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By Joe Marconi in Joe's Blog13 commentsMost shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.
Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
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By carmcapriotto
On Record with Tom Ham from the Automotive Management Network. Tom discusses a recent survey from his website about the stress level at work, reasons why someone would reject a technician application, health insurance and more! These results may surprise you!
Tom Ham, Automotive Management Network. Tom’s previous episodes HERE. Show Notes:
AMNSHOP.com laborratetracker.com - lowest labor rate so far is $50 and highest is $297 Management Help Polls: 130 types Why techs avoid working at some shops- low pay, dark/lack of lighting, dirty, disorganized Job applicants for possible reasons they might be rejected: 70% driver license issues, 68% frequent job changes, 66% negative comments about past employers, 64% know it all, 60% questionable attitude, 60% excessive demands. 59% inconsistent information, 58% late for interview, 55% listens poorly, 53% sloppy appearance, 53$ incomplete application, 51% lack of manners Pay portion of health insurance- 35% pay nothing, 19% pay full health insurance. Stress level at your shop ranked 1 to 10, 10 is maximum stress level- 40% rank their stress level at 8+, 81% say their stress level is average or above average, only 19% say their stress level is ranked 4 or less. “What do we do here that is not as clear as it could be, a bit confusing?” Service advisor responsibilities (are these regular tasks of your service advisor)- estimating, collect vehicle information, parts ordering and returns, labor claims, operation/management, quality control, assist technicians, pickup/deliver customer or parts (porter). None of these should be the service advisor responsibilities! Consider hiring an estimator/parts person Service Advisor Overload [THA 305] Service Advisor Overload: Part 2 [THA 312]
Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Connect with the Podcast:
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Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Guest hosts and shop tour with Bob and May Patterson, Bob's Automotive, Panama City Beach, FL. With encouragement from his wife May, Bob opened his own shop 8 years ago. Hiring technicians has been a challenge; find out why they patiently wait for the right fit for their shop culture. Watch Episode HERE Bob and May Patterson, Bob's Automotive, Panama City Beach, FL.
Show Notes:
Opened 8 years ago (3rd location since original) Bob was a shop foreman, his wife May saw his potential and wanted him to open his own shop Been without a technician for over 6 months- just hired new technician. Hiring has been the challenge for the business- it’s all about the fit in the shop culture DVI- educating customers on preventative maintenance
Connect with the Podcast:
Aftermarket Radio Network
Subscribe on YouTube
Visit us on the Web
Follow on Facebook
Become an Insider
Buy me a coffee
Important Books
Check out today's partner:
Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Click to go to the Podcast on Remarkable Results Radio
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By Joe Marconi
Perhaps this is a trick question, but it's worth a discussion. Many auto repair shops spend a lot of money to get new customers. But what about the ones we have already?
What marketing strategies do you have to attract new customers and retain the ones you have now?
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By Joe Marconi
As a business coach with Elite Worldwide, I speak to many shop owners around the country about their struggles and concerns. At the top of that list is driving more profit to the bottom line. Some of the questions I hear are: Should I increase my marketing budget? Should I raise prices and my labor rate? Is it a car count issue or an ARO issue? Or should I improve my procedures and policies? All of these are great questions and the right questions.
However, the first step in improving your business is to ask yourself: Do I have the right people employed at my auto repair shop?
Whether you are struggling in business or having a banner year, your future depends on the quality of people you assemble around you. Do all you can to take care of your employees. Listen to them, and include them in on ways and ideas to build your company. Make them feel important.
When you assemble a great team of employees and take care of that team, trust me, profit will follow.
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By carmcapriotto
Guest Host and Shop Tour with Demeny Pollitt, Girlington Garage, South Burlington, VT. Demeny believes in a transparent business and lists her labor rates and menu prices on her website. Demeny Pollitt, Girlington Garage, South Burlington, VT.
Key Talking Points
Lists labor rate and prices on website Menu board in the shop also lists prices Be transparent- customers know what to expect Experiences as a woman getting car repairs- unfortunate situations occurred. Wanted to go to a woman technician and realized other women probably felt the same. Wanted to open her own shop where women and men didn’t feel like they were getting ‘ripped off’ Went to school to be a technician- gets bored easily and wanted an engaging career. Took a local women's small business startup course Opened for 13 years- hired business coach 3 years ago. Felt close to being done after 10 years and needed support in a business coach. Hired a manager to run the day-to-day. Looks outside of the automotive industry for hires- hospitality
Connect with the Podcast:
Aftermarket Radio Network
Subscribe on YouTube
Visit us on the Web
Follow on Facebook
Become an Insider
Buy me a coffee
Important Books
Check out today's partner:
Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Click to go to the Podcast on Remarkable Results Radio
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