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This is something that I'm hearing from shop owners constantly when we're talking about car count levels in their auto repair shop:

"Car count is down in my shop because cars are made better."

If I've heard it once, I've heard it a thousand times, and chances are you've probably said it yourself. Look, I'm not going to tell you cars aren't made better because that would be sheer stupidity.

The fact is that cars are made better. Cars are made to last much, much longer than they used to.

But... That's not the reason why car count is down in shops.

How do I know that? Well, a recent study came out that said the average car on American roadways is over 14 years old.

Let me say that again... The average car is over 14 years old. That's not a new car. The average. That means for every brand new car out there, in order to have an average of fourteen years, that means there's a car that's 28 years old. There is a balance there.

If the average car is 14 years old, those are the cars you work on. Right? 14 years ago the cars weren't made as good as they are now, and even if they were, they're 14 years old right now, odds are that they're going to need a lot of maintenance now or in the near future. It's important to make your shop available for those repairs.

Don't get caught up in the thinking that the car count is down simply because cars are made better. Those cars that are made better are not your business. Those aren't the ones that are going to give you more cars in your bays and increase your profitability. The most of a shop owner's profits is going to come from the cars that are older, and the average car is much older than it used to be.

Clear the "cars are just made better" excuse out from your mind, understand that there are plenty cars out there, it's just up to you to go focus on your marketing and attract more customers to your shop.

-- Ron Ipach (a.k.a Captain Car Count)

  • President/Founder of Repair Shop Coach
  • More articles and content like this and originated through Ron Ipach's Car Count Daily campaign
  • Auto Repair Shop Owners, Managers, and Automotive Industry Professionals are invited to join 'Car Count Daily Boosters' LinkedIn group to provide resources and gain insight on boosting car count DAILY and filling up the bays in their shops.
 
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  • 2 weeks later...
On 7/14/2017 at 5:22 PM, Ron Ipach said:

This is something that I'm hearing from shop owners constantly when we're talking about car count levels in their auto repair shop:

"Car count is down in my shop because cars are made better."

If I've heard it once, I've heard it a thousand times, and chances are you've probably said it yourself. Look, I'm not going to tell you cars aren't made better because that would be sheer stupidity.

The fact is that cars are made better. Cars are made to last much, much longer than they used to.

But... That's not the reason why car count is down in shops.

How do I know that? Well, a recent study came out that said the average car on American roadways is over 14 years old.

Let me say that again... The average car is over 14 years old. That's not a new car. The average. That means for every brand new car out there, in order to have an average of fourteen years, that means there's a car that's 28 years old. There is a balance there.

If the average car is 14 years old, those are the cars you work on. Right? 14 years ago the cars weren't made as good as they are now, and even if they were, they're 14 years old right now, odds are that they're going to need a lot of maintenance now or in the near future. It's important to make your shop available for those repairs.

Don't get caught up in the thinking that the car count is down simply because cars are made better. Those cars that are made better are not your business. Those aren't the ones that are going to give you more cars in your bays and increase your profitability. The most of a shop owner's profits is going to come from the cars that are older, and the average car is much older than it used to be.

Clear the "cars are just made better" excuse out from your mind, understand that there are plenty cars out there, it's just up to you to go focus on your marketing and attract more customers to your shop.

-- Ron Ipach (a.k.a Captain Car Count)

  • President/Founder of Repair Shop Coach
  • More articles and content like this and originated through Ron Ipach's Car Count Daily campaign
  • Auto Repair Shop Owners, Managers, and Automotive Industry Professionals are invited to join 'Car Count Daily Boosters' LinkedIn group to provide resources and gain insight on boosting car count DAILY and filling up the bays in their shops.
 
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Ron,

I’ve seen you give some helpful advice here, but I think you are way off on this one and are doing a disservice to all of us trying to find ways to maintain and grow our businesses. Being a some what overly optimistic person, I fought this idea for years, but more reliable cars are having a negative effect on the automotive repair industry and there is no denying it. I could provide you hard data to prove it, and could probably spend hours responding to this post. But to minimize the time I spend on my response, I’m just going to make a few simple points about your 14 year old average car. Right now that would be 2003 models. Compared that to a 14 year old car we would have been working on 10 years ago, which would have been 1993 models. We were exclusively working on Volvo’s 10 years ago.  We are now servicing all makes and models, and one of the main reasons is because of the issue of increased reliability and the reduction in required maintenance.

Just a quick look at the maintenance charts from 1993 to 2003 you will see major extensions in the intervals for just about every maintenance item, or the elimination of them. While it was not uncommon for 1993 to be towed in at least once over the course of several years, it is uncommon for 2003 models on to be towed in. Over the last few years we have seen timing belt service intervals go to 150,000 and a lot of cars going back to timing chains. Oil leaks were always good money makers, but with improvements in seal designs and PCV systems, those repairs have diminished. Oil change intervals of 3,000 miles are now going to 7,500, 10,000, up to 15,000. Simple math on that alone will indicate lower car count. 

I have been hearing for years how many cars there are on the road and how the average age continues to increase and how great that is going to be for our business. Meanwhile I have watched most everyone I know in this business have their year over year sales decline. In fact, I just bought the customer base of a German car specialist who went bankrupt after 39 years in business. Just 10 years ago he was grossing over $1M.

I don’t think people have changed that much when it comes to car ownership expenses. There are always exceptions, but most people will not keep an older car if it does not make financial sense. Generally that means the older the car gets, the less they are willing to spend on it. So if the average age of vehicles on the road is increasing, it is a further indication to me that less money is being spent on maintenance and repairs.

There is one last point I would like to address and that is fear. Fear is a very strong motivator. When I first started in this business, most customers knew what it meant to have a car break down or leave them stranded somewhere. Fear of that happening was a strong motivation for them to do all they could to make sure it did not happen to them again. When someone got towed in, they almost always bought any other recommended work. Most of my customers now can’t even imagine a car that won’t start or one that might quit running. You can say that bad behavior is no longer punished.

Scott

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1 hour ago, Ron Ipach said:

Hmmmm... Not sure why you'd say I'm doing you a disservice with my thoughts??

There are a lot of ways to approach the issue of car count being down. I chose to go the route of average age of the vehicles. You mentioned the lack of fear in the consumers getting stranded. We could talk about the overabundance of shops in the marketplace. Cars made better. Maybe fewer miles being driven by consumers because of Uber; Lyft; Amazon shopping; home delivery of goods; work at home employees; etc.

There are lots of reasons why car count is down and we can spend all day on each and every one of them - but my main point I was trying to get to (although maybe not my best effort) is summed up in the final sentence of my post -- "it's just up to you to go focus on your marketing and attract more customers to your shop. "

You see, every day, in practically every city, there are cars sitting on lifts RIGHT NOW. Cars that are being inspected, serviced, and maintained.

If you have 10 competitors in your area and each of them has 7 cars in their shop per day => that means that there are 70 vehicles PER DAY, in your market area, that are not in YOUR shop! They are instead in someone else's.

You cannot control what's happening in the industry. Why not focus more on what you can control => attracting more of those 70 daily available cars to your shop?

Ron,

Your post is a bit confusing. You titled it "Are Better Made Cars Drowning Car Counts?" You went on to state "That's not the reason why car count is down in shops." Then in your response to my post, you included "Cars made better." as one of the reason for lower car count. So hopefully you can see how this may create some confusion and distract from your intended main point.

Scott  

 

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I don't see the more reliable cars as a problem. There's no denying that cars are more reliable and require fewer visits to the shop, but there's also no denying that there are more cars on the road per shop than ever before, leaving each of us with more cars available even if those cars come to us less often per mile driven. There's also no denying that people in most areas of the country put more miles on their car every year. This leads to more wear and tear on the car, and more needed repairs.

You just have to go out and get them. My car count is up 11.75% on the year. This has been my trend for the last 5+ years. Probably more if I go back and look.

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On 7/28/2017 at 10:24 AM, AndersonAuto said:

I don't see the more reliable cars as a problem. There's no denying that cars are more reliable and require fewer visits to the shop, but there's also no denying that there are more cars on the road per shop than ever before, leaving each of us with more cars available even if those cars come to us less often per mile driven. There's also no denying that people in most areas of the country put more miles on their car every year. This leads to more wear and tear on the car, and more needed repairs.

You just have to go out and get them. My car count is up 11.75% on the year. This has been my trend for the last 5+ years. Probably more if I go back and look.

Actually total miles driven in this country peaked in June of 2005. https://www.advisorperspectives.com/dshort/updates/2017/06/20/vehicle-miles-traveled-another-look-at-our-evolving-behavior

"The Driving Boom – a six decade-long period of steady increases in per-capita driving in the United States – is over. 
Americans drive fewer total miles today than we did nine years ago, and fewer per person than we did at the end of Bill Clinton's first term. The unique combination of conditions that fueled the Driving Boom – from cheap gas prices to the rapid expansion of the workforce during the Baby Boom generation – no longer exists. Meanwhile, a new generation – the Millennials – sees a new American Dream that is less dependent on driving."

I didn't look up whether there are more cars on the road than ever because it really doesn't matter. What matters is that the total miles are down.

Less service due per mile x less miles driven = less overall repair opportunities

Edited by tyrguy
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1 hour ago, tyrguy said:

Actually total miles driven in this country peaked in June of 2005. https://www.advisorperspectives.com/dshort/updates/2017/06/20/vehicle-miles-traveled-another-look-at-our-evolving-behavior

"The Driving Boom – a six decade-long period of steady increases in per-capita driving in the United States – is over. 
Americans drive fewer total miles today than we did nine years ago, and fewer per person than we did at the end of Bill Clinton's first term. The unique combination of conditions that fueled the Driving Boom – from cheap gas prices to the rapid expansion of the workforce during the Baby Boom generation – no longer exists. Meanwhile, a new generation – the Millennials – sees a new American Dream that is less dependent on driving."

I didn't look up whether there are more cars on the road than ever because it really doesn't matter. What matters is that the total miles are down.

Less service due per mile x less miles driven = less overall repair opportunities

Total miles are not down. Total miles driven per person is down.

This article is geared toward financial advisors, who need to adjust the data to fit a financial perspective. They felt it was more important that people are driving slightly less per capita than the fact that there are more miles actually being driven. The first graph in the article shows the reality. More miles are being driven than ever before, with more cars than ever before.

Number of vehicles on the road is up:

https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_11.html

Note the switch from "passenger cars" and "other 2 axle 4 tire vehicle" to "light duty short wheelbase" and "light duty long wheelbase", so the table looks a little funny but the numbers are good.

The total miles driven by light vehicles vehicles is up:

https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_35.html

And the average age of those vehicles is going up.

https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_26.html_mfd

Meanwhile, the number of repair shops has remained largely stagnant:

https://www.statista.com/statistics/436416/number-of-auto-repair-and-maintenance-shops-in-us/

So the long and short of it is that there are more miles being driven in more cars that are getting older all the time. The only thing that the financial advisor article shows is that the number of miles driven per person is down. This is a reflection of the fact that the number of passenger cars and light trucks hasn't kept pace with population growth. In 2007 there were almost .8 vehicles for every person in the US, by 2015 that was down to less than .76. This trend might in some way be relevant to financial advisors, but for us it means we have more vehicles, driving more miles, for more years, per shop, than ever before.

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1 hour ago, tyrguy said:

Actually total miles driven in this country peaked in June of 2005. https://www.advisorperspectives.com/dshort/updates/2017/06/20/vehicle-miles-traveled-another-look-at-our-evolving-behavior

"The Driving Boom – a six decade-long period of steady increases in per-capita driving in the United States – is over. 
Americans drive fewer total miles today than we did nine years ago, and fewer per person than we did at the end of Bill Clinton's first term. The unique combination of conditions that fueled the Driving Boom – from cheap gas prices to the rapid expansion of the workforce during the Baby Boom generation – no longer exists. Meanwhile, a new generation – the Millennials – sees a new American Dream that is less dependent on driving."

I didn't look up whether there are more cars on the road than ever because it really doesn't matter. What matters is that the total miles are down.

Less service due per mile x less miles driven = less overall repair opportunities

tyrguy,

I think that the fact that no other shop owner on here except Anderson (who I have had some valuable exchanges with and great respect for) is supporting the original post, or even liking it, speaks volumes about the argument put forward. I can imagine the guys who made buggy whips were probably told there was no shortage of horses. And I'm sure the makers of DVD players whose sales continue to decline  year over year can take comfort in the fact that the number of DVD is the world is at an all time high, and people are watching more movies now than ever. 

Scott  

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8 minutes ago, ScottSpec said:

tyrguy,

I think that the fact that no other shop owner on here except Anderson (who I have had some valuable exchanges with and great respect for) is supporting the original post, or even liking it, speaks volumes about the argument put forward. I can imagine the guys who made buggy whips were probably told there was no shortage of horses. And I'm sure the makers of DVD players whose sales continue to decline  year over year can take comfort in the fact that the number of DVD is the world is at an all time high, and people are watching more movies now than ever. 

Scott  

The statistics are what the statistics are. But there are caveats. Part of the problem with them is that it's a nationwide number. While the overall miles driven and cars on the road and age of the vehicles are all up, and number of shops stagnant, this doesn't mean it necessarily applies to tyrguy's neck of the woods. If his area is economically stagnant, or the population is shifting toward older retired folks, or it's in an economic boom and everyone ran out and bought new cars, he's surely going to have problems. Even if the population and number of cars has remained stagnant for him, the increased reliability will be a problem.

The problem isn't that cars are more reliable. We can't do anything about the fact that manufacturers have responded to market forces and made their cars better. The problem is how are we going to get more of those reliable vehicles into the shop given the market forces at work in his particular area.

The trick is to really dig into the data and figure out what's actually going on. Then figure out what to do about it. How many cars? How many service bays? Has there been a shift in the population? etc etc. If the data shows that there hasn't been an increase in the number of vehicles in his area, or some other similar problem, he may have to make a concerted effort to steal customers from other shops. Other shop owners that he probably knows and likes are going to suffer, and possibly go out of business. Not an enviable position, but the bottom line is that he may have to make that choice.
 

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3 minutes ago, AndersonAuto said:

The statistics are what the statistics are. But there are caveats. Part of the problem with them is that it's a nationwide number. While the overall miles driven and cars on the road and age of the vehicles are all up, and number of shops stagnant, this doesn't mean it necessarily applies to tyrguy's neck of the woods. If his area is economically stagnant, or the population is shifting toward older retired folks, or it's in an economic boom and everyone ran out and bought new cars, he's surely going to have problems. Even if the population and number of cars has remained stagnant for him, the increased reliability will be a problem.

The problem isn't that cars are more reliable. We can't do anything about the fact that manufacturers have responded to market forces and made their cars better. The problem is how are we going to get more of those reliable vehicles into the shop given the market forces at work in his particular area.

The trick is to really dig into the data and figure out what's actually going on. Then figure out what to do about it. How many cars? How many service bays? Has there been a shift in the population? etc etc. If the data shows that there hasn't been an increase in the number of vehicles in his area, or some other similar problem, he may have to make a concerted effort to steal customers from other shops. Other shop owners that he probably knows and likes are going to suffer, and possibly go out of business. Not an enviable position, but the bottom line is that he may have to make that choice.
 

Anderson,

I always appreciate the thoughtful post you make. While I cannot speak for him, I imagine tyrguy would be in agreement with your assessment as I am. That we each need to analyze or local market conditions and plan accordingly. I think the issue we both have with this post is the argument put forth that more reliable cars and reduced required maintenance are not lowering car counts, and making this business more challenging for most. Obviously there is always the exceptions and caveats. For me is was being able to buy the customer base of a shop that went out of business after 29 years for the exact reason we are debating. This has grown our revenue 25% over the last 3 months. While this has been a great return on my investment, I unfortunately cannot count the availability of customer bases as a long term strategy. 

Scott             

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52 minutes ago, Ron Ipach said:

tyrguy,

Please stop looking to blame outside forces for your car count numbers being off. This serves no one and almost seems like you've given up hope.

As I have pointed out several times to you before, if your numbers are off - it's up to YOU to fix it - and finding 'proof' there are fewer opportunities sure as heck isn't helping you fix it. Action will.

Hey Corporal Car Count first of all, don't tell me what to do. I've been in this industry for over 40 years and I believe I have a bit of insight to offer. I've seen industry highs and lows, new technologies come and go, competitors open and close up shop. I've made a ton of money and spent a ton of money. I'm still making a good living at this, just not near what I was 10+ years ago. But thankfully, I don't have to. I really don't have to do this anymore if I don't want to.

I know why MY car count is down. There are 2 reasons. First of all, IT'S A FACT THAT CARS REQUIRE LESS SERVICE THAN THEY DID 10+ YEARS AGO. Talk to any repair shop that has been in this business for at least 20 years and they'll tell you it ain't what it used to be. Secondly, in the last 10 years the amount of bays in my little town have double with 5 car dealerships opening up within a half mile of my shop.

Given up hope? Hell no!! I'm constantly evolving the way we do business. In the last 10 years we've built a beautiful new shop [opened 10 years ago this week], developed a great website, hooked up with a great CRM company to reach out and touch our customers constantly, and got involved with social media just to name a few of the things we've done. 

I agree that it's up to the shop owner to fix it. But it's also important not ignore forces out there that are causing the problems in the first place. 

 

 

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4 hours ago, ScottSpec said:

Anderson,

I always appreciate the thoughtful post you make. While I cannot speak for him, I imagine tyrguy would be in agreement with your assessment as I am. That we each need to analyze or local market conditions and plan accordingly. I think the issue we both have with this post is the argument put forth that more reliable cars and reduced required maintenance are not lowering car counts, and making this business more challenging for most. Obviously there is always the exceptions and caveats. For me is was being able to buy the customer base of a shop that went out of business after 29 years for the exact reason we are debating. This has grown our revenue 25% over the last 3 months. While this has been a great return on my investment, I unfortunately cannot count the availability of customer bases as a long term strategy. 

Scott             

Anderson,

What are your thoughts on this https://fred.stlouisfed.org/series/REV8111TAXABL157QNSA The amount of information about the report is limited, but if I read it correctly, revenues from Automotive Repair & Service have been pretty much flat since 2010.

Thanks
Scott 

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Here's the thing. If this thread had started out with a statement such as "We all know that newer cars with longer service intervals and warranties, as well as car dealerships getting more aggressive with service has caused decreases in car counts to independent shops. But don't dismay, there are actions you can take to combat these forces and maintain the car counts you need to grow your business today and beyond", I would have never even posted a response. But instead the gist is basically to deny these facts and imply there is a quick fix.

But I understand why he didn't write it that way. Because of what he is selling, he would rather you believe there is no car count problem except in your shop [the cars are all in someone else's shop] and he has the "quick" fix.

 

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2 hours ago, Ron_Ipach said:

Maybe this will clear things up a bit. My post was taken from a transcription of one of the 60+ Car Count Daily videos that I have on my daily video blog. Maybe it you watch it, you'll get a better understanding of my message because you'll hear my voice inflections, plus some of the words that were edited out the transcription. In other words, maybe you'll hear my intend more clearly.

There have been almost 1000 views of that video, and you seem to be the only person taking exception to my message. You'll find the video here

If the link doesn't work, copy and paste this to your browser: http://www.captaincarcount.com/auto-repair-marketing/better-made-cars-and-decreasing-car-count/

Ron,

I think it is inaccurate and misleading, like a lot of information you publish, to say that tryguy is the only one that takes exception to your message. I clearly do, and based on the number of likes of my posts here, it would seem others do as well. I think the fact that your post has no likes indicates a lot as well. I also would not read into the number of video views you have. I checked some of them out, and subscribed to your email list. I did not watch for long before I became I was turned off, and your emails were directed to my junk folder. I don't know why you are struggling with this so much, but it's time for me to move on from this discussion.

Scott       

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21 hours ago, ScottSpec said:

I always appreciate the thoughtful post you make. While I cannot speak for him, I imagine tyrguy would be in agreement with your assessment as I am. That we each need to analyze or local market conditions and plan accordingly. I think the issue we both have with this post is the argument put forth that more reliable cars and reduced required maintenance are not lowering car counts, and making this business more challenging for most. Obviously there is always the exceptions and caveats. For me is was being able to buy the customer base of a shop that went out of business after 29 years for the exact reason we are debating. This has grown our revenue 25% over the last 3 months. While this has been a great return on my investment, I unfortunately cannot count the availability of customer bases as a long term strategy. 

Thanks Scott. I try.

I meet with a few other business owners I know every month or so just to kick around ideas to help with business. We met this morning and talked about marketing. There were only three of us today, a gym owner, a guy who has a company arranging international youth sports travel, and me. I said something about the fact that I use cheap oil change coupons as a draw. Almost in unison, they said "right, because it's a commodity". What do people in your area view as a commodity that can be bought anywhere anytime? I'm not saying that everyone needs to jump on the cheap oil change bandwagon, I think we've beat that horse to death elsewhere here. I'm saying that we all need to figure out what spurs the people in our area to move their business from their current shop to our shop. Bottom line is, the cars have to get into your shop by any legal and ethical means available. Do what you have to do to make it happen.
 

16 hours ago, ScottSpec said:

Anderson,

What are your thoughts on this https://fred.stlouisfed.org/series/REV8111TAXABL157QNSA The amount of information about the report is limited, but if I read it correctly, revenues from Automotive Repair & Service have been pretty much flat since 2010.

Thanks
Scott 

It's interesting, but I think there's more to the story. It could well be that auto repair revenue is flat for the last 7 years, hard to say without more info.

If that chart is showing the reality, then at some point the number of viable shops is going to go down. It may take a few years, but it will happen. Costs increase every year, and if revenue is flat, someone's going to lose. I intend to make sure it's not my shop on the losing end. I have 13 employees who depend on me to make sure their mortgage gets paid and their kids get fed. If that means Darryl and Tony a couple blocks away from me don't make it, then I'll feel bad for them, but that's about it.

I'll dig into the numbers more tomorrow to see if I can find more info, but if the chart is accurate, it's just more motivation for me to make sure my marketing is on point.
 

BTW, if it makes anyone feel better, I'm getting my ass handed to me this month.

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3 hours ago, AndersonAuto said:

Thanks Scott. I try.

I meet with a few other business owners I know every month or so just to kick around ideas to help with business. We met this morning and talked about marketing. There were only three of us today, a gym owner, a guy who has a company arranging international youth sports travel, and me. I said something about the fact that I use cheap oil change coupons as a draw. Almost in unison, they said "right, because it's a commodity". What do people in your area view as a commodity that can be bought anywhere anytime? I'm not saying that everyone needs to jump on the cheap oil change bandwagon, I think we've beat that horse to death elsewhere here. I'm saying that we all need to figure out what spurs the people in our area to move their business from their current shop to our shop. Bottom line is, the cars have to get into your shop by any legal and ethical means available. Do what you have to do to make it happen.
 

It's interesting, but I think there's more to the story. It could well be that auto repair revenue is flat for the last 7 years, hard to say without more info.

If that chart is showing the reality, then at some point the number of viable shops is going to go down. It may take a few years, but it will happen. Costs increase every year, and if revenue is flat, someone's going to lose. I intend to make sure it's not my shop on the losing end. I have 13 employees who depend on me to make sure their mortgage gets paid and their kids get fed. If that means Darryl and Tony a couple blocks away from me don't make it, then I'll feel bad for them, but that's about it.

I'll dig into the numbers more tomorrow to see if I can find more info, but if the chart is accurate, it's just more motivation for me to make sure my marketing is on point.
 

BTW, if it makes anyone feel better, I'm getting my ass handed to me this month.

Anderson,

Looking forward to hearing more of your thoughts on this. It doesn't make me feel good to know you are having a down month, but it does help to know you are not super-human. experience slower times as well, and are humble enough to admit to it.

Scott

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Anderson,

Likewise sorry to here about your month. We've been busy but we are just starting to notice the "back to school" slowdown.

I wasn't aware of the 7 year flat repair sales data. If true, coupled with the increase of bays in our town, I don't feel so bad about our downward trend. It would also explain why some shops in town have gone under.

Mark

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Seems  like everything I read has a different number. Unfortunately all of them are damn short on actual data, mostly relying on market research reports. The good news is that most paint a rosy picture for us.

http://www.alldata.com/blog-entry-option-1/feeling-good-about-future

http://www.tirebusiness.com/article/20161222/NEWS/161229978

https://www.inc.com/sageworks/why-business-is-booming-for-auto-repair-entrepreneurs.html

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      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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