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Opportunity Cost/Loss [E102] - Diagnosing the Aftermarket A to Z

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carmcapriotto

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Matt Fanslow discusses the challenges and considerations of offering small engine repair services in an auto repair shop. He shares his personal experience with his grandparents' implement dealer and explains the low profitability of consumer-level products like chainsaws and lawn mowers. The concept of opportunity cost is emphasized, highlighting the potential loss of focusing on these additional services. He also discusses the challenges of finding parts for classic cars and the need to consider the opportunity cost when expanding services beyond auto repair.

Show Notes:

  • The challenges of offering small engine repair (00:02:21) The difficulties and considerations of offering small engine repair services in an auto repair shop, including opportunity cost and low profit margins.
  • The struggles of small engine repair shops (00:04:51) Explains the struggles faced by repair facilities and dealers that focus solely on small engines, including the high overhead costs and low profitability.
  • The importance of technician training (00:08:24) Highlights the benefits of technician training in improving knowledge, skills, job satisfaction, and overall shop profitability.
  • Understanding opportunity cost (00:09:30) Explains the concept of opportunity cost and its significance in terms of productivity and profitability in an auto repair shop.
  • Considering opportunity cost in shop operations (00:10:36) Discusses the impact of opportunity cost on shop operations, particularly in terms of vehicle storage and its effect on productivity and income.
  • The challenges of finding parts (00:16:46) Discussion on the difficulties of finding parts for small engine repair and how it affects the rate of service.
  • Working on classic cars (00:17:57) Exploration of the shop's willingness to work on classic cars and the positive response from customers.
  • Considering opportunity cost (00:18:51) Advice on considering the potential loss of income when offering additional services and the importance of evaluating daily tasks.

 

Thanks to our Partner, NAPA Autotech napaautotech.com

 

Email Matt: [email protected]

Diagnosing the Aftermarket A - Z YouTube Channel HERE

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

Click to go to the Podcast on Remarkable Results Radio

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      Want to End Your Technician Shortage? Focus on Retention!
      By Joe Marconi in Joe's 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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