Payroll Costs for NAICS Code 72 Entities That Qualify as Seasonal Employers or as New Entities:”

If you are a seasonal employer or new entity that is not a NAICS Code 72 business this is for you, but wait. A NAICS Code 72 business is defined as “businesses in the accommodation and food services sector”. Here’s where it gets a bit deep and potentially confusing. A NAICS Code 72 business may also be considered as seasonal employer or a new entity.

I know, what appears to be typical government legalese and double speak. Hang in there as I do my best to translate this for you.

The Interim Final Rules clarify this by stating that when your NAICS Code 72 business fits into one of these separate categories… Here’s where the seasonal employer/new entity and NAICS Code 72 business are joined. These businesses MAY calculate their payroll costs used to determine their loan amount…

…based upon the formula that applies to the entity, OR
the standard formula used to calculate payroll costs for every other type of borrower…

while still being allowed to use the 3.5 times multiplier that is applied to NAICS Code 72 entities under the new Act.

Wading through government regulations can be challenging and this blog series will continue with Part 3. We’ll start with:

“Bankruptcy Prevents Borrowers from Receiving a Second Draw PPP Loan:”

I may be able to shed some additional light on these new rules, so contact me if you want to talk this over or do my best to answer specific questions about these new rules.

See you back here for Part 3.

Natalie Paris

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

SBA Issues New PPP Regulations, What You Need To Know Part 1

Thu, 21 Jan 2021 01:21:16 +0000

Hi, Natalie here. There is wealth of information to clear up confusion about the new regulations regarding PPP loans. There will probably be changes, so this is summary is based on the best information currently available. Before you take action, I encourage you to check for updated rules and make sure you are fully informed before signing any paperwork.

As with any government program, there are a lot of details that need to be understood. So this may be spread out over two-to-three blogs, as my goal is to deliver this information in bite-sized chunks. For additional information, I suggest you contact your local Small Business Association (SBA).

Here’s a headline of the first section from an article in Forbes magazine:

“Second Draw PPP Loan Eligibility Requires that Borrower will have spent the “Full Amount” of the First Loan Before Receiving the Disbursement of the Second Loan”

The title for this Act is a mouthful of legalese, but the short title is the “Economic Aid Act”. This Act states that “a Second Draw PPP Loan may only be made to an eligible borrower that (1) has received a First Draw PPP Loan, and (2) has used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower.

Let’s break this down into simpler language.

You have to be eligible
You have received the first PPP loan
You will spend 100% of the first loan before collecting any of the funds from the second PPP loan

Here is some clarification from the Interim Final Rules:

The borrower must have spent the full amount of its First Draw PPP Loan on eligible expenses under the PPP rules to be eligible for a Second Draw PPP Loan; and
“The full amount” of the borrower’s First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act.

This next topic is what the definition of “Gross Receipts” is. “Gross Receipts” Defined for Purposes of Determining Whether There Has Been a 25% Drop in Revenues to Qualify for Second Draw

Unfortunately, the Economic Aid Act does not include a general definition of “gross receipts” for purposes of determining a borrower’s revenue reduction.

Here is what is included in gross receipts: ““All revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.”

Here is what is not included in gross receipts:

“Taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees);
Proceeds from transactions between a concern and its domestic or foreign affiliates; and
Amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.”

One additional statement regarding what may not be excluded from gross receipts has to do with contractor costs and other items under the category of “all other items”. These items include:

reimbursements for purchases a contractor makes at a customer's request
investment income
employee-based costs such as payroll taxes

Lastly for part 1, this definition of gross receipts is consistent with SBA’s size regulation 13C.F.R. 121.104. This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

I may be able to shed some additional light on these new rules, so contact me if you want to talk this over.

10 Top Financial Tools Your Auto Repair Shop Need Today

Sat, 21 Nov 2020 03:10:52 +0000

Hi, Natalie here. You have a great selection of tools on hand that will cover every job a customer will bring into your shop. Whether it’s Mac Tools, Snap-on, OTC, or Wright, the right tool for the job is priceless.

The tools we’re talking about in this post are for finances, but the same strategy holds true. If you’re planning to do your own bookkeeping, the right tool for your financial job is also priceless. They can take what may appear to be a daunting challenge and save you a ton of time. You’ll be back to running your shop before you know it.

Stick around until the end and I’ll outline what’s in my bookkeeping toolbox. Here is an overview with some suggestions on how to choose great financial tools

Here are the top 10 categories:

1. Accounting Software

QuickBooks has been the go-to software for accounting for decades. There are online tools that may be a better option for you. The most popular choice is Xero and the numbers of small business owners that are using Xero is increasing. Compare several and pick the one that is both robust and flexible.

According to the 2015 edition of the Business News Daily’s Buyer’s Guide here are the features you should look for:

 Invoicing
 Expense Tracking
 Client/Vendor Contact Management
 Billing and Recurring Payments Automation
 Quote and Estimate Creation
 Tax Preparation
 Multiple-User Access
 Payroll Processing
 Mobile Access
 Integration with Programs Such as Point-Of-Sale Software, Credit Card
Processing, and Google Apps

2. Budgeting Tools

Creating a budget is the cornerstone of your shop’s financial success. Staying on task within your budget is equally as important. If your accounting software has this feature, you may already have the proper tool to create that budget. If your preference is a tool dedicated to this task, a recommendation is PlanGuru.

3. Payroll Management System

Payroll management can occupy so much of your time and mistakes are easy to make. Look for tools that streamline the payroll process and cut costly errors. A tool that integrates with your other tools is another feature to look for. Some tools like SurePayroll can calculate and pay payroll taxes. Simple. A couple of other tool suggestions are ZenPayroll and ADP. These combine payroll and HR functions in one.

4. Agile Billing

Speed and flexibility in your billing process means quicker cash flow back to you. With a tools like FreshBooks or Bill.com the billing process will be quicker and give your customers an easy experience. Improving the billing process will serve you and your customers better and shorten delays in receiving payments.

5. Financial Dashboard

The dashboard gives you a quick look at your shop’s financial health. See at a glance if your shop is thriving or surviving. Tools such as LivePlan or InDinero give you clear visuals and show you if you’re starting to go off course. Then you can take the actions to keep moving towards your financial destination.

6. Cash Flow Analysis

Your accounting software should have cash flow statement capability. As with the budgeting tools there are specialty tools for cash flow tracking. A couple of suggestions are Float or a simple spreadsheet. These give you patterns from the past to offer a forecast of your shop’s financial future.

7. Inventory Management

This is all about efficiency and tracking. From the purchase of parts and consumables to generating sales reports and low inventory alerts, this is a very valuable tool. A couple of cloud-based options are SOS Inventory and Scout’s top Shelf.

8. Expense Tracking

Those tiny expenses can quickly add up and may be hard to track. Using an expense report tool such as Expensify or Xpenditure makes this much easier. Track those meals, gas, and incidental expenses by scanning receipts and typing in cash expenses. Some tools have the capability to link to mobile devices helping to track these instantly..

9. Business Credit Card

A business credit card, when used properly has several benefits

 Improve your shop’s credit history
 Earn higher credit limits
 Receive rewards and discounts
 Manage employee cards (ease of tracking expenses)
 Boosts employee morale due to convenience and trust

10. E-commerce Solutions

Imagine your customer paying for their oil change before the service is completed. They need a couple of quarts of oil to tie them over. It’s easy to buy them online from their trusted repair shop.

Many businesses have seen an increases in cash flow since the beginning of the pandemic by using E-commerce solutions. These are powerful and create revenue streams that you may not have thought of.

11. Three Rivers Bookkeeping

With my 5-years of experience, these are the tools I use:

 Accounting software – QuickBooks
 Payroll Management System – ADP
 Agile Billing – bill.com
 Financial Dashboard – LivePlan

I’m passionate about books and service to my clients. If you’d like to have a conversation about tools and why I selected the one’s above, contact me. I can also outline the services I provide and why adding me to your team may make perfect sense to you.

Saving you time and headaches is the value I bring to you, the Auto Repair Shop Owner.

A Tool for Becoming a Better Leader

Tue, 04 Aug 2020 21:56:55 +0000

Superstar shop owner and Elite Business Development Coach Ed Cushman shares an excerpt from a book that will change the way you view leadership.

For additional help building a more successful auto repair business, learn how you can team up with a superstar shop owner like Ed through Elite Top Shop 360: One on One Coaching

A Valuable Lesson from COVID-19

Wed, 17 Jun 2020 22:54:03 +0000

Although COVID-19 has brought our industry plenty of challenges, it has also taught us a valuable lesson. Many of us have seen a drop in our car counts, but have simultaneously witnessed an increase in our AROs and happier customers. These slower days give us the opportunity to spend more time with each and every individual and vehicle that enters our shop, yielding positive results for both our business and our customers.

From this point forward, in order to maximize every single opportunity at your shop, I recommend you implement the following three items.

First, I recommend you hold a meeting with your employees as soon as possible and make sure they know that each vehicle that comes in should be properly, professionally and ethically inspected. Make sure they also know that everything should be documented.

Next, it’s important that every single customer that enters your facility gets full disclosure on what is going on with their vehicle. This includes what needs to be done now, what should be done in the near future, and what may need to happen in the long run.

Lastly, make sure that everyone in your company believes in all of your products and services. When a tech or advisor is on the phone with a customer, they must truly believe in their recommendations in order to really get through to that customer. The customer will be far more likely to listen if they know the recommendations are coming from a place of honesty and care.

If you can implement the three items above, not only will you see sales go up, but you will have happier customers as well. I can assure you that the more time you spend on each vehicle and with each customer, the more successful you will be.

For additional help making the most of your shop’s opportunities, visit the Elite website or call 800-204-3548.

Engaging Your Shop's Customers on Facebook

Thu, 04 Jun 2020 15:40:00 +0000

Superstar shop owner and Elite Business Development Coach Greg Skolink shares a fun tip on how to keep your shop's customers engaged on Facebook.

For additional help building a more successful auto repair business, learn how you can team up with a superstar shop owner like Greg through Elite Top Shop 360: One on One Coaching

4 Powerful Tips to Save on Shop Expenses

Thu, 21 May 2020 17:08:08 +0000

By Bob Cooper

Given the uncertainty many businesses around the world are currently experiencing, we must look for ways to save as much money for our shops as possible, while also making sure we are maintaining and building a more profitable business in the long haul. Here are 4 powerful tips to help you save on your shop’s expenses.

1. Review your profit and loss statement, and take a look at each and every line item. For each line item, you should ask yourself up to 3 questions: First, ask yourself if the line item is going to lead to an immediate profit. An example of this would be parts purchases or labor. If the answer to this question is no, then ask yourself if the line item will lead to a potential profit in the near future. An example of this would be your advertising or marketing investments. If the answer to this question is no again, then ask yourself if the line item will lead to any foreseeable profit at all. Examples of these items would be insurance investments, utilities, and your water cooler payment. Once you have the answer to these questions, it will be much easier to see where you can scale back or even put certain items on hold for the time being.

2. This tip comes from Dean Kuhn, a successful transmission shop owner and one of Elite’s rockstar Business Development Coaches. He recommends taking a look at the top 2-3 most expensive items on your financial statements each month. When you look at these expenses, really dive deep into every single line item that goes along with it. This way, nothing will slip through the cracks and you can get a complete picture your business’s finances, which will help you determine areas where you can save.

3. Always remember that your vendors are your partners, and it’s important to treat them this way. I would highly recommend meeting with each of your vendors and having an honest conversation with them to make sure your partnership is as mutually beneficial as possible. During these discussions, set clear expectations for the vendor and make sure that you are meeting theirs. This will save you valuable time in the long run and will make both of your businesses more successful!

4. To save on what’s likely one of your biggest expenses, I recommend that you sit down with your landlord or mortgage owner and have a conversation with them to see what can be done to reduce this cost. You’d be surprised how often an agreement can be made to help in situations like the one we are currently facing.

Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers the industry’s #1 peer group of 90 successful shop owners, training and coaching from top shop owners, service advisor training, along with online and in-class sales, marketing and shop management courses. You can contact Elite at contact@eliteworldwide.com, or by calling 800-204-3548.

3 Tips on Building Brand Recognition in Today's Climate

Fri, 15 May 2020 21:09:27 +0000

By Bob Cooper

During difficult times like these it's important to look for creative ways to keep your shop's name in the minds of your community members. Here are 3 easy-to-implement tips that will help your shop build its brand recognition in today's climate.

1. If you have a shuttle or any type of vehicle that features the name of your shop, it's important to get that vehicle out in your community. There are plenty of charitable organizations you could partner with that may need delivery assistance, such as Meals on Wheels. You could also provide a shuttle service for local retirement homes and any other group that may need assistance getting around your community, or you could even deliver groceries or household items to these groups. Getting your business's name out there and helping your community will certainly help people remember your shop.

2. Host an online course for people who are currently stuck at home. One specific idea is to host an online car care clinic for new drivers, teaching them things like how to maintain a car, how to deal with a flat tire, how to read and use their car's owner manual, and other similar topics. Not only will this help them learn vital information, but it will give them an indoor activity to focus their attention on, which I'm sure their parents will thank you for.

3. Now more than ever, it's important to have the right attitude each day. This is crucial not only for your own well-being, but for the well-being of everyone around you. A positive outlook will permeate throughout your staff and your community, and show people the type of business you have; one that views each day as a new opportunity to build a wonderful life and a wonderful company.

For additional help building a more successful auto repair business, feel free to give us a call at 800-204-3548 or visit the Elite website.

3 Tips on Maximizing Your Shop's Sales During Difficult Times

Tue, 28 Apr 2020 21:37:45 +0000

By Bob Cooper

We all know that these incredibly challenging times are impacting businesses and people all around the world. To help maximize your shop's sales and profits in the face of these difficulties, here are 3 simple and cost-free tips that you and your service advisors can start implementing today.

1. Pick up the phone and call your customers. However, this is not a sales call and shouldn't involve discussion about the customer's vehicle. Rather, this is a chance for you to check in on your customers and their families, let them know you are thinking about them, and offer to help in any way you can. By giving them a call and speaking from your heart, you are showing your customer that you not only care about their well-being, but that your company truly values people over profit.

2. Set up call forwarding during your commute to and from work. By having incoming calls forwarded to your cell phone rather than to the shop's voicemail during your drive to and from the shop, you are essentially extending your hours and allowing more customers to reach you if they are in need. There may only be a couple of calls that come in during these times, but it can make a world of difference for those calling customers.

3. Adjust your 2020 sales and car count goals so that they are broken down to daily targets, and track these daily goals in a descending manner. Instead of feeling discouraged if your shop is far from reaching a monthly or weekly goal, having daily sales and car count goals will allow you and your advisors to look at each morning as a brand new opportunity to accomplish the goals for the day.

Tracking these daily goals using a descending method helps your team focus on what they still have left to accomplish, and motivates them to reach the targeted numbers. For example, if your daily car count goal is 10 cars, and 7 cars have come in, a descending method of tracking will have your advisors saying, "We only have 3 cars left to meet our goal!" rather than, "We've had 7 cars come in so far." When I first began coaching, my average client saw a 15% increase in sales just by making this simple switch from an ascending to a descending method of tracking goals, so this tip is sure to help!

For additional help increasing your shop’s sales, learn more about Elite’s Online Masters Service Advisor Sales Training, or give us a call at 800-204-3548.

Money Isn't the Answer

Sun, 01 Mar 2020 15:40:57 +0000

Your lead tech is not performing up to expectations. Shop production is slipping and you’re not sure why. You hear through the grapevine that some of your employees are wondering when they will get their next pay raise. After a few agonizing weeks of pouring through reports, you make the decision to give across-the-board pay raises. Almost immediately, you see a boost in production. The shop is more upbeat and all is well. Your decision appears to be correct. Three months later, your shop is once again struggling to meet its sales and production goals—and morale has slipped, too.

I have seen this scenario all too often. And, while there are times that we need to give pay raises, if your shop is struggling to meet its sales and production goals, increasing pay to improve business is not the answer. The reality is you have deeper issues.

Let’s address employee compensation first. You must pay people a competitive wage with the opportunity to earn more. There should be incentives in place to reward your employees for reaching their personal and team goals. And, there needs to be a process in place where your employees understand how and when they will get a pay raise.

However, in terms of long-term company growth, a focus on pay alone will never be the formula for success. In other words, throwing money at a problem is a short-term fix. It’s putting a Ban-Aid on a more serious injury that requires much more care and attention.

About 10 years ago, Mercedes-Benz was struggling with its customer experience at many of its dealerships. In response to this, Mercedes decided to increase pay incentives, implement new policies and training programs. No improvements were realized. Mercedes top executives could not understand why customer service was not up to company expectations. After all, this is Mercedes, a car company that represents quality and sophistication. Why were their dealer employees so indifferent?

A senior leader at Mercedes recognized the problem and stated, “Pride in the brand was not quite as strong as we thought, the level of engagement with work was not as deep as we thought.” Mercedes finally realized that until the employees at Mercedes genuinely cared more, no amount of money, policies or training would make a difference.

Understanding the need to get front-line people more engaged and take pride in their work, Mercedes began to invite its dealer employees to spend 48 hours with the model of their choice. To experience not only the amazing performance and mechanical attributes of the vehicle, but also that they can turn heads as they drive through their neighborhoods or when they drive into the little league parking lot.

Mercedes also built its Brand Immersion Center in Tuscaloosa, Ala., in 2014, where hundreds of employees go each year to spend time getting to know how the cars are built, gain a deeper understanding of the brand, the history of Mercedes and experience the legacy of the company. According to Philippa Green, brand immersion trainer for Mercedes-Benz, “The ultimate goal is to engage their hearts and minds around the brand. We’re teaching them about our legacy.”

As business owners, we track KPIs, set goals, work on marketing and refine our business plans. We also ensure that we provide our employees with adequate training and a well-equipped environment. These are the essentials of our business. However, we must never overlook the importance of your employees taking pride in their work. And, pride comes from employees knowing who you are, what you stand for, what you do for your community and for the industry.

Giving people pay raises can motivate them. But the bounce you get from that is short-lived. Once people have gotten over the excitement of the raise and made the financial adjustments to their lifestyles, the raise is long forgotten. If there are no other intrinsic motivators, then shop morale, production and employee engagement will fall right back to where it was before the raise.

Anyone who knows me and has read my articles, knows how much I preach about leadership. The theme of this article also has its roots in effective leadership. You, the leader of your company, have the power to transform the people around you. Focus on the person, not the position. Recognize when your employees do things that are from the heart. Promote your company’s brand, vision and legacy. These are the keys to a long-lasting company. This is what will improve morale, not a pay raise.

This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2020

People First, Profit Will Follow

Sun, 09 Feb 2020 03:22:01 +0000

The year was 1980 - the year I founded my company. And, like many new business owners, I didn’t have a clear understanding of what was needed to grow a successful business. I thought that success would be determined by my technical skills and my willingness to wear the many hats of the typical shop owner. It wasn’t until I began to let go of trying to do everything that I realized that success is not just dependent on what I do, but by the collective work accomplished by the team. I eventually discovered that I was not the center of my universe. After a few years in business, I began the transition from simply owning a job to becoming a businessman. And, while technology has reshaped our industry throughout the years—and will continue to do so—there is one constant that will never change: success in business rests largely on the people you have assembled around you.

By the late '80s it was obvious that I was doing way too much. I looked at each role I had my hands on: shop foreman, service advisor, shuttle driver, bookkeeper to lot attendant. And, as long as I’m confessing all this to you, I need to disclose that I was also the shop’s maintenance person; making repairs to the bay doors, the slop sink and equipment. You name it, I did it. I was literally too busy to be successful.

In order to lead my company, I had to first clearly define my responsibilities. These are working on the business, recruiting and hiring the best employees, becoming a leader of people and making sure that my business was successful. I also needed to fulfill the obligation I had to my employees. I realized that this required a deep understanding that putting people first is the best strategy for success. This was difficult at first because it requires working on things that have no immediate impact on the business. Unlike working in the trenches and having your hands on everything, working as a businessperson means that you need to spend time building for the future. The things that are most important to your success in business are the things that have a payoff down the road.

I also clearly defined the duties I should not be doing and assigned those tasks to others. This is a critical step for any shop owner. Warren Buffett says that in order to be successful in whatever you do, it’s crucial to focus on the things that generates the greatest return and that you can’t do it all, and that means sometimes you have to say, “no.”

By the late '90s it became clear that the most valuable role I played in my business was that of coach. All the best marketing plans and the best business strategies mean nothing without a team of great people around you all pushing in the right direction. And that takes a strong leader. Not just a boss, but a leader. Leaders inspire people. Leaders get others to reach down deep inside themselves and perform at their best because they are aligned with the leader’s vision.

Leaders inspire others through praise and recognition for the work they do. When people feel their work matters, they have a purpose. People are motivated by the heart, not the wallet. That’s not to say earning a decent wage isn’t important. But a focus on money alone is not a strategy for success. Focus on people first and profit will follow.

Spend time with your employees. Get to know them as people, not just the role they have in your company. Find out what their dreams and goals are. And then find a way for others to achieve what they want out of life. People cannot be motivated until they realize that what they do every day helps them to achieve what they want in their personal life.

There are other people in our business world that we must never forget. And that’s our customers. If you were to ask me, who is more important, my employees or my customers? I would answer, “They are equally important.” You cannot have a successful business without the right employees and the right customers.

One last bit of advice I can give you is to focus on your success, no one else’s. Be very clear about the pathways you take and never forget about the obligation you have to others. Build a company culture of teamwork, quality and integrity. Focus on what’s in the best interest of the customer and the people around you. Put people first, and everything else will fall into place.

This story was originally published by Joe Marconi in Ratchet+Wrench on February 4th, 2020

Feedback From The Trenches

Sun, 19 Jan 2020 04:20:12 +0000

“Why are we discussing these issues when the people who need it the most are not here? We’re not reinventing the wheel. We get it. But the ones who don’t get it need to be here, too!”

Those were the words spoken by one of my service advisors during a recent meeting. We were discussing quality issues and ways to improve overall production, which, we determined, would improve sales and profit. I listened as Tommy (not his real name) continued for a few minutes. I could hear the frustration in his voice, so I let him speak until I felt he expressed all his feelings to the group.

I am a firm believer in holding regular meetings. And, while there are times when the group gives me feedback, rarely does anyone voice their opinion with such passion and intensity the way Tommy did that day. Drawing on experience, I thanked him for his openness and honesty. I also asked him if we could continue this discussion in the morning in private. He agreed.

The next morning, I paged Tommy and asked him to come to my office. I thanked him again for his openness and asked him to elaborate more on what he said the night before. Tommy hesitated at first, but slowly began to tell me his frustrations. It really boiled down to the level of commitment from a few techs. Tommy spoke in length about what he would like to change in the shop, and again repeated that we’re not reinventing the wheel. His words were clear and on point, “Joe, we all know what to do. We all know our goals. And we all know when we perform to the level we are supposed to. So, I just don’t understand why all of us can meet those expectations.”

Tommy’s insight into the work environment and the dynamics of people’s behavior was perhaps deeper than he even realized. When people within an organization feel that some of their coworkers are not pulling their weight, animosity begins to set in. Essentially, your top employees want to make sure that everyone is committed to the company’s success and doing their very best for the greater good of the team.

We also need to remember that people look at things from their own perspective. And their perspective becomes their reality. The key thing is to keep the lines of communication open, learn from each other and try to view different situations from the viewpoint of others.

After nearly 30 minutes of discussion, it was time to give Tommy my input on how I viewed the situation. I let him know that, while not everyone will be in total agreement with how he views these concerns, he has made a giant step forward at letting me know the issues we have in the shop. I then asked Tommy, “Out of our 16 employees, how many people in your opinion, without giving me any names, do not live up to the expectations of the company?” Tommy thought for a moment and replied, “Well, when I think about it, just a few. Two, maybe three.” Here was my opportunity to bring logic into a very emotional discussion. “So, what you are telling me is that the majority of your coworkers do live up to the company’s expectations and do a quality job?” Tommy replied, “Yes, I didn’t see it that way.” I let Tommy know that I would take his ideas and implement them into my strategy to improve the work environment. He appreciated the fact that I listened to his concerns.

Here’s the bottom line. When a person speaks up like Tommy did—listen to them. Don’t shut them down. They are expressing more than their frustrations over a few of their coworkers. They are giving you real-life, from the trenches information. And although it may be from their perspective, their viewpoint can give you valuable information that will help you and your company improve. Even a few people not pulling their weight can be enough to affect morale. And others may be feeling the same way.

What you don’t want are “yes” people who merely agree with you because you’re the boss. No matter how uncomfortable it may be, welcome feedback and criticism from your key people. We also need to listen more and speak less. And most of all, we need to understand that the solutions to our problems don’t always have to come from us. Sometimes, an employee’s outburst is just what we need to put things in the right perspective.

This story was originally published by Joe Marconi in Ratchet+Wrench on January 1st, 2020

Why Don't My Employees Do What I Ask?

Sun, 15 Dec 2019 15:55:32 +0000

What’s wrong with my employees? Why don’t they do what I ask of them? It’s the same thing every day. I say one thing, they do another. It seems as if I am the only person who knows what to do around here.

Does any of this sound familiar? Have you said these words, or a variation of these words, from time to time? If so, you’re not alone. Getting people to follow policy or a new marketing strategy sometimes feels as if you are trying to move the earth off its axis.

People in high levels of authority are well-aware of the need to get things done. Each member of their team plays an integral part in the success or failure of the organization. In your shop, you are the authority: you are the shop owner. You know that the responsibility of attaining success directly rests on your shoulders. This is a weight you carry around with you each day.

Eventually, if your efforts don't attain the results you need to run a successful business, you begin to look around to find out what’s causing the problem. And the tendency is to assign blame. All too often, you find that your employees are not all pulling in the same direction. And you determine that this is the cause of your problems. The following may not sit well with you, but if most of your employees are not engaged and not performing up to your expectations, it’s probably not their fault. You need to take a long hard look in the mirror. The fault may lie with management, and that means you.

Assigning blame is destructive. It keeps our focus directed in the wrong areas. This is not to say we can never have a bad employee. But, if we focus on seeking blame, we are directing our attention from where our focus should be; and that’s accepting the responsibility to correct what’s happening and make the necessary changes.

In order to really get things done and achieve personal success and the personal success of your employees, it takes the cooperation of each team member. Getting people to work as a unified team involves commitment, not compliance. Compliance is demanding people to do something. And they will—but only up to a certain point and only for a certain period of time. What you need from your employees is not compliance; you need commitment.

Surveys have shown that the majority of employees in most businesses are not engaged at work and the primary reason is that most employees don’t know the overall goals and vision of the company. And they also don’t know what’s expected of them. Employees are largely left to react to their situations during the day; never really having a clear understanding of how their role contributes to their success and the success of the company.

A business team is no different than a sports team. Every member needs to know the objective and goals. Imagine the coach of a football team who does not let the quarterback—or the other players— know what the play is? He simply tells the players to get out on the field and perform. After all, the players are well-trained, highly capable and all professionals. Shouldn’t they know what to do to win? And when they fail to win, the coach ends up blaming the players. Is this a ridiculous analogy? It may be, but this is what happens every day in shops across the country.

Your best employees don’t want to fail. They don’t intentionally ignore what you want from them. It’s more likely that they really may not know what you expect from them. Employees need to know exactly what is expected of them and they need to be motivated and inspired to perform their best. However, the only way your employees can perform at their best is for each of them to know what the company goals are. In other words, what is our overall objective and how we, as a team, are going to achieve it.

Each employee also needs to know that when the business wins, they do, too. When employees realize that achieving the company goals is also aligned with achieving their personal goals, you have commitment. And commitment equates to success.

Communicate the goals of the company often. Communicate what success looks like and how we are going to attain it. Create a workplace where the goals of the individual are aligned with the goals of the company. If things get off track, just look in the mirror. If you want to blame someone, you might want to start with yourself.

This story was originally published by Joe Marconi in Ratchet+Wrench on December 3rd, 2019

Sell the Benefit

Sat, 30 Nov 2019 01:50:01 +0000

A few years back, my service advisor, Tony, was trying to sell a customer a new battery. Let’s call this customer Ed Jones. Here’s how the conversation unfolded; “Mr. Jones, my technician completed our 21-point inspection on your vehicle and everything checks out fine. However, I do want to discuss the battery. Your battery was tested with our Midtronics digital battery diagnostic tool, which is a very accurate piece of equipment. Your battery is rated at 575 cold cranking amps, and your battery tested at 300. Would you like me to replace the battery today?” Ed Jones looked at Tony, and three seconds later said, “Thank you for the information. Let me think about it.”

I know Ed very well. The car we were servicing that day was his daughter’s car, who was home from college for the Christmas holiday. Ed’s daughter is in her first year at Plattsburgh University in upstate New York, which is about a five hour drive and near the Canadian border.

I could see the frustration on Tony’s face, so I gave him a little advice; “Tony, ask Mr. Jones who drives the car. After he answers you, ask him what the car is used for. Listen to his answers and then use that information to sell safety and peace of mind, not a battery.”

Five minutes later, Tony reported back to me excited and amazed; “Joe, great advice! He authorized the battery! I guess you knew he would buy the battery with the right questions?” I replied, “You were trying to sell Ed Jones a battery by pointing out the technical process we use to determine the health of the battery. What you need to do is reach the customer on an emotional level. The questions I recommended you ask made him realize that it’s the welfare of his daughter he was really buying, not a battery.”

Now, let’s clarify something. Tony didn’t say anything wrong with his sales presentation. But he got the process backwards. He was leading with logic. If you’re trying to sell something by using logic alone, you are going to struggle. People make buying decisions based on emotions. To make a sale, you need to connect with the part of the brain where emotions reside, and then back it up with logic.

Bombarding the customer first with facts and features tends to confuse the brain as it tries to make sense out what you are saying. That can be difficult because the technical information is usually not fully understood by the customer and the confusion usually results in the customer saying, “No.”

Let’s review the conversation when Tony asked the right questions; “Mr. Jones, who drives this car?” Ed replied, “My Daughter.” Tony continued, “And what does she use the car for?” Ed replied, “She uses it to go college at Plattsburgh. She’s home for the holidays and goes back to school on Monday.” At that point, Tony realized why I urged him to ask those questions, and continued with, “So, your daughter drives this car back to college, and leaves on Monday. She goes to Plattsburgh, which is near the Canadian border. Mr. Jones, it’s wintertime and that’s a long, lonely drive. Her battery tested weak and may fail without warning. For peace of mind and your daughter’s safety, wouldn’t it be in her best interest to replace the battery before she leaves?” Ed now makes the emotional decision, “Yes.”

Here’s the bottom line. First, know your customer. Build rapport during the write up process and find out all the details of why the car was brought in for service. Second, tone down the technical side of what you do. That’s not to say it’s not important. But, before you give the technical facts, reach your client on an emotional level. Ask questions to find out as much as you can about the customer, and then direct the conversation to the reasons why what you are trying to sell will benefit the well-being of the customer and/or the customer’s family.

Remember, decisions are easier to make when it has meaning to them or a family member. In Ed’s case, not replacing the battery would have been unsettling to him. Tony’s recommendation to replace the battery is perceived as the right decision because it promotes the safety and well-being of his daughter.

Humans are driven by feelings and make emotional decisions, then justify it with logic. Next time you are trying to sell anything to a customer, ask yourself, “Why should the customer buy what I am trying to sell?” The answer may surprise you.

This story was originally published by Joe Marconi in Ratchet+Wrench on November 1st, 2019

Small Victories

Sat, 05 Oct 2019 14:50:30 +0000

We all have those customers that focus on price alone. And we all struggle with our persistent attempts at converting them into believers. Believers of the concept that, while we cannot totally dismiss price, it’s the value of the product or service the customer needs to consider when making a purchase. What’s funny about these customers is that each visit tends to start with a complaint about price, even before the car is looked at. We recently had a situation that started off on the wrong foot, with price being the issue; but ended up a win for us, and for the customer.

Charlie Challenge (not his real name) arrived at our shop and asked for an estimate on replacing the timing chain for his Nissan Altima. My service advisor responded with, “Mr. Challenge, that’s a big job. How do you know your car needs a timing chain?” Charlie replied back, “Another shop checked it out and they told me it does. Can you please give me a price?” My advisor continued with, “Well, before we do anything, we need to perform a few tests to make sure you really do need a timing chain.” Charlie emphatically replied back, “And how much is that going to cost? All you guys want is my money! I asked for one thing; a price on a timing chain and you just want to make more money on something I already know I need!”

It took a lot of composure, but my advisor calmly stated all the reasons why testing is the best way to go, emphasizing the fact that if we replace the chain and it’s not the problem, the money spent would be wasted. Charlie shook his head, threw the keys on the counter and authorized the testing.

I’ve known Charlie for a long time. He’s not a bad guy. But price is always the topic of discussion. He has told me in the past that I should take a look at what other shops charge, and be more competitive with my prices. I have told Charlie that I don’t, and never will, price my services by what other shops are charging. I have also told him to look beyond price and look at the value you get. Besides, all the quality shops that I know are pretty much the same when it comes to pricing.

During the write-up process, Charlie revealed to my service advisor that the check engine light had been on, and that’s why he took his car to the other shop. The other shop replaced a valve timing solenoid, but that didn’t fix the problem. He was then told that the next step was to replace the chain.

Later that morning, the car was dispatched to a technician. A multipoint inspection was performed, along with all the tests related to the check engine light; which was a timing error. After the MPI and the tests were completed, we found a few things wrong with Charlie’s car. His Altima needed an oil change service, a battery, rear brakes, an air filter, the cabin filter had a mouse nest in it and the car needed an intake timing control sensor, not a timing chain. This engine has two intake control solenoids. One was supposedly replaced by the other shop. So, did this car have two bad sensors? Or was the wrong sensor replaced by mistake?

When my service advisor called Charlie to tell him the good news, he was silent for a moment. He was shocked that the car didn’t need a timing chain. He authorized the solenoid replacement, the oil change and replacing the mouse-infested cabin filter. He declined the other work.

I purposely did the follow-up call with Charlie a few days later. He was happy to hear from me and told me that car hadn’t run this good in years. I had to needle him a bit, “So Charlie, are we really expensive? We saved you a ton of money by doing the tests first and not just replacing the chain.” He said, “Ok Joe, I get it, I really do this time.”

During our conversation, Charlie did confess that he didn’t go to another shop, but actually went to that all-knowing, all-powerful place on the internet known as Google. It was Charlie that replaced the solenoid, not realizing there were two, and not knowing how to properly test the system either.

When I asked Charlie why he didn’t let us replace the battery, air filter and the rear brakes, he replied, “Joe, come on, I can do that work myself, and besides, you guys are expensive.”

Sometimes you win the battle, but it’s hard to win the war with some customers.

This story was originally published by Joe Marconi in Ratchet+Wrench on October 1st, 2019