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Have you checked out Joe's Latest Blog?
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By Joe Marconi in Joe's Blog13 commentsMost 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.
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By autorepairuniversity
I feel the need to say thank you! After reviewing the financials for this past year I was quite depressed. I did $100,000 more business than the year before, but hardly any more profit to show for it. I had personally been stressed out, buisy beyond belief, and just plain beat up this past year, and for what... a small profit??? Yes I did profit more than the year before, but put it this way - not impressive. One night I tuned to Auto Shop Owners for a little help and guidence. Threre was a TON of helpfull posts, and some real eye openers. The one post that was burned into my brain was a post about running a business vs. running a repair shop. I told myself it was time to run a BUSINESS not just a AUTO REPAIR SHOP. I had a BIG meeting with my guys, telling them its time they stepped up there game and helped me "bear" some of weight I was carrying around with this business. I raised prices $5 per hour. I started charging for diagnosis. I started tracking the techs billed hours (I pay hourly) and created a bonus program for them. I actually started "watching and analyzing the numbers" rather just going off of feel.
The results.... Utterly amazing. This year (Jan and Feb) I have profited almost twice as much as last year. I know!!! that is crazy. Just goes to show what a little "thinking" can do. I remind myself everyday to treat my shop as a business, not a "repair shop". I hope this helps others, it sure helped me. Hopefully this trend continues for me, but again THANK YOU to my fellow shop owners for posting your knowlegde and advise!!!
Sent from my Chromebook 11 Model 3180 using Tapatalk
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By Elite Worldwide Inc.
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By Gonzo
Nothing Beats a Full House
There’s days, even weeks (depending on the time of year) when a pair is pretty good. Then there are days when three of a kind ain’t bad. But in my book nothing beats a full house. I’ll bet you thought I was talking about poker, didn’t ya? Nope, I’m talking about the automotive repair business. When the shop is humming, and the jobs are flowing, and business is brisk, that’s when I know I’ve been dealt a winning hand. It might mean coming into work really early or staying late, but at the end of the week it’s a pretty good feeling to know you’ve played your cards right.
There’s been many a day that closing down the shop early is better than being dealt jokers or cards that won’t play. The phone isn’t ringing, the shop is empty, all the tools and service bays have been cleaned, and all the shelves are stocked, but not a single car in the service bays. Those are the days that even a pair sounds good. I’d even settle for pulling one decent card out of the deck on those days.
“It’s feast or famine,” a good friend of mine told me. He’s a realtor, and his business is the same way. One day everybody is calling, and the next day you have to pick up the phone just to see if there’s still a dial tone. (Boy, do I know it, I certainly can relate to that.) There is a pattern to all of this chaos though. It took me years of running a shop to figure it out, and I’m sure the same thing happens in every part of the country, just like it does here in the southern part where I live.
Take the holidays… no, seriously… take them. There a joyous time to be with family and friends, but it’s not that great if you’re making a living servicing cars. It never fails when a holiday is on the calendar you can bet it’s slow. But, the day or so before a long weekend holiday you can guarantee it’s going to be packed at the repair shop. Seems everybody waits to the last minute to get the car ready for a trip and everybody wants their car done… RIGHT NOW! I pretty much know those are the days I’m coming in early and staying late.
Then there’s when school starts… listen close…can ya hear the crickets out in the shop? I know I can. Usually the week or two before school starts everything slows to a crawl. Oh you might get a couple of pair, maybe three of a kind but it’s doubtful you’ll get a full house. As soon as school is in session the cards start to fall in the right place again. It’s a sure bet the shop is going to be full for the next couple of weeks.
Of course there’s Fair week. Don’t get me wrong, I like the Fair, I think it’s pretty cool, but not from a business stand point that’s for sure… it’s the week to fold your hand. Nothing ever happens Fair week. In my early years there was one Fair week that I’ll never forget. I had one car for the whole entire week… yes… one and only one car. However, it was a super huge job that nearly took the whole week to finish. (Funny how things work out that way.)
Temperature and the weather have a lot to do with what cards you’re dealt in this crazy world of auto repair. Heavy snow or monsoon rain means… stay home, fold em’. Now a light rain, one of those steady down pours that doesn’t seem to end has a different affect. The shop slows, but the phone rings constantly. The usual caller will tell me something like this; “Yes, I’m having a problem with my wipers can you fix them?”
I’ll answer, “Why yes, we could get you in right now.”
“Oh it’s raining, but as soon as it lets up I’ll bring it in.”
I know better than to assume they’ll be in on the next sunny day. As soon as the sun comes out they forget all about their wiper troubles. I guess it’s one of those “out of sight, out of mind” things. Although, I’ve learned to get their phone number, and call them the next day and remind them of their previous call and set an appointment to get it in the shop. Surprisingly enough, it works.
Now the temperature, that’s a real fickle issue. Too hot or too cold does some strange things to cars. Usually means it’s going to be busy. Then again if it’s a “room temperature” sort of day… it’s probably not going to be that busy. There are the calls of course, there’s the “stop by the shop and chat about it” kind, and then there are the ones that just want to pick your brain and price check everything.
When it comes to creature comforts in the car, it’s a safe bet on those high or low temperature days those systems are on the top of the repair priority list. Wouldn’t be the first time someone has come in the shop with their brakes metal to metal, but they’re not worried about that… that A/C is a must. Now in the winter months it’s the heater, or the defroster, or the wiper blades that froze to the windshield the night before and they didn’t bother to clean them off… they just turned them on, and now... oops… they don’t work at all.
The one ace in the hole that does take the edge off of the ups and downs of the seasonal changes is to have a back burner job sitting in the corner of the shop. Maybe a restoration project or some personal toy you can pull out of moth balls for the guys to fiddle around with when it’s slow.
All in all, doing this job is a great reward; it’s a great career choice. You meet some really interesting people from all walks of life in this business. A lot of them become regulars, and stop by no matter what the temperature is or whether or not the Fair is in town. Ya just got to play your cards right, know when to fold them and know when to hold them.
When it’s slow you might tend to dwell on things and think you’ve done something wrong, but then things pick back up and you forget all about those thoughts. You’re taking a gamble in just about any career choice you make, automotive repair is no different, and when someone asks, “How’s it going?” I always answer with, “It’s slowly getting busy or busy getting slow.” A couple of cars in the morning, maybe three of a kind later that afternoon, whatever there is that’s the hand you’ve been dealt for the day. But, in this game of auto repair… nothing beats a full house.
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