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How Corporations Benefit from Running Their Business Like a Small Automotive Repair Shop


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  • Have you checked out Joe's Latest Blog?

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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.
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      Thank you to RepairPal for sponsoring The Auto Repair Marketing Podcast. Learn more about RepairPal at https://repairpal.com/shops
      How To Get In Touch
      Group - Auto Repair Marketing Mastermind
      Website - shopmarketingpros.com 
      Facebook - facebook.com/shopmarketingpros 
      Get the Book - shopmarketingpros.com/book
      Instagram - @shopmarketingpros 
      Questions/Ideas - [email protected] 
      Click to go to the Podcast on Remarkable Results Radio
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    • By Joe Marconi

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    • By carmcapriotto
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      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 episode of the "Weekly Blitz" podcast, host Coach Chris Cotton discusses the concept of value in the auto repair business. He emphasizes that value goes beyond price, encompassing quality service, skilled labor, genuine parts, and transparency. Cotton debunks the myth that being the cheapest shop guarantees success, instead advocating for a balance between price, quality, and value. He also highlights the link between staff compensation and value, stating that a well-compensated team is more motivated and productive, enhancing the overall customer experience.
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      The balance of price, quality, and value [00:03:20] Highlights the importance of striking the right balance between price and quality to provide real value to customers, debunking the myth that the cheapest prices are always the best.
       
       
      Connect with Chris:
       
      [email protected]
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      www.autoshopcoaching.com
      Facebook: https://www.facebook.com/
      AutoFixAutoShopCoachingYoutube: https://bit.ly/3ClX0ae
       
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      Click to go to the Podcast on Remarkable Results Radio


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