Quick Lube Owners
Have you checked out Joe's Latest Blog?
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
Many auto repair shops are still busy, and many are booked out from a few days to weeks. After the initial shock of Covid, the recovery for our independent auto repair industry has been quite good, with many positive indicators for the future.
However, how many of the auto repair shops that did suffer a great loss in business during the lockdown phase of Covid would have survived if not for the SBA loans, the Pay Protection Program and the Employee Retention Credit?
Building a cash reserve is crucial to prepare yourself for the next economic downturn. How much should you set aside? That depends on your business model, how much debt you have and other financial conditions. Speak to your accountant, financial advisor and business coach, if you have one.
Rule of thumb, you should have at least three months of operating expenses set aside in a dedicated bank account. Some accountants and financial advisors may suggest up to six months.
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 ASOG Podcast
The Biggest Mistake New Shops Make
During Today's episode #105 Brent and I Talk About:
Brent’s Favorite Super Hero Brent’s Shop Brent’s Coaching Style Brent’s Ideal Client
This episode is sponsored by AutoLeap. AutoLeap is a cloud-based all-in-one automotive invoice software that helps you supercharge your mechanic shop. Their customers have experienced:
30% increase in revenue by improving transparency and trust 50% reduction in time spent researching and ordering parts 10% increase in profit margins through robust reporting
Click here to learn more about AutoLeap and schedule a demo: http://bit.ly/3GRgO88
Don't forget to rate and review us!
Connect with Chris:
Click to go to the Podcast on Remarkable Results Radio
By ASOG Podcast
Free Diagnostic Time: Is It Worth It for Auto Repair Shops?
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 account
Already have an account? Sign in here.Sign In Now