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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
For all the veteran shop owners who have been around the block a few times, and have experienced the roller-coasted rides of being an auto repair shop owner, what advice could you give those shop owners just starting out or planning to go into their own business?
We are back at Tom Sciortino's Total Automotive for a special Field Trip! Tracy learns how to change the oil on her car for the first time, from the guidance of automotive intern, Jay Mack. Join Tracy Capriotto as she accelerates her learning curve within the automotive industry.
Tom Sciortino, Total Automotive, Buffalo, NY. Tom’s previous episodes HERE
Key Talking Points
Maintenance service vs oil change Why oil changes are important How to change the oil Checking tires
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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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By ASOG Podcast
Did I Pay Too Much To Fix My Car?
By Eric Roberts
Hi guys just a short one this! As garage owners present or past how do or did you cope with the "can you just" brigade. This is the customer male or female (or otherwise) who just asks if "you could pop a light bulb in for me please". I no it could be a slow day, then this would not be problem, but does it annoy you. We had one in the other Saturday. A guy pulled in and wanted us to check knocking on the rear end. The car was road tested and on the ramp for two hours on a busy Saturday morning.
Eventually we found a broken coil spring on the front of the car! I am sure there are much worse stories than this but it really gets me mad sometimes?
While at the Ratchet and Wrench Management Conference, I was able to review most of the management software packages available. I have a few observations to share that might be helpful. Each software package has its own pluses and minuses, but, I see some high-level commonalities amongst them.
At a high level, you can separate software packages into two groups based on age. The longer a software package has been available, the more likely that many of its features are highly refined and give you the most controls. The disadvantage of an older software package is that they are too busy keeping their customer base happy with fixes and minor features that they don't have time to take the leap of innovation (e.g. DVI). If the platform is really old and/or they are not charging enough money monthly to have the revenue to hire a good team, they may not be able to completely rewrite their software to utilize newer technology features. For these software packages, you are forced to change vendors to adopt new the new features. On the other hand, if the software package is new, they go straight for the snazzy features and also, try to fix the perceived problems of the legacy software packages. They excel in the basics, but lack the depth of feature functionality that only time brings. Mind you, both types of companies are trying to reach feature parity. New companies need to flush out features, adding complexity and older companies are working to build the snazzy features. Both of these take time.
For the record, I'm using Protractor. I can tell you all of the good and bad of this package. I used my in-depth knowledge of this program to compare it to the newer packages. In other forums, the two main contenders for new appear to be:
TekMetric ShopWare Other New: Shop Monkey AutoLeap Older More Mature Systems: Protractor Mitchell (I didn't look at this one) NapaTracs (I didn't look at this one) Many others not at this show I liked the snazzy new features that I saw in each new package, but quickly recognized that in my daily use, I'm using certain mature features that are not present in the new packages.
Another observation is that each software package somewhat enforces a workflow methodology. You can choose to fight their internal structures (and lose), or go with their model. I noticed a few idiosyncrasies, but, they are all trending towards a seemingly similar workflow. This requires scrutiny when selecting a software package. The new guys are often pushing their "better way" as a solution to the problems of old. For instance, ShopWare had a unique approach to canned jobs that deserves investigation that I didn't notice in other packages.
So, when shopping, make note of the real features that you must have. Don't be fooled by the shiny new outer skin. Balance it with your real needs.
I do see that some of these new contenders are investing much money into development of new features, so over time, they will likely build the feature that you need today. As well, some mature packages are investing in the future.
I will say this loudly. Your software vendor must be charging you healthy monthly fees to have the money necessary to continue to innovate. If you gravitate to the lowest price, features could take longer or never come. Just like us, we must first survive before we can do good work and be able to pay the bills.
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