Shop Owner Glossary of Terms
-
Have you checked out Joe's Latest Blog?
-
.thumb.jpg.2b345efc275b9df0af2bbb306a10a78a.jpg)
By Joe Marconi in Joe's Blog0 commentsAuto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
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.
-
-
Similar Topics
-
By carmcapriotto
How can different personality types impact leadership and success in business? Murray Voth discusses the importance of understanding personality types in business. He introduces a new acronym, CASE, which stands for Controller, Analyzer, Socializer, and Entrepreneur. The conversation also covers the role of human motivation, clear expectations and accountability in managing employees, and the importance of giving space to your partner in a marriage and how it applies to business relationships. Find out how you can create a harmonious and productive team dynamic, where individuals can play to their strengths and contribute effectively to the business. Murray Voth, RPM Training. Listen to Murray’s previous episodes HERE Show Notes
CASE: Controller, Analyzer, Socializer, Entrepreneur Defaulting to Personality Types Under Stress (00:08:42) Discussion on how individuals default to certain personality types under moments of stress, fear, and overwhelm. Understanding and Utilizing Different Personality Types in Leadership (00:09:45) Exploring how different personality types, such as controllers, analyzers, socializers, and entrepreneurs, can contribute to effective leadership and business success. Using the SOAR Acronym for Problem-Solving (00:16:19) Introduction of the SOAR acronym (Situation, Outcome, Action, Results) as a tool for problem-solving and decision-making in coaching and personal development. The Outcome and Visualization (00:17:08) Discussing the importance of imagining the desired outcome and visualizing the qualities and skills of a potential service advisor. Taking Actions (00:17:57) Exploring the necessary actions to achieve the desired outcome, such as creating an advertisement, conducting interviews, and ultimately hiring a service advisor. Dopamine and Accountability (00:18:51) Highlighting the role of dopamine in motivating and rewarding oneself throughout the process, as well as redefining accountability as providing clear expectations and tools for employees. The technician who is a serial or the visionary (00:25:22) Discusses the different types of technicians and how to effectively utilize their skills and strengths in a shop environment. The analyzer technician who spends excessive time diagnosing (00:26:17) Explores the reasons behind why some technicians feel the need to overanalyze and prove themselves, and shares a personal story about an apprentice. The importance of decision making and understanding personal strengths (00:30:46) Highlights the impact of decision making on business and personal life, and emphasizes the importance of making decisions based on strengths rather than getting stuck in analysis paralysis. The Growth Mindset vs Fixed Mindset (00:35:20) The concept of growth mindset vs fixed mindset and how it affects learning and personal development. Fear of Regret (00:37:43) The fear of regret and how it holds people back from making decisions and taking risks. The Check Engine Lights of Your Business (00:41:46) Teaching business owners to diagnose their business using KPI technology and scanning tools. Learning How to Learn (00:42:31) Beta testing the idea of using personality assessments to understand team dynamics and improve business performance. Playing to Strengths in the Shop (00:43:36) Positioning team members based on their strengths, such as having analyzers in the background and socializers at the front counter. Thanks to our Partners, AAPEX and NAPA TRACS Set your sights on Las Vegas in 2024. Mark your calendar now … November 5th-7th, 2024. AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at http://AAPEXSHOW.COM/WEBINAR NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/ Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
Click to go to the Podcast on Remarkable Results Radio
-
By Transmission Repair
Premium Member Content
This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.
-
By carmcapriotto
Join Matt Fanslow as he answers some questions from his listeners in his 'mailbag.' Matt discusses the hiring bonus dilemma, compensation and profit sharing, the power of training, the flat rate pay system, book recommendations and how to create a network of industry peers.
Have a question for Matt to answer? Email him at: [email protected]
Show Notes
Hiring Bonuses for New Techs (00:02:27) Discussion on the fairness and impact of hiring bonuses for new technicians and how it affects existing employees. Broken System of Compensation (00:04:58) Exploration of the different ways technicians are compensated and how it can lead to resentment and difficulties in hiring new technicians. Ethical Profit and Long-Term Benefits (00:07:31) Explanation of how Matt's shop rewards employees based on ethical profit and how hiring bonuses can benefit both the shop and existing employees in the long term. The Mismanagement of Compensation (00:09:59) Discussion about the mismanagement of compensation in the aftermarket automotive industry and the potential impact on employees. Concerns about Flat Rate Pay (00:13:33) Addressing concerns about transitioning to a flat rate pay system and the potential negative impact on technicians' income and job satisfaction. Recommended Books for Auto Repair (00:19:49) Discussion on the importance of reading books on auto repair Building a Network in the Automotive Industry (00:26:06) Advice on how to build a network of connections in the automotive industry, including attending trade shows and utilizing social media. The importance of networking (00:29:42) The value of building relationships and networking in the automotive industry.
Thanks to our Partner, NAPA Autotech napaautotech.com
Email Matt: [email protected]
Diagnosing the Aftermarket A - Z YouTube Channel HERE
Aftermarket Radio Network: https://aftermarketradionetwork.com/
Click to go to the Podcast on Remarkable Results Radio
-
By Joe Marconi
Premium Member Content
This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.
-
By carmcapriotto
The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. If you want to take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.
Click here to learn more about Top Tier Marketing by Shop Marketing Pros and schedule a demo:https://shopmarketingpros.com/chris/
Check out their podcast here: https://autorepairmarketing.captivate.fm/
If you would like to join their private facebook group go here: https://www.facebook.com/groups/autorepairmarketingmastermind
In this podcast episode, Coach Chris Cotton provides advice to a San Diego auto repair shop owner looking to grow their business. The shop owner currently makes around $200,000 a year, mostly from custom jobs, and wants to increase profitability without working seven days a week. Coach Cotton suggests using a cloud-based SMS system for tracking numbers, advertising as a larger shop to attract more customers, and following California's hourly pay laws. He also advises focusing on oil services, brake, steering, and suspension work for consistent revenue, and charging separately for parts and labor. The shop owner admits to lacking proper income statements and running their business in an unstructured manner.
The shop owner's challenges (00:02:17) The shop owner discusses their challenges in scaling their business, working long hours, and the need for more employees.
The issue with custom work (00:05:15) Coach Chris explains the common misconception of making money from custom work and advises focusing on regular retail customers.
Assessing the shop's financials (00:07:28) Coach Chris questions the shop owner's income statement, advertising budget, and advises tracking numbers and moving to a cloud-based SMS system.
The shop owner's financial situation (00:09:23) Discussion on expenses, rent, employee pay, and the potential legal consequences of not following labor laws.
The importance of proper advertising and marketing (00:12:15) Emphasis on the value of effective advertising and the difference between low-cost and high-quality marketing strategies.
Challenges with pricing, warranty, and business operations (00:15:13) Exploration of pricing strategies, the need for clear warranties, and the shop owner's lack of financial and operational management.
Oil services and alignment machines (00:17:55) Discussion about the importance of oil services and the misconception of alignment machines bringing in a lot of business.
Charging for parts and labor (00:20:42) Conversation about the necessity of marking up parts and the importance of charging for both parts and labor to run a profitable auto repair business.
Coaching package and growth potential (00:22:42) Discussion about the coaching package and the potential for the shop to double its revenue next year through improved processes, procedures, and technician work.
Shop owner wants to scale their auto repair business and improve profitability
Current revenue and net income of the shop owner
Coach Chris advises against custom jobs and suggests focusing on regular retail work
Importance of tracking profits regularly and using a cloud-based SMS system
Advertising strategies on Facebook, Instagram, and Google
Concerns about employee payment and legal issues in California
Suggestions for raising labor rates and providing clear warranties
Lack of proper income statements and structured business practices
Disappointment with the performance of the alignment machine
Focus on oil services, brake, steering, and suspension work for consistent revenue
Coach Chris Cotton, 00:12:15, "If we don't have a legitimate business, we don't have anything at all."
Connect with Chris:
[email protected]
Phone: 940.400.1008
www.autoshopcoaching.com
Facebook: https://www.facebook.com/
AutoFixAutoShopCoachingYoutube: https://bit.ly/3ClX0ae
#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #serviceadvisor #serviceadvisorefficiency #autorepairshopmarketing #theweeklyblitz #autofix
Click to go to the Podcast on Remarkable Results Radio
-
-
-
Our Sponsors
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now