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One Location $2.5M: How We Do It [THA 334]


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Shop owners Jimmy Alauria, Joe Hanson, and John Gustafson share their strategies and tactics for achieving exceptional success. The most valuable lesson? The importance of having a strong team, setting goals, and monitoring key performance indicators to achieve success. They emphasize the need for attention to detail, accountability, and hiring the right people, empowering them to lead and demonstrating commitment to the purpose and core values of the business. Tune in to learn more about how to achieve success in this industry!

Joe Hanson, Gordie’s Garage, Roseville, MI. Listen to Joe’s previous episodes HERE.

John Gustafson, Gustafson Brothers, Huntington Beach, CA. John’s previous episodes HERE

Jimmy Alauria, 3A Automotive and Diesel Repair, Phoenix, AZ. Jimmy’s previous episodes HERE

Show Notes:

  • Watch Video Episode HERE
  • The Importance of Staffing (00:03:04) Jimmy and Joe discuss the importance of having a full team to run the operation and how adding key pieces to the office, such as a parts manager and a service manager, helped them grow their business.
  • The Role of Culture in Business Success (00:05:30) The importance of having a top culture and how it is the umbrella that everything works under. They emphasize the need for a competitive, positive, and teamwork-oriented culture.
  • Managing by Statistics (00:07:11) Jimmy explains the importance of managing by statistics and how posting graphs and statistics can help motivate the team to improve and keep score. He emphasizes the need for a competitive nature in the team and the importance of keeping track of personal sales, efficiencies, and hours.
  • Weekly meetings and KPIs (00:08:38) The importance of weekly meetings and key performance indicators (KPIs) in tracking trends and setting goals for their shops.
  • Leadership and accountability (00:09:46) Holding both employees and owners accountable for meeting goals and contributing to the success of the shop.
  • Selecting leaders (00:13:16) How leaders in their shops are selected based on their demonstration of the company's purpose and core values, as well as their ability to gain the respect of their peers. They also draw parallels to their experiences with leadership in sports.
  • Training and Self-Discipline (00:17:01) Jimmy and Joe discuss the importance of training and self-discipline in leadership and management roles.
  • Marketing Strategy (00:20:11) The importance of having a marketing strategy and investing in it to grow the business.
  • Numbers Game (00:22:47) Joe explains how having a plan and using math to calculate the number of customers needed to hit revenue goals is crucial for success.
  • Building Customer Base (00:24:38) Importance of growing customer base and hiring a support consultant for social marketing.
  • Financial Disciplines (00:27:10) The importance of pro forma and daily reports in achieving financial success, with examples from successful shops.
  • Big Business Attitude (00:33:23) Discussion on how to run a much bigger business and all-inclusive with people, backing oneself out and putting other people in charge mentality.
  • Creating Groups within Our Group (00:34:20) Creating teams within the organization, with a production team and a manager over that production team, and a sales team with a service advisor and a customer service rep.
  • Unleashing Responsibility to the Team (00:36:16) The importance of being the visionary of the company, where to go and how to get there, and unleashing the responsibility to the team.

Thanks to our Partners Shop-Ware and Delphi Technologies

Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com

Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com

Connect with the Podcast

-Join our Insider List: https://remarkableresults.biz/insider

-All books mentioned on our podcasts: https://remarkableresults.biz/books

-Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom

-Buy Me a Coffee: https://www.buymeacoffee.com/carm

-The Aftermarket Radio Network: https://aftermarketradionetwork.com

-Special episode collections: https://remarkableresults.biz/collections

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  • Have you checked out Joe's Latest Blog?

         0 comments
      Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
      As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
      But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
      Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
      Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
      Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
      The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
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