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How Can You Improve Your Auto Repair Shop's Profitability? Case Study: Texas - Chris Cotton Weekly Blitz


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The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. If you want to take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.

Click here to learn more about Top Tier Marketing by Shop Marketing Pros and schedule a demo:

https://shopmarketingpros.com/chris/

Check out their podcast here:

https://autorepairmarketing.captivate.fm/

If you would like to join their private facebook group go here:

https://www.facebook.com/groups/autorepairmarketingmastermind

Are you running an auto repair shop and struggling with cash flow? In this podcast, Coach Chris Cotton from Auto Fix Auto Shop Coaching shares a success story of a shop in Houston that overcame its cash flow issues and increased its net profit by 5%. In under 6 months! The secret? Improving their DVI process, introducing a maintenance schedule program, and teaching their staff about the benefits of BG products. By doing so, the shop's average estimate went up by $400 per ticket, and their average repair order increased from $600 to $829.

But that's not all. Coach Cotton also talks about the importance of effective management, marketing, and continuous improvement. He shares valuable metrics and KPIs that his team tracks, and emphasizes the need to focus on improving processes and procedures before considering a second location.

If you're looking for practical advice on how to increase your auto repair shop's profitability, this podcast is a must-listen. Learn from a real-life success story and discover how you can take your shop to the next level.

Introduction [00:00:06] Introduction to the podcast and its purpose.

Success Story of a Shop [00:02:09] A success story of a shop in Houston, Texas, that was able to increase its sales and net profit by making minor tweaks to its DVI process and introducing a maintenance schedule program.

Improvements in Labor Gross Profit Margin [00:09:06] The labor gross profit margin of the shop has gone up by 13%, and the technician productivity has increased by 10%.

Bay Utilization [00:10:10] Importance of maximizing bay utilization before expanding to a second location.

Marketing and Image [00:11:20] Discussion of the importance of marketing and image, and a recommendation for Shop Marketing Pros.

Metrics and Processes [00:13:38] Improvements in build hours, close rate, effective labor rate, and labor hours per repair order through better processes and procedures.

Don't forget to rate and review us!

Connect with Chris:

[email protected]

940.400.1008

www.autoshopcoaching.com

Facebook: https://www.facebook.com/AutoFixAutoShopCoaching

Youtube: https://bit.ly/3ClX0ae

 

#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #autoops #onlinebooking #serviceadvisor #serviceadvisorefficiency

Click to go to the Podcast on Remarkable Results Radio

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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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