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Story you guys might like from 2 friends!

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I have been talking about this since last night still trying to wrap my mind around it...



So I have 2 friends, 1 that owns a shop (SUPER mismanaged) and another friend that needed work done on his 1994 Toyota MR2. They both do not know each other. The MR2 was brought over to the shop 2+ years ago. My shop owner friend was hired to partially build an engine, transmission, modify the trunk to fit an intercooler and install the engine. The last piece of the puzzle was creating a wiring harness for an aftermarket engine management. Yes I know all work we cringe and turn away! Anyway, for one reason or another the car say for 2+ years waiting on parts at times or various other reasons. At no point was any price established. Recently the shop owner friend called it quits on the car said he couldn't finish the harness and he really needed the space (3 bay shop, 1 car taking a whole bay for 2 years). My MR2 friend went to pick up the car and all the while kept asking "do you have a price for me?" The response he got was, "Oh most of it is in storage fees." Keep in mind at no point was any price established. Well the car was released to the owner and towed out of the shop. After asking multiple times the bill was finally presented.... $12,500! Now I am sure the work was painstaking and took a ton of hours but how do you charge someone that kind of money without ever establishing any sort of pricing? Also you let the car go losing all your leverage! I don't know what the outcome will be but I just can't wrap my mind around how it got this far and how you can justify trying to charge $12,500 without ever establishing any pricing. Keep in mind, no paperwork was ever drawn up, nothing was ever signed, no verbal agreement was ever presented or reached.


I'd love to hear some comments, I am trying to not get involved but I can't stop thinking about what a shitshow this is.

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What a nightmare. Looks like shop owner buddy is going to be looking for work soon. You hiring? Lol.

That's a real mess. One of the key reasons we stepped out of performance and custom work, the customer has his idea of what it's worth and the shop has their idea of the worth of the job. Neither are ever close. The shop always wants more and the vehicle owner always thinks it should be a "couple hundred".


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The sad part is the guy works 10-10 Monday - Saturday all by himself 3 lifts. He works Sundays I think until 5 or 7. Been doing it for nearly 10 years or around there. Charges well below the average labor rate (last time I think it was $65) in Queens which is a borough of NYC. He also doesn't charge enough margins on parts as well as allows customers to bring their own parts. There is also a auto parts store on the corner where I've seen customers walk to the parts store and come back with a starter with my friend having no objections. Hes put 2 kids through private school by doing this but I have to imagine hes living on a shoe string.


Both are my friends so its a tough thing to give any advice out however being a shop owner (and a logical human being) I can say without a doubt my shop owner friend Effffff'd up big time by not establishing pricing and allowing the car to be released without getting payment.

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This is a classic case of someone with the right intentions, the desire and all the heart in the world, but no business sense. Many of us started this way, I was one of them. But, what happens is you get burned out. And, if you don't change, you fail.


For this case, he should have clearly outlined the charges and kept the customer in the loop. He should have documented everything he did. The fact that he gave up means he should not have taken the job in the first place.


The saddest part of this story is that it's not that uncommon, not the part with the MR2, but with the fact that too many shops don't spend enough time learning about business. This is sad because if you know anything about the typical shop owner, he or she, is a hard working person, goes the extra mile each day for the customer, sacrifices a lot, works long hours, takes little time off and does not make the money they deserve.

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Hit the nail on the head Joe.


You have to recognize when you need help and also where to seek it. I have offered to pay for a 1 day class just to open his eyes on the possibility. He and his wife are wrapped up that they don't even feel like they can give up a day to go to the class!


Its a sad story.

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      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.  
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