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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.
Obamacare program costs $50,000 in taxpayer money for every American who gets health insurance, says bombshell budget reportBy xrac
The American Dream
Like most young lads, I grew up with a lot of the same dreams and aspirations as we all did. Things like owning your own home, a nice car, maybe a few “boy” toys, and … most of all, the ultimate American dream… owning your own business.
Looking back on things now, I guess my interest in owning my own business probably started with my paper route. My family lived out in a rural part of the country, just outside a small college town, and delivering the paper took a bit more than a stroll down a sidewalk. This was farm country, and houses were sometimes miles apart. Luckily, my dad let me ride my mini-bike to make my rounds, and since it was so rural even the county cop looked the other way. Besides, I had his paper in that sack as well… if he wanted his paper he’d have to ignore the half-pint kid on the little Briggs and Stratton powered motor-scooter. At least as long as I had that huge sack over my shoulder and I was delivering the paper, he didn’t seem to mind. But, I’m sure any other time he’d have a few words. (I don’t think you could get away with that today.)
I saved my money, counted it often, and thought it was pretty cool that somebody would pay me money to do something that I was having fun doing in the first place. Yep, I thought this sole proprietorship thing was pretty awesome. Then as we all must do, we grow a bit older and find out rather quickly that a few dollars from a paper route doesn’t add up to a tank of gas in that hotrod you’re now driving to high school.... ya need a better paying job. So the self-employed thing gets put on hold.
For some, the idea of being self-employed goes no farther than the newspaper route or the lemonade stand. It becomes a part of your past, but for others, including me, owning your own business draws you back in.
It could be because of the smiles and wonderful comments I would get as I pulled up on that little mini-bike when I was delivering the paper. Maybe that was part of the motivation to go into private business as an adult. I still remember how some of my older customers I delivered to would be at their mailbox when they heard that scooter coming up the road. They’d smile and hand me my change, then wave goodbye as I took off for my next stop. It was a Norman Rockwell moment to say the least.
Ok, time to snap out of that nostalgic dream land and back to reality. Is owning your own business for everyone? No, it’s not… it’s a tough road of ups and downs, argumentative people, bad choices, poor investments, lack of working capital, and long hours. At that’s on a good day. Not every day is that way; some days remind me of my paper route customers greeting me at the mailbox. But, owning your own business can be a rough, tangled road that takes years to figure out how to make it all work, and even tougher to figure out how to keep it going for another day.
Being self-employed “sounds” great until you realize the hours you put towards your success is based on the hours you put into it. Which generally means, 12 – 16 hour days, no vacations, no paid holidays, no paid health insurance, and no time off just ‘cause it’s your birthday. You have to be totally self-motivated and willing to do whatever it takes to get the job done. As well as keeping up with the advanced education needed to stay current with your chosen field. It’s not a dream anymore… it’s certainly not a nightmare (unless you let it be.) It’s just not as easy as it was when all you had to do was ride that scooter up and down those country roads with a sack full of papers.
Is it any easier after you put a few years under your belt? Well, that depends on the effort you put into it in the beginning. I’ve been at this independent repair shop thing for three decades now, and I don’t think it’s any easier than it was thirty years ago. Mind you, with the skills, the patrons, and the reputation you gain over the years (decades) things do get a bit better. But, you still have to show up every work day ready to take on the next challenge.
When I first opened my shop there was an elderly man in the rented space next to mine, and he would come over to check on me from time to time. He had been in private business his entire adult life, and would tell me stories of how he made money and lost money. With his various ups and downs his stories reflected upon my concerns about starting up my own business. I’ll never forget what he told me about being in private business.
He said, “Don’t let the banks own ya, and don’t let the business own ya. You run the business; don’t let the business run you.”
I take that to heart every day. What I got out of it was that you have to make sure you remember what you were trying to accomplish in the first place. That is, to create an opportunity for yourself and others while doing something you liked to do. But, don’t forget to take time off, get away from it when you can, and reminding yourself that running your own business isn’t just for you… it’s for your family too. They’re the real winners in your choice to follow the American dream.
Blink, and those days on that little scooter are just a memory, another blink and you’re looking at retirement square in the face. Make the best of your time, and don’t forget your family along the way. Private business ain’t bad. It’s not for everyone, but I do think it’s something everyone should experience. And if you do decide to follow the American dream, just remember that kid on that noisy little mini-bike heading down that country road on his way to the next house. All he was looking for is another smile and a bit of change.
Hopefully, we can all run our business like that, with a smile and make a bit of change, while taking our own personal ride on the American dream.
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Bob was well into his late 80's when I met him. He's quite the talker, and he'll never run out of things to tell you. I like old Bob. We have a few things in common, not much because of the years between us, but just enough that we can relate on quite a few subjects. We both served in the USMC. Of course, the years we served were decades apart, but even with the differences in time served, we still could "talk-the-talk" like two old veterans who just got their discharge papers.
Bob had a problem with the horn buttons on his '92 Buick. It was the kind of horn that has its buttons and the air bag all built as one piece. He didn't have the money to replace the entire airbag, but he did want to get that horn working somehow. I thought I could get it to work even if I had to "rig" something up, but that was OK with him.
With his advancing years catching up with him, his hands weren't the best. Most of his strength had faded with time, and so did the ability to straighten his fingers all the way out. I had to come up with a way that he could hit the horn button with the palm of his hand, rather than with a finger tip or thumb. Not a big deal, actually if he didn't mind the look of an old style horn button attached to the edge of the air bag (so it didn't interfere with the air bag operation) it could work just fine.
Now Bob, being Bob, talking was his gift, and finding somebody with a little military background, and stuck in the driver's seat of his car was all he needed to tell one of his stories. Bob hopped in the back seat and leaned over to watch what I was doing. As I worked on his new horn button, he told me all about his time in the Marine Corps. Fascinating story; I could have listened for hours. In fact, I made sure I took long enough for him to tell his story in full and without any interruptions.
He told me about his time in Korea, in Inchon actually. It was a cold winter when he was there. A bitter cold wind and heavy snow was only part of the horrific condition he had to deal with. He went on in great detail how he was just a young kid who didn't know a thing, and how you would be talking to someone one minute and the next minute the fellow Marine sitting right next to him froze to death. When he told me that part of his story I had to stop and turn to him to ask, "That really happened, just like that, Bob?"
With a stone cold look on his face he said, "As sure as I'm sitting here talking to you, my friend."
I don't think he was kidding. He was dead serious, but it was as if he was telling me a story from a distance, but at the same time, a story where he was actually there in the mountains of Inchon still fighting the bitter cold. I think it's a way for time and age to allow a person like Bob to separate themselves from what was probably a terrible event in their life. I certainly have never experienced some of the things he was telling me about, like the chow, the hours of watching for the enemy, or how his boots didn't have much in the way of insulation, so you put on as many socks as you could along with any straw or grass you could find. Bob made a point to tell me that if you needed to run to the "head" (bathroom for all you none GI type) … well, you tried to wait as long as you could, because exposing yourself in that kind of cold could be the end of you… and I don't mean just "your" end that's exposed.
I finished up my little project and gave it a try. It worked just fine.
"Hop up here Bob, and see if you can make it work like this," I told him.
Bob made his way into the driver's seat and gave his new horn button a try. A gleam came over his face, beaming from ear to ear. He had to try it a few more times, and each time the smile kept getting bigger and bigger. "Don't you know I needed that horn! Mercy, there's some little kids in my neighborhood who get out in the street to play, and I just want to toot my horn to let them know I'm coming. Thanks partner, ya done me right."
The old Marine got out of his car and opened his wallet, "How much do I owe ya?"
"Bob, it was an honor to do this job for you. I can't take a thing."
"You most certainly are, Marine!" he said to me as he palms a twenty in my hand.
"Thanks Bob, I appreciate that, but I really appreciate the stories. You know I write a column for a magazine, and I think I'd like to tell your story if that's OK."
"Sure, not a problem. Go right ahead. I think I'd like that."
You don't shake hands with Bob, because of his crippled hands; his way of shaking hands is to "bump" knuckles. Good enough for me. It's the thought that counts. Then Bob turns to the car sitting in the bay just in front of his car. With whatever strength he had, he did his best to straighten one finger and point at the car in front.
"I'll never get over seeing this," he said.
It was a Kia Sportage in for a no start condition. I made the assumption it was because it's a Korean car, and I thought it must be bringing back some of those painful memories he had as a young man.
"I understand where you're coming from Bob, it's a Korean car. I understand completely; it's something your generation had to deal with on the battlefield where your friends had died. I'm sorry it brings up some bad memories for you."
"That ain't it," he said as he walked closer to the car, and pointed directly at the name branded on the back door, "Killed – In – Action."
I think my knees buckled a bit when he said that. I didn't know what to say next. Bob waved good-bye, and pulled his car out of the shop, and tooted his horn as he made his way down the street.
I see old Bob once in awhile, still driving the same car, still tootin' his horn. I don't think I'll ever forget his story of how he served our country. He's one of the last of that generation, a much simpler time, before computers, before cell phones, and when KIA stood for only one thing.
I'm proud to have served my country, I'm even more proud to have met a great man like Bob. We should all be as lucky, and we should all remember what his generation and many others have done to keep this country free. So the next time you see a Kia, think of it as something other than a car, think about my friend Bob. Then, say this to yourself:
Semper Fi, Bob, Semper Fi
A salute to all who has served our great nation. This country wouldn't be the country we are today if it wasn't for all the service men and women who have put their lives on the line for those back home.
I'm honored to be a part of that same group. Gonzo USMC
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