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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?
How do you stop having a job and start having a business? It all begins with the foundation of core values. Don't 'thesaurus' your way to writing them down once on a piece of paper. Your core values are the essence of who you are and what you stand for. And guess what? Your company's core values involve your entire team too.
Watch Episode HERE
Aaron Woods, X-tra Mile Auto Care, Stillwater, OK. Listen to Aaron’s previous episodes HERE Judy Zimmerman Walter, Zimmerman’s Automotive, Mechanicsburg, PA. Listen to Judy’s other episodes HERE.
It is not what we do, it's who we are at our very inner core. A core value provides that concrete foundation for us to be able to build people and build companies. You do things better when you know where you start, stand, and where you're starting from. Core values give that navigational beacon for everybody to be rowing in the same direction at the same speed. How do we know how to measure accountability without knowing what to measure it against? And what better thing to measure accountability against than the very core principles by which your company is founded How are you implementing core values? Quarterly conversations with each of your staff members- grade each other on the core value alignment. Meetings away from the business- getting away from the workplace, being away from the day-to-day activities and the distractions. Post your core values everywhere- forward facing. Empower your team.
Thanks to our Partners Shop-Ware and Delphi Technologies 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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By ASOG Podcast
Auto Repair Shops Should All Be Doing This
By Joe Marconi
As we close out 2022, it's time to reflect on the past year. Review your accomplishments, the state of your business, your personal life, and things that could have gone better. The key thing to remember is that it's better to have a plan and goals instead of trying to fly blind.
Establish your goals for 2023 and beyond. Include family time too, and time for yourself. It's not all about business. Having the right balance will actually make your business more successful.
Speak with your employees too. Find out from them what went wrong, what went right, and what they would like to see in the coming year. While you can't always act on what your employees want, getting their perspective will not only help you create the plan moving forward, it will help to build morale, a win/win for all.
By Joe Marconi
We often speak of the "Customer Experience," which is crucial to the success of your auto repair shop. But equally important is the "Employee Experience."
I don't have to remind anyone that happy employees make happy customers, but this concept goes even further. If you want to attract superstar candidates and hold on to the superstars you employ right now, you must do all you can to ensure that your employees have a healthy workplace where they are appreciated and can grow and enrich their careers.
I know we have a lot of great shop owners on this forum. What do you do to create a great workplace environment that both attracts and retains top talent?
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