Help me with my gameplan here

[Southeast Tire Co.]

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??

[xrac]

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[Joe Marconi]

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.

[Southeast Tire Co.]

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?

[Joe Marconi]

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.

[twest6792]

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.

[xrac]

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[Joe Marconi]

Twest6792, welcome to the forum. Yes, Joe, we would all be more interested in how you track or manage productivity.

 

It’s a bit involved but I will do my best to explain.

 

First, all newly hired techs are told that we track productivity and for the first month or so we keep carefully track of their productivity and efficiency. This is done to find what they are capable of doing. In other words if a tech works a 40 hour week and is producing an average of 35 hours per week, we make that number his minimum level of expectation. The goal is to get this tech producing 40plus hours in a 40 hour work week.

 

This strategy works because it gets the tech to compete against himself, rather than worrying about what other techs are doing.

 

After about 4 to 6 weeks we put the tech on commissions based bonus. The tech will receive a bonus when the tech books any over his minimum level. So, if a tech is rated at 35 hours and he books 40, he will get a 5 hour bonus (based on his hourly rate) for that week.

Every month the tech will be bumped up 5 percentage points. After that A techs must achieve 110% efficiency and B techs must achieve 100%. To be eligible for bonus the tech must work a minimum of 40 hours.

 

All comebacks that are clearly the techs fault will come off their bonus.

 

If a tech cannot achieve these levels, the tech needs to find another job.

 

Please note; if the shop has little work due to a snow storm or other reason, we do not count those hours.

I hope this explains my system. I tried to trim it down to make it easy to understand.

 

Please let me know if you need anything clarified.

[RickM]

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.

[Joe Marconi]

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.

 

There’s nothing wrong with helping out in the shop from time to time, but it must not become a crutch for the survival of your company.

 

Each new tech will have his hours tracked and an average hour potential will be established. That becomes their base. So, if a tech averages 35 hours of labor per week, he must beat that before he gets a bonus. For every hour he books above his base, he will get paid an additional hour pay. In other words, if a tech has a base of 35 and books 45 hours of labor, he will get paid an additional 10 hours of pay at his hourly rate.

 

Now, the key is to raise the bar every month or so until the tech is at 100% base. So, if a tech works 40 hours, you expect 40 hours of labor booked before he reaches bonus.

 

I hope this helps, let me know.