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  • 2 weeks later...
Posted
More and more shops are adopting the flat rate pay model. Is this the future?

 

I don't like flat rate pay.

 

I have long paid my techs an hourly rate plus bonus based on performance. I feel this gets my techs motivated with security. Many think my plan creates a dead-beat attitude. I don't think so. My system rewards those who excel and are willing to work hard.

 

Am I wrong? What plan do you have for your techs?

 

A number of shops are having good success with a pay system that is about half hourly and about half flat rate....kind of the best of both worlds and fair to all parties.

  • 2 months later...
Posted
Tom, could you go into more detail with real numbers about that plan?

 

I would also be interested in more of a description of how this would work. :D

  • 3 months later...
Posted

More and more shops are adopting the flat rate pay model. Is this the future?

 

I don't like flat rate pay.

 

I have long paid my techs an hourly rate plus bonus based on performance. I feel this gets my techs motivated with security. Many think my plan creates a dead-beat attitude. I don't think so. My system rewards those who excel and are willing to work hard.

 

Am I wrong? What plan do you have for your techs?

 

 

As well I'll agree, I to dislike flat rate pay. BUT, at this point in my business, it's my only choice, and with as many shops around that do the same, I'm okay with the fact, but not entirely. I would love to be able to do more for my guy, and sooner or later guys. I never once worked flat rate, I refused. So here I am paying my tech flat rate, and your right it has its ups and downs. I would be interested in atleast getting an idea of how you set up the hourly rate plus bonus based on performance. I may be to small at this point in time, but something well worth consideration for the future. I want to be able to reward good help, and offer incentives as well in the future.

Posted

Joe,

 

That is the way the dealership that I worked at was and that is the main reason that I left. When the work was there, the required 45 hr week wasn't bad when you were turning 50-75 hrs a week. I turned as many as 130 hrs one week (in six days) and set the shop record for the most hours turned in one week. That was a great plan when there was work but like you said, if there wasn't any work, there was no base pay so it wasn't uncommon to turn 30-40 and still have to be there the full week and a sat every 3 weeks. I always wondered how "legal" it was to require us to work hours that we were not paid for. Since I am the only tech here now I pay myself flat rate because its the easiest for me to figure for now. When I get big enough to need more help, I will have to change that.

Posted

My point exactly, well said!

 

I can't tell my people to put in a 50 hour week and only pay them for 20. I understand the principle of rewarding hard work. But, hard work with no pay makes me wonder. And like you said; is it legal?

 

Many shop owners don’t agree with me but I pay a base wage with a performance bonus. The base pay is usually less than what the tech wants to make, this makes them a little hungry. In good times we all make money, in hard times we tighten our belts a little. But how can you ask a tech to take it on the chin in bad times and then ask him to go the extra mile when it’s busy. It’s the reason why I left the dealer in 1980.

 

If we are ever going to raise the level and image of the auto business we need to find ways to pay a decent wage in order to attract the right people.

 

I'm like Joe, I pay a base salary... (what I call... "just enough" to get by on $$) then the main focus is on the performance bonus or % of actual sales that they accomplish. I even have an incentive if you manage to stick it out on a slow week where there is very little in bonus/perfomance... be here a whole 40 hours, you get your base pay and a 100 to 150 bonus.. just for being here. That works on the busy weeks and the slow weeks too. It's worked well for years. However, now with the economy taking a dive, and... some of the other shops lowering their labor rates... I may need to come up with a new plan. Cause the guys are staying... and I'm a paying... and the work is off and on...

Hey, lean times, just hanging around waiting for spring... Gonzo

Posted

Tom, could you go into more detail with real numbers about that plan?

 

Joe:

 

Sorry to take so long to reply. The plans I am referring to pay the tech a basic wage for the hours they are at work, and then pay a progressive incentive based on production. The lows of flat rate are higher, and the highs of flat rate are lower. But, the system is still significantly tied to incentive enough to make good production critical to excellent pay. Similar systems can be created for advisors and parts managers.

 

Hope this helps,

  • 10 months later...
Posted

I have one tech whos flat rate and 2 that are salary. The flat rate guy averages over 40 hours in a week. He has been as low as 32 and as high as 55. Our buisness isnt slow so the work is not an issue. I dont have a "lube tech" I dont want my guys being paid on what they sell due to the possibility of it interfering with what is really needed or what they want to do. Aan air filter that is ok tell next oil change may be needed and brakes that have 5k left will be needed due to the bonus $. It creates to much possibilites for coruption in my opinion. Now in shops that dont have the work thats the owners responisbility to make it happen. The tech should be creating work. My guys are also some of the highest paid in the area and we are one of the buisiest shops.

Posted

My flat rate guys still make good money even on a slow week say they flag 30 hours. 30 Hours is still a decent salary. I could see changing my pay system if I could not keep a tech busy but at this point my newest tech(been here 13 years) is still on flat rate. His checks fluctuate a little like last week he got 52 hours and the week before 42 but either way I like it. I could switch him to salary but I feel I could possibly be screwing him on those weeks he flags 40 + hours and I wouldnt feel right in doing that.

  • 1 month later...
Posted

I agree with the flat rate module, I pay all my techs and customer service guys and all others a guaranteed base pay. I also give them an incentive, that is install an engine and get an extra $150, also we work on a percentage or commission. if the shop makes more, we all make more, if the shop is slow, I take the hit and pay everyone the base pay. As a result alll my employees are happy and hard working. I also give all of them a full Health Insurance paid by the shop. I have the best techs. in my shop and most of them came from dealerships. that I think is the fair way, (after all they also have to provide for their families). and they know what they will get what ever the economy does).

Kingsun Auto & Tires

Oklahoma City, Ok

Email me

My link

  • 1 month later...
Posted

We also pay more than most shop and dealerships. But, I also feel I have the best techs because of it.

 

I know when I worked for flat rate in the 1970's, those lean weeks were tough. I was newly married with a new born baby. I had to work another part time job.

 

I think we should pay our techs a decent wage and reward them when they produce.

 

 

this greatly depends on the volatility of the shops cash flow and the local economy. If you go out of bussiness paying salarys, your not doing your tech any favors.

Posted

Joe, I have recently joined this website, due to what this topic is all about. I am a guy living in Sarasota, Fl where the work is all based on season. from May to late September/October, work slows down alot. I've decided to go out on my own, and try and run my own place. I feel that it's very hard to make a decent living here working for someone else, due to the whole flat rate trend. I say flat rate is good, if you live somewhere, where work is there throughout the whole year, but not in places where people vacation. I've worked for shops where I'd be there for over 40 hours, yet not make that pay due to the flat rate deal. It's just frustrating to work for people who make salary because they are management, and the techs make nada. Anyways that's my rant, on a side note, I could use some help from anyone willing to give me advise on the whole starting the business aspect, haha I can tell you now, I have only a business name, and a couple locations for a shop, I need more advise on the administration aspect. any help would be greating appricated, Thanks!

Posted

We all get salary. If you are at work you get paid. If not you don't. We ALL work on shop upkeep when "slow". We can change if we have to but that has worked since 1978.

  • 2 years later...
Posted

I know this is an old topic but thought I would way in anyway. I have been a mechanic for 13-1/2 years and have been paid flatrate and hourly plus commission. One job I made $10/hr plus 10% commission on labor, another job paid $7/hr plus 15.5% of parts and labor after the first $1550, but they also figured overtime into the commission. That job payed the tire/lube techs $10/hr plus 9% of parts and labor after the first $650, not including tires. All pay scales have there pros and cons. Whatever the pay scale I think commission/bonus needs to be some aspect of it.

Posted

We also pay an hourly rate plus a percentage of labor and parts for jobs that were recommended and sold based off of a technicians recommendations. Joe, how is your performance bonus set up for your techs?

  • 1 month later...
Posted

Very interesting responses from all of you.

 

This is what we do at our shop please correct me if I am not doing it the correct way.

 

We use Real Time Labor Guide. I dont know how good of a system this is but it works for us now.

 

My husband is alone in the morning while my workers go to school. They dont get to the shop till 2:00pm.

Their rate is $16.50 an hour and we pay according to labor guide, for instance if a job takes 3 hours they will get pay for the 3 hours at their rate. If they take 4 hours they will still get pay for only 3. We always have work, so they are always busy. They clean their work area, and they also have their own tools. I would like to pay them hourly from the time they get here to the time they leave. That way I can have a little more control over them and I can set rules and regulations. Unfortunately, our shop is not there yet. I dont want to take the chance and pay them hourly when we dont make the money. By us paying them flat time, I know that we made that money for that week.

 

Is this a fair system? Am I doing something that Is not right or Ilegal?

 

I want to be fair to my employee they are good techs.

Posted

When a tech is hired we monitor and track the production hours sold against what the tech works. We do this for 4 to 6 weeks, depending on the level of the tech. We then get a base, (the average the tech produced in that time). For example; if a tech works 40 hours and is averaging 35, that becomes the base, or the min level of expectation, he needs to make before he makes a bonus. Anything after that he will get another hour of pay for each hour produced. So, if he books 40 hours in a 35 hour week, the tech will get another 5 hours pay.

 

But the goal is to get the tech to 100% - for every hour worked. We raise the bar each month until the tech reaches 100%.

 

We like this because the tech competes against himself. We don't set the min standard, the tech does.

 

The techs like it because they are motivated to earn more, but will also get paid for the hours they work. Again, if a tech works 40 hours and produces 45, the tech will get paid for 40 and a bonus of 5 more hours.

 

Hope this is clear, if not let me know.

Joe,

I am wondering how do you pay them during those 4-6 weeks of gauging their performance.

Thanks!

Posted

Very interesting responses from all of you.

 

This is what we do at our shop please correct me if I am not doing it the correct way.

 

We use Real Time Labor Guide. I dont know how good of a system this is but it works for us now.

 

My husband is alone in the morning while my workers go to school. They dont get to the shop till 2:00pm.

Their rate is $16.50 an hour and we pay according to labor guide, for instance if a job takes 3 hours they will get pay for the 3 hours at their rate. If they take 4 hours they will still get pay for only 3. We always have work, so they are always busy. They clean their work area, and they also have their own tools. I would like to pay them hourly from the time they get here to the time they leave. That way I can have a little more control over them and I can set rules and regulations. Unfortunately, our shop is not there yet. I dont want to take the chance and pay them hourly when we dont make the money. By us paying them flat time, I know that we made that money for that week.

 

Is this a fair system? Am I doing something that Is not right or Ilegal?

 

I want to be fair to my employee they are good techs.

If you go strictly by the guide then you are doing them a serious disservice. The labor guides are a starting point for a new clean rust-free vehicle and even then they can hardly ever be met.

Posted

If you go strictly by the guide then you are doing them a serious disservice. The labor guides are a starting point for a new clean rust-free vehicle and even then they can hardly ever be met.

What do you suggest Phynny? They are very hard working individuals and they also have a family I want to be able to pay them fair.

Posted

What do you suggest Phynny? They are very hard working individuals and they also have a family I want to be able to pay them fair.

Let me try and Pynny (or anyone) can correct me.

He is suggesting not to follow the labor guide strictly because then you will NOT be fair to your mechanics and/or yourself.

The point here is that you must charge the customer more money per job especially if you know that it will take longer, more involved work for your mechanic to do that job.

For example the labor guide will say 2.3 hrs to replace "whatever that is" but your mechanic and hopefully you, see that it's an old car, rusted bolts, "rusted" customer that will require a 1/2hr explanation of the job been done. You need to increase the above 2.3 hrs, to let's say 3hr or 3.2 hr, depending on above difficulty.

This way you are not shortchanging (underpaying) your mechanic because they will get paid for the amount of time it took them to perform the replacement of the part.

I am going to sound like a broken record, but what you really need right now is training for yourself as an owner/service writer/office manager - that I suspect you are serving as right now. I do not suggest the coaching at this point, but a day or two of "business jump-start" would be very beneficial. If you suspect that you are easy to sell to, don't go because most of these companies are in business of coaching rather than seminars. I saw Mspecperformance gave you a very good suggestion of taking a parts supplier training, they should have less interest in selling you anything else other than training. Maybe find a course on-line you can take, but take something. You will have a much better understanding of the process, terms and your future plans after you take the training.

hope this helps,

Posted

Exactly, I've wrenched for a long time so I have a realistic labor time in my head already. On a small 1-3 hour job I would up the time 25-30%. On a large job, IE an engine, I charge by days and a 2-day or 16 hour minimum. So if the book says 10 hours, I'm charging 16. If it says 18, I'm charging 24. His has worked very well for us and we have never had complaints.

 

We pay a small salary plus a % of labor and I do not want a job rushed. By using these times we are normally always within an hour of my estimated time. On tranny jobs I add 50% on to the time and again it works out perfect. On electrical troubleshooting I charge by the hour.

 

If the job calls for 10 and I charge 16 and do it in 8 I will charge around 12. Customers LOVE getting a lower bill than they were quoted.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.
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      Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ Join Our Virtual Toastmasters Club: https://remarkableresults.biz/toastmasters Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 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 Special episode collections: https://remarkableresults.biz/collections Buy Me a Coffee: https://www.buymeacoffee.com/carm   The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/ Remarkable Results Radio Podcast with Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion. https://remarkableresults.biz/ Diagnosing the Aftermarket A to Z with Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life. https://mattfanslow.captivate.fm/ Business by the Numbers with Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest. https://huntdemarest.captivate.fm/ The Auto Repair Marketing Podcast with Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level. https://autorepairmarketing.captivate.fm/ The Weekly Blitz with Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching. https://chriscotton.captivate.fm/ Speak Up! Effective Communication with Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size. https://craigoneill.captivate.fm                                          Click to go to the Podcast on Remarkable Results Radio
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      Thanks to our Partners, NAPA TRACS, Today's Class, KUKUI, and Pit Crew Loyalty Watch Full Video Episode Carm Capriotto talks with Matt Curry and Judy Curry of Craftsman's Auto Care about building one of the automotive industry’s most respected multi-shop operations twice.
      After growing Curry’s Auto Service to 10 locations and retiring in 2013, the Currys returned to the industry with a new vision, launching eight Craftsman’s Auto Care locations in eight years. Matt shares his role as the visionary leader driving momentum and ideas, while Judy explains how operational discipline, marketing, and customer experience keep the business grounded and scalable.
      The conversation explores their “5 Ps” philosophy: People, Policies, Processes, Procedures, and Profits, along with their commitment to employee development, strong culture, customer transparency, and community involvement. The Currys also discuss how Digital Vehicle Inspections and an intentional customer experience helped them earn nearly 10,000 five-star Google reviews.
      What You’ll Learn
      How Matt and Judy Curry scaled multiple successful shop operations Why leadership balance and “staying in your lane” matters The “5 Ps” framework for building a strong shop culture How employee investment drives long-term success Why transparency and DVIs build customer trust How culture and customer experience fuel growth and retention
      Sustainable growth in automotive repair comes from more than technical expertise. It requires intentional leadership, strong systems, a healthy culture, and a commitment to both employees and customers.
      Matt and Judy Curry, Craftsman Auto Care, 8 locations, Virginia Thanks to our Partner, NAPA TRACS 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/ Thanks to our Partner, Today's Class Optimize training with Today's Class: In just 5 minutes daily, boost knowledge retention and improve team performance. Find Today's Class on the web at https://www.todaysclass.com/ Thanks to our Partner, KUKUI Stop juggling multiple marketing tools. KUKUI’s integrated platform delivers 4x better website conversions, automated follow-up, and real-time ROI tracking. Get industry-leading customer support with KUKUI at https://www.kukui.com/ Thanks to our Partner, Pit Crew Loyalty You’re probably tired of chasing new customers who never return. We understand. Pit Crew Loyalty ends the one-and-done cycle, turning first visits into lasting, reliable revenue at https://www.pitcrewloyalty.com/ Connect with the Podcast: Visit the Website:https://remarkableresults.biz/ Subscribe on YouTube:https://www.youtube.com/carmcapriotto 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/ Join Our Virtual Toastmasters Club:https://remarkableresults.biz/toastmasters Join Our Private Facebook Community:https://www.facebook.com/groups/1734687266778976 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 Special episode collections:https://remarkableresults.biz/collections
      The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/ Remarkable Results Radio Podcastwith Carm Capriotto: Advancing the Aftermarket by Facilitating Wisdom Through Story Telling and Open Discussion.https://remarkableresults.biz/ Diagnosing the Aftermarket A to Zwith Matt Fanslow: From Diagnostics to Metallica and Mental Health, Matt Fanslow is Lifting the Hood on Life.https://mattfanslow.captivate.fm/ Business by the Numberswith Hunt Demarest: Understand the Numbers of Your Business with CPA Hunt Demarest.https://huntdemarest.captivate.fm/ The Auto Repair Marketing Podcastwith Kim and Brian Walker: Marketing Experts Brian & Kim Walker Work with Shop Owners to Take it to the Next Level.https://autorepairmarketing.captivate.fm/ The Weekly Blitzwith Chris Cotton: Weekly Inspiration with Business Coach Chris Cotton from AutoFix - Auto Shop Coaching.https://chriscotton.captivate.fm/ Speak Up! Effective Communicationwith Craig O'Neill: Develop Interpersonal and Professional Communication Skills when Speaking to Audiences of Any Size.https://craigoneill.captivate.fm
          Click to go to the Podcast on Remarkable Results Radio


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