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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.
Retention Marketing And Strategies For Bringing Back Clients More Often with Caroline Legrand [E076] - The Auto Repair Marketing PodcastBy carmcapriotto
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Now, I know what you're thinking, "Culture again?" But trust me, this episode takes a deep dive into how culture can truly make or break a business. Every business has a culture, whether it's intentional or not, and it's crucial to evaluate if it's the right one for retaining employees and attracting customers. Imagine an auto repair shop that truly understands the frustrations of car owners and aims to provide honest, knowledgeable, and reliable service to give them peace of mind. That's the kind of culture that draws customers in and keeps them coming back. Chris Lawson suggests checking out an article in the show notes that discusses the impact of culture on over 40 business metrics. Studies have shown that employees are more motivated and efficient in a happy work environment. So, investing in your company culture can actually boost your bottom line. If you're a business owner or someone interested in creating a positive work environment, this episode is a goldmine of information. Carm and Chris provide practical guidance on building company culture and emphasize the need for strong policies, procedures, and teamwork. Chris Lawson, TechnicianFind.Com. Chris’ previous episodes HERE
Watch Full Video Episode How Much Does Company Culture Really Matter? 40+ Real Business Metrics Impacted by Your People and Culture (with sources)! https://www.betterculture.com/blog/does-company-culture-really-matter Importance of Company Culture (00:00:51) Discussion on the significance of company culture in retaining employees and attracting customers. Real World Studies on Culture Impact (00:02:33) Exploration of tangible studies on how developing a strong and positive culture impacts a business's bottom line. Different Categories of Shop Culture (00:04:25) Explanation of the three categories of shop culture: those who don't think they have culture, those who have a vague understanding of their culture, and those who have a clear understanding and can effectively communicate their culture. Employee Retention (00:10:37) A strong culture contributes to higher employee retention rates, reducing costs associated with turnover. Productivity (00:11:08) Positive company culture leads to increased efficiency and higher output from motivated employees. Collaboration and Teamwork (00:12:43) A positive company culture fosters collaboration and teamwork, encouraging employees to work together effectively towards common goals. Employee Loyalty (00:16:28) The importance of employee loyalty in fostering a positive company culture and reducing turnover. Ethical Behavior (00:17:50) The impact of a strong company culture on encouraging ethical behavior and maintaining a positive reputation. Talent Acquisition (00:18:13) How a positive company culture attracts top talent and makes talent acquisition easier for recruiters. Importance of Company Culture in Hiring (00:25:01) The significance of company culture when hiring new team members and emphasizes the need to convey the culture in job advertisements. Developing Effective Job Ads (00:26:55) Chris Lawson provides tips on creating job ads that highlight the shop's culture and attract candidates who are a good fit for the company. Thanks to our Partners, AAPEX and NAPA TRACS.
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Is Your "Fishbowl" Mentality Holding Your Auto Repair Shop Back? A Nationwide Comparison - Chris Cotton Weekly BlitzBy carmcapriotto
The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. To take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.
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Are you an auto repair shop owner feeling stuck in a "fishbowl" with no way out? Coach Chris Cotton from Auto Fix Auto Shop Coaching has helped over 500 shops across the country and has rarely encountered a situation that he hasn't seen or coached around. In his podcast, "The Weekly Blitz," he shares insider knowledge, industry developments, and practical business strategies to help shop owners see the bigger picture.
The most valuable lesson from this podcast is the importance of making small incremental changes in an auto repair shop to have a significant impact on the business. Cotton shares success stories of shops that have gone from consistently losing money to making a profit by refining their processes and increasing their productivity. He also emphasizes the importance of having a good shop management system that is cloud-based and does a digital vehicle inspection.
Cotton encourages auto repair shop owners to seek help and not be limited by their "fishbowl" mentality. He believes that any shop in any area can achieve success with the right direction and help. So, if you're an auto repair shop owner looking to improve your business, tune in to "The Weekly Blitz" and take the first step towards success.
National and Regional Averages [00:02:20] Coach Chris Cotton shares data on national and regional averages for various metrics in auto repair shops, including return on investment, gross profit, net profit, technician productivity, and more.
Getting Out of the Fishbowl [00:01:02] Coach Chris Cotton discusses the common problem of auto repair shop owners feeling stuck in their "fishbowl" and how to help them see the bigger picture and improve their businesses.
Case Study from a Shop in California [00:02:20] Coach Chris Cotton teases a case study from a shop in California with a surprising ending, to be covered in episode #121.
Small Changes, Big Impact [00:12:03] Coach Chris Cotton discusses how small incremental changes can have a huge impact on an auto repair shop's business, with examples of a shop going from losing money to making a profit.
Marketing and Branding with Shop Marketing Pros [00:14:26] Coach Chris Cotton recommends Shop Marketing Pros for auto repair shop marketing and branding, and shares how they helped a shop increase their car count.
Profitability and Upside [00:19:05] Coach Chris Cotton shares success stories of auto repair shops in South Texas, East Coast, SouthWest and West Coast all with increased profitability and upside realized through small tweaks and process improvements.
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By Joe Marconi