ATLAuto

Great article, as always. Thanks for posting.

Who are you guys using to stock your air / oil / cabin / etc filters? We are looking to start keeping a decent inventory on hand, so we never need to call the parts store. Curious on anyone's experience here.

Just spoke with Kauffman Tire. Here is what they are told me: Deliveries 2x per day for free. Hot shot delivery for $25. Tires sold at the same cost their Kauffman retail stores pay. I found this hard to believe, but the numbers checked out. Kauffman has two distinct businesses ... wholesale and retail with separate business models for each. 20 different tire sizes will cover 85% of the vehicles on the road. I walked into this conversation thinking that I would need to stock like the local Firestone to get decent pricing. Our Firestone keeps over 1,500 tires on hand at all times ... that's around $150k in inventory at all times. Not many shops can float that kind of cash. However, after talking with Kauffman, it looks like getting into the tire game is easier than I thought. Keeping 2 full sets of each of the 20 sizes on hand (8 tires * 20 = 160 tires) would only cost around $20k in inventory. Going to move forward with this one. EDIT: Attaching the tire size matrix showing the most popular sizes. Any tire supplier can give you this.

Joe, how does your shop handle the road side assistance aspect? I'm guessing that you outsource this to a towing company or someone like AAA.

Wow. Nice refinancing! What rate were you able to get? I'm looking at Prime + 2% right now. I'll take a look at Suntrust. Good thoughts.

Prices are good, but not incredible. Craigslist has been a good source for us. Also, camping out closing dealerships (like ncautoshop) sounds like a great idea. The liquidate for pennies on the dollar when they go down.

Curious which banks you guy use and are the best for small businesses? In terms of features and lack of fees. Interestingly enough, this has been a tough one to google, as most "small business bank" articles are focused on the lending-side, not the ongoing operation side.

Miller makes MIG wirefeed welders for steel and TIG for aluminum. Both can be had fairly cheap off craigslist ... just keep your eye out for them. Also, make sure you'e got power for it at your shop. I would also grap a Speedglas helmet ... it auto-dims, so you do not have to constantly flip your helmet up and down while welding. A lot of guys will criticize these saying that the time it takes to auto-dim is too long, and your eyes can get injured. Maybe. I've never had any issues with them and have welded for 15 years.

Agreed. Great advice from someone who has been there and done it. Thank you.

Great article on LLC's vs. S-Corps in our industry. Provides a very good overview of when and why to choose one over the other ... and why NOT to go with a sole proprietorship. From today's Ratchet + Wrench: http://www.ratchetandwrench.com/RatchetWrench/August-2013/Classification-Clarification/

This is an excellent thread. Funny story, we had our NAPA sales rep in the store the other day talking about their "OEM-quality" parts. I wanted to test him a bit, so I asked, "What's the difference between your OEM brake rotors and Advance's?" He loved this question and started talking about rotor plate thickness, number of vanes, metal densities, etc etc. I said, "Ok, Ok, that's interesting. Let's test this out. Send me a pair of yours right now." He did. Then, I called Advance for the same part, $27 less, and we had a show-down. We got out the calipers, measured everything, counted the vanes, "dinged" them (his method of testing density of the metal). ...turned out, they were the exact same rotors in different boxes. Not a end-all-be-all scenario, but it sure made for a good laugh.

Update on this one. Just got off the phone with DrewTech. Great guys. In summary, I would call the CarDAQ a top of the line REFLASHING TOOL with some added diagnostic capabilities. Great with Toyota's Techstream, great with Volvo's VIDA, and great on newer GM's (the sheet is misleading, you still need a Tech2 for older GM's). Other OEM's, you'll need another diagnostic tool like the Snap-On or dealership level. Junior, I'm not sure if you've seen this chart, but it really clarifies what the CarDAQ does and does not do: http://drewtech.com/technician/support/oemapps.html I'm going to order one.

Please do ... I am especially interested in this topic among a bunch of others. 3 failed replacement parts in a row is absolutely ridiculous. Have not seen that (yet) in Atlanta.

Junior, did you end up getting this tool? Very much looking forward to hearing someone's experience with it. On another note, I've been hearing a lot about Autel lately. Supposedly, a bunch of ex Snap-On guys started the company and made this tool to give Snap-On a run for its money. Please don't quote me on that, since it's what I heard from their salesperson. http://www.autel.us/

Wow! Great to see our hometown's Braxton at the top of the list. They are a great shop ... well respected throughout Atlanta. While it may be tough to beat these guys immediately, we will be giving their webpage a run for their money shortly!

Agreed on this. All the independent shops around me have owners in their 50's or 60's. None of them have children that will be taking it over. It's not a glamorous profession at all ... their kids went on to do white collar work. It should be noted that all of the franchises around me have 25-35 year old managers behind the desk, and the owner comes in once a week or once a month. If a business owner can get their shop to run like a franchise and make $$ while he sleeps, it would be a great retirement income.

There are many industries that bill like we do ... most skilled labor jobs charge parts and labor separately and then charge a parts mark-up. Plumbers do it ... they mark up their fittings, tubing, etc. Construction workers do it ... they mark up their lumber, nails, etc ... MEDICAL CERTAINLY DOES IT!! Wow, there have been 20/20 specials on the medical field. A $1 pill becomes $54 the minute you step foot into the ER. Most industries do this. It is the norm. We can accept that, or we can question it. Personally, I choose to question that and look for other options to keep the customer as happy as possible. I will not accept a norm or a standard way of doing things until I am convinced it is the best way. Our industry has marked up parts due to the vast difference in jobs that we see. Examples: Brake job: 1 hour time @ $100/hr and $100 worth of parts marked up to $150. For this job, you could go either route. Mark up your labor to $150/hr and keep parts at $100. Or keep labor at $100 and mark parts up to $150. It really doesn't matter either way. Valve spring job: 6 hours time @ $100/hr and $2 worth of parts marked up to $5 For this job, you cannot go either route. If you just used your stock, "I'm not going to mark up parts at all and win on my labor being $150," you would lose the customer if they did any price checking at all. You have to use the lower labor rate and the standard parts mark-up. This distinction is easy to make for a small shop with one service writer and one tech. They know the numbers; the can make the call at the front desk; they share the profits; no issues. However, imagine trying to train a team of 6 service writers and 1 manager to do this all day long with 40 cars per day. Not really possible, which is why most shops go to the standard parts mark-up table. I should add that I'm also still battling this, myself, as I HATE having to explain parts mark-up. It's just an awkward conversation every time, and if I can avoid having it, I will. Any other suggestions are more than welcome.

It all depends on your purpose for making the plan and who its audience is. If it's just for yourself, you can really put in anything you want. It would just be a plan to convince yourself that you've covered everything and say, "Yeah, this'll work for sure. I'm convinced." If the plan is for the bank in order to get a loan, you need to be a lot more specific. The bank will want the first two years of finances broken down month-by-month, and then the third year summarized. Banks will also look not only at your business plan but how wisely you have been leading your life up until that point. They will look at your credit score, your current mortgage payment, car payment, child support payment, last five years of W4's for income, wife's income, etc etc etc. You want your business plan to be rock solid, but you also want your life to be rock solid leading up to this point. The business plan that you found online is solid ... it looks like it covers all the bases that the bank will be asking about. When you present it to them, I have found that they are not going to go into all the nitty-gritty details of everything. Rather, they are going to use it and just start asking you random questions about the business. Their goal being to find out, "Has this guy done his homework? Has he asked himself the tough questions? Is he financially prudent and wise with his business?" Therefore, come prepared to answer just about anything, and you should be alright. Shoot me PM if you need any specific advice. I've just been through all this myself ... got a ton of documents that may help. LLC forms, Operating Agreements, Business License checksheets, etc etc etc.

I'm not sure I explained this clearly, my apologies ... Integrity is not advocating to simply drop all margins on parts and just lose that part of his income. Rather, he adjusts his labor accordingly, so he makes the same $$ at the end of the day, just split up differently. Example (old way): Labor Rate = $95/hr Parts Margin = 60% Example (new way): Labor Rate = $155/hr Parts Margin = 0% Using the "price by total job" approach above, this allows you to dodge the entire "why do you mark up your parts so much" argument entirely, while still maintaining the same necessary profit margin at the end of the day. Maybe I'm way off base here ... could really use some advice or input from a few owners that have moved to this model.

You are the first shop I've seen that does this, and it sounds like a GREAT marketing tool. It would be so nice to just avoid those "Why do you mark up your parts so much?" questions altogether, rather than explaining over-and-over again the very valid reasons. We may go to this model and adjust our labor rate accordingly. Has anyone else done this?

No kidding, Jeff!! One photo taken beforehand = 30 seconds. Searching for the diagram in AllData afterwords = 15 minutes!!

Been thinking about this a lot myself. Breaking down invoices line-by-line typically has two or three issues associated with it: Arguments on labor costs (discussed above) Arguments on part price mark-up Arguments on shop supplies, if you add this one Lumping everything together by job gets rid of all of the above arguments. And, they have no hidden fee surprises when the invoice comes out. A business adviser that I know questioned the legality of this in regards to taxes and whether or not the state required separation of parts and labor. We did a bunch of research, and here is the law in Georgia: Taxes must be paid on parts, but not on labor. If the invoice separates the two, you are fine. However, if you combine the two (parts and labor) into one job, then the entire job must be taxed: http://rules.sos.state.ga.us/docs/560/12/2/78.pdf

Wow ... what an awful design. Probably a $0.15 cost save at the plant but violates major design rules. I always have a couple paint pens handy for stupid stuff like this. http://en.wikipedia.org/wiki/Poka-yoke

My understanding is that the "dealer tool" is nothing more than a fancy pass-through tool. It's the software on the laptop that matters. I'm going to give Drewtech another call this week. Please let me know if you have any specific questions you want me to run by them. Probably going to buy this tool.

I'm getting a tired of the pink Cintas-style shop rags we use. They don't soak up much at all and are really rough/gritty. I'm always scared a tech is going to use one to wipe down a car and cover that vehicle with scratches. My friend in town runs a salvaged textiles warehouse. He buys unpurchased t-shirts and cotton clothes from Goodwill and Salvation Army by the semi-load. Then, at his warehouse they cut them into rag sized pieces and sell them dirt cheap in huge bundles. I'm thinking of over moving over to using this system and washing the rags myself. Have any of you guys done anything similar? Any EPA issues you've run into with doing your own in-house laundry of sorts?