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Help me with my gameplan here


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My shop currently has one full-time tech and one manager/alignment tech. This is a business I recently acquired and am still dialing in my rates and pricing matrix. Both of my employees are on salary now. We are working a 40 hour week and I am currently billing out around 30-35 hours per week. The low productivity is due mostly to the previous owner only working part-time and not really pushing to grow the business. He was near retirement and content. Based upon this setup, what are my most important metrics to monitor and when do I make the leap to add a second tech?

 

As is, I am losing a few jobs every week due to the fact that I really only have one tech that can do anything beyond basic alignments and brakes. So I miss jobs that customers want done that day or others that my top tech doesn't have time to diagnose during the day because of other jobs. I feel that I do not have enough business yet to keep two techs working steady but I have too much traffic for one. How should I attack this? My manager currently fills in on the simpler jobs and alignments but he is really a "front of the house" guy and an excellent salesman and I want to get him fully into that role as soon as possible. Advice??

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You need to get your billable hours up and they only way to do that is to have more manpower. You cannot afford to turn away work. People are too busy these days and if you are not accommodating they won't come back.

 

Part time techs are an option. When I was expanding I hired “B” rated techs part time with the opportunity for full time as the business grew. I also paid them a wage that was lower than they would expect, but paid them commission based on productivity. I found that techs like this. In a busy week they can make money.

 

As our client base grew, I put them on full time.

 

In my opinion, the most important thing you need to do now is concentrate on getting your car counts up. And this requires not turning away work.

 

Another thing, your manager needs to manage. That's the way you make money. Keep him out of the bays.

 

I struggled with the same thing. Trust me, do this first.

 

 

This is pretty much along the lines of what I was considering. I like the idea of a lower paid, lower skilled tech that is paid on commission. I may explore that after the new year.

 

What do you guys consider a good productivity rate? Are your mechanics paid on a flag rate? If so, what is the split?

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  • 2 months later...

My shop goal for productivity is to be above 100%. That's for my techs. Lube/tire techs are different. If a tech cannot give you a least 100%, then something is wrong. It could be the tech, it could be you are not estimating a job correctly or the shop environment has too many obstacles that prohibit the tech from achieving his productivity. It could also be the time that’s wasted when the tech is waiting for approval on a job.

 

To achieve high technician productivity requires following systems and constant tracking to find out the weak areas.

 

My techs are paid by the hour, but get a bonus when the reach certain productivity goals.

 

I would like to get a little more information on your goals and how you are tracking the technicians productivity. I have the same system in mind.

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  • 4 months later...

You need to get your billable hours up and they only way to do that is to have more manpower. You cannot afford to turn away work. People are too busy these days and if you are not accommodating they won't come back.

 

Part time techs are an option. When I was expanding I hired “B” rated techs part time with the opportunity for full time as the business grew. I also paid them a wage that was lower than they would expect, but paid them commission based on productivity. I found that techs like this. In a busy week they can make money.

 

As our client base grew, I put them on full time.

 

In my opinion, the most important thing you need to do now is concentrate on getting your car counts up. And this requires not turning away work.

 

Another thing, your manager needs to manage. That's the way you make money. Keep him out of the bays.

 

I struggled with the same thing. Trust me, do this first.

 

 

Joe, how did you set up the commission based on productivity? I have been considering this option to put on another tech.

Also, maybe it will help keep me out of the bays. one of my big down falls I'm afraid. but when we get behind I head for the shop to turn out work.

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  • Have you checked out Joe's Latest Blog?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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