tyrguy

Internet problems today. Sorry for the double posts.

double post

As far as customers going somewhere else, that could very well explain the general decline in car count since the recession. We have a few more bays in town than we previously did. And I work on that everyday. However, this thread was more about the last 5 weeks and this unprecedented dead April and early May. Something strange is going on. It's a general slowdown. It's the Walmart Tire and Lube who's bays are within 150 yards of where I am sitting. It's the NTB a half a mile down the street. The Valvoline quick lube and Midas in town. My buddy's shop I mentioned previously. I'm hearing it from the local NAPA store owner, my other parts sales people and my ATD contacts. The car dealerships that buy tires off me haven't been because they are slow. I was told the other day that the dealerships parts truck normally make 15-17 deliveries a morning made 2 that day. It's other business' like my significant other's carper/ flooring store. EVERYBODY IS DEAD. Is it the cold spring here? Is it uncertainty due to the political climate? I wish I knew.

I've been in business for 37 years this November. Started with myself and 1 tech straight out of voed school. Business grew thru the years to 1.5M in sales with myself, 2 service advisers, 3 full service techs, and 2 tire techs. Had a pretty good run for the first 29 years but the last 8 have been rough. 2008 was the last normal year we had. At that point we had had a run of 15 straight years of 96-97% hours billed. Then the recession hit and things have never recovered. Every year our hours billed continued to drop. Last year we billed about 73% of our hours. It's all due to declining car count. Two weeks ago that first employee came to me and said that he was retiring from this business to concentrate on a non auto business he was running at home. It was a bittersweet moment for me because being together everyday for 37 years he is like family to me, but on the other hand, I truly haven't needed 3 techs for the last few years. So it saved me from laying a tech off, something I promised myself I would never do. Three years ago when we ended 2013 billing about 85% of our hours I thought it was the end of the world. However, at this point, 2013 seems like the good old days. We have a beautiful shop, built in 2007. We have great online reviews. We are doing more marketing than ever before. I still have a great staff that averages 16 plus years of service here. We keep up to date with electronic inspections, etc. I'm here everyday fighting the good fight. Even at last year's numbers, I made money and had a positive cash flow. But....what in the world is going on this spring. Talk about soft. We just had one of the worst months we ever had. Down 30% from last April. And it's not just me. EVERYONE I talk to here in NE Ohio is dead.. The foreign car shop we do alignments for is never slow because he specializes in German cars. He's slow so now he is working on domestics. A small shop across town had one small job yesterday and nothing on his schedule for the rest of the week. A customer that works for a steel company told me April was his worst month in 10 years. I truly believe we will find out that we are already in a new recession. I guess I just want to hear from you guys that it's like this all over, misery loves company. Plus hearing it helps me to sleep at night. Sorry for the long rant.

Three years ago the BWC did an audit of my classifications and I was able to keep my two service advisors classified as office personel. Although they didn't give me reason, looking back on my audit exit notes I believe the following influenced their decision. 1] My service advisors share an enclosed office behind the counter where they both have their own desks. 2] My service advisors wear different unforms than my techs. 3] My techs are all ASE certified where my advisors are not. 4] My techs are not at all involved in selling the customer.

My 3 techs average 27 years tenure with me. I pay them way too much but they're kinda like family. I pay them $36.00 per billed hour or $21.60 per hour whichever is greater. They work 44 hours per week so their minimum is 40x21.60 + 4x32.40 = $993.60. So, if they bill over 27.6 hours, they get paid for the hours they bill, under 27.6 hours they get the minimum. Until the 3rd quarter of 2011 they rarely ever got paid the minimum. Since then, it's been happening a lot as business has slowed down.

When selling tires we don't charge anything extra. When doing free [include with tire purchase] rotations, and repairs we don't charge anything extra. If we are doing any other tire tire work [mounting, repairs, rotations] on vehicles that don't have our tires on, we charge $10.00 extra for a "minor" reset [look up and perform reset without plug in tool], and $20.00 extra for a "major" reset [relearn sensors with plug in tool].

My family actually sold the land my tire store of 28 years was located on to Walmart to build a superstore. We ended up building a new store right behind the Walmart. I can throw a baseball from my bays to their bays. Before the Walmart, my unit sales had stagnated at about 3800-3900 units per year. The first year with Walmart next door [2008] we sold 4500 units, a near 20% increase. Believe me, having the traffic that a superstore generates next door far overshadows any competition they bring. Plus, we've developed a good relationship with them and they send us alignments, brake work, etc, as well as the stuff they break and need repaired. Additionally, when they run into complicated tires issues, they send them our way. Their tire prices initially seem low until you add in lifetime balancing, flat repair and road hazard, all services we include in the cost of the tire.To be frank about it, I don't know how they sell anything anyway. I usually buy stuff in the store and check out at the tire and lube service counter. What I observe just causes me to chuckle. They never answer the phone. People sometimes wait at the counter for 5 or more minutes before anyone even comes back to the counter from the service area. And recently, they quit taking appointments for anything which means they are constantly backed up several hours because they are so slow in the bays. And to be totally honest, even as slow as my business has been for the last year and a half, I probably don't want most of those customers anyway.

Hello from NE Ohio, I just found this site, great stuff. I wonder how everyone is finding their business these days? This is the worst year I've seen in a long time. I have a 12 bay tire store/repair shop doing about 1.5 mill in sales a year, 70% service/30% tires. This is my 33rd year in business. I started in 1979 with myself and 1 employee. I now have 2 service writers, three full service techs, and 2 tire techs. The average tenure of my employees is 20+ years. From the late 90s thru 2008 my three techs averaged billing 6181 hours out of 6285 hours worked for a productivity of 98.3% It didn't matter what the economy was doing, we never were more than 50 hours plus or minus that number. Then the "great recession" started in late 2008 and things took a dive. 2008 6125/6317 96.9% 2009 5919/6325 93.5% 2010 5749/6305 91.1% 2011 5842/6331 92.2% 2012 3600/4211 85.4% projected thru this week Actually, thru Aug of last year, we were on pace to bill about 6000 hours for the year, and I thought we were out of the woods, but things started downhill the last 4 months of 2011 with no end in sight. I can survive at this level indefinitely, but we're not making much money. My logic tells me that this is just the economy because the slide coincided with the start of the banking mess.The thing I'm worried about is "is this the new normal?". My question is, are you other guys seeing similar things? I can sleep a lot better at night knowing we're all in the same boat. I've talked to other shop owners in my area but no one seems to track their productivity. All they seem to know is what their total sales are. Hell, with tire, parts and labor rates up, my sales aren't off that much. In fact, they're up from a few years ago. But the hours always tell the real story. One last comment. For some reason my tire sales have never taken a hit thru all this mess. Just service hours. Comments?