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How to Run a Successful Auto Repair Business

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autoguy Rising Star

autoguy

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I read this article online and decided to repost it to the community.....

 

How to Run a Successful Auto Repair Business

 

By Barb Nefer

 

As long as people rely on cars as their main form of transportation, there will be opportunities for success in the auto repair business. By following some important steps, you can run a successful auto repair business that provides a steady income

 

STEP 1: Decide whether you will open your own auto repair business or whether you will purchase an established business. By purchasing an existing auto repair shop, you will immediately have an appropriate location and equipment, and the experienced employees may choose to stay. If you start from scratch, you will need to find a high-traffic location, purchase or lease the necessary equipment, and hire a new staff of mechanics and other employees.

 

Step 2: State your ethical standards up front. Many customers are leery of auto repair businesses because they have a reputation of making people pay for unnecessary repairs or charging for work that is never performed. Have a statement of ethics printed, and hang it in a prominent place in the customer reception area. The ethics should be centered around being honest with customers, pledging never to overcharge them, and striving for their full satisfaction.

 

Step 3: Offer a guarantee. When a customer is paying for an expensive car repair, she wants some assurance that the vehicle will work properly or that you will take care of the issue if it does not. Offering a guarantee based on a certain period of time or mileage will show that you stand behind all work performed at your auto repair business.

 

Step 4: Treat employees well to eliminate high turnover. An auto repair business that has a constant turnover of mechanics will have difficulty maintaining its quality. This can give it a bad reputation and keep it from being successful. When you find good, reliable mechanics, pay them fairly and give competitive benefits to keep them from moving on to another job. Customers who build up trust with a particular mechanic will be glad to see him there the next time their car needs repairs.

 

Step 5: Resolve customer complaints promptly. Although there will always be some unreasonable customers, most will be willing to come to a compromise if you are willing to work with them. Discuss the problem without judging them or making them defensive, and ask them what they feel an equitable solution would be. If you agree that it's fair, you've got a resolution. If not, be prepared to give an alternative solution.

 

Step 6: Reward regular customers. Repeat customers are key to running a successful auto repair business. Not only do they provide income themselves, they also are likely to refer others to your business. Send out periodic offers for a free or discounted oil change, a discount on their next repair or some other goodwill gesture. While it may cost you in the short term, it will pay off in the long term by reinforcing customer loyalty.

 

 

Tips & Warnings

 

Joining a professional organization like the Automotive Service Association (ASA) demonstrates your commitment to quality and excellence.There will always be some customers who cannot be pleased. If a customer has an unreasonable complaint and insists on a totally unrealistic solution, you will have to refuse. Even though they may spread bad word of mouth about your business, it shouldn't hurt your success if the majority of your customers are satisfied and you have a good reputation.

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autoguy Rising Star

autoguy

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The artilce is ok, not too specific, too generic. I think most of the conversations found in AutoShopOwner have more relevance to every day business.

 

Ofcourse they do, but I think these are a good start for anyone who is not at the level.....let's say...you, or another sucessful shop is at.....and looking for some quick tips and things to be doing to get started.

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      Technician Production is More Complicated than You Think
      By Joe Marconi in Joe's Blog
         0 comments
      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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