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Help! New to shop management


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Hello guys,

 

First I want to say thanks to all that post such great thoughts and ideas! I just recently(within the last few months) took over my dads shop. He started a dealership about ten years ago and started the shop mainly to service his vehicles. We have had several people run the shop with absolutely no success. I am very new to the shop business. I currently farm with my brother and also buy cars for the dealership so I can't put all my time into the shop. I just have a few questions and would appreciate any and all advice!

 

First off, what is decent pay for a tech? I have two flag hour techs that I think I pay very well. One gets 22.50 and the other gets

$25 per hour, plus they get a 15% raise if they flag so many hours. What do you think? I also have an hourly guy (who is the best bang for the buck!) and a service writer/ shop manager who takes care of the daily shop business.

 

Secondly, I've been reading about policies and procedures, which this shop has never had, and I was wondering where would be a good place to start.

 

I guess I'll leave it at that for now. Thanks

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Sounds like you are well grounded in the business. We went the other way and started a shop them added the car lot. I would strongly advise getting some business coaching. You can learn the fine points the hard way or have a coach tell you what is working well for other shops. Attending training with other shop owners is a real eye-opener.

 

For technicians' pay, you need a system that lets you retain your labor margin if they go into overtime. This has been by far the most complex issue we have faced in our ongoing education.

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I appreciate the response. Does anyone have any recommendations on some good shop training? I've also been thinking about some training for my service advisor/ manager. Any recommendations on a program that would work well for both of us? Thanks for any and all input!

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AVI out of Ft Meyers Florida has a number of DVD and/or on-line training courses for both techs and service advisers. Check with the local parts suppliers for training they might have available locally. NAPA provides a very comprehensive on line library for their Auto Care Centers.

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  • Have you checked out Joe's Latest Blog?

         13 comments
      Most 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.
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