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Good day to you all!

 

I have been trying to do research in how to financially manage our small business, and came across this site. Been looking around it and reading some real good articles.

 

My husband and I have started our own mechanic shop in Houston Tx. This is our 2nd time giving it a try. Last time we got into it without knowing anything at all about how to run a business. We mutually decided to closed it down and wait till the time was right for us to try again. We both got a job at a repair shop. My husband was working as a mechanic in the shop and I was helping inside the office. We got some experience while working there but not enough.

 

3 years later and here we are again. This time we seen there was an opportunity and we just could not let it go by.

 

On November 22, we will be making one year since we open our small Auto Repair Shop. We are so grateful with all the support that we have been receiving from our community. We have lots of work, and is all by referrals. The only marketing i have done is through Facebook, most of our customers are walk-ins or friends, or family members from people we have done work to their vehicles. We are very happy with the outcome. Our local dealer is even sending us cars for us to work on them and right now their jobs is what is keeping us afloat.

 

Our shop name is Exclusive Auto Care, we have 2 mechanics that work with my husband. Very good guys by the way. I work in the office. I deal with the customers. I get the jobs in, and my husband gets them out. I order parts, deal with estimates and invoices, all that good stuff. I enjoyed what I do and why I do it.

 

Im not so sure that we are doing everything the right way or how we suppose to. Our rate is $80.00/hour. We are the cheapest ones in our area. The rest auto shops charge $90-$100/hour. There is 4 mechanic shops in our same street, regardless of that I dont see them as competitors. We all trying to make a living here, and their reputation is not all that good. We are just happy with any work that we get. We order parts from O'reillys Auto Parts. We get a discount and raise the parts to 0.8% (im not too sure about this percentage) How much do you guys mark up parts? Some times I dont think we make any money on parts. At times the customer rather get their own parts and we are ok with that too. If customer bring parts do you guys offer warranty? How long? We were giving 3 months (90 days) but due to us loosing money we had to make it 30 days only. I am thinking about not offering a warranty for parts that are supply by the customer. Could this be a good decision? Why or why not? I am in desperate need of advice I dont want to see our business fall apart.

 

Thank you so much for taking your time to read my post.

 

Have a good day!

Zulma

 

 

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If I could give you any advice it would to be a to take a service advisor training course.

 

I started off my shop 7 years ago and I would say the first 3-4 years were a disaster. I was more concerned with what I thought my customers wanted more so than making sure the business and the owners (ME!) needed out of it. After taking a service advisor training course I understood the business from a business perspective. Proper parts pricing (using a parts matrix or making sure you get a certain amount of gross profit) was something I never realized. Also selling the job and the value of your service opposed to labor hours was pretty crucial. If you are trying to sell your customers "labor hours" they can easily go and price shop anywhere. Sell them on the unique value of doing business at your shop opposed to price and labor hours.

 

Also never EVERRRR offer warranty on parts brought in by a customer! I have recently instituted a hard policy on no outside parts. I used to have a soft policy however bad experiences have led me to really crack down hard on this problem. Most people who bring their own parts are not worth being your customers. You don't bring your own ingredients to a restaurant why should our business be the same. Also you are using parts you stand by so you should be offering a confidence based warranty. If you are charging an appropriate mark up on parts and you know the parts are quality and the job is quality then there should be no reason why you wouldn't offer at least a 24k miles 24 month warranty. This builds confidence with your customers as well as gives you a basis to sell only your parts due to warranty issues.

 

The service advisor course I took was put on by WorldPac but I am sure there are other trade organizations that have classes. Don't get caught up in expensive programs that costs thousands of dollars. They may help I can't cross them out completely however the course I took was a 3 day course that cost me somewhere around $800 if I remember correctly. I have just recently blew the dust off my material I got from the course and am reviewing it again in order to write my operations and employee handbook and i have to say, the BEST money i have ever spent.

 

 

Sorry if my rambling is a little incoherent, I am typing as I am thinking LOL best of luck to you!

 

 

P.S. I was just thinking, your shop is named Exclusive Auto Repair... it is not so exclusive if you allow customers to bring their own parts! I would seriously consider nixing that ASAP!

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First of all, the best of luck to you.

 

You post addresses a lot of issues, maybe too much to answer within the forums. But, let me try to offer my help. I have been in business for 33 years. One of things that I have learned is that we sometimes focus too much on the price and what everyone else is doing. You need to charge what you are worth, and make a profit. You need to understand the balance between being profitable and competitive. But with that said, if you market your company with a focus on price, that is all the customer sees. For example; People go to Wall Mart for the everyday low prices. That's because Wall Mart markets themselves that way.

 

You don't have to be the cheapest and don't promote price. Find what makes you different and unique and promote that.

 

Part mark up is another issue. We target min of 50% overall, even with dealers parts when we can. But we work on a matrix, getting more for lower cost items and less for higher cost items.

 

We do not give a warranty if the customer brings their own parts. But, this is rare for us, we discourage anyone from bringing their own parts. That is not my customer.

 

I never worry about labor rates, I am usually the highest in my area. But again, I don't promote price, I promote value service, long warranties, money savings maintenance packages, convenience, shuttle rides home, lifetime protection on major components and many other feature benefits. The more perceived value, the less price becomes an issue. Think of McDonalds....now think of a fancy Steak House......two totally different perceptions, right?

 

One last bit of advice. I also learned that being everything to everyone is a sure way to fail. I have found that the narrow the market I target, the more profitable it is. Understand you key profile customer and take care of these. They will bring you the greatest amount of return and send more people like them.

 

Again, best of luck!

Thank you so much for all the advice. It was easy to understand with the examples that you have provided.

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If I could give you any advice it would to be a to take a service advisor training course.

 

I started off my shop 7 years ago and I would say the first 3-4 years were a disaster. I was more concerned with what I thought my customers wanted more so than making sure the business and the owners (ME!) needed out of it. After taking a service advisor training course I understood the business from a business perspective. Proper parts pricing (using a parts matrix or making sure you get a certain amount of gross profit) was something I never realized. Also selling the job and the value of your service opposed to labor hours was pretty crucial. If you are trying to sell your customers "labor hours" they can easily go and price shop anywhere. Sell them on the unique value of doing business at your shop opposed to price and labor hours.

 

Also never EVERRRR offer warranty on parts brought in by a customer! I have recently instituted a hard policy on no outside parts. I used to have a soft policy however bad experiences have led me to really crack down hard on this problem. Most people who bring their own parts are not worth being your customers. You don't bring your own ingredients to a restaurant why should our business be the same. Also you are using parts you stand by so you should be offering a confidence based warranty. If you are charging an appropriate mark up on parts and you know the parts are quality and the job is quality then there should be no reason why you wouldn't offer at least a 24k miles 24 month warranty. This builds confidence with your customers as well as gives you a basis to sell only your parts due to warranty issues.

 

The service advisor course I took was put on by WorldPac but I am sure there are other trade organizations that have classes. Don't get caught up in expensive programs that costs thousands of dollars. They may help I can't cross them out completely however the course I took was a 3 day course that cost me somewhere around $800 if I remember correctly. I have just recently blew the dust off my material I got from the course and am reviewing it again in order to write my operations and employee handbook and i have to say, the BEST money i have ever spent.

 

 

Sorry if my rambling is a little incoherent, I am typing as I am thinking LOL best of luck to you!

 

 

P.S. I was just thinking, your shop is named Exclusive Auto Repair... it is not so exclusive if you allow customers to bring their own parts! I would seriously consider nixing that ASAP!

Thank you so much for all the advice. I will take it all in. I will also make sure I make some changes.

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Thank you all for the good advice and feed back in return.

 

I will definitely make sure that I do my research and take some type of seminar or class to be more educated about the business. I will also be making changes to our policy dealing with parts and warranties.

 

You all have a wonderful day.

 

Zulma

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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