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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.
Erich and Lauralee Schmidt went to a 4 day work week during COVID and haven't looked back. They also have an app for their shop with benefits to customers.
Erich and Lauralee Schmidt, Schmidt Auto Care, Springboro, OH Show Notes:
4 day work week- exhaustion during COVID, started cutting Fridays with three day weekends. Prefaced it as summer hours and would go back to 5 days in the fall. They never went back to 5 day work week. Revenue, productivity, and efficiency increased. 8-7 pm work hours. The check-in process includes 4 day work week schedule. 40 hours of training a year minimum- observing efficiency, open communication, partnering with employees with their training. Training is a requirement when hiring employees. “Where are your interests?” Service Advisor=Serice Specialist Free Schmidt Auto Care App- started 6 years, App Fueled is a customizable garage for clients and a bevy of services outside of just communication. Special pricing, birthday specials, loyalty touch points. 30% of the customer base has the app. Had ADAS for 3 years, one of the first in the area to get it. Program and calibration.
Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
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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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I'm Martin, founder of Auto Globes, a startup mag connecting auto enthusiasts with experts like you! I'm reaching out to invite you to share your unique story and expertise with our readers.
We're putting together an upcoming issue and want to feature a select group of top auto shop owners from across the US. Your story, services, and insights will be of great interest to our readers and will make a big impact on our mag.
If you're interested, comment in this thread and we can schedule a chat about your story and the services you offer.
Looking forward to sharing your expertise with the auto community!
By Joe Marconi
Let's face it, no one or no entity will help us with the Tech shortage. The truth is, this is not new. This shortage has been created largely from decades of steering young people to college, and not the trades. I believe we need to get involved with apprenticeship programs. Below is an article in Motor Magazine.
Your thoughts? Comments?
By ASOG Podcast
Do We Regret Starting Our Auto Repair Business?
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