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Ok guys I need some ideas and advice !


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Ok guys I am looking for some advice from different people with some different ideas. I am not grasping at straws just want some different ideas from other parts of the US. My dad opened this location in 1961 I have worked their since 1975. Dad retired in 96, My problem is my customer base is to large and it is working me long hours, to long. I just lost my right hand man of 17 years , he wants to try his own gig, Good Luck. My customer base is very very large. I am doing between 1 to 1.5 mil a year. I am really thinking about going to appointment only, selecting about 75% of my customer base , the really good ones and just cater to them, apointment only. I got a bout 5000k customers in my database . Have any of you guys tried this . It has completely got out of control, actually effecting some quality control issues. We are turning profits, not as much as 10 years ago, although that will be no good when I am in the ground. How have some of you guys dealt with this. I know I am not the first one have this problem. I got some ideas running through my head I just want to make the correct move.My labor rate just went to 100 dollars hour and not slowing down customers are just as happy as ever. I really appreciate your time to read this, I thank you in advice for any input.

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Just my deducting from the info you provided I think you are working on too many cars with not enough profit. You have the car count which is a great problem to have. Lets play with some numbers and say you are doing 1.5 a year (1 mil to 1.5 is a huge gap btw I'd love to know exactly what your gross is), and lets say you are seeing 75% of your database a year which is 3,750 cars. Lets multiply that by a factor of 2 and say you see each of your customers at least 2x a year (you might even be seeing them 3x a year) which would effectively make your car count jump to 7500 cars yearly. 1.5 mil divided by 7500 cars would give you an ARO of $200. Just by that number you know you are working way to hard. Also you have to know what kind of average gross profit you are making off of every car and then what are you netting at the end of the year.

 

With that in mind I would suggest you really look at your numbers and find help with interpreting them. You can find out a lot like how to trim your car count down and only retain the good clients. Increase your ARO so you are working smarter and not harder. Also analyze your numbers so you know how to stay profitable.

 

The best thing to do is to educate yourself on how to run a more effective shop. This generally means spending some coin on good help.

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Read the thread where HarrytheCarGeek posted this:

 

Labor rate from $115 to $150 car count down 1/3 revenue up 6%.

 

Going on the third month that we raised our rates. Our best customers have stayed, trouble nickle and dime customers seem to have disappeared. ARO from 380 to 628.

 

There may be your answer.

That is what I was thinking !!! I did not give my exact numbers on my post, it is 1.275 Gross. I really think gross wise I am topped out. I like the idea and that was actually the way I have been leaning. Thanks for the input.

Edited by tirengolf
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Be very careful what you wish for here. I'd bet that your issue is a process issue more so than labor rate issue or price issue. Find a better, more thorough process for looking at cars so that you can help your customers get the most out of their cars and watch the ROA increase. Have a plan, follow the plan, modify where needed, and stick to it. It will take you some time but work it for six months, measure, and modify. Good luck!

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Just my deducting from the info you provided I think you are working on too many cars with not enough profit. You have the car count which is a great problem to have. Lets play with some numbers and say you are doing 1.5 a year (1 mil to 1.5 is a huge gap btw I'd love to know exactly what your gross is), and lets say you are seeing 75% of your database a year which is 3,750 cars. Lets multiply that by a factor of 2 and say you see each of your customers at least 2x a year (you might even be seeing them 3x a year) which would effectively make your car count jump to 7500 cars yearly. 1.5 mil divided by 7500 cars would give you an ARO of $200. Just by that number you know you are working way to hard. Also you have to know what kind of average gross profit you are making off of every car and then what are you netting at the end of the year.

 

With that in mind I would suggest you really look at your numbers and find help with interpreting them. You can find out a lot like how to trim your car count down and only retain the good clients. Increase your ARO so you are working smarter and not harder. Also analyze your numbers so you know how to stay profitable.

 

The best thing to do is to educate yourself on how to run a more effective shop. This generally means spending some coin on good help.

MSpec, Thanks for your help, my gross is 1,275 a year. I guess after all these years I have become complacent. I am on a fact finding mission as we speak. One thing you mentioned is spending some coin for good help. I am completely lost on that, my inside guy has been with me for 17 years although that is coming to a end very shortly. What are these assistant guys starting out at 30's , 40's. 50's etc. I have not tracted that info, in my search for a replacemen . I am out of tune with the pay these guys and gals are making. My techs are at 35% , which is basically $35 a hour. I am in the process of instilling a bonus program for them. I have spoke to my dealership service manager friends although they push ,push push customers. I do not personally like that sales technique. I am trying to fiqure out a way to make this thing go smoother as a team. My dealership friend says start a assistant manager off in the mid 30's, with some kind of attainable goal. My last guy got very complacent and would not reach any goals. I really think there is a fine line between selling and ramming it down the customer throat, I prefer not to sell the later way. My business is a small town with me knowing the core group of customers pretty well, first name basis. I just started closing on Sat. Oct 1, had a small amount off pushback from 2 customers , went back and looked at there volume and really think I am better without them. Any ideas on how to replace this guy and what his pay scale or formular should be would greatly be appreciated. Thanks David

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