mspecperformance

Jay, I am in a similar boat as you. The questions I had to ask myself are...

1. Do I have a handle on my numbers? Do I understand all of my KPIs?

2. Do I have the right systems in place?

3. Do I have the right staff in place?

4. Do I have enough capital or do I have access to capital?

5. Do I have a business plan? What is my current business plan?

6. Am I profitable enough at my first location?

7. What is my launch marketing campaign? What is my marketing budget?

8. Where will my staff come from? Have I been recruiting?

9. Can my shops operate with me not being there?

10. What is the demographic of the new location?

Got it. I understand how it will help a lot however I am curious to really know what level of tech will you need to have? What would you have to pay that person? It still seems to be that the engagement level of the tech still has to be very high. It would also cost a nice fat subscription fee to be apart of such a program. I am also curious how much money and resources can the chains commit to something like this.

How would a robot as a mechanic work?

I'm fortunate to have enough biz to have a full time bookkeeper/admin. Life would suck without her here. She takes care of my Quickbooks, HR, tracks my marketing, does my tech time management spreadsheets, pays the sales tax on time, does payroll, and generally keeps my guys in line. All for only $20 an hour.

 

I can pull a P&L or balance sheet and know it's always up-to-the-minute up to date. When I had an outside bookkeeper/cpa, he would pick up receipts and the check registers once a month, then return a P&L the following month when he picked up the next batch. My P&L was always 6 weeks behind, and honestly I didn't understand it back then anyway. If I did understand it, it was 6 WEEKS OLD. What am I going to do to fix a problem that was half a quarter ago? Even before I could afford to hire Terri I started doing the books myself, and it was the best thing I ever did. There's no better way to understand where your profitability is going, either in gross profit or expenses, than being able to see it in real time. Besides, if you don't understand your books (P&L and balance sheet), you don't understand your business.

 

Terri and I go over all of the numbers line by line once a month to make sure everything is on track, and it helps provide the checks and balances we need. Of all my employees, Terri has the greatest ability to steal from me. I trust her implicitly, but as the old saying goes, trust, but verify.

 

All of that being said, I still use a CPA for my taxes. Once a year, Terri, my CPA, and myself get together and work through any issues to make the tax prep smooth and easy.

Do you mind if I ask how much you pay your book keeper? Seems like she does a bit more admin duties as well. If you don't feel comfortable posting please PM me. Thanks!

I'm getting rid of Facebook. Too much hassle. Had a customer complain that we put a hole in his engine block doing a water pump and timing belt and he's now leaking oil. We did the repair 7 months ago. Within an hour of the one bad review I had two additional reviews from people I investigate who happen to be friends of the first guy who said we used tape to cover an engine block hole! There's no policing this type of thing.

 

I get good results from Google Adwords and I took my Facebook account down.

There is no policing any type of review platform unless it is on your own website. Yelp, Googl Review, Facebook etc fall into this category.

I know you are pissed off and I would be as well however by just turning off facebook as an act of defiance you are just keeping yourself in the digital dark ages. To make any any social media / review platform work for you, you must be consistent. To drown out the negative reviews you must obtain positive reviews. The only way you get ahead of it is to embrace the good with the bad. There is nothing anyone can do to stop change. This is the world we live in.

The reason you want to have your Labor sales higher than Parts is simply you make more money off labor. If you are shooting for a 70% GP on labor and parts is around 50%, which would you rather be your biggest profit center. Its damn good that you are getting 55-57% on labor because that probably helps compensate for the off ratio. What is your Hours Per RO?

Sorry you have to go through stuff like this. We had a similar situation recently but it was more that the dealership was trying to throw us under the bus. We were totally not at fault but of course the dealership has the most ethical people working there.

When I have been in situations like this in the past it really does help to be profitable so when you take hits it doesnt hurt as much. I know you had an issue with your labor rate and charging the appropriate amount. Something to keep in mind.

marketing can be a hit or miss. We try to play the law of averages where if you send out X you should get a return percentage or whatever that might be. The highs and lows of marketing can and should be anticipated especially when factors that MAY play a role such as climate, time of year, holidays, etc. The best advice is to just hang in there, evaluate your marketing, and think of things you might have more time to do now. You may also want to just jump in your car and go out and meet people. Go to businesses, hand out cards, shake hands. You have nothing to lose there.

An off tangent thing to think about is how do you help to even out these highs and lows? Something I have been thinking about but I have seen work for some shops (very very very tightly ran shops) is to train your customer base to pre book appointments. I know this is A LOT easier than it sounds however if you implement a system and really make it a part of your business operations you'll probably start seeing it pay dividends within 6-12 months. It is certainly something on my list to try!

You make it sound like a wage law. Obviously 30% is not a bad benchmark but it can definitely vary. I probably pay my techs closer to 40% loaded of my labor rate due to other factors such as tenure and experience. Before one of my three techs retired in May, the average tenure of my techs was 31 years. It's now 29 years with the remaining two. Is 40% too high? Maybe, but I haven;t had to hire a tech since 1994 and I can probably count on 1 hand how many days a year the three of them have called off sick in a year. When I hear stories from you guys about the problems finding techs I just smile.

This is very true and great point! If you can reduce expenses elsewhere to compensate then you can certainly pay your techs more. It is more of a rule of thumb however it is important understand the WHY. In this business, your payroll is probably the biggest cost and is rather constant. For this reason there is a lot of emphasis placed on paying an appropriate wage so that the employee makes a good living while the business also stays profitable.

Another good point is that techs are harder and harder to find these days. This is however a dangerous line because many owners get it into their head that they are almost held hostage to pay their guys more and more just to keep them when they may not being doing their business a service and also keep on guys that aren't worth the higher wage. Even though techs are harder to come by these days, it is still a big ocean out there!

We had a fun couple in today. Well, Mrs brought it in and Mr called about six times saying to do this and do that. No, my Manager tells Mr we have to test and verify before we go on and put fuel pumps and filters on a car as you're instructing. We agree to run tests, test drive, and they agree to pay for diag time. They call back wanting an oil change, too. We test drive, run tests and find issue (not a fuel pump). They say we're screwing them over with our charge for diag time now. We explain our process and what's involved. Mr is ok with it. Mrs then comes in and starts in on my Manager. He's polite, listens, and explains it all over again. She starts throwing F bombs at him, my shop, and our 'tactics'.

 

I tell my Manager to go in the shop and get the car down and ready while I soften the situation. She understands and insists on paying after I tell him I'm going to let this go for nothing today. She cries. When I go to back the car out and bring to her at the front my Tech says he chalk-marked a tire where there was a gash in the tire that might become a problem. We didn't complete our oil change and stopped what we were doing when the F bombs started. I bring the car around and tell her thanks and that she should get the tire looked at. I show her and she accuses us of doing it. 'Listen, I'm being nice here and you're out of line. I'm sorry I can't help you and I hope you find another shop that can make you happier." F you, F this place blah blah blah. Merry Christmas and drive safe! Wow

Really disturbed people!!!

I had a guy tell us we should close down because we didn't know a price for a particular job off the top of our head. When we asked why he would say that he said, "doesn't seem that you know what you are doing." Then when we proceed to ask him for info and phone number he says, "You don't need that, I just need a price." Very thick west indian accent. Majority of our clients are immigrants and dealing with different cultures and how messed up people are after they have obviously had a terrible upbringing is a challenge. I get pissed off just hearing the stories even though I don't even deal with the customers!

Hey Tyrguy, I feel you. There are customers that just want to take advantage of every single situation and suck every last penny out of you. My example was from last week.... had a comeback for a bad wheel bearing over 3 months after it was done.... but instead of coming back to me, they take it to another shop. We have a good relationship with that shop and they said it was no big deal (2 of the 3 bolts for the hub were loose) and they tightened everything up. Once I found out that they fixed our comeback (for free byw, customer was not charged at all), I offered the customer $40 for goodwill for the inconvenience. They said no and wanted money back for the entire job. Offered them $70 (labor for the wheel bearing) because I did not want a pissed off customer even though it was evident they wouldn't be my customer anymore but they turned that down because they wanted their money back for the whole ticket (we also did inner tie rods on that ticket). They wanted money back for their entire ticket and money for time missed time off of work and threatened to sue me. Well, I am probably going to end up in small-claims court.

 

I obviously have the signed invoice with our warranty agreement. 24mo 24k mile warranty to be done at our shop only. So not really worried and I thought I did the best I could in this situation. Yea, I hate the public too

As you grow you will deal with this type of thing. In reference to your other thread, I think you will notice that once you increase your labor rate you'll start to see the bottom feeder customers drop off. Also as you grow you'll be able to spot them. Let the junk shops that are going nowhere deal with that headache.

Self driving cars that drive themselves back to the dealership for service could be a concern.

Major litigation I foresee if that ever happens. Who knows who will win. Dealers and car makers have deep pockets...

also something to think about is most customers do not rate your business based upon your labor rate. The ones that used to come in for work at 35/hr you need to help them come to terms with your growing biz and hope that they will support it or else get rid of them. I was in the same boat you were and if a divine entity would endow me with an increase of +500 cars per month at half my labor rate I would emphatically decline. You are selling TIME and if you are short changing what you are selling and not turning a profit then why even stay in business? No matter what you do, 35/hr is WAY too little.

Regarding to you vs your neighbors, as mentioned before it really doesnt matter what you charge hourly. I would be surprised in 1/100 people question you on what your actual labor rate is. Provide value and to the right customer at whatever you charge and you'll be fine. Value must match price.

If you're looking into a 20 group Bob is not the right guy to talk to. IMO you need to speak with Jim.

 

Good luck!

Bob was kind of the gate keeper to that whole process.

Weekends is a touchey subject. There are going to be for and against it. For the morale of your staff and maybe even your own quality of life it does make it very appealing to close on Saturdays. The flip side is as we are becoming more of a ME ME ME NOW NOW NOW society, businesses can take advantage of the convenience factor. I think it is a little too short sighted to just look at what kind of money you are making on that particular day. As another member stated maybe you should promote that you are open on Saturdays. Also do you calculate what you are making for Saturday drop offs for work during the week?

What is mastermind and which 20 groups are you looking at? Have you spoken to Jim Murphy?

There is a new mastermind group Greg Bunch of Aspen Auto Clinic is starting up. It is geared specifically toward multi shop owners which is what we are transitioning to become. I'll be attending their first meeting and checking that out.

I have spoke to Bob Cooper about Elite Pro Service but I haven't spoken to Jim Murphy.

I will also be attending another 20 group meeting to test the waters in February. I believe the name of the group is Import Auto something? the name eludes me at the moment.

 

 

I see above you've stated a connection with Elite.....to what capacity? Are you in a 20 group, part of a one on one coaching? Or looking to be a coach?

I was a coaching client for 2 years with Elite. Not currently a coaching client, transitioning to mastermind and 20 groups. Elite is a great organization though, nothing but good things to say about them.

Since being in 20 group? First year we in group we did 875k. Last year 2.4 mil. Was 5 bays and 2200 sq ft, now 12,500 and 15 bays

 

 

Sent from my iPhone using Tapatalk

Excellent!

What kind of financial and operational growth have you guys seen?

Absolutely my fault, and I readily accept that fact. And I didn't mind making it right by giving the service away at no charge. And if the customer had said it's an old car, or I can't afford it I wouldn't have thought anything of it. It was just the fact that he admitted he would have had given the authorization that got under my skin.

Yup the guy completely sucked. I'm not sure how you handle those types of shitty people but I will put a smile on my face, give them the best service and never ever book them again.

Also in the spirit of the headline I too also hate dealing with the public! That's why I hired service advisors and I don't speak to a single customer about their vehicle at all. Its been really great and has helped me exponentially grow the business.

Please do not take my post as any sort of disrespect, just my humble opinion.

I totally understand the situation as explained. In my opinion you are both wrong and to go further, as a business owner and a leader you are 100% the person to blame. I hope you can follow me on this... The customer was obviously being a douchey customer. We have all experienced and it happens. For whatever reason maybe his personality, maybe you didn't build rapport with him, whatever the case is he is not what I would consider a client and not a customer. A client to me is someone that we give our best effort and in turn we buy a little good will on their part. Customers are totally "what have you done for me lately" types and will more likely take advantage of situations that best suit them.

Now to be fair, the reason that this situation happened is totally your fault. As a business owner and a leader you have to recognize that anything and everything that goes wrong in your business is your fault. As outlined in other posts, you should have a Standard Operating Procedure which I would assume entails no work to be done without prior authorization. If this is a common problem of alignment checks and waiting on approvals, you could have a SOP that gets you a pre approval at the time of drop off. Whatever your SOP is, you should have it written down and it should be followed. If you are deviating from SOPs that are in place to reduce this type of thing from happening you only have yourself to blame. The guy could have been an even bigger douche but it could have all been avoided if you had done what you were suppose to do from the beginning.

I hate to be someone who is beating you up over this. The only reason I am is I have been there. Hell I still complain about douchey customers but anything that allows them to take anything away from my business is my fault.

I was in 20 groups for many years. I started in a RLO 20 group some 18 or so years ago. After our Coach left and joined with Elite I stayed with them for many years. I think I dropped out 3-4 years ago. I miss some aspects of it but there were many things in the process that became stagnant. That was the sign to me to drop out.

Understandable. Did you ever consider joining another 20 group or something else comparable?

 

 

 

The statements made above sort of explain themselves. I have always been taught.....

 

When discussing parts discuss margin not markup, if you dont know the difference it is rather large. To mark up a part that costs you $100 50% you would charge $150. To have a 50% margin on a part that costs you $100 you would charge $200.

 

This has nothing to do with the comeback ratio. The best shops still need a minimum 50% margin on parts to maintain profitability.

 

Has you known this when you were in business you may have had the opportunity to fund a retirement program not only for yourself, but also the employees and have more than a tool box of old tools.

 

It is unfortunate that so many techs hang their own shingle and never learn the business skills to be successful. The only thing you are doing by working cheaper is subsidizing customers vehicle expenses at the cost of your own families financial health.

I couldn't have said it better myself.

Curious, what kind of margins are you getting and whats your volume look like?