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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 carmcapriotto
How do you create an amazing customer experience in your business? Guess what? No one is born with those skills, but your employees are can turn talent into a skill with proper training.
Joe Marconi, Executive Council Member, Elite Worldwide. Auto Shop Owner. Joe’s Episodes HERE. @Joe Marconi
Show Notes: https://www.autoshopowner.com/
It's never too early in business to prepare for the unexpected and your eventual exit. Life can throw you a curveball, and we have all heard the stories of a shop owner that had a life-changing illness or worse. As a shop owner, are you prepared for life's curve balls? And what about your family? In addition, the primary responsibility of the business owner is to create an exit strategy. It's not that you are selling tomorrow, but preparing for an exit strategy grows a successful business and is worth more. Curveballs and Exit strategies go hand in hand. Build your business as a home; build it to sell in the future THA 316 surviving health scare Delivering an amazing customer experience is taught, not assumed Amazing customer service is lacking these days, and so is creating a world-class customer experience. By the way, customer service and customer experience are different. All too often, we blame the employees, especially younger people, for not having the people skills to create an amazing customer experience. Well, no one is born with those skills, and just like the skill of playing the piano or shooting a basketball, having the talent is one thing, but to hone that talent into a skill takes training. What is great customer service? What does it look like? Do you have in-house training in place for everyone in the business? Be prepared for customers- lower their anxiety. Get into the hearts and minds of the individual- personalize it, make notes Talent comes first, develop the skills comes second
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 carmcapriotto
On Record with Tom Ham from the Automotive Management Network. Tom discusses a recent survey from his website about the stress level at work, reasons why someone would reject a technician application, health insurance and more! These results may surprise you!
Tom Ham, Automotive Management Network. Tom’s previous episodes HERE. Show Notes:
AMNSHOP.com laborratetracker.com - lowest labor rate so far is $50 and highest is $297 Management Help Polls: 130 types Why techs avoid working at some shops- low pay, dark/lack of lighting, dirty, disorganized Job applicants for possible reasons they might be rejected: 70% driver license issues, 68% frequent job changes, 66% negative comments about past employers, 64% know it all, 60% questionable attitude, 60% excessive demands. 59% inconsistent information, 58% late for interview, 55% listens poorly, 53% sloppy appearance, 53$ incomplete application, 51% lack of manners Pay portion of health insurance- 35% pay nothing, 19% pay full health insurance. Stress level at your shop ranked 1 to 10, 10 is maximum stress level- 40% rank their stress level at 8+, 81% say their stress level is average or above average, only 19% say their stress level is ranked 4 or less. “What do we do here that is not as clear as it could be, a bit confusing?” Service advisor responsibilities (are these regular tasks of your service advisor)- estimating, collect vehicle information, parts ordering and returns, labor claims, operation/management, quality control, assist technicians, pickup/deliver customer or parts (porter). None of these should be the service advisor responsibilities! Consider hiring an estimator/parts person Service Advisor Overload [THA 305] Service Advisor Overload: Part 2 [THA 312]
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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