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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
by Joe Marconi: Quiet Quitting: New Phrase, Old Problem - Featured in Ratchet and Wrench Magazine
Some people go to work each day with great enthusiasm and believe they can change the world. But then, others anticipate each workday with feelings of despair. These employees do the bare minimum; just enough to keep their jobs and go unnoticed. They are called quiet quitters.
While quiet quitting may be the latest catchphrase, it's not a new workplace disorder. We've called them disgruntled, disengaged and even toxic in the past. But who's responsible for this behavior? Is it the employee? Or is there a deeper problem brewing in the workplace?
Work has Evolved
As a young technician in the mid-1970s, the shop owner was typically at the top of the pinnacle. It was common back then for a boss to run his company with the mindset, "my way or the highway." Was it wrong? Perhaps. Thinking back, I don't think we clearly understood or appreciated the role we played in the workplace or how we fit into the company's structure. We accepted things the way they were, unlike employees today. I also believe we felt we couldn't change how things were.
Today, it's a lot different. There has been a shift in the workplace. Societal changes, the internet and social media have changed our exposure and heightened our awareness of the world and the issues that confront us daily. Today, employees of every generation believe they should have a voice in the company's decisions and direction. It's important that their opinions count and that their job role has a purpose. Of course, earning a decent living is top of mind, but as always, not the prime motivator. At the top of what's most important is the workplace environment and the employee experience. When employees lack the experience they crave, they become disengaged, leading to what we call quiet quitting. Employees Want Accountable Leaders
Lack of trust in leadership is another factor in quiet quitting. Shop owners and managers must communicate what their employees can expect from management and not only what management expects from them. Consistency in the message and following through on promises contribute to workplace morale. After all, if you can't trust the message, you will not trust the messenger.
Some people will excel in any work environment. However, they are the exception, not the rule. If you want a team of employees where everyone is pulling in the right direction, you should consider the needs and opinions of your employees.
If you are concerned that understanding your employee's point of view and acting on it is giving up control of your company, don't be. Earlier, I referred to shop owners from years back. Most of them had a good business but not a great business. The reason was that they were the business. Growth was difficult because it was dependent mainly on their abilities and talents. This one fact alone causes a business to plateau. However, when a business combines different points of view and strategies from the team, greater growth is possible.
Lastly, there will always be employees who won't be happy no matter what you do. If you are confident that you have done all you can to help a quiet quitter, the only hope at that point is for the employee to look within themselves, which may be difficult for most people. Instead, focus more on what you can do. Look within yourself to ensure you are doing everything possible to create an amazing employee experience. Your goal must be to create happy employees. We've all heard the expression, "happy employees create happy customers." Well, they create happy employers, too.
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By Joe Marconi
Many auto repair shops are still busy, and many are booked out from a few days to weeks. After the initial shock of Covid, the recovery for our independent auto repair industry has been quite good, with many positive indicators for the future.
However, how many of the auto repair shops that did suffer a great loss in business during the lockdown phase of Covid would have survived if not for the SBA loans, the Pay Protection Program and the Employee Retention Credit?
Building a cash reserve is crucial to prepare yourself for the next economic downturn. How much should you set aside? That depends on your business model, how much debt you have and other financial conditions. Speak to your accountant, financial advisor and business coach, if you have one.
Rule of thumb, you should have at least three months of operating expenses set aside in a dedicated bank account. Some accountants and financial advisors may suggest up to six months.
By ASOG Podcast
The Biggest Mistake New Shops Make
Recorded Live at the 2023 Institute Summit, shop owner turned coach Jennifer Hulbert discusses the value of joining a coaching group. Find out what it's like to be in a coaching group with the Institute, and why she is passionate about celebrating other people's accomplishments.
Jennifer Hulbert, Service Plus Automotive, Calcium, NY. Facilitator for the Institute for Automotive Business Excellence.
Has 3 coaching clients- discovering finances, gross profit, structuring segments of business, increasing billable hours, and implementing a parts matrix. Facilitating- a group usually consists of 18 to 20 shop owners. They are assigned a partner, they have an individual accountability partner along with access to their facilitator coach. Have three in-person meetings a year. Part of those in-person meetings is to evaluate the whole shop. Go in, do a full evaluation of the shop, and give the owner feedback on areas for improvement. The other time is spent with training, and reviewing financial numbers, because if you don't know your numbers, you're never going to grow your business. In between, they have a couple of Zoom meetings as an entire group, and then the facilitator does reach out individually once a month. Never be the smartest person in the room If you’re not learning, you’re not growing Celebrate other people's accomplishments Joining a coaching company- understand profits, understand the structure of a business, understand your numbers, and structure your finances to make a profit. “Mama Bear of the Team”- Jennifer wants to see individual employees and their families succeed. Ensuring whatever decision you are making about the company is going to benefit your employees Women can do anything that a man can do Read the book “Traction: Get a Grip on Your Business”- communicate clear goals, build a leadership team, and hold each other accountable. Increased sales by 38%
Thanks to our Partner, NAPA AUTO CARE Learn more about NAPA AUTO CARE and the benefits of being part of the NAPA family by visiting www.NAPAAutoCare.com Connect with the Podcast: -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
Click to go to the Podcast on Remarkable Results Radio
By ASOG Podcast
Free Diagnostic Time: Is It Worth It for Auto Repair Shops?
Employees today will disengage if they don’t feel valued.
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