Running The Shop

Agree 100%!!! Shop owners need to sit down and do a deep dive into their operating expenses, and track it back over the past few years. That will open a few eyes!  Many shops are doing better in SALES (not profit) because of increases in labor rates, and increases in parts. BUT the gross and net profit have probably not increased, and I would wager a bet, have gone down.  When ever you hear about a shop stating their numbers, it's always the Top Sales Number.  That number means nothing. It's the NET, what you keep that matters.   

Great points, Joe.  I think a bigger problem is due to shop owners being afraid to charge what it costs to be profitable.  There's plenty of articles stating one facet of inflation: vehicle repair costs.  I'd rather have a shop that's not that busy, but profitable, than a shop that is busy, busy, busy, but not very profitable.  The "profit" of a shop IS NOT the owner's salary.  The profit of a shop is after ALL COSTS AND EXPENSES, including what the owner gets paid.  I believe the fear of charging more is the biggest detriment to shop profitability than any other threat.  This is especially true for shops that charge/bill flat rate.  Flat rate was developed over 100 years ago and penalizes technicians for a shop's inability to market/advertise effectively, aka not busy.  IMHO, flat rate no longer applies to today's technology, market conditions, or risks. Most repairs today involve a certain amount of research, reading, and studying; especially for first-time repairs.  Has a TSB been issued?  There's no flat rate time for that, let alone getting paid for it, but that's the reality of our industry today. Another profit-eater few think about is supply chain issues that tie up a bay or lift.  Being a transmission shop, removing the front suspension and/or frame would really cripple our shop's production.  My answer to that was to buy 10 engine hangers and 10 car dollies as shown below.  It really upped our production and profitability even when supply chain issues befell us.  I've posted this video before, but it bears repeating.   0:48   https://youtu.be/XhcSqfBsjJ8  

There are so many issues with our industry, and you point out some of the more severe. The auto aftermarket needs a reset. Shops need to do all they can to get more younger people to enter our industry, we need to provide the best training available, great pay with benefits. And most of all, create a culture where people (including the boss) is respected. This takes money.  Too many shops don't understand this, and undervalue what they do. To think we can hire "THE PEFRECT TECH" is no longer a reality for most.  Another thing, techs today are always looking over the fence for greener grass. is it for money only?  Or do have have bigger issues?  I don't have any easy solution, and you bring up great points. Perhaps is starts with these conversations.   

Zoya, you describe our automatic transmission repair shop business perfectly.  I bought a list of all registered vehicles in our state (Utah) from the DMV and was shocked by the fact that ALL European vehicles COMBINED made up only 6% of the vehicle population.  Our shop was located in a more affluent area that had 8% Euros.  Nationally, the number is less than 10%.  I reasoned to myself and realized that if I specialized in only non-European vehicles, we would still have 92% of the market.  You speak of risk, and the Euros were riskier, too. At first, I couldn't believe the low European vehicle population; I was in disbelief.  I felt that I SEE more than that on the road.  It was only then I began to pay attention when I was on the road and this is what I learned:  When we see a Euro vehicle on the road, we naturally take notice.  When we see any other non-Euro vehicle, it's just merely traffic, and we don't notice other than the traffic factor. Speaking of specializing, there's a local shop near us that started out specializing in front end, brake, and suspension work.  They eventually morphed into doing mainly 4X4 trucks and Jeeps.  You can check them out at https://layton-ut.fatbobsgarage.com/.  So, in my opinion, in today's environment of high-tech and changing trends, specialization is a must if a shop is to remain profitable.  You know the adage, "Jack of all trades, and a master of none."  

I would pull the core out and send it to a radiator shop. They should be able to repair it.

I have to tell you this last year has been tough, never in my life did I think that I would have to pay a state inspector so much. never mind technicians. I have been thinking about this topic and we may have to specialize just to stay in business. The lack of skilled help avaliable is unnerving. I think the days of a technician being able to do it all are coming to a close. I had a technician working for me for six years, I had a shop owner steal him away by talking to him through one of his freinds, he promised him the world. My pointt to saying that is that is whet we have become.  We will need to find technicians with the skill sets we need to perform work that is profitable and may be very specialized. The problem occurs when you are lacking in work for that tech and only have work that they cannot do.  so proffits will drop. Small shops will end up with the biggest challenges in this area. No easy answers, no easy solutions. 

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Sometimes to narrow your focus ends up being more profitable.