Where'd the Electricity Go? - Confused? Yea, me too!
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By Joe Marconi in Joe's BlogAuto 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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By carmcapriotto
Thank you to RepairPal for sponsoring The Auto Repair Marketing Podcast. Learn more about RepairPal at https://repairpal.com/shops
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By Joe Marconi
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By Joe Marconi
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By carmcapriotto
Gary Gunn discusses how mentoring differs from coaching and how it can benefit shop owners in defining their own success and implementing necessary changes in their businesses. Gary shares his experience as a mentor and offers tools and strategies for shop owners to implement new ideas and overcome challenges. He emphasizes the importance of working on the business and oneself, creating a scoreboard for business performance, and understanding the true cost of doing business. Gary also explains the role of a true mentor and the value of assessments in tailoring mentoring approaches. Carm and Gary believe that mentoring can enhance the value of coaching and help shop owners gain confidence and make informed decisions.
Gary Gunn, Auto Shop Showcase
Show Notes:
The importance of mentoring for shop owners (00:01:12) Gary Gunn discusses the concept of mentoring for shop owners and how it can benefit them in achieving better lives. Defining mentoring and its role in implementing change (00:05:56) Gary explains his definition of mentoring and how it involves helping shop owners implement changes that will lead to true freedom and success in their businesses. The role of a mentor in addressing specific struggles (00:07:03) Gary talks about how a mentor can assist with specific challenges such as hiring, budgeting, and determining financial goals, and how their role is to help mentees become self-sufficient in these areas. Implementing Ideas from Training (00:09:35) Discussion on the challenges shop owners face when trying to implement new ideas and how mentoring can help them overcome resistance and successfully implement changes. Using Tools for Implementation (00:11:32) Explanation of the five tools that shop owners can utilize to implement changes in their business, including staff training sessions and staff behavior sessions. Understanding the True Cost of Doing Business (00:15:02) Explanation of the concept of the true cost of doing business and how it can help shop owners analyze their financials and make informed decisions. The missing piece for shop owners (00:19:05) How mentoring can complement coaching and provide shop owners with additional value and guidance. Group mentoring and individual sessions (00:22:01) The different formats of mentoring, including group mentoring sessions and one-on-one sessions, based on the specific needs of the participants. The concept of mentoring in the automotive industry (00:26:50) Discussion on the importance of accepting the need for mentoring and the discrepancy between appearances and reality in the industry. The potential benefits of seeking a mentor (00:27:10) Highlighting the potential positive impact of finding a mentor to help individuals and businesses grow and improve. The role of a mentor as a supplement to coaching (00:28:45) Explaining how a mentor can work alongside existing coaching programs to provide additional support and guidance to shop owners. 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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By Joe Marconi
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