Some People Are Cut Out For This

[CMillet86]

Wow, some people are really cut out for this. I've been doing it in my 2 bay shop since 09, and I think it's time to close the doors.

[Wheelingauto]

Wow, some people are really cut out for this. I've been doing it in my 2 bay shop since 09, and I think it's time to close the doors.

why?

[CMillet86]

why?

Not to clutter his thread, but I'm struggling to stay profitable. I'm a solo operation, but I can't get above 10K gross, which is barely putting $200 a week in my pocket by the time parts and overhead are paid.

[mspecperformance]

Not to clutter his thread, but I'm struggling to stay profitable. I'm a solo operation, but I can't get above 10K gross, which is barely putting $200 a week in my pocket by the time parts and overhead are paid.

 

Sorry to hear that.

 

You might need an outsider's perspective. Sometimes it is hard to be objective when you are the one in the situation struggling and trying to make it another day. I've been there and stuck it out. I'd love to say I was as fast growing as Jay but it definitely wasn't my story. Took me a good 6-7 years to turn my business around and most of my problems came from not being able to look in the mirror and take responsibility.

[Wheelingauto]

You can grow very quickly and not make a penny, as a matter of fact I would guess that to be fairly easy. That being said what do you feel are the primary contributors to your current situation? You should be able to turn more than $500 a day even as a single man operation.

[Jay Huh]

On 2/24/2017 at 8:47 AM, CMillet86 said:

Wow, some people are really cut out for this. I've been doing it in my 2 bay shop since 09, and I think it's time to close the doors.

I'm sorry to hear that as well. I checked out your website and FB page, hard to believe you're not making $10k gross/month. Looks like you got a lot to offer especially with a dyno and quite a following on your FB page. What's your car count like on a daily/weekly basis? I see that your location is outside of columbus so maybe the population isn't there. 

 

I'm located in one of the fastest growing areas in the US and i think that has a lot to do with my growth.

Edited February 27, 2017 by Jay Huh

[CMillet86]

The Engine Dyno &  machine shop is technically a separate business. I do run a chassis dyno, but that is one reason I've been floundering, it's not making any money. My biggest issue's are marketing and me. When I do get busy I get behind as a one man auto repair shop. My car count only averaged 21 a month last year, now I have a high ARO at $508 for the last year, but profit margin wasn't there. I only averaged 26% on parts last year. I try not to cut my prices, but in my town it seems like everyone is selling parts at cost and only running a $65hr labor rate. I'm at $70 and trying to make a minimum of 40% on parts and everyone keeps telling me how high I am. 

[Alex]

CMillet, I split your reply and the other replies to your comment into this separate topic for you, to not take over the original topic. You can change the title if you like, I just used the content from the first post. 

 

[Jay Huh]

1 hour ago, CMillet86 said:

The Engine Dyno &  machine shop is technically a separate business. I do run a chassis dyno, but that is one reason I've been floundering, it's not making any money. My biggest issue's are marketing and me. When I do get busy I get behind as a one man auto repair shop. My car count only averaged 21 a month last year, now I have a high ARO at $508 for the last year, but profit margin wasn't there. I only averaged 26% on parts last year. I try not to cut my prices, but in my town it seems like everyone is selling parts at cost and only running a $65hr labor rate. I'm at $70 and trying to make a minimum of 40% on parts and everyone keeps telling me how high I am. 

I see. To me, I think it's almost impossible to run a shop alone. I was there less than 2 years ago and I remember thinking that I'll never hire anyone bc of the overhead. But now, even on a slow day I have to have a minimum of 3 people in the store. One busy day makes up for a the week of being slow. 

When its busy, you can't turn away business but if you're a one man shop, then that becomes the reality. 

I would hire help at minimum wage and offer to train them as a mechanic. There's a lot of kids looking for jobs like this. Have him help with phones and train him to do the simple stuff. I wasn't looking to hire but a kid came and begged me for a job. He was swapping out motors and heads since he was 12 and no one was giving him a chance. He promised me to be the best employee at minimum wage. Having that extra hand changed EVERYTHING

If the going rate is $65, advertise $60. Hell I'd do $50 and get my car count up. Once they see who you are and trust you, raise the price then. Looks like car count is the problem as ARO is great. I'm cheaper than all my neighbors and they come to me. 

Sam Walton, the founder of Walmart wondered if people would drive a little more, come and shop at a place that wasn't as flashy or nice to save a few dollars. People will do more than you think to save a couple dollars. In the auto repair business, I notice that people will go the cheap route and once burned they will look for a reputable shop and stick with them. I've only been doing this 2 years so I'm not an expert but that's my philosophy and so far it's working. I'm not making a killing but definitely a living 

[Robert Ohlmann]

I think it will be interesting to get a few more ideas on this. If Jay Huh's philosphy works for him more power to him. My experience was I was working on more cars, had 35% parts profit and a labor rate at the lower end of the market average. We got by, but not at an exceptable rate for how hard we were working. I then raised my labor to the higher side of the market average, I have 55% parts profit and we are working on less cars. But, now there is considerable more money in the bank. And contrary to the Sam Walton philosophy I have found people will travel further and pay more for a job done right the first time, quality work, quality parts, good warranty and great customer service.

 

Its possible that different markets and smaller shops cant follow my line of thinking but again, I'm interested in hearing more thoughts.

[xrac]

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[PAPShop]

On ‎2‎/‎28‎/‎2017 at 6:19 PM, CMillet86 said:

The Engine Dyno &  machine shop is technically a separate business. I do run a chassis dyno, but that is one reason I've been floundering, it's not making any money. My biggest issue's are marketing and me. When I do get busy I get behind as a one man auto repair shop. My car count only averaged 21 a month last year, now I have a high ARO at $508 for the last year, but profit margin wasn't there. I only averaged 26% on parts last year. I try not to cut my prices, but in my town it seems like everyone is selling parts at cost and only running a $65hr labor rate. I'm at $70 and trying to make a minimum of 40% on parts and everyone keeps telling me how high I am. 

I have spoke with you in the past and we met at PRI.  Our shops have some similarities as far as the kind of work we do.  I am sorry to hear you are still struggling. 

I completely agree with hiring someone at minimum wage.  Give a kid a chance that is a total motor head who is willing to learn.  This will free up some of your time.  Teach and demand from him quality, and to do it right.  He will become a valuable asset.  Or if you can find someone experienced that can bring some business with or fill in your weak areas, that would help you.

Our chassis dyno took awhile to be busy, it is something you have to create a reputation.  We started out only scheduling dyno pulls for Fridays and Saturdays.....  Why?  Word of mouth travels faster on those days in the performance area. It is just before the weekend and your customer will brag all weekend. 

Another suggestion from our experience:  Change your shop labor rate..... RAISE IT!  Have two different rates.  Have an hourly rate for your daily drivers, and a second, higher rate for performance.... and do not make excuses for the higher rate!  Your experience and knowledge on performance is worth more than general auto repair rate.  Our hourly rate is $90 and our rate is $130 for classics (older than 30 years) and performance.  We take pride in our performance side of the business and you get what you pay for, a top notch job done by an experienced shop. With the higher rate, we have earned respect and the performance shop did not slow down this winter. 

You have customers telling you about other shop's pricing.  Are you comparing apples to apples?  Do you take in the same clients?  Secret shop the competition and find out for yourself.  Don't go on the word of a customer that wants a deal, fire them and define the type of customer you do want in your shop. 

(Sorry so long)

[Gonzo]

Read this ... 

 

[JohnC0721]

I'm a one man and one bay shop that's been open since '09 as well. my shop is dead center in an office / industrial park so it's very easy for those people to leave there cars for the day.  It also doesn't hurt that my shop is in the town and neighborhood I grew up in so I already had a good trusting customer base.  I opened at 23 and haven't slowed since.  I'd hire someone but the one bay really limits things.  I don't do the numbers these other guys do and I don't even know my average ticket but I put $130k in my pocket at years end.  maybe your problem is location or population?  My shop is also in a fairly affluent area so that helps

[JustTheBest]

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[CMillet86]

I figured I'd come in and reply to this. I'm sure as shop owners we all have ups and downs. Earlier this year was definitely a down time. I did take a job working at an R&D place, it lasted all of 2 weeks. I've been back in the shop since, making a go of it. I'm still struggling but have been able to do some things to allow me to keep going. 

[JustTheBest]

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[AndersonAuto]

Since this thread has been revived, I might as well chime in. 😉

Looking at your web site, reviews, competition, and demographics, it seems to me that you might want to change the focus of your operation. It looks like the focus is on performance, and catering to the DIY hot rod crowd. This can be profitable in the right market, but you're in a smaller town and I doubt you're going to see enough car count with enough GP to make life good.

Your web page clearly markets to the DIY performance crowd. 3 of 4 panels on your home page market to them. 3 of the top 4 panels on your services page markets to them. Your entire customer gallery markets to them. Your google reviews also indicate that your DIY performance customers love your work when they need someone other than themselves or their buddies to work on it. Not what I'd call a recipe for steady car count and great profit.

In my experience, the DIY performance crowd shops for parts on the internet constantly, and expect that you'll sell them the parts for very near the same price that they can get them online. They also do most of their own work, and as a result will undervalue your work. Even when they know the job is over their head, the simple fact that many of them believe an hour of your time is roughly equivalent to an hour of their time in the driveway is a real problem.

I would try to shift the focus to daily drivers. People need to get to work every day, and if you can make sure they get there, they'll pay you enough to make it worth your while.

[CMillet86]

14 minutes ago, AndersonAuto said:

Since this thread has been revived, I might as well chime in. 

Looking at your web site, reviews, competition, and demographics, it seems to me that you might want to change the focus of your operation. It looks like the focus is on performance, and catering to the DIY hot rod crowd. This can be profitable in the right market, but you're in a smaller town and I doubt you're going to see enough car count with enough GP to make life good.

Your web page clearly markets to the DIY performance crowd. 3 of 4 panels on your home page market to them. 3 of the top 4 panels on your services page markets to them. Your entire customer gallery markets to them. Your google reviews also indicate that your DIY performance customers love your work when they need someone other than themselves or their buddies to work on it. Not what I'd call a recipe for steady car count and great profit.

In my experience, the DIY performance crowd shops for parts on the internet constantly, and expect that you'll sell them the parts for very near the same price that they can get them online. They also do most of their own work, and as a result will undervalue your work. Even when they know the job is over their head, the simple fact that many of them believe an hour of your time is roughly equivalent to an hour of their time in the driveway is a real problem.

I would try to shift the focus to daily drivers. People need to get to work every day, and if you can make sure they get there, they'll pay you enough to make it worth your while.

While I do a fair amount of that stuff, 90% of my work is normal service work. I have been doing a little marketing towards standard crowds as I'd call them. I haven't seen much difference in it though. 

[AndersonAuto]

1 hour ago, CMillet86 said:

While I do a fair amount of that stuff, 90% of my work is normal service work. I have been doing a little marketing towards standard crowds as I'd call them. I haven't seen much difference in it though. 

I figured you were going to say most of your work is daily drivers. I almost addressed it in my last post.

I wonder then, why doesn't your web site reflect what you do? Your web site is dedicated at least 50% to the DIY performance crowd, not getting mom and dad to work.

Why aren't you soliciting google reviews from those daily driver customers? Reviews are important, but when I read your reviews, it looked to me like they were from your performance customers.

If 90% is daily drivers, then let your marketing and web presence reflect that. You're currently trying to draw in your least profitable customers, I suspect because you like doing performance work. I used to like it too, but I had to learn the hard way that it's a lot more fun to pay the bills and have money in the bank.

Also, what does the inside of your shop look like? If it's clean and tidy with a decent customer waiting area, show it off. If it's not, make it that way. SOAP, PAINT, LIGHT.

[CMillet86]

4 hours ago, AndersonAuto said:

I figured you were going to say most of your work is daily drivers. I almost addressed it in my last post.

I wonder then, why doesn't your web site reflect what you do? Your web site is dedicated at least 50% to the DIY performance crowd, not getting mom and dad to work.

Why aren't you soliciting google reviews from those daily driver customers? Reviews are important, but when I read your reviews, it looked to me like they were from your performance customers.

If 90% is daily drivers, then let your marketing and web presence reflect that. You're currently trying to draw in your least profitable customers, I suspect because you like doing performance work. I used to like it too, but I had to learn the hard way that it's a lot more fun to pay the bills and have money in the bank.

Also, what does the inside of your shop look like? If it's clean and tidy with a decent customer waiting area, show it off. If it's not, make it that way. SOAP, PAINT, LIGHT.

The website is honestly an afterthought. It's something that I've neglected because I've mostly just forgotten about it. I'm terrible at soliciting reviews. Both are things I'm going to actively work on going forward. The waiting room needs work. I tend to try and tackle too many things at once and fail to accomplish most of them. When I'm slow I can focus on doing things a certain way, when It does get busy I have a bad habit of throwing everything out the door. 

[AndersonAuto]

On 7/31/2017 at 4:08 PM, CMillet86 said:

The website is honestly an afterthought. It's something that I've neglected because I've mostly just forgotten about it. I'm terrible at soliciting reviews. Both are things I'm going to actively work on going forward. The waiting room needs work. I tend to try and tackle too many things at once and fail to accomplish most of them. When I'm slow I can focus on doing things a certain way, when It does get busy I have a bad habit of throwing everything out the door. 

This thread started (actually I think may have been peeled off another thread) with you talking about closing your doors. We all go through ups and downs, and we've all been there, done that. It seems to me there are some really basic things you can do to steer things in the right direction. Here's what I would do.

First and foremost, get your waiting room and write up area in order. You don't have to spend a lot of money on this, but clean and organized goes a long way toward customer confidence and their willingness to be back and tell their friends. SOAP, PAINT, LIGHT. You can buy an inexpensive service counter online, or you can make one from lumber, drywall, and a bit of countertop from home depot. Pick up some waiting room chairs on the cheap through craigslist or Govdeals.com and you're in business.

If your shop isn't the cleanest shop in town, make it that way. Get rid of any "good" junk. It's just junk and technicians are notorious for hanging on to it as if the next car rolling in your door needs a "good" used steering gear with 200K on it. If you have that sort of junk laying around the shop, inside or out, get rid of it all.

Get your web site redone. Focus on getting mom and dad to work, and minimize the performance work. You said 90% of your work is "regular" cars, make your web site reflect that. Take pictures of your happy customers standing next to their nice car, and get permission to put it on your web site.

Get google reviews. The easiest way is to ask them to review you from their phone while they're standing at your counter. People would much rather do this on the spot than do it later after they get home. It's amazing how easy this is, and how much good it will do for your business.

Become the biggest "yes man" you've ever met. Any time a customer needs something, you need to find a way to say yes. Say yes, then find a way to make it happen. Customers call you because they want to be in your shop NOW, not 2 weeks from now. But once you say yes, it's on you to make it happen. Figure out a way.

It's been a long time since I've had a 2 bay shop, but these things have always served me well no matter what size the shop.

[CMillet86]

1 hour ago, AndersonAuto said:

This thread started (actually I think may have been peeled off another thread) with you talking about closing your doors. We all go through ups and downs, and we've all been there, done that. It seems to me there are some really basic things you can do to steer things in the right direction. Here's what I would do.

First and foremost, get your waiting room and write up area in order. You don't have to spend a lot of money on this, but clean and organized goes a long way toward customer confidence and their willingness to be back and tell their friends. SOAP, PAINT, LIGHT. You can buy an inexpensive service counter online, or you can make one from lumber, drywall, and a bit of countertop from home depot. Pick up some waiting room chairs on the cheap through craigslist or Govdeals.com and you're in business.

If your shop isn't the cleanest shop in town, make it that way. Get rid of any "good" junk. It's just junk and technicians are notorious for hanging on to it as if the next car rolling in your door needs a "good" used steering gear with 200K on it. If you have that sort of junk laying around the shop, inside or out, get rid of it all.

Get your web site redone. Focus on getting mom and dad to work, and minimize the performance work. You said 90% of your work is "regular" cars, make your web site reflect that. Take pictures of your happy customers standing next to their nice car, and get permission to put it on your web site.

Get google reviews. The easiest way is to ask them to review you from their phone while they're standing at your counter. People would much rather do this on the spot than do it later after they get home. It's amazing how easy this is, and how much good it will do for your business.

Become the biggest "yes man" you've ever met. Any time a customer needs something, you need to find a way to say yes. Say yes, then find a way to make it happen. Customers call you because they want to be in your shop NOW, not 2 weeks from now. But once you say yes, it's on you to make it happen. Figure out a way.

It's been a long time since I've had a 2 bay shop, but these things have always served me well no matter what size the shop.

I'm working on the waiting room right this minute, I cleaned it up immensely. Looks like a whole new place actually. Cleaning the shop is always a ongoing project, but something I'm also working on. I've already spoken to my website guy about shifting the focus of the website, that will take place in the next couple weeks. The google reviews I will make a point of to get, just need to figure out how to do it in a way that I feel comfortable. I understand the Yes man mentality, at the same time I have to say no more in my opinion. To keep jobs that I think are going to be unprofitable out of here. 

[AndersonAuto]

12 hours ago, CMillet86 said:

I'm working on the waiting room right this minute, I cleaned it up immensely. Looks like a whole new place actually. Cleaning the shop is always a ongoing project, but something I'm also working on. I've already spoken to my website guy about shifting the focus of the website, that will take place in the next couple weeks. The google reviews I will make a point of to get, just need to figure out how to do it in a way that I feel comfortable. I understand the Yes man mentality, at the same time I have to say no more in my opinion. To keep jobs that I think are going to be unprofitable out of here. 

Great to hear. Sounds like you're getting things rolling.

Google reviews are a lot easier than we make them out to be in our heads. Kind of reminds me of a Jr high dance. There's always a girl you wanted to talk to, but were afraid of being rejected. The truth is that she wanted to talk to you too. Your customers are no different. We feel funny asking someone to say nice things about us, but our customers are already thinking nice things, they just need a little help knowing where to write them down. The more you ask, the easier it gets.

Be sure you know exactly how to leave a google review, on both Android and Apple phones. Most people will need a little instruction.

You don't necessarily need to keep "unprofitable" jobs out, just price them differently. I look at it this way: I can say no to a job, and not get the job. Or, I can price the job so it's profitable, and either not get the job (same outcome as saying no) or get the job at a profitable price. Granted, there are jobs that are just a "no win" but I think most loser jobs simply need to be priced correctly to turn them into money makers.

Edited August 4, 2017 by AndersonAuto