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For all you startup shop owners out there...


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I could talk for a long time on this. However, in summary, we looked at two key criteria for choosing our location:

- Daily traffic count

- Area demographics

 

You can get the daily traffic count online through the DOT websites. Or your real estate agent can get it for you. In a city, you want at least 30k cars going by your shop daily.

 

You can get demographics through a number of paid sources or from your real estate agent (ask for a Costar report). You are looking for high median household incomes. Opening your shop in a good neighborhood will eliminate a LOT of the problems that guys in this forum are complaining about.

 

Let me know if you want to get into specifics.

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What brought you guys to exactly 30k or greater in traffic counts. The only problem I see with that is we are not the only ones that realize traffic count is important. Since others realize that obviously real estate costs are going to be much higher.

 

What I'm wondering is does the increase in real estate costs overcome the increase in sales due to traffic count or is 30k that sweet spot?

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To get customers in your front door as a startup, there are 3 methods that come to mind:

- Get a great location with a lot of visibility

- Market like crazy

- Wait for word of mouth to do it for you

 

Waiting for word of mouth to work takes a looooong time. Additionally, I would argue that in the city, word of mouth is less valued than in a small town.

 

So, you are left with the first two methods. Both cost money. A great location is expensive. Marketing is expensive. Both work. If you don't have a great location, expect to spend a lot on marketing to make up for it.

 

Is 30k the magic number? No. It is the minimum number. I looked at minimum traffic across various industries to get this number. Go to the IHOP or Meineke webpages and look under "start a franchise." It will show you minimum stats for choosing a location. Or just buy into a franchise, and they'll do all that hard work for you.

 

http://www.ihop.com/about-ihop/franchise-opportunities/usa#05

http://www.meineke.com/about/

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I like your creativity in finding a base traffic count that was a good call.

 

Also I just wanted to add that these real estate websites like trulia especially or realitor.com or zillow.com offer lots of free demographic info for areas of town.

 

Also I think there are a l of cheap marketing avenues out there that I think are a lot of time discounted such as social media, face to face meetings with fleets or car lots etc.

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Something to remember about how many cars drive by, how fast they are going. 30k going by at 75 mph isn't gonna do you much. 20k cars going by when your location is at an intersection and the speed limit is 30 mph or 40 mph is way better. Just FYI

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What other factors did you guys find to be most important through your market research, we got location and customer base/median income of those customers. What about some of the cold hard facts like how much I can expect my customer to spend in a year with us? Or how many customers should I even expect to come through my door? I'm interested in the answers to these questions as well as how you found them as I'm sure they are slightly different here.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
      As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
      But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
      Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
      Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
      Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
      The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
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