By Nevil Jay
I'm currently looking into a business acquisition. It's a wheel repair shop based in South California. I have questions in terms of profitability and also, the expenses involved within the business.
I have profit and loss statements of the business. They currently operate 24/7 and have 30-35 employees. I am looking for someone who has experience in this sector that may be able to give me some unbiased advice. I also wanted to somehow come up with a valuation of the business. It operates out of a leased building, but consistently profits the owner a large amount of money. Who should I look for to verify these numbers? Will any CPA be able to understand?
Thanks in advance,
By Joe Marconi
A woman called her dentist the other day and asked how much would a root canal cost. Her dentist replied, “Sure, hold on, let me look that up. Ok, that’ll be around $1400 for that job. Would you like to come in and have that root canal done?” Ridiculous scenario, you’re thinking? I agree! A dentist would never give a price over the phone without first examining the patient.
Why do some shops continue to give prices over the phone? Even something as simple as a wheel alignment price can lead the customer and you in the wrong direction. Do you really know the car needs an alignment?
Pricing over the phone is the same as giving them a diagnosis. When a customer calls for a price on a water pump and you give a price, you are saying to them, “Yes, it IS the water pump and here’s the price. And then you get the car in the bay and it needs hoses, a thermostat, and the radiator is leaking, not the pump.
Giving prices over the phone also tells the caller to please judge you on price alone; a road I refuse to go down.
I know this is going to push a lot of buttons today, but my tip today is to resist giving prices over the phone. Get the car into you bay, perform the inspection and/or the proper testing and then when you know what the problem is, sell the job.
We are professionals, no different than the Dentist.
My name is Karla, I had previously owned a 3-bay mechanical repair shop in Burlington, VT for 6 years and built it to maintain an outstanding reputation and provide a comfortable income. I had the opportunity to sell my half of the business and finalized that deal this past fall. I have worked in all areas of the auto repair industry over the past 15 years, graduated from a two-year ASE certified auto tech program and went on to earn my Bachelor’s in business and a masters degree in executive leadership.
I have some capital I will be contributing to the planning and opening of a new shop and am very open to meeting potential partners/investors in all areas of the country. I greatly look forward to building something new in a location new to me.
Anyway, I’d like to welcome all /any interest and to answer any questions about joining forces in shop planning and management. Please do not hesitate to contact me, thanks for considering!
By Ron Ipach
We all know as local business owners how important it is to get those online reviews because most potential customers read those things before they make a decision whether they want to do business with you. As a matter of fact, 90% of consumers read less than 10 reviews before forming an opinion about a business. Because of this, auto repair shops should want to collect as many positive reviews as possible to stay ahead.
In the automotive industry, for getting new customers in the door, there might not be a more essential tool than positive online reviews. It can make or break a business plan. From a consumer's point of view, Google will almost always be the resource used to find an auto repair shop in each area. Not only this, some potential customers will view online reviews for the sole purpose of ranking shops, or choosing one over the other.
The auto repair shop with the most positive reviews and best Google ranking is most often going to be the one the consumer decides to go to for their car repair needs. The same goes for reviews on both Facebook and Yelp.
Some shop owners may be asking clients: "Hey, if you liked our service, please give us a review." And this is a proven strategy as 7 out of 10 consumers will leave a review for a business if they're asked to.
However, if they're not giving reviews, how can they expect to get reviews back? There's something maybe a little karmic about that, right? If you're not doing it, how can you expect other people to do it for you. Aside from that, if you're not writing reviews, how can you tell them how to do the review?
In other words, if you've never given a Google review, or a Yelp review or a Facebook review, and you've never physically done it yourself it's going to be hard when you ask somebody to give your a shop a review. A shop owner may say - "Sure, I'll give you a review, just show me how to do it," now you're scratching your head and saying, "I have no idea how to do it. I've never given one myself." What are the chances that they're actually going to give you a review? Get in the habit of writing as many reviews as possible using all of the local review sites, so you know how to navigate the waters, and you know how to actually write the review.
Secondarily, sitting down to write a review is not easy. If you get in a habit of sitting down trying to figure out what you're going to say in your review, chances are when you do it more often, you'll get better and better at it. It will start to flow a little better. When you're asking a client to write you a good review, not only are you going to be able to show them how to do this, but you're going to give them some suggestions on how to write a good review for you because, after all, that's what we want to do. We want to get as many good, positive reviews from our happy customers as we possibly can.
Getting in the habit of writing two reviews per week, will ultimately attract more online reviews for 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.
Save a dime, spend a dollar
There’s trend in “out of shop” repairs I’m seeing more and more of these days. It’s been going on since the very first cars hit the open road, but because of the technical advancements and procedural changes there seems to be a lot more cars that aren’t getting repaired properly than ever before. It seems to have more to do with cost than with a general lack of maintenance, and because of the technical and repair procedure changes fewer DIY’rs are adequately prepared to take on those repairs. So, to save their cash they opt for a side line repair rather than a professional shop. Of course, they might have saved a dime by going “rogue” on the repair, but there’s a good chance they’ll have to spend a dollar just to undo the damage done by these back alley repair hacks.
Take the guy who needed a heater core, but didn’t want to pay the professional shop that diagnosed the problem. What he wanted was a cheaper alternative. The next day while at work, he casually mentioned his predicament to a co-worker. The co-worker said he knew a guy who knew of a guy who has a friend of a friend that’s a really good mechanic and would even come to your house and fix it. So, the guy called this traveling tool box connoisseur and a deal was struck up that he would be over by the weekend to change it out, as long as he had the new part waiting for him.
About half way through the repair the “friend of a friend mechanic” found himself with connections and parts he had never seen before. He then tried to start the car only to find out it wouldn’t. Of course, the wiry mechanic friend had neither a clue, nor an educated guess as to what was wrong. All he had to his credit was a vague knowledge of how to remove a couple of bolts and screws and hopefully not to leave a pile of miscellaneous parts under the seat when he was finished.
Outmatched by the new technology and his lack of taking the trade of automotive repair serious enough to warrant any training or certifications, our weekend nut buster and his little cohort (aka “his tool box”) took off for parts unknown (pun intended), never to be seen or heard from again. Which left the owner of the vehicle high and dry with an even bigger problem than he originally had.
It never ceases to amaze me that even with various repair manuals, internet sources, and parts available at the corner parts store, somebody would be willing to tear into a car without a reasonable understanding of what lies behind the dash. That seems to be the perpetual gap between how a professional mechanic tackles repairs and how the “friend of a friend mechanic” does the same job.
There’s something to be said about being in the trade on a daily basis. Most pros will tell you that even a year away from the business can leave you far behind your competition. More often than not, the professional mechanic has to stay up with the ever changing industry, as well as adopting a few tricks of their own or at least finding easier methods than what the engineers originally anticipated. (No offense engineers.)
However, even then, those tricks and short cuts are often omitted in the corner parts store repair manual or YouTube video. Whether it’s due to space, or because some of those mechanic “tricks” aren’t approved by the manufacturer. The manual writers often have to stick with what is “engineeringly-correct” rather than what professional mechanics have found out in the trenches.
Let’s face it, years ago when most systems didn’t use miles of wire with interconnecting information and calibrated components, a good shade tree mechanic could get by without knowing the inner workings of the actual systems. All they needed to know was what part was bad and where it’s located. That’s not the case anymore.
There’s going to come a day when these backyard mechanics are going to reach a tipping point, and not following all the warnings and directions printed in the repair manual will to lead to a catastrophe. Even those repairs that seemed simple in the past will require extensive training to accomplish. With some of the latest systems in production now it’s safe to say we already have reached that tipping point. But, the dollar is still the deal breaker when it comes to professional automotive service. Then again, the typical person who decided to go the route of finding the cheapest ratchet slinger or rely on a friend of a friend carrying a rusty tool box to do their repairs may find themselves still standing in their driveway with a broken down car.
Sure, there’s still a lot of ways to save money on service repair costs just like you can with any type of service work, and not just the family car, either. The question you have to ask yourself is, “Am I willing to take the risk of a failed repair by not calling a professional, and do I understand that it will probably cost more for the professional to straighten out the mess from the last guy?” If not, you might be stuck on the side of the road like the guy with the heater core looking for another “friend of a friend”.
Save a dollar. That’s always smart thinking. Having diagnostics and service work done by some guy you met at the corner parts store who is moon lighting as a mechanic...? Hey, it’s your dime.
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