phynny

I'd charge time involved. The cost for a tap is on the shop as it's not really an uncommon part.

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I don't understand what you're doing during a day. If you are working an 8 hour day you should be charging 6-10 hours, if not, you are working for free.

I will never lower a price to match a dealer price. My techs are more skilled, my warranties are better and my customer service isn't even on the same planet at the "dealer."

How can he bad mouth you when you fixed it and the dealership failed twice?

You will never win with a price shopper because there will always be someone cheaper, a l w a y a =D. Just keep a great reputation and the rest falls in line.

Exactly, I've wrenched for a long time so I have a realistic labor time in my head already. On a small 1-3 hour job I would up the time 25-30%. On a large job, IE an engine, I charge by days and a 2-day or 16 hour minimum. So if the book says 10 hours, I'm charging 16. If it says 18, I'm charging 24. His has worked very well for us and we have never had complaints.

We pay a small salary plus a % of labor and I do not want a job rushed. By using these times we are normally always within an hour of my estimated time. On tranny jobs I add 50% on to the time and again it works out perfect. On electrical troubleshooting I charge by the hour.

If the job calls for 10 and I charge 16 and do it in 8 I will charge around 12. Customers LOVE getting a lower bill than they were quoted.

I'm at $65 hourly and a pretty common matrix. I'll post it up later. I've been catching some flack for charging by the hour for diagnosis. But otherwise no complaints. Had a customer tell me 3.2hr was outrageous to diagnose and repair an intermittent a/c issue. Has me rethinking the by the hour concept.

 

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Take the previous 4 week average and pay them that.

Best thing I did Phynny was get a Service Advisor. His job is not just to create sales but to hold profit margin as well. I average 51.66% parts margin rather than the 27.10% when I was up front. I'm just too nice of a person and help others too much. Very difficult thing to let go of but I found for my business it was one of the best decisions I made.

I agree that if you can't handle it yourself then you should hire someone to do it. I on the other hand, left a job in which I made more in my 1.5 hours of overtime per day then most people make in a week. I only say this to explain that I own a shop because I enjoy the work and like providing a much needed honest service but I'm not in the mood for short-changing my family.

He's talking about the quality of the repair, customer service and warranty on all work done. And all this at less than the dealer price!

Xrac is right, walk away unless you're fully committed.

Very interesting responses from all of you.

 

This is what we do at our shop please correct me if I am not doing it the correct way.

 

We use Real Time Labor Guide. I dont know how good of a system this is but it works for us now.

 

My husband is alone in the morning while my workers go to school. They dont get to the shop till 2:00pm.

Their rate is $16.50 an hour and we pay according to labor guide, for instance if a job takes 3 hours they will get pay for the 3 hours at their rate. If they take 4 hours they will still get pay for only 3. We always have work, so they are always busy. They clean their work area, and they also have their own tools. I would like to pay them hourly from the time they get here to the time they leave. That way I can have a little more control over them and I can set rules and regulations. Unfortunately, our shop is not there yet. I dont want to take the chance and pay them hourly when we dont make the money. By us paying them flat time, I know that we made that money for that week.

 

Is this a fair system? Am I doing something that Is not right or Ilegal?

 

I want to be fair to my employee they are good techs.

If you go strictly by the guide then you are doing them a serious disservice. The labor guides are a starting point for a new clean rust-free vehicle and even then they can hardly ever be met.

Just felt like writing about a recent customer experience.

A week ago I recieved a call at 8:30pm (office phone was fowarded to my cell) and it was a lady saying she needed help repairing her vehicle. The vehicle is a 2005 Saturn Ion and she's already paid twice to have it repaired. The first time was by her son-in-law who works at Advanced auto. He scanned the car and replaced the drive-by-wire throttle body which cost her over $300. Since repair number one did not fix the problem she took it to Saturn who replaced the pedal assembly. This was also very costly and still did not fix her problem. So now is when I recieved the phone call and the fun begins.

She tells me she is a single mother of 2 daughters and only makes $10/hour. Though I somewhat feel for her I really don't see why I need to know this information. I promise her I can fix the vehicle but since I have not seen it I have no clue what it will cost. After recieving the vehicle I find that the old throttle body and pedal assembly are in fine working order. Turns out the wiring harness is damaged and it also burnt up some capaciters in the ECM.

After calling her she says she doesn't have money to complete the repairs and cries to me because she doesn't even have the money to pay me for my time and it's my fault apparantly... I really do not understand how people will blow hundreds of dollars on bogus repairs and then cry to a shop that can actually fix the problem, and then want them to do the work for peanuts. Feeling for the lady, I offered to give her a 1999 Mercury Couger with very low miles and excellent condition for FREE and her response was, "well that's not the kind of car I want." I almost just hung up on her... Next she says she's going to have her friend come and get the car and she'll pay me for what we have in it when she saves up enough money... After explaining that we can not do that and the bill must be paid first all of the sudden I'm the bad guy. The lady is a chain smoker and If she didn't smoke for a week or two she could easily pay the bill with us.

So now this vehicle has sat on my lot taking up space for the last 2 weeks and I'm very frustrated. So I guess I'd like to know if anyone can explain to me why people believe that competent shops should have to pay for poor choices that vehicle owners make? This lady even asked me if I'd total the car for her since she has full coverage LOL!

I too have made countless notes while working with the old books. I grew up those books. It's hard to imagine the way things were back then. With no IATN, Internet, Identifx, etc.

 

As far as Labor Guides go, or Labor "Misguides", as I like to call them. Please, we are held hostage to these guides way too often. I have a totally different way of thinking than from most. If my tech takes an hour to test and diagnosis a complicated electrical problem and another tech is doing a brake job that takes an hour, are they both worth the same, with respect to labor rates?

 

Let me put it another way...It takes 2 hours to cut and trim my lawn. It also takes two hours for some brain surgeries. Are THEY BOTH worth the same because they both took the same amount of time.

 

Labor rates and labor time must be redefined.

 

Sorry for go on and on, but you got me started Gonzo, it's your fault (all good stuff, right?)

I completely agree and this has always bothered me. The skill level required to do a 30 minute oil change vs a 30 min diagnoses of an electrical issue are on opposite side of the spectrum.

Gonzo I recently went through a similar issue, they even called the dealer and were quoting repair times to me. I called the dealership and their starting price for the same repair was over $280 more than me and it did not matter to the customer.... They just kept going back to the fact that I was charging "more hours".

I know it will be another judgment call, but... If you are an introvert as much as you think you are, maybe hiring a kid better yet a girl to distribute the fliers first, then stop buy and introduce yourself, so it does not seem like you are begging for business. Offer them the pickup/drop off - if you can. Coming from experience, it's a big benefit to a business owner

GL

I was thinking the exact same thing. For $60 you can have some passing out cards or flyers for a good 4 hours.

Thanks,

 

that is my problem at the moment (amongst many) is finding a shop with higher profit margin.

This has been a job all by itself

You lost me, what exactly do you mean?

If we're talking labor and parts you need to make a far better percentage than that. I will not go below 60% combined profit margin.

Thanks for the input guys! Makes me feel like I'm not doing so bad! I do have one somewhat unrelated question. For instance today I did (more like started lol) a rear wheel bearing on an explorer. It killed book time. It was very rusty and the toe link and upper ball joint fought every step of the way. It took hours just to get apart and ended up ruining the link and ball joint boots and will likely replace the joints. How do you address this problem in regards to billing? I typically stay with book hour and don't bill more time and often find myself paying for the parts to keep happy customers. This time I told the customer I was upping the time 1.8hr and ended up charging regular price on the parts. I was amazed that he didn't give me the third degree? How do you guys handle this? If I don't start charging more I won't be able to continue.

For instance this job had no indicators until partially disassembled that it would require more parts and labor, and even then I could begin to guess the degree to which this would occur!

 

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It's a fine line and one that we struggle with. The way I see it there are 2 options. The first being pay closer attention when you price it out and quote them a higher price which could cost you jobs if people are price shopping or charge them after. We have starting telling people that we charge for rust or broken parts and have had very little backlash. We are even planning on putting some signage up in the office talking about rust and billing.

Remember this, every time you give a "price" on a job it's an ESTIMATE.

Never really thought of this but it's very interesting. I have faith in morons so I personally believe we'll always find ways to crash cars =D

Not sure what else we can do honestly :/. Many on here are very successful in business and it sounds like your transmission business breaks every successful business rule. If I took 30minutes to speak to every customer that wanted to talk I'd be doing a serious disservice to myself and my family. I'd be losing money and taking time away from my kids and wife by working at night and on my weekends. If I'm at my house and a buddy stops by while on working on my race car but having a customer take my time and money, never going to happen.

Where are you located? I firmly believe that we as shop owners should work together and be more of a support net when needed. After all there is plenty if work to go around. If you are anywhere near me you are more than welcome to come see the inner workings of our business. I know anytime I find something that helps efficiency I pass it on to the other honest shops in my area.

We are located in Morgantown WV.

I don't understand some of your comments, first being if you know nothing about cars yet you say older cars shouldn't take more than book time? That logic is severly flawed and can/will serioulsy affect the bottom line. Bolts rust/break, things are brittle, dirty etc, all this take time and time is money. Unless you specialize and only do one type of transmission, book time is hardly ever going to be met. If your husband puts in 65 hours/week and your labor rate is $70/hour you should be easily doing over $200k/year. Heck, even if only 40 hours of that is repairing vehicles that is $140k/year.

A hard fact is that it is a very rare ability/skill to be able to manage a business, especially when not trained and schooled on such matters. It takes time and a lot of work to remove your personal thoughts/opinions out of the business. An example would be lowering the price instead of charging List price for fear of customer backlash.

Hope some of this helps, sounds like your husband isn't really open to running a profitable business by the things you've said.

Quick question, does he charge diagnostic time (including test drive time)?

If he's buying remand or dealer parts they have a suggested resale value. I just ordered a tranny from jasper and cost was 2500-2800 (don't remember exactly) and list is 3500. And if he's going by suggested labor time for the hourly charge he'd be losing money there also. This particular calls for 7.2 hours but on a 10 year old vehicle it will take almost twice that time so we charge for it.

Folks have to realize that we don't get to work on new cars because they are all under warranty so these "suggested times" are really only a starting point. All tranny shops in my area are 95 and up and we are in a small town.

Hope this helps

They may just be selling those operations off to someone else. They simple change the name and keep operating as usual. Our local GE chemical plant was sold a few years ago to an Arabian company (Sabic).

Possible but highly unlikely. They're selling point was the fact that they've been doing it for years.

GE credit is exiting consumer lending as reported by WSJ on 8/30/13. Also, most consumers that need this type of lending

are usually not credit worthy so they get turned down.

I do not think this is accurate as we just received all of our advertising and system from GE 2 days ago.

Torches are a good one, can't live w/o them. I wouldn't buy a lathe, cutting rotors for the most part is a thing of the past. The metals in the rotors anymore just don't hold up. We have the machines as do many shops in our area but there is nowhere to get rotors turned. No one will do it, just not worth it IMHO.