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Why Can’t Every Shop Owner Be Profitable? [RR 682]


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Scott Wheeler, President of Automotive Consultants Group, Inc. (ACGI) is a shop management expert in the transportation industry, with over forty years’ experience in the automotive, trucking, heavy-equipment, marine, motor sports, and defense aerospace industries. He holds numerous ASE credentials, including two Master’s Certifications, and has experience working in every position from Tech, Fixed Operations Director, and Mechanical Engineer. Scott has authored five books for the automotive industry and continues to write, consult, and speak professionally at major industry events throughout the U.S. and Canada. He has been a regular featured consultant/contributor to Ratchet+Wrench Magazine, Auto Inc., and Canadian Tire magazine with articles relating to topics such as technician compensation programs, understanding production capacity, and how to maintain passion for your automotive repair business, among others. ACGI continues to consult and mentor clients throughout North America.

Listen to Scott's previous episodes HERE

Key Talking Points

  • “How to Make Money (& Stay Sane) in the Automotive Service Industry”- Chronicles “Bob” a fictitious character. Effective labor rate, marketing and advertising in 21st century. Charts and graphs included. Policies, procedures, job descriptions. 
  • What are your goals? Why are you in the industry? “What’s in it for me?”
  • Are you willing to listen? Try new things? Change? 
  • Change triangle- the center is change, outside points are commitment, plan and action. 
  • “Why when how to” with financials 
  • “All business is, is a math problem”- understanding the numbers, understanding benchmark (labor gross profit margin, parts margin etc) 
  • Ego factor- what is your break-even point is? Do you rate how well your month went by how much money is in your checking account? 
  • Holding someone accountable- clear set goals and expectations
  • CPA using Quickbooks- Quickbooks isn’t geared towards automotive
  • Make sure you set your shop management software to your set gross profit matrix for parts and labor
  • Production incentive for technicians and service advisors- it should be easy to calculate. Is it based on working 40 hours or meeting/beating time guide? Consider individual compensation plans. Find one that motivates your employees. 
  • Raising effective labor rate
  • Automotiveconsultantsgroup.com

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This episode is brought to you by AAPEX, the Automotive Aftermarket Products Expo. AAPEX represents the $740 billion global automotive aftermarket industry and has everything you need to stay ahead of the curve.  The Virtual AAPEX Experience 2020 is in the record books. Virtual AAPEX lived up to presenting leading-technical and business management training from some of the industry’s best and brightest. Now set your sights on the homecoming in Las Vegas in 2021. Mark your calendar now … November 2-4, 2021, AAPEX // Now more than ever.

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This episode is brought to you by Shop-Ware Shop Management. It’s time to run your business at its fullest potential with the industry’s leading technology. Shop-Ware Shop Management will increase your efficiency with lightning-fast workflows, help your staff capture more sales every day, and create very happy customers who promote your business. Shops running Shop-Ware have More Time and generate More Profit—join them! Schedule a free live demonstration and find out how 30 minutes can transform your shop at getshopware.com/carm

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Aftermarket Radio Network

Click to go to the Podcast on Remarkable Results Radio

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  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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