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Posted (edited)

So I've been running my shop for a little over a year now, taking in whoever I could at whatever rate I could, regardless of profit margins. Recently I've started becoming more selective and strict on my markups and margins, and lo and behold I think I get more business now than I did catering strictly to the customer's wallet.

 

So now that I'm more set on my prices and have a matrix setup for parts markup, I figured I set up some generic specials on oil changes and things of that nature. I read someone's idea on here about advertising factory scheduled maintenance instead of just oil changes, and I thought that was a really good idea, so if it's okay with Junior I'd like to run with that idea in my shop. :)

 

Now on to the problem. I think I'm taking these flat cost services too far. I have one set up for standard service/oil change (4qt/5qt, conventional/high mileage/synthetic) and I have a flat cost for EGR delete kits on a couple of the newer diesels. But wait, I can set up one for CV Axles too! And everyone has a brake special! Maybe a set price for timing belts on most 4-cylinders! Oh wait, transmission services too! See where I'm heading with this? At what point do you differentiate between a flat cost service and quoting on a vehicle-by-vehicle basis?

Edited by MattW
Posted

I would only flat cost a few things like oil changes and a basic disk brake jobs. I would be careful on doing more than that because you can cost yourself too much money. It seems like today that every vehicle is different and it is harder to flat charge things.

Posted

Flat pricing or what I call, menu pricing, works for a lot of services: Wheel align, tire rotation, wheel balance, fluid services, LOF, etc. While just about any service or repair can be menu priced, trying to bridge that concept to many repair jobs can have a negative impact on your bottom line. A lot of repair work is vehicle specific. The job of assigning menus can be a daunting task, but not impossible.

 

Be competitive on the services that consumers regularly compare to with other shops, but you need to be very profitable on repair work. If not, you will not make it.

 

We often base of price structure on what the "other guys" are doing. We compare ourselves to the average shop. Remember, build an outstanding business and you can charge accordingly, but be careful, if your shop is not perceived as top notch, you will never be able to charge what you are worth.

 

Personally, I don't want to be the average shop, anyone can be average. I strive to be the best and hire the best. It's like a ball team. Does a ball team work to be average and hire average ball players? No, they work to be the best and know that they can be the best with the right players, training and equipment. We are the same.

 

Look at your margins, understand the numbers of your business and your breakeven. And never, never, never, base your bottom line or sales goals on breakeven. Just paying the bills is not the reason you went into business. Making a profit is.

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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