Article: If You Think Your Shop is a Business, This Article May Surprise You

[autorepairuniversity]

I feel the need to say thank you! After reviewing the financials for this past year I was quite depressed. I did $100,000 more business than the year before, but hardly any more profit to show for it. I had personally been stressed out, buisy beyond belief, and just plain beat up this past year, and for what... a small profit??? Yes I did profit more than the year before, but put it this way - not impressive. One night I tuned to Auto Shop Owners for a little help and guidence. Threre was a TON of helpfull posts, and some real eye openers. The one post that was burned into my brain was a post about running a business vs. running a repair shop. I told myself it was time to run a BUSINESS not just a AUTO REPAIR SHOP. I had a BIG meeting with my guys, telling them its time they stepped up there game and helped me "bear" some of weight I was carrying around with this business. I raised prices $5 per hour. I started charging for diagnosis. I started tracking the techs billed hours (I pay hourly) and created a bonus program for them. I actually started "watching and analyzing the numbers" rather just going off of feel.

The results.... Utterly amazing. This year (Jan and Feb) I have profited almost twice as much as last year. I know!!! that is crazy. Just goes to show what a little "thinking" can do. I remind myself everyday to treat my shop as a business, not a "repair shop". I hope this helps others, it sure helped me. Hopefully this trend continues for me, but again THANK YOU to my fellow shop owners for posting your knowlegde and advise!!!

 

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[xrac]

Great story, way to go, way to use your head. 

[AndersonAuto]

I've been listening to an interesting book that I think a lot of us can benefit from. "Profit First" by Mike Michalowicz. It takes the "pay yourself first" principles that a lot of personal finance gurus talk about, but few of us do, an applies it to doing business. We all need to understand that our businesses exist to produce a profit for the owner, not to fix cars. If we want to fix cars, we can fix cars working for someone else.

I'm fortunate enough to have my business to a place where I'm actually getting a decent profit, although it's not quite as much as I want. Probably a result of being lucky more than being good. I have never quite reached the elusive 20% net plus my W2 pay. I intend to change that this year by removing my profit first, then figuring out how to run the business on what remains. If we think about it, we figure out how to run our businesses on less money all the time. Every lean month we have, we figure out how to get the bills paid with what we have. What if "what we have" is simply what's left after we remove the profit? I bet we could all figure out how to make it work, and would finally realize the benefit of being business owners.

[autorepairuniversity]

That’s awesome, and 100% true. I sometimes almost find myself feeling guilty when I make good money on a job.... No more!!!


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[rpllib]

Great story, thanks for sharing. i have had a few aha moments in my career. Never regretted any of them. 

 

[Alex]

If anyone is looking for the article @autorepairuniversity mentioned, I believe it's this one by @Elite Worldwide Inc. 

 

[autorepairuniversity]

Yup, that’s the one! Thank you for posting that. That post along with many others honestly transformed the way I view, and therefore run my businesses. I was basically making every decision for every repair in my shop. It’s been hard to let go, but also very freeing. I’m putting a whole lot more pressure on my techs to MAKE DECISIONS, but after all it is there job to make sure the vehicle they are working on is properly diagnosed and repaired. Not the owners! Let them do there job and hold them accountable.


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[FNGJWS]

Makes life a little easier, no? I pay my guys hourly as well and was wondering how their bonus program is structured?

[autorepairuniversity]

yes I also pay my guys hourly. The bonus program is pretty simple. I’ve been paying them $1 for every billed hour. After every month, we have a lunch meeting and go over numbers, I give them their folder with all the jobs they billed out that month. They can make around $150 (or more) if they have a decent month. I used to give them 100 bucks if we surpassed a certain gross sales per month. However this seems be working pretty well and the guys get a kick out of watching their numbers. It’s also help because I let them recommend their own labor times per job (so there extra mindful now if they think something is going to take longer)