Government Shutdown Averted...For Now [E086] - Business By The Numbers
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By Joe Marconi in Joe's Blog0 commentsAuto 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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By carmcapriotto
This week, Hunt sits down for an insightful Chat with Joelle Pollak to talk about how Promotive is tackling staffing shortages in the automotive aftermarket, offering innovative solutions for shop owners.
Expert Take on Recruitment Challenges: Dive into the complexities of hiring, focusing on the crucial balance of pay, benefits, and shop culture in attracting and retaining top talent. Promotive's Strategic Approach: Learn about Promotive’s unique strategies in talent retention and their collaboration with technical schools to address the technician shortage. Streamlined Staffing Solutions: Explore how Promotive’s comprehensive services simplify the recruitment process, saving time and efficiently matching shops with ideal candidates.
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
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
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
Click to go to the Podcast on Remarkable Results Radio
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By Transmission Repair
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By carmcapriotto
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
In this podcast episode, Coach Chris Cotton provides advice to a San Diego auto repair shop owner looking to grow their business. The shop owner currently makes around $200,000 a year, mostly from custom jobs, and wants to increase profitability without working seven days a week. Coach Cotton suggests using a cloud-based SMS system for tracking numbers, advertising as a larger shop to attract more customers, and following California's hourly pay laws. He also advises focusing on oil services, brake, steering, and suspension work for consistent revenue, and charging separately for parts and labor. The shop owner admits to lacking proper income statements and running their business in an unstructured manner.
The shop owner's challenges (00:02:17) The shop owner discusses their challenges in scaling their business, working long hours, and the need for more employees.
The issue with custom work (00:05:15) Coach Chris explains the common misconception of making money from custom work and advises focusing on regular retail customers.
Assessing the shop's financials (00:07:28) Coach Chris questions the shop owner's income statement, advertising budget, and advises tracking numbers and moving to a cloud-based SMS system.
The shop owner's financial situation (00:09:23) Discussion on expenses, rent, employee pay, and the potential legal consequences of not following labor laws.
The importance of proper advertising and marketing (00:12:15) Emphasis on the value of effective advertising and the difference between low-cost and high-quality marketing strategies.
Challenges with pricing, warranty, and business operations (00:15:13) Exploration of pricing strategies, the need for clear warranties, and the shop owner's lack of financial and operational management.
Oil services and alignment machines (00:17:55) Discussion about the importance of oil services and the misconception of alignment machines bringing in a lot of business.
Charging for parts and labor (00:20:42) Conversation about the necessity of marking up parts and the importance of charging for both parts and labor to run a profitable auto repair business.
Coaching package and growth potential (00:22:42) Discussion about the coaching package and the potential for the shop to double its revenue next year through improved processes, procedures, and technician work.
Shop owner wants to scale their auto repair business and improve profitability
Current revenue and net income of the shop owner
Coach Chris advises against custom jobs and suggests focusing on regular retail work
Importance of tracking profits regularly and using a cloud-based SMS system
Advertising strategies on Facebook, Instagram, and Google
Concerns about employee payment and legal issues in California
Suggestions for raising labor rates and providing clear warranties
Lack of proper income statements and structured business practices
Disappointment with the performance of the alignment machine
Focus on oil services, brake, steering, and suspension work for consistent revenue
Coach Chris Cotton, 00:12:15, "If we don't have a legitimate business, we don't have anything at all."
Connect with Chris:
[email protected]
Phone: 940.400.1008
www.autoshopcoaching.com
Facebook: https://www.facebook.com/
AutoFixAutoShopCoachingYoutube: https://bit.ly/3ClX0ae
#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #serviceadvisor #serviceadvisorefficiency #autorepairshopmarketing #theweeklyblitz #autofix
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Today on Business by the Numbers, Hunt explores key strategies for enhancing business success through effective team management and development, as well as the long-term benefits of strategic employee management and development for sustained business success.
• Strategic Value of Team Retreats: Insights into how team retreats and paid time off (PTO) contribute to employee satisfaction and business growth.
• Collaboration in a Hybrid Work Environment: Adapting to modern work models and the importance of in-person collaboration for team dynamics.
• Investing in Employee Well-being and Training: The critical role of continuous training and employee appreciation in boosting productivity 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
Click to go to the Podcast on Remarkable Results Radio
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