Daily "Customer brought his own parts" story for the day, open for discussion!
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By Joe Marconi in Joe's BlogMost 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.
By Joe Marconi
Joe Marconi will be speaking at the upcoming virtual conference Amplify 2023, hosted by AutoLeap, with an exciting session to help shop owners be prepared with their business! Joe's session is titled "You Can & Will Survive an Economic Downturn". For most repair shops, the recent years have been smooth sailing for business. Although it's impossible to predict our economic future, does that mean you shouldn't always be prepared for what's next? The COVID pandemic brought a variety of challenges, and while it didn't bring significant negative impact to the repair industry, it does offer the opportunity to reflect and properly prepare for a time when an economic event could. Join Joe in this live session to dive deeper into this topic, happening at Amplify 2023 on March 24th, 1:00pm ET! Book your complimentary, virtual ticket today. https://bit.ly/3XSdY8b
How has Matt Lachowitzer been able to expand his multi store business while maintaining the culture within it? How did his team support each other through the sudden passing of a key manager? It all starts with building better people. So how do you do that? How do you find those unicorns that want to grow with your company and lead better lives themselves? Matt Lachowitzer, Matt’s Automotive Service Center, Fargo-Moorhead, North Dakota and Minnesota. Listen to Matt’s previous episodes HERE Show Notes
Lost a key manager that passed away in the shop- 43 years old. Got the shop back together with the help of the other shop managers. Paid everybody for the day off for the funeral and for the day that they closed. Promoted within and already had potential employees in the wings- always be recruiting. A new hire must read 2 books (Customer Service Revolution- John DiJulius and Unstoppable- Dave Anderson) and will spend 30 days in training before they're really set loose. Multiple different layers of managers- district managers, store level managers, shop foreman, and a lead tech that oversees all the shop foremen. Don't just build better team members, but rather build better people. Focus on hospitality training. Rip off and duplicate- nothing's new, you just have to make it yours. FORD - family, occupation, recreation, and dreams. Acquisitions- owners retiring, consolidation. What is your exit strategy? Pay attention to Opportunities- little things that matter. Do research and homework on the company before investing in or buying them Advice if you want to grow to multi shops- have a phenomenal team before starting a new shop, people who want to grow with you. Share your goals with your team. Be transparent. Have your finances in order. Solid systems and processes. Keep the career path aligned so they're growing and seeing the value and the work they're putting in. Connect, build a relationship and have a coach. You learn from every interaction, every moment of everything you do if you allow yourself to be able to be open to it. Launched ‘Hammer Consulting’ Coaching
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While at the Ratchet and Wrench Management Conference, I was able to review most of the management software packages available. I have a few observations to share that might be helpful. Each software package has its own pluses and minuses, but, I see some high-level commonalities amongst them.
At a high level, you can separate software packages into two groups based on age. The longer a software package has been available, the more likely that many of its features are highly refined and give you the most controls. The disadvantage of an older software package is that they are too busy keeping their customer base happy with fixes and minor features that they don't have time to take the leap of innovation (e.g. DVI). If the platform is really old and/or they are not charging enough money monthly to have the revenue to hire a good team, they may not be able to completely rewrite their software to utilize newer technology features. For these software packages, you are forced to change vendors to adopt new the new features. On the other hand, if the software package is new, they go straight for the snazzy features and also, try to fix the perceived problems of the legacy software packages. They excel in the basics, but lack the depth of feature functionality that only time brings. Mind you, both types of companies are trying to reach feature parity. New companies need to flush out features, adding complexity and older companies are working to build the snazzy features. Both of these take time.
For the record, I'm using Protractor. I can tell you all of the good and bad of this package. I used my in-depth knowledge of this program to compare it to the newer packages. In other forums, the two main contenders for new appear to be:
TekMetric ShopWare Other New: Shop Monkey AutoLeap Older More Mature Systems: Protractor Mitchell (I didn't look at this one) NapaTracs (I didn't look at this one) Many others not at this show I liked the snazzy new features that I saw in each new package, but quickly recognized that in my daily use, I'm using certain mature features that are not present in the new packages.
Another observation is that each software package somewhat enforces a workflow methodology. You can choose to fight their internal structures (and lose), or go with their model. I noticed a few idiosyncrasies, but, they are all trending towards a seemingly similar workflow. This requires scrutiny when selecting a software package. The new guys are often pushing their "better way" as a solution to the problems of old. For instance, ShopWare had a unique approach to canned jobs that deserves investigation that I didn't notice in other packages.
So, when shopping, make note of the real features that you must have. Don't be fooled by the shiny new outer skin. Balance it with your real needs.
I do see that some of these new contenders are investing much money into development of new features, so over time, they will likely build the feature that you need today. As well, some mature packages are investing in the future.
I will say this loudly. Your software vendor must be charging you healthy monthly fees to have the money necessary to continue to innovate. If you gravitate to the lowest price, features could take longer or never come. Just like us, we must first survive before we can do good work and be able to pay the bills.
By Joe Marconi
I have heard mixed messages from around the country concerning parts. Are you seeing acquiring parts getting worse or better?
By Joe Marconi
The word OSHA makes many shop owners cringe.
I was lucky enough years back to have my insurance agent suggest I perform a voluntary OSHA inspection. A private company did it at the time.
They found tons of violations; some we knew would be flagged, but most we did not.
Have you ever had an OSHA inspection? And what can shop owners do to protect themselves?
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