TTP

{I put this in the General discussion forum, if its not the right one please move it.}

I was wondering out loud today, if there were any other off-road, diesel or truck performance shops on here struggling with the same issues that I do on a daily basis, so I just thought I would ask.

I know that we are a special niche in the marketplace and our own struggles and issues. Alot of the information on this site we can incorporate, but some of it just doesn't apply to us. Now don't get me wrong, this site has been invaluable to me for answers to some problems that I have been struggling with, not to mention dealing with customers and techs. Just the answers I have received has helped me to save my shop from the brink of disaster and closing my doors.

But in our line of work, we have to deal with the DIY guy that thinks he knows everything because he either read it on the internet or one of his buddies told him how. And no matter what we tell them, they are always right.

I would love to know how you are generating sales, dealing with customer issues, how you price out a big build that is going to take more than a couple of days...etc

I was thinking if there are enough of us in this forum we could band together and help each other out. I know down here in my area, the competition is fierce, our markup on our parts is barely above jobber cost, because of the internet sites.

I feel we have some other issues that these general mechanic shops do not have to deal with. if you are interested in pursuing this idea then post up with your shop name and location and we will see how much interest this generates.

TTP

I was trying out BBT's Smart Auto software. At first the support was great then as time went on it got worse. I was really impressed at the simplicity of the program but I could never get it setup to work properly, so I finally just gave up and went back to Quickbooks. Has anyone else tried it out?

I agree with you on that one Gonzo! That movie had so much taken out of context it was hilarious! But scary, thinking that it might really happen...

I appreciate you sharing those thought with us. For years I was taught that the best advertising was word of mouth, after reading this I see this ol dog needs to learn some new tricks.

Joe brings up a really good point, especially for all of us with a highly competitive market. Normal repairs have to be priced within a reasonable amount in order to stay in business. BUT on a specialty niches, you can, no you must charge more. Thats the only way you will stay in business and make alongside the low ballers. Trust me I know, I am in a very competitive market dealing with offroad and diesel performance. Everyone her is a DIYer- they can do it better than you, faster than you and cheaper than you...BUT run into trouble and the internet idiots can't give them a good answer, you are a GOD then. SO, for all those idiots that ask you every question under the sun, and have NO intention of using you are purchasing anything from you...You have to have a way to make up that time you lost and were unprofitable.

OK I will get off my sopabox now...just my nickels worth of advice from the school of hard knocks.

Mitchell is very resonably priced. It depends on how many stations you want also. You should speak to a rep for more information.

 

As far as flagged flat rate hours, there are so many ways to skin this cat. Some shop owners pay the tech a gurantee hourly base, any where from 30 to 40 hours. Then, if they hit a predetermined productivity number, they get a bonus for every hour above that. There are many formulas you can use.

 

Again, you should track each tech for a month or so, find out how productive they are. Then after you know this, calculate how much you need to book in order to acheive for sales goals and profit goals. This way you are not just coming up with someone else's numbers. This will insure that you are paying bonus and payroll on what the shop earns in profit.

 

As far as how much to pay...well that's hard to say. It depends on the quality of the tech, the expereince, etc. Plus, many shops pay on a sliding scale. For example, for the first 40 hrs booked, the tech gets $20.00 per hour. Over 40 to 45, the tech may get $24.00 per hr. On and On.

 

I can tell you that in my area good A techs are earning anywhere from $20.00 to above $30.00 per hr, before bonus.

 

I know one shop owner that pays straight time to 40 hrs booked (in a 40hr work week) and time and half for anything booked over 40 hrs.

 

It also depends on you labor rate and how effecient your shop is and how effecient your shop is at selling profitable repairs. Also, how the tickets are written.

 

It gets kind of complicated. I hope I did not cloud the issue, but as you can see, there's a lot to consider when setting up a pay plan.

Man you aint lying there, that gives me a headache just trying to decipher all that information. But I have to do it so I can get my life back. I started this business with a dream and so far that dream is a nightmare...LOL I owned a cabinet shop before doing this for 20 years,(I know you are now asking yourself what an I doing in this business) did pretty good, 15 employees at one time, running two jobs at once or more all over the state. So I do understand what you are saying its just a bit more complicated than before, but I will figure it out, with you guy's help. Thanks so much for all the advice.

JOE

The issue with splitting tech time must be accounted for properly. Accurate time keepping and record keepping procedures must be designed. If you estimate that a job will take 6 hours and you put two techs on a job, each portion of the job must be broken down into segments of the job. It's not easy at times, but you need to be fair to the customer and fair to the techs. Once the job is broken down, you need to assign the time properly in your managment system. We use Mitchell. In Mitchell you can divide the labor time among many techs and the hours can be split any way you need to. What system to use you? So, splitting the tech hours should not impact the business in any way.

 

As far as performance bonues are concerned, I would first track everyone's hours for a least a month. I would also make sure you review your Cost Of Doing Business numbers, to know your breakeven and what you need above breakeven. Also, make sure you track gross profit dollars. Basing bonues just on sales or booked hours is not the best way. Find out at what point the shop is making money and base the bonus on this number.

Well I tried BBT software but I could never get it to work properly. I have heard of Mitchell, is it expensive? Right now I have access to ALL DATA, so thats what I use to set our labor rate. I also use Labor Guide to check the numbers.

Any input on the first question? I have heard numbers from 22.00-29.99 per flag hour fare these about right or too high/low?

I own/run a truck, diesel and offroad performance shop. I have been paying strictly by the hour, but its really not working out. I want to be able to pay my guys better but I cant afford to be hung out to dry on the hours. I have been reading on this forum about flat rate and a performance bonus, I really like the concept, it will keep me in the black and my guys can make more money. I am just not sure how to accomplish this for my business. We do alot of high performance work that requires more than one tech to accomplish. How do you pay? I cant charge the customer double time to make up the difference and I want to be fair to my guys, but on the other hand I have to make a profit also.

So my question is this;

1 How do you come up with a fair number to pay on the flat rate?

2 How do I split the job between the two techs, without going broke?

3 What do you base the percentage on to come up with a performance bonus?

I welcome any and all input to these questions. I need some answers quickly, before I lose one of my best techs to another store. He wants more money, I want to pay him more he is definitely worth it, but increasing his pay scale by-the-hour is killing my profit margin. I know that flat rate is th way to go...

JOE

Thanks guys, glad to be here. I spent all day yesterday going through the archives, soaking up alot of information. Great site, wish I had found it sooner!!

This is a friend?

 

Let me tell my story. When I started my business in 1980 I had tons of friends. I gave them all super discounts because I thought they were like family. I thought they were special. Well, after a while I realized most of them wanted too much from me. They were killing my business and tying up too much of my time. When I changed my policy and told them that I can give them a 10% discount across the board, and that I would supply ALL PARTS, I lost most of my friends.

 

The bottom line is: if they truly are like family they don’t want you to fail and will support you business, not drive it into the ground. You are in business to turn a profit, you can’t please everyone. Look out for yourself and take of the people that appreciate what you do and are willing to pay what you deserve.

Well said, I closed a company for this very reason. Lots of "friends" no customers. You don't need the headache associated with that. And on top of that those "friends" will want everything done for either very cheap to free, and expect you to give them a big discount on parts. DON'T do it!!

JOE

Hey guys

 

I just opened a shop about 2 months ago. Business was really slow at first, but it's starting to pick up a bit.

 

My question is, what book or service are you guys using to quote hours on a job. We've been just taking a guess so far, but my mechanic wants to get this service that tells you what amount of hours a job takes, and it's like $500 a month. I just can't afford it right now, since we are not breaking even yet. Would love to know what you would suggest.

I use LaborGuide. It works great its cheap and its accurate. I have checked it against All Data and they are either spot on or very close. They also give you the option of low, high or average, which helps if you have a good client that you want to give a special deal to. Hope this helps you out.

JOE

Hello to all. I am a shop owner but not the normal type of shop that you guys are running. I run a performance truck shop. Where we work on gas and diesel trucks. We install mostly performance enhancements to the vehicle. I have found in our type of business that we dont have many repeat customers, after we have gotten the truck to the performance level the customer is looking for. Now I'm not saying that they never come back, thats not true, we usually dont see them back until they want another upgrade or they purchase a new vehicle, but that in general is not getting it done anymore. In this latest economy, we are seeing lower sales than ever, since what we do is a luxury service not a necessity. So I am looking for ways to expand into other markets related to the industry, to grow my business bigger and more profitable. I stumbled upon this site doing research on the net. I hope that I can glean some tips from this forum to help me accomplish this.

JOE