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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 Hands On
Tekmetric re-designed the appearance and I can not stand it. I refuse to pay $399 a month for software that gives me a headache to look at. Anyone have a good alternative to tekmetric with all the same functionality that either has a tiered pricing schedule that makes sense for smaller shops, or is less then $399 a month, or looks like tekmetric used to and costs about the same?
The only integrations I use from tekmetric are parts ordering and the built in labor catalog, I do not use any of the marketing features so those are not important to me.
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What does the future look like for the automotive industry? Listen to the perspectives of Jennifer Maher, Executive Director of the TechForce Foundation, Derek Kaufman, Managing Partner at Schwartz Advisors, Matt Fanslow, Lead Diagnostician and Shop Manager at Riverside Automotive, and Dustin Brown, Shop Owner of Brown Auto Experts with 3 locations. We have an open discussion about future trends, aftermarket challenges, and electric vehicles.
Jennifer Maher, Executive Director, TechForce Foundation, Jennifer's previous episodes HERE Derek Kaufman, Managing Partner, Schwartz Advisors, President of C3 Network. Listen to Derek’s previous episodes HERE. Matt Fanslow, lead diagnostician and shop manager, Riverside Automotive, Red Wing, MN. Matt’s previous episodes HERE Dustin Brown, Brown Auto Experts, 3 Locations in New Mexico, Albuquerque, Village of Los Ranchos and Rio Rancho. Listen to Dustin’s other episodes HERE
Today's BEV headlines may be "over the top" in terms of the pace of BEV adoption, but the VIO will definitively change over time – we are forecasting the VIO at 7.3% BEV in 2030, 26.5% in 2040 and 51.2% in 2050 We know that people are talking about 60 and even 70% reductions in BEV maintenance versus ICE cars, and that may be true – but the true lifetime service of BEVs has more to do with major part failures than it does maintenance. Motors, power modules and other BEV components will fail and the aftermarket will be ready to service them. BEVs will generate new under-car and cooling system service opportunities – they are heavier and have higher torque, so suspensions, half shafts, and steering gear will see more wear than ICE cars. Cooling systems will be much more sophisticated with multi-directional and intelligent valves, PTC and Heat Pump heaters, multiple radiators, and many more fluid connectors. Multi Shop Owner- consistency of service Technology not only makes things more complex, in many cases, but that complexity is usually in the background. Technology also makes things easier. Not just vehicle technology itself, but tools and equipment technology. The technology is here for a 100% automated tire changing system, but it is cost prohibitive for many/most. It won't remain so, and if it isn't 100% automated, you'll just need someone to take the wheel off and roll it to the machine, the machine will replace the tire, maybe test the TPMS sensor, and then mount the new tire and balance it. The human will be little more than an assistant. Technology may make vehicles, as it has already done, even more reliable, but also change how we service them. The following are already expected by most but will soon be expected by all due to the cost of repairs. Top Notch Facilities, clean and professional appearance inside and out. Top customer service experience. Professionalism from all areas of the business. Tools, equipment, digital inspections, customer education materials Diversity in the workforce- including more women and the younger generation, puzzle solving Variety of vehicles in the next 30 years New jobs- power stations, power grids, safety on repairs Investors- real estate game (pit stop), autonomous trucks in ‘service center.’ Be malleable and willing to adapt
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Check out today's partners:
Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com
Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com
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Hear from 3 shop owners that provide financial education for their employees. Setting our employees up for success in life goes beyond signing paychecks. Watch the Episode on YouTube John Gustafson, Gustafson Brothers, Huntington Beach, CA. John’s previous episodes HERE Russell Crosby, Russ’s Wrench Auto Repair, Clinton, NJ. Russ’s previous episodes HERE Shawn Gilfillan, Automotive Magic, Kenvil and Lake Hopatcong, NJ. Listen to Shawn’s previous episodes HERE Key Talking Points
Orientation at John's shop- offer to sponsor each team member’s membership in the Dave Ramsey personal financial series if they choose to participate. John also offers whiteboard sessions to team members or groups of team members on Business Math and another session on Personal Math. The personal math includes the team member on the whiteboard listing their assets, liabilities, after-tax spendable income, expenses, cash flow either pos or neg, 6-month reserve, and investment savings buckets. Mentor/mentee thought process- the owner is the mentor Lunch and learn with financial advisors, mortgage broker etc $100 a month invested at 25 years old, by the time you retire it will be about 1,000,000 Getting the partner/spouse involved is key Transparency with business financial numbers Employees sharing with others how the Dave Ramsey Progam has helped The stress that is lifted when you can create your budget to be workable Social media impact- keeping up with the jones’ Getting ahead of debt with the debt snowball- paying off debt in order of smallest to largest. When the small debt is paid in full, you roll the minimum payment you were making on that debt into the next smallest debt payment Educating the younger generation- setting their future in a positive direction
Connect with the Podcast Aftermarket Radio Network Subscribe on YouTube Visit us on the Web Follow on Facebook Become an Insider Buy me a coffee Important Books Check out today's partners: Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. DelphiAftermarket.com
Click to go to the Podcast on Remarkable Results Radio
Did you know that 70% of change initiatives with new programs/systems will fail due to a lack of leadership commitment? I want to focus on mentor/mentee and apprenticeship programs, which are most critical to our industry’s survival. You can lose your way without processes, procedures, and accountability to mold your apprentice into your shop. Too much talk and not enough action is the breakdown. Luckily for you, my guest, Marc Brune, has a program focused on helping businesses develop entry-level technician mentoring programs with the tech shortage in mind. Marc Brune, Business Development Manager, mentormentee.com Key Talking Points
3 key people- manager, mentor, mentee People are looking for a plan and someone to help along the path Preparing for business before entry-level candidate comes on board- do you have the right culture for a positive mentor-mentee atmosphere? Who will be the best person to step in (manager) and mentor (can multitask) Mentor- teaches not only automotive but also speaks the culture of the shop Mentoring vs. teaching- teaching is 1-way street, and mentoring is a 2-way street Assessment- 15 different categories, ranked in order of importance Educate- set expectations for each role Execution- have mentee and plan Plan- having a repeatable plan Online course specific for each role- 3 hours each Facilitating growth- offers ASE task lists used in ASE accredited program Soft skills- customers are a part of your business Setting goals- mentor and mentee can set specific goals with dates and be able to adjust Recruit- “the important things are never urgent, and the urgent things are never important.” Have the recruiting mindset. Execute- daily on the job training plan for mentees and track progress Analyze and reward- get the data flowing on how the mentor/mentee progressing. Build incentives for growth with both mentor/mentee. Don’t let your mentors go red in their pay. mentormentee.com
Connect with the Podcast: Aftermarket Radio Network Subscribe on YouTube Visit us on the Web Follow on Facebook Become an Insider Buy me a coffee Important Books Check out today's partners: Set your sights on Las Vegas in 2022. Mark your calendar now … November 1-3, 2022, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM/WEBINAR. Shop-Ware: More Time. More Profit. Shop-Ware Shop Management getshopware.com
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