Expanding?

[D&SMotors]

Hi all,

 

I need some help; my husband I and run our automotive business. He does the work; I do the paperwork; we currently have 1 full time employee. We have been in business for about 5 years. We are suddenly super busy, even in January which has never happened. Our shop rate is $80.00 an hour. We have 1 lift but can fit a car in front of it;

 

So even though they are working overtime; it seems as if we can never get ahead of the overhead; rent payroll insurance.

 

My husband uses the billable rates from shop key; but when it comes to diagnosis time we feel we cannot bill them for the amount of time it takes sometimes. We have a 5 star rating on yelp and have generations of families coming to us now.

 

Also, his employee cannot diagnose so its all him; He is good with brakes, oil; stuff that he can start and finish.

 

So I'd like to get another lift, as other than raising our fees not sure of how else to make more money. Any help would be appreciated!

 

Thank you

Denise and Steve Thiel

[xrac]

Buy another lift and raise your labor rate. Based on your location I would expect your fixed and labor costs to be higher than they are here in the Midwest. Our labor rate is $92 which is competitive in this market.

[Trealubit]

I think its best to start with your labor rates and margins first. Fix that first before trying to expand or hire another tech or buy more equipment. Make sure you are making money with every job and margins are correct.

 

Money robbers are:

-diagnostic time(not billing for it)

-items not being billed to customer (miscellaneous shop supplies)

-not selling recommended work

 

Are the few. But its a place to start. Goodluck!

 

 

Sent from my iPhone using Tapatalk

[Joe Marconi]

It's hard to judge your entire operation, but from I see you need to hire a quality tech. Adding a lift too will help with production.

 

As far as raising your rates, I feel that too many shops around the country grossly under charge what they are worth. However, you may have a production problem if your husband is wearing too many hats.

 

Make sure you are charging for the little things, such as testing and diagnosing.

 

You really need to sit down and analyze everything, get help through any organizations you are involved with, this forum can help and seek out help other friends in the business.

[Jay Huh]

I definitely understand where you're coming from. I started from my own home garage and had a scissor lift. Sure I made profit but it was measly. I moved into a shared building and I had 3 lifts (2 2 posts and 1 4 post) but only had 2 bay doors so really I could only do 2 cars at a time unless the one on the 4 post was a big job. At that location, I too only had one other tech and I did all the diag. Never lost money but didn't really make any either..... maybe like $2k a month?

 

I took a big chance and signed a 63 mo lease and paying $4035/mo and got a 6 bay shop. Now I have 5 employees and making money. If you're going to expand, EXPAND. Your husband is lucky to have you support him. I can't see how you're making money with only 1 lift. If you are having too much work then you have to hire and you have to move in order to fulfill it. It's getting the customers that is the tough part.

 

Every so often you get a car that you lose out on. Broken bolt or wrong diag... whatever the reason, if you only have 1 lift then you aren't making money from other cars. We have jobs that we lose out on all the time but I have 4 other guys that are making money

[mspecperformance]

I would suggest that you get a firm grasp of what your financial are and what it's really going to take to make money. My guess is your labor rate is absolutely too low for your area. Even if you are getting a good margins now on labor (meaning your husband pays himself a low wage and your worker is paid a low wage vs what your labor rate is) it will soon climb as you grow and hire more techs that are going to demand a higher wage. Also gaining some knowledge as to why you are busy now. Is it a fluke? Do you have more business because another shop closed down? Have you done any particular marketing initiatives that are bearing fruit? Is it repeatable?

 

The best piece of advice I think that I can give you is to find a business coach. Someone from the industry not outside of it. There are tons of consulting companies out there and I can give you some recommendations if you are interested. You can learn a lot of stuff on your own by reading, research and networking but you will accelerate your business tremendously if you have some help.