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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.
By Joe Marconi
Recorded Live at AAPEX 2023, Andy Bizub and part owner Brandon Ludwikowski discuss the transition from technician to business owner, the importance of a positive attitude, and the tools and knowledge required for technicians. The conversation also covers the division of responsibilities within the company, decision-making processes, and the importance of understanding business fundamentals and financials. Brandon Ludwikowski, Midwest Performance Cars, Chicago and Northbrook, IL. Andy Bizub, Midwest Performance Cars, Chicago and Northbrook, IL. Andy’s previous episodes HERE. Show Notes
Attitude is Key (00:02:12) Brandon emphasizes the importance of having a positive attitude in the face of challenges and setbacks. Providing the Right Tools and Knowledge (00:03:19) Brandon discusses the need for owners to provide technicians with the necessary tools and knowledge to perform their job effectively. Finding the Best Training Sources (00:04:51) Andy explains how he identifies knowledge gaps in his team and seeks out the best training sources to enhance their skills and capabilities. Using a dashboard for learning and improvement (00:09:10) Discussion about the usefulness of a dashboard in identifying areas for improvement. Dealing with overconfidence and ego in technicians (00:09:42) The challenges of working with technicians who believe they know everything and the importance of leaving ego at the door. Considering succession planning and bringing on an ownership team. (00:11:01) The reasons behind bringing on an ownership team, including geographical considerations and planning for the future. The journey to becoming part owners (00:17:56) Brandon discusses the process of becoming a part owner of Midwest Performance Cars and the decision-making involved. Andy describes the complementary skills and characteristics of the three owners: Chris, Ryan, and Brandon. Future plans and ownership transition (00:24:34) Andy explains the terms of the deal, including the timeline for the owners to fully pay for their shares and the possibility of Andy staying on as an advisor. The importance of balance sheets (00:31:46) Andy explains the importance of understanding balance sheets and how they show the true worth of a business. Teaching finance to the team (00:34:02) Andy discusses how he teaches finance to his team, emphasizing the importance of understanding numbers and making informed decisions. Transitioning from a single owner to a business owner (00:34:24) The conversation shifts to the challenges faced by single owners and how they can start transitioning to becoming successful business owners. The balance sheet and cash flow statements (00:34:40) Explanation of the importance of understanding balance sheets and cash flow statements for business owners. The benefits of having a coach (00:36:17) Discussion on the positive impact of having a coach for business owners. Transitioning to a business mindset (00:37:08) The importance of shop owners understanding the business side of their industry and becoming businessmen, rather than just shop owners. Thanks to our Partners, AAPEX and NAPA TRACS Set your sights on Las Vegas in 2024. Mark your calendar now … November 5th-7th, 2024. AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at http://AAPEXSHOW.COM/WEBINAR NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -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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Meg Lewis, BJ’s Automotive Diagnostic Center, Belfast, ME, NAPA Auto Care Technician of the Year 2022. Carm and Meg discuss the shop's transition to a four-day workweek to promote work-life balance, the challenges of finding and retaining skilled technicians. Meg shares her experience as a female technician. They also discuss the need to change the perception of the automotive industry and attract more women. The episode concludes with a discussion on succession planning and the shop's community involvement
The decision to move to a four-day workweek (00:03:14) Meg discusses the idea of transitioning to a four-day workweek and the process of deciding which day to take off. The role of a diagnostician as a technology specialist (00:07:55) Carm suggests renaming the role of a diagnostician to a technology specialist, highlighting the importance of technology in automotive diagnostics. The collaboration between a technology specialist and a mechanical specialist (00:08:48) Carm and Meg discuss the complementary roles of a technology specialist and a mechanical specialist in automotive repair and the importance of their collaboration. Challenges with staffing during COVID-19 (00:10:02) The impact of COVID-19 on staffing, including layoffs, struggles to find new technicians, and the use of apprenticeship programs. The decision to pursue automotive technology (00:17:36) Meg discusses her early interest in working with cars and her decision to pursue automotive technology in high school and college. The importance of attracting more women to the automotive industry (00:18:09) Carm suggests changing the perception of the industry and highlights the unique traits that women can bring to the workplace. Overcoming physical challenges as a female technician (00:19:31) Meg talks about how she adapts and finds creative solutions to overcome physical challenges in her work as a female technician. Importance of communication in internal succession (00:27:14) The significance of regular and effective communication between the owner and the successor in a business's internal succession process. Thanks to our Partner, Dorman Products.
Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
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-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
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-Special episode collections: https://remarkableresults.biz/collections
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Hunt explores the crucial differences between shop management software and QuickBooks, focusing on the impact on parts margin. This episode is a must-listen for shop owners and financial managers seeking clarity and efficiency in their business operations.
• Dual Bookkeeping Explained: Unravel the reasons behind running two sets of books and its effect on your financials.
• Real-Life Client Case: Learn from a client's experience with discrepancies in parts margin between shop management systems and QuickBooks.
• Strategies for Financial Accuracy: Gain insights into aligning financial data across platforms for precise tracking and profitability.
Thanks to our partners, NAPA TRACS and Promotive
Did you know that NAPA TRACS has onsite training plus six days a week support?
It all starts when a local representative meets with you to learn about your business and how you run it. After all, it's your shop, so it's your choice.
Let us prove to you that Tracs is the single best shop management system in the business. Find NAPA TRACS on the Web at NAPATRACS.com
It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
Paar Melis and Associates – Accountants Specializing in Automotive Repair
Visit us Online: www.paarmelis.com
Email Hunt: [email protected]
Get a copy of my Book: Download Here
Aftermarket Radio Network
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