By Joe Marconi
From as far back as I can remember, labor has always been an issue. As and industry, we have struggled to get paid properly for the work we do. And those shops that understand how critical labor is, are the shops that have done quite well.
In today's auto repair shop world; Getting the right labor dollars is no longer a buzz topic or debate- Labor dollars will be the salvation of your business. Labor translates into profit, and will also allow you to build for the future and to attract the quality people we need in our industry.
If you don't know what your labor should be, you need to find out. Don't call ABC Auto, down the street to ask him. The odds are he did not do the math. Plus his expenses are not the same as yours.
Depending on what you pay your techs, your overhead, and knowing your numbers will determine your labor rate. I can tell you that there are shops that are paying techs a very good wage and those shops are getting $135 to $150 per hour, and more. That is not a typo. And there are shops that have multi-tier rates. So, for Diag and labor jobs that have no parts associated with the repair, their labor is much higher than their standard labor. It's fair, it's honest and it's time we all raise the bar.
Please, do the math, get help and make sure your labor is right for your shop.
By Joe Marconi
We, automotive shop owners of America, must take the opportunity of a lifetime and turn it into a bunch of success stories. What opportunity? Look around you. The world is in turmoil. COVID-19, social unrest, uncertainty about the presidential election, the economy, how are we going to get out kids back to school, on and on and on.
While the world is spiraling out of control, we have the power to make big changes to our auto repair shops. And it can all be positive!
First, the average age of a car in the U.S. is about 12 years old, attaining well over 200k on the clock.
Second, Uber, taxis and limo companies are suffering. Guess why?
Third, the motoring public in the foreseeable future will be traveling by car, taking road trips like they have never did before.
Fourth, the roads are packed with motor vehicles, as more and more people prefer their own car as their primary means of transportation.
Fifth, as the cars get older and older, more of them will be out of factory warranty.
Sixth, independent auto repair shops have a vast amount of training, resources and replacement parts.
Seventh, the overwhelming majority of cars being build and sold today are still internal combustion engine powered cars. If you factor in the expected average age of car these days, we can safely bet that those gas engine cars being sold today will still be on the road in 2033 and beyond!
Eight, You need more? That's not enough!
Get your plan in place. Get your prices in line with making a profit. Don't give anything away anymore (I am mostly referring to checking, testing, diags of any sort!) Offer world class customer service. Be a leader of your employees. Show the world what you are made of!
By Joe Marconi
For many of us, it's been a wild ride the past few months. We had to take care of everything, making tough decisions, dealing with banks and the SBA and running the shop from the trenches. But, with things looking better each day, it’s time that we get back into the role of building and operating the company.
For many, the COVID-19 crisis is far from over. However, the sooner we begin to adjust and build for the future, the better off we will be.
Shop Owners are among the hardest working people on the planet. We find ways to get through the most difficult situations. I have no doubt that the lesson’s learned from this crisis will make us stronger and more successful.
By Joe Marconi
Sometimes I feel like I’m alone on a deserted island. I charge for diagnostic analysis. Why? Because I know what cost is to buy the tools, equipment, information systems, training and pay a technician to professionally and accurately diagnosis a check engine light, air bag, ABS or any other complicated problem. But, I feel a lot of shops are willing to give this up in hopes to get the work. In my opinion all they are doing is digging themselves in a hole.
And, I have heard all the reasons:
“If the customer gives me the job, I waive the analysis”.
“I package the analysis into the repair, so the customer does not see the diag charges”
“I will lose customers if I charge analysis”
And the best yet: “It only took me 10 minutes to diag the O2 sensor, so I can’t charge diag labor”.
Waiving the analysis is the same as a doctor waiving the x-rays and blood tests. They don’t do it, we should not either. I will also challenge those who “package” the analysis into the repair. You mean to tell me that after taking 1 hour to find a faulty mass air sensor, you will add the 1 hour to the 5 minutes it takes to install a new mass air? Come on, we all know the truth.
And let’s address the 10 minutes it took to find the failed O2 sensor. Did it really take 10 minutes? NO, it took years of training, years of experience, the investment in the right equipment and the investment in the right information systems. Why we sometimes diminish what we are truly worth is amazing. No other profession does that.
Sorry for being so tough on this topic, but business is hard enough these days and people question everything. If shops don’t realize what they are giving up, it makes it bad for all of us.
Please tell me what you think. Agree? Disagree? Or any other thoughts....