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Joe Welcomes New members


Joe Marconi

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Welcome to AutoShopOwner. As one of the administrators I want to personally welcome everyone to our exciting new site. We welcome your opinions and comments. As a shop owner for more than 27 years and a veteran in the auto business for more than 30, I fully understand the needs of the modern shop owner.

 

Together we will share knowledge and learn. The opportunities are endless. And you have my promise; AutoShopOwner will be a valuable business tool and resource.

 

Thank you and looking forward to networking with everyone,

 

Joe Marconi

Osceola Garage

New York

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  • 3 months later...

I strongly believe in incentive programs. People who work hard and produce should be rewarded. We set productivity goals for out techs, sales goals for our service advisors and team bonuses to create an atmosphere of teamwork and for morale. Every company needs to have goals in order to grow. A company that does not have goals does not grow and falls behind.

 

Do you have any ideas you want to bounce around?

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I have programs in place that are working good. I was looking to see the details of other programs out there. I have 3 tire and automotive stores with 45 employess and am always looking for betters ways to motivate.

 

That is very impressive. Are you part of any tire/automotive banner programs? Goodyear, Firestone, ACCC, etc..

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We are similar in our approach. The plan is a bit involved but I will summarize:

 

- “A” rated techs must book 1 hour of labor for every 1 hour they work (100% productive). They get a set hourly wage and a bonus for booking over 100%

- “B: rated techs, same as above, except they must reach 90% productivity

- Service advisors and managers are paid salary. They must reach sales goals based on break-even and last year sales. They get a percentage of the increase over that goal.

- We also team sales goals where all employees get a bonus if sales reach a second, higher sales goal.

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  • 4 weeks later...
We are similar in our approach. The plan is a bit involved but I will summarize:

 

- “A” rated techs must book 1 hour of labor for every 1 hour they work (100% productive). They get a set hourly wage and a bonus for booking over 100%

- “B: rated techs, same as above, except they must reach 90% productivity

- Service advisors and managers are paid salary. They must reach sales goals based on break-even and last year sales. They get a percentage of the increase over that goal.

- We also team sales goals where all employees get a bonus if sales reach a second, higher sales goal.

 

When you folks have instituted changes in pay plans, how have you gone about the process?

 

Presumably you start by developing a formula based on stimulating yet proven ideas from some outside source

 

Then you " run the numbers" based on how this new pay plan will affect the people who work for you and your business.

 

Do you run the old plan and new plan simultaneously for a month let's say so that those stepping up to the plate with increased performance are rewarded and those not stepping up have the safety net of the old plan but are made aware of what the new one will be to their paycheck

 

Finally dump to old plan and let the chips fall where they may (i.e. risk the loss of 1 or more staff)

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My plan involves rewarding those who deserve to be rewarded. It also involves training and one-on-one employee meetings. A process that demands its employees to follow a system, will not work. Your employees must see the importance of the plan and how it will benefit them, the company and the customers.

 

Our bonus plan was more of evolutionary process. We tweaked the plan for a period of years and still make changes. When your people see the benefits, they will buy into it.

 

The most important thing I have found is that the employee needs to know what his/her minimum level of expected performance is. Also, every employee goes home with a guaranteed pay amount. It’s the opportunity to earn more income that makes the difference. Tracking productivity and rewarding people for great work will help to insure the success of your company.

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.

.Techs are paid on % of labor

Sales people are pd hrly + % of sale

Mgrs are pd hrly, % store sales + bonus for sales increase over previous yrs sales for the month

 

 

Can you disclose publicly or privately those %s? ([email protected])

 

Is your benefits package generous?

 

One seminar I attended by ATI recently (Jan 08) contended that loaded techs' GP should be 60% (Labor Income generated by the tech - [tech's wages + vacation pay + other pay + 11.5% of the tech's total wages for payroll taxes + company paid portion of Health Insurance premiums + Workers Comp premiums for that tech {which is based on the tech's wages}] = Gross Profit for this tech/ Labor Income generated by this tech = % Labor GP (Loaded)

 

After doing this calculation I realized how short we are on the "loaded" Labor GP even though our "unloaded" Labor GP% was above the industry target

 

I feel I am in a real pickle and definitely looking for some insight and solutions.

 

 

To raise our Labor Rate without raising techs' wages would help for sure. We are already at the high end in our area so we stand the risk of losing new clients who balk at the high prices. I know that we retain a lot of clients with superior quality and service but we also lose a lot because our prices are too high - they come once and never return.

 

To cut benefits can play out as losing or at least disturbing an excellent team and is in reality a pay cut

 

A more bold move is to cut techs' wages - a great way to success...

 

I certainly need more car count with an average RO of $ 395 but not sure about the most effective method to attain that, or cut one of my techs loose - problem is that summer will soon be here with tourists and money flowing more freely and more vehicles in the area

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I have attended the same class and countless seminars like those. First, let me tell…it’s not that cut and dry as when it’s explained in those seminars. And I don’t care who is giving them.

 

The problem is that EVERY shop is different in the way they pay their techs, expenses, overhead, etc. For example if you just purchased a new alignment machine and built a new building, your expenses are going to be dramatically differently from a shop that has no mortgage and no outstanding loans. To generalize numbers can be misleading. Plus, you don't pay your bills with %, you pay them with profit dollars!

 

You sound like you have a good handle on your business. Your ARO is great. I would not consider cutting staff or cutting benefits. That’s a sign of retreating and that can be bad for morale.

 

You are probably going through the same thing that many shops are going through right now, my shop included. Our fixed expenses are increasing a bit faster than our sales income. Find what is most profitable and do more of those things. Increase car counts to increase your opportunity to sell more profitable service work. Make sure you get compensated for diagnostic work and look for ways to become more efficient and productive.

 

I would do these things before I consider raising prices.

 

Hang in there. You also sound like a leader. Trust in yourslelf and find ways to improve!

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