I currently employ a mechanic and friend who has been with me for about 20 years. He was formerly a transmission rebuilder, but we have switched to mostly reman units and have no need for a rebuilder. His pay has remained the same despite his value declining. I am currently paying him roughly $100,000 a year. The problem i'm having is that his skill set is not near that pay level anymore. He does light diagnostic and basic managerial work, but I am not confident enough for him to run the shop for more than an hour. With the current state of the industry our numbers have gone down a bit over the last two years. While still being profitable, I can't help but think about the extra income that would be available by terminating this employee, I just dont know how to do it. Any advice on how to do this? I like him as a person and have known him a very long time, but I feel his is paid about twice as much as he is worth. Any help wouldbe greatly appreciated.
By Joe Marconi
With Mother Google literally tied to our hands, through our cell phones; are part margins becoming more difficult to achieve? Traditionally, shops use a 50% part margin, which they deserve. But, we live in a world today where part prices are so transparent that maybe we need to rethink this.
Consider this: What if we concede on prices? Hold to a suggested list…BUT…raise our labor rate to offset the loss in overall profit. In other words, keep your parts prices at a margin the consumer will not question, but raise your labor to make up the part profit?
This is being discussed around the country and there are shops that have implemented this strategy. We can’t give up our overall gross profit, so is this a viable option?
By Brent J
Hi everyone, I’ve been a shop owner for 20 years, I have a small 3 bay shop in a small town of about 3,000 people. My question is how do I deal with being so busy all the time, I’ve been trying to find another experienced tech for about a year now. I’m so swamped all the time I can’t keep up, I’m 54 years old and just about ready to get out of the business because I can’t take it anymore. I’ve run ads online, in newspapers, on Facebook. No response ! I have 2 other techs. We’re so busy every day I’ve gotten to the point of leaving the phone off the hook for half a day. I used to work a lot of hours when I was younger and just refuse to do it anymore. Pretty much worked my life away. We’re scheduling 2 weeks out. I’ve even gone as far as telling people I’m not accepting any new clients. We do good work and have a good reputation, but sometimes I feel like I’m letting my good customers down cuz I don’t have time to get their car in the next day when they have a problem. I put an add online through a newspaper and it went to 20 different sites and papers for a month straight and got 2 applications out of it, neither one for the experience I’m looking for. I offer a great salary, I supply all the tools, contribute to retirement plans, paid holidays, don’t work weekends and contribute to health insurance plans. Still can’t find anyone. Anyone have any ideas?
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By Joe Marconi
I can't tell you how frustrating it is to give a price on a radiator to a customer at the service counter, while he's on his phone searching for the part!
Here's what I do when I get a customer that tell me he can get the part cheaper....I agree with him!
I let him know that he can get the part cheaper, just like he can buy a steak and potatoes cheaper at the super market too. But he'll pay more for the steak and potatoes at a restaurant.
And then in a calm manner, I review all the benefits of me suppling the part, the warranty and the fact that if the part is wrong or defective or fails in the future, he will have no recourse and will have to pay to have done all again.
For most, it works. For many it's all about price.
Now Most IMPORTANT IS THIS: The reason why you don't mind spending more for a steak at a restaurant is because of the experience. So, make sure the customer experience clearly demonstrates the value of why people need to do business with you. When Value goes up, price becomes less of an issue.
Hope this helps. Let's hear from you on this frustrating topic!
What do you think - is something like this helpful in a shop? Basically an app where a mechanic can practice changing the brakes or something again and again on a tablet until he gets all the steps down, without wasting materials on training?