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By Joe Marconi in Joe's BlogMost shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.
Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
By Joe Marconi
by Joe Marconi: Quiet Quitting: New Phrase, Old Problem - Featured in Ratchet and Wrench Magazine
Some people go to work each day with great enthusiasm and believe they can change the world. But then, others anticipate each workday with feelings of despair. These employees do the bare minimum; just enough to keep their jobs and go unnoticed. They are called quiet quitters.
While quiet quitting may be the latest catchphrase, it's not a new workplace disorder. We've called them disgruntled, disengaged and even toxic in the past. But who's responsible for this behavior? Is it the employee? Or is there a deeper problem brewing in the workplace?
Work has Evolved
As a young technician in the mid-1970s, the shop owner was typically at the top of the pinnacle. It was common back then for a boss to run his company with the mindset, "my way or the highway." Was it wrong? Perhaps. Thinking back, I don't think we clearly understood or appreciated the role we played in the workplace or how we fit into the company's structure. We accepted things the way they were, unlike employees today. I also believe we felt we couldn't change how things were.
Today, it's a lot different. There has been a shift in the workplace. Societal changes, the internet and social media have changed our exposure and heightened our awareness of the world and the issues that confront us daily. Today, employees of every generation believe they should have a voice in the company's decisions and direction. It's important that their opinions count and that their job role has a purpose. Of course, earning a decent living is top of mind, but as always, not the prime motivator. At the top of what's most important is the workplace environment and the employee experience. When employees lack the experience they crave, they become disengaged, leading to what we call quiet quitting. Employees Want Accountable Leaders
Lack of trust in leadership is another factor in quiet quitting. Shop owners and managers must communicate what their employees can expect from management and not only what management expects from them. Consistency in the message and following through on promises contribute to workplace morale. After all, if you can't trust the message, you will not trust the messenger.
Some people will excel in any work environment. However, they are the exception, not the rule. If you want a team of employees where everyone is pulling in the right direction, you should consider the needs and opinions of your employees.
If you are concerned that understanding your employee's point of view and acting on it is giving up control of your company, don't be. Earlier, I referred to shop owners from years back. Most of them had a good business but not a great business. The reason was that they were the business. Growth was difficult because it was dependent mainly on their abilities and talents. This one fact alone causes a business to plateau. However, when a business combines different points of view and strategies from the team, greater growth is possible.
Lastly, there will always be employees who won't be happy no matter what you do. If you are confident that you have done all you can to help a quiet quitter, the only hope at that point is for the employee to look within themselves, which may be difficult for most people. Instead, focus more on what you can do. Look within yourself to ensure you are doing everything possible to create an amazing employee experience. Your goal must be to create happy employees. We've all heard the expression, "happy employees create happy customers." Well, they create happy employers, too.
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By ASOG Podcast
The Biggest Mistake New Shops Make
By ASOG Podcast
Free Diagnostic Time: Is It Worth It for Auto Repair Shops?
By Joe Marconi
Check Out Our NEW Series on YouTube, and See WHY You Should Team Up With The Top Shops In America!
In The Vault with Darrin Barney - A New Series!
We're so excited to release the first interview clip from our new YouTube series, "In The Vault with Darrin Barney" !
This series follows Elite President and Shop Owner Darrin Barney interviewing fellow shop owners, managers, and service advisors at our AMI-Accredited Fly With The Eagles 3-day Shop Management course.
In this interview, Scott Schmid of Archer's Auto Repair in Idaho talks about the career changes that led to his beginnings with Elite, the immediate results he saw, and the business values that he holds dear.
Watch now, and subscribe to our channel so you never miss an upload of shop tips, webinars, interviews, vault clips, and more!
Watch Now! Are you looking for a more successful shop and a healthier work/life balance?
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Did you know that after spending only 90 days in Top Shop 360, our clients AVERAGE more than a 4 to 1 return on investment? And, we're one of the only companies that requires NO CONTRACTS with our coaching?
There's a reason Elite's Top Shop 360 is number one. All our coaches are working to give back, and elevate the industry that we love.
We know every shop is different, which is why our Business Development Master Plan outlines YOUR goals and every step to reach them, and coaching is tailored to exactly what you want to accomplish.
Learn more about how our shop-specific approach can help you uplevel your business TODAY!
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On Record with Tom Ham from the Automotive Management Network. Tom discusses a recent survey from his website about the stress level at work, reasons why someone would reject a technician application, health insurance and more! These results may surprise you!
Tom Ham, Automotive Management Network. Tom’s previous episodes HERE. Show Notes:
AMNSHOP.com laborratetracker.com - lowest labor rate so far is $50 and highest is $297 Management Help Polls: 130 types Why techs avoid working at some shops- low pay, dark/lack of lighting, dirty, disorganized Job applicants for possible reasons they might be rejected: 70% driver license issues, 68% frequent job changes, 66% negative comments about past employers, 64% know it all, 60% questionable attitude, 60% excessive demands. 59% inconsistent information, 58% late for interview, 55% listens poorly, 53% sloppy appearance, 53$ incomplete application, 51% lack of manners Pay portion of health insurance- 35% pay nothing, 19% pay full health insurance. Stress level at your shop ranked 1 to 10, 10 is maximum stress level- 40% rank their stress level at 8+, 81% say their stress level is average or above average, only 19% say their stress level is ranked 4 or less. “What do we do here that is not as clear as it could be, a bit confusing?” Service advisor responsibilities (are these regular tasks of your service advisor)- estimating, collect vehicle information, parts ordering and returns, labor claims, operation/management, quality control, assist technicians, pickup/deliver customer or parts (porter). None of these should be the service advisor responsibilities! Consider hiring an estimator/parts person Service Advisor Overload [THA 305] Service Advisor Overload: Part 2 [THA 312]
Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
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