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[transcription]

Could Auto Repair Flat Rate Be Dead?

TECHNICIAN shortage today is real. Last study that I saw said, for every eight shops that’s looking for a technician, there’s only one tech available so I know many of you watching this are experiencing that same thing. And I’ll also say one thing that I found: most technicians, when I mention flat rate, their cheeks kind of pucker up. They hate it. Why? There’s risk. They’ve been burned before. So often in the technicians starved market, what’s a shop owner left to do but put technicians on hourly or even maybe salary? And what that leads to is, really what I’m going to call an “uninspired performance.” Why? They get comfortable, they’re able to pay their bills without exerting a ton of effort.

So what’s a shop owner to do? The answer I’ve uncovered recently in my shop is to have a Win Number. For every single employee. See one of the truths I discovered in my 30 plus years of being a shop owner is that often we don’t get the most out of our employees because we never really sat down and told them what we expect. I know that’s been one of my mistakes.

So one of the things that I’ve done recently is I’ve given each employee a weekly Win Number, and that’s why it’s so important. For example, I recently sat down with each of my technicians and shared with them their Win Number. What do I mean by win number? What I expect out of them in parts and labor production for each employee. The numbers are based on my desired technician cost as a percentage of sales. It’s worked so well with my technicians that I now sent it out and established that win number with both my CSR and my service advisor.

I’ve got to tell you the results have been incredible. Not only are my sales and profits up through the roof lately, it’s led to believe it or not, happier employees. Why? They drive home at the end of the day or at the end of the week knowing that they hit their goals. Knowing that they’ve contributed to a successful week for the shop and that certainly led to a happier shop owner!

So, let me leave you with a question. Does each and every one of your employees on your team clearly know what you expect of them?

If your answer is not a resounding YES, it’s time to put a pencil to paper and figure out each team employee or each team members weekly and daily Win.

Edited by Ron Ipach
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      By the late '80s it was obvious that I was doing way too much. I looked at each role I had my hands on: shop foreman, service advisor, shuttle driver, bookkeeper to lot attendant. And, as long as I’m confessing all this to you, I need to disclose that I was also the shop’s maintenance person; making repairs to the bay doors, the slop sink and equipment. You name it, I did it. I was literally too busy to be successful.
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      I also clearly defined the duties I should not be doing and assigned those tasks to others. This is a critical step for any shop owner.  Warren Buffett says that in order to be successful in whatever you do, it’s crucial to focus on the things that generates the greatest return and that you can’t do it all, and that means sometimes you have to say, “no.”  
      By the late '90s it became clear that the most valuable role I played in my business was that of coach. All the best marketing plans and the best business strategies mean nothing without a team of great people around you all pushing in the right direction. And that takes a strong leader. Not just a boss, but a leader.  Leaders inspire people. Leaders get others to reach down deep inside themselves and perform at their best because they are aligned with the leader’s vision. 
      Leaders inspire others through praise and recognition for the work they do. When people feel their work matters, they have a purpose. People are motivated by the heart, not the wallet. That’s not to say earning a decent wage isn’t important. But a focus on money alone is not a strategy for success. Focus on people first and profit will follow.  
      Spend time with your employees. Get to know them as people, not just the role they have in your company.  Find out what their dreams and goals are. And then find a way for others to achieve what they want out of life.  People cannot be motivated until they realize that what they do every day helps them to achieve what they want in their personal life.  
      There are other people in our business world that we must never forget. And that’s our customers.  If you were to ask me, who is more important, my employees or my customers? I would answer, “They are equally important.”  You cannot have a successful business without the right employees and the right customers.  
      One last bit of advice I can give you is to focus on your success, no one else’s.  Be very clear about the pathways you take and never forget about the obligation you have to others. Build a company culture of teamwork, quality and integrity.  Focus on what’s in the best interest of the customer and the people around you. Put people first, and everything else will fall into place.  
       
      This story was originally published by Joe Marconi in Ratchet+Wrench on February 4th, 2020

       
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