nmikmik

Thank you for the site,but

I have checked out few vehicles and they are all with the steering wheel on the wrong (depending on where you live) side of the car.

Pretty useless in US imo

Thank you for the research and of course for spending the $$$ on that research!

I would be interested to find out how they justify the $1k price and if they can prove the following statement:

"300% Higher Conversion Rates Than Industry Average"

Who's industry is it? SEO? Website building and hosting? Marketing?

Sounds like an easy statement to make but not to substantiate

It's like we are #1 in town for brakes! imo, even that is better.

Just ran across this link that has them all lumped together and does not "rate" them.

http://www.autoinc.org/archives/2013/july2013/mechanical.htm

At least there some information they share. I personally love the answers regarding the tech support.

"award-winning customer support and training. We also have library staff that can assist you to find the information you need."

It's like today's politically correct way of saying - "you get nothing"?

I never had a body shop, but one of my friends did. Considering the fact that you want to make it multipurpose and the competition, see if you can find something that primarily serves luxury client. That should give you better hope for been profitable right from the start.

Balance sheet is the best indication of how the shop is doing, not the number of booths. You should look into any new environmental laws that may or may not be grandfathered to the new ownership. Those things (just like the cigarettes)

can kill you

Thanks Jeff,

sounds reasonable, i just need to figure out how productive they are.

Between being honest about the changes and giving them an incentive to work hard, we should be ok ha

Thank you CarGeek,

That's pretty much what I am doing - hopefully today.

Maybe I am overpaying 15-20% over the asset value, in a rough estimate. I just came to conclusion that there is no good locations left in the area and I am paying for the location

btw, meant to tell you. 70 stores purchased and kick-started - wow!

They are paid pretty well already, but no profit sharing right now. I don't know at the moment how good they are because I have not seeing them do the work yet, so profit sharing % will depend on their performance.

Do you pay them % bonus at the end of a week on the net profit?

I will be shadowing the owner, but he does not want to stay that long, so maybe will shadow him while negotiating

Thank you for your suggestions!

Hi,

I am in a process of purchasing a “functioning” shop where two mechanics (one A and one C) working as a father and son team. I would love to change some things at the shop right away, but know it could be a recipe for disaster. So I am thinking to work with them for a couple of month until they feel more comfortable with me, then start giving them job descriptions/expectations etc.

My nearest goal is to grow the business, so hiring new tech(s) is a must. How do I make the two original techs comfortable with the idea? I suspect they are pretty set in their old ways of not having anyone there. Any suggestions?

Oh, and if you happen to have a set of questions that you usually ask prospective tech employees/candidates, please PM me.

Thanks!

Hi Joe,

How do you have them work for a few days in the shop?

"After we narrowed down the applicants to 4, we had each work a few days to see how they work, fit in, and interact with the rest of the staff."

i.e. how do you put it on paper, a probation period, temporary employment?

I would like to institute a similar system and have no idea where to start.

Thanks!

I think I have seeing Joe saying that in general it is considered a good practice to have profits broken down 50/50 between labor and parts.

So, figure what is your actual cost of labor and estimate the parts cost to be the same or the percentage in relation of your 150k to your actual labor profit and mimic that to parts.

I suspect it's very subjective on the type of shop you have and all bunch of other criteria, but in general it could be ok. Veterans here may be able to give you their rough numbers to help you picture it.

Anyone tried or used the http://www.omnique.com/ ?

It's pretty overwhelming (not like the rest of it is a walk in the park) looking at all the different systems and options.

Thanks for sharing!

a. Welcome to the wonderful world of business management!

b. Sorry to hear this results from the direct mail.

You have about .5% closing rate on your mailings. The average response to a direct mail campaign should be around 3.4%

1. I think you are almost better off targeting the same names and addresses 3-4 times in the row rather than trying to blanket all the names on the list. In advertisement consistency is more important than almost anything else.

2. You must have a good online presence and reference it in your mailing to increase the "call rate"

c. Handwriting the name and address (can be done by hired school kid) increases the "open rate" about 75% from my experience.

Send me a PM with your email or paste your flyer in the PM, maybe I can give you some critique of the content.

Wish you luck!

I feel that there always been and always will be a place for a mobile mechanic trying to earn a living. I am sure many of the shop owners here started that way. If it takes some of my business away, so be it, it's the market forces at play and nothing I can do about it, nor would I want to, considering you may end up working with that customer I really don't want.

As far as the labor rate goes, I disagree. In the sense that a brick and mortar shop should charge a somewhat "standard" for the industry and geographic location rate. Are this arbitrarily set? no, it is dependent on the going $ per sq ft lease rates or the payment on the building financing. If someone is charging $90 an hour and someone else is charging $200 there better be a reason, just like there should be a reason for a mobile mechanic not to have to charge the parts mark up. When someone is coming to a mobile mechanic, they consciously or subconsciously know that this business may or may not be there tomorrow. So whatever warranty you give them could be a mute point for them. When they come to a brick and mortar shop, they have different expectations and are hopefully willing to pay a different price. What it boils down to is the very same reason this thread was started "Sell the job not the labor and parts" .

I am only trying to point out that if you would have started your answers to the post with this statement and made people here aware of the the fact that you are "mobile", it would have limited amount of unenthusiastic replies.

Wouldn't you agree? Integrity

 

Not sure if these questions are designed to be or leading into a jab at me personally or at Mobile Auto Mechanics in general or both or neither, but let me just preface my answers by saying that I am very well aware that a lot of the rules that apply to a 10 bay shop do not apply to me, or at least do not affect me nearly as much. The implications of a 10 bay shop not marking up parts is likely to be quite a bit different than a 1 man mobile mechanic not marking up parts. I am not necessarily even recommending that EVERYONE immediately stop marking up their parts on ethical or any other grounds.

 

Being a Mobile Auto Repair business, I have overall much less overhead than a regular shop and therefore I can afford to charge a lower labor rate than everyone else. I can also afford to NOT mark up parts. I am my own receptionist, janitor, supervisor, CSA, accountant, maintenance man, etc etc etc...so I don't have all the costs associated with paying individual people for each one of those positions. This is the way I have chosen to structure my business and I am very pleased with the way it is working out.

 

Let me also say for the record, perhaps because of my personality or maybe because of my religious or social background I am NOT in this business to make money (at least not lots of it...*lol*). I started my business because I wanted to do something that I felt was meaningful and helpful to people and that I could do QUALITY work and be satisfied in my Job. I have worked factories and I have worked Corporate Retail jobs and I have worked in the food industry and NONE of those jobs could give me what I seek in that regard.

The bottom line FOR ME is, the less overhead I require, the less I have to charge my customers in order to make enough profit to keep my business going. The less I have to charge my customers, the MORE satisfied they will be with me and more likely they will come back. I can then be picky about my customers (weeding out the good ones from the bad) which improves my overall personal satisfaction in life not having to deal with the stress.

 

I am not sure that I completely understand the exact reason for your first question or even what you mean by it. The relationship between a shop's labor rate and a shop's overhead is only associated by the fact that the labor rate drives revenue and the revenue is what pays the overhead costs. So in that sense, yes, the labor rate is somewhat dependent on the shop's overhead. But in the sense that I think you may be asking my answer would probably be "not necessarily." I DO NOT think that a shop's labor rate should be dependent on overhead in the sense that the bigger the shop is the higher their labor rate should be. The labor rate should be dependent on the quality of service provided....this is what the customer is ACTUALLY paying us for.

Thank you Joe!

I know exactly what you mean, sometimes it's like comparing apples and oranges.

I guess, what I am really asking is your opinion on what the net should be in relation to the gross of the shop.

Let's say it the similar two 6 bay shops with same rent and equipment. Both gross a $600k a year, but one of them nets $200k and the other does $120k. Obviously the first one looks a lot more attractive, but...

My question would be, is the 30-33% gross to net a "norm" for this size of a shop? Should it be higher/lower?

I am just trying to gauge it for myself roughly before I hire a professional ( I found one, but he charges on a per-business basis) to evaluate the business I am going to concentrate on.

Thanks,

As you can probably tell , you have started somewhat of a firestorm with your answers to this post Integrity.

I just have one question, make it two, for you.

a.Do you feel that the labor rate should be dependent on the shop's overhead?

b. Are you a mobile mechanic by any chance?

Thanks!

Don't know how far these are from you or if this helps any:

http://www.ecoreintl.com/markets.php

or

http://www.tiremanagement.net/ (973) 723 4884

Would you ATS, offer him to throw in the level2 or half of it or??? if he did repairs with you?

There is so many factors that go into selecting the "right" business for "me"

I have searched on the site and could not find a definitive (or close to) answer to my question.

Maybe someone has general formula for evaluating the business.

For example:

If the business does ~ $$$$$k gross a year and the parts mark up is %%

then the net should be $$$$$, the car count should be ### with ARO $$$, and the brake-even should be $$$

If the actual shop deviates from the formula a %% it's a go/no-go or re-evaluate.

I realize this is overly simplified, but at least it gives me idea what to look for when evaluating.

Thank you,

Thank you Joe.

Well, it's another tough one.

a. Manufacturers and their representing dealers are doing everything possible to "attach a rubber band" to the customer's back or at least his car. Like 24mo, in some cases 36 mo prepaid service plans that include all scheduled maintenance for the automobile. They (the dealer) sometimes offer an extra incentives for the customer to come to their specific dealership. That makes it even harder for the customer to even consider going to the independent shop.

b. We really have no control, or knowledge of what is said in the privacy of the sales or financial office of the dealership. The only time we hear it is when we are buying a new car and let's face it, how often does that happen

You are mentioning that FTC did not take any action on the BMW Mini owner manual, did they do anything about the other two or any other examples? Can we report the abuse to this kind of associations?

http://amra.org/index.cfm

Interesting topic.

Yes, fluid changes/flushes are good source of profit for the shop, but:

a. not always

b. still an overall bigger benefit to the consumer in my opinion.

Just like anything else, when the news like this get to the front page of any media it causes an uproar from everyone, including us

Every car (customer) we look at, is a special case.

Would I "recommend" flushing the ATF on a 10 year old car with 200k miles on it and molasses-like ATF?, probably not. Who knows what kind of contaminants I am going to swirl up by doing the flush. The least I can do, is make them aware of possible problem and even have them initial the fact that i told them so.

Would I put a brand new car on a 30-50k miles maintenance ATF flush? You bet I would, heck, I do it to all of my own cars, not because I like the exercise.

How many times have you seen a $50-60k car with required synthetic oil been requested by the customer to "just do a regular oil" - "this time" You know it and I know it, it's not going to be just "this time", he will run this car for another 30-40k and sell it as "well maintained". Then someone opens the oil fill cap and sees nothing but crud

Today almost all manufacturers promote their cars as set-it-and-forget-it mechanical marvels. Forget the fact that same manufacturer wants to see you back in their dealership on a very regular basis after the sale. When manufacturer stops the maintenance schedule at 150k miles, does it mean that it is in fact the life expectancy of the car? No, it means it is a perceived and promoted life expectancy of the car, by nobody else but them. If the powertrain warranty is a 100k miles and the $8,000.00 transmission clunks at 105k or 125k, who's problem is it, the manufacturer's or the owner's? I am a no lobbyist, but if i was, I'd promote all kinds of laws extending the maintenance intervals, just about beyond the warranty. This way it's a win-win for the manufacturer every time.

Fortunately if we have a good customer base that do TRUST us, there is nothing for us to worry about. I'd post this article in my shop right by the BAR certificate, just as a conversation piece if nothing else

Thanks for bringing this up Joe.

I'd actually advise against going after the "do it all" type of a business, especially that you say you know and love the restoration.

You need to study the market anyway, why not compare two as long as you are doing the math.

Also (in my opinion) the following words from the Xrac's post above, should be framed, stickied whatever it takes

"What would benefit you would be to take a week or at least 2-3 days and go somewhere and work behind the counter of a successful shop. Watch the operation and work flow and pick managements brain. You might find it invaluable."

I was in your shoes (almost to the T) about 7 years ago and wish someone would have told me this very statement.

When you follow Xrac's advise make sure not to cheat yourself, i.e. go work at the shop while you do your full time job. Trust me, it's not as easy as it seems.

Don't know how it is in your town(s). We usually look at the oil changes as the money loosing "opportunity".

Just calculate how much real cost goes into the regular (not synthetic) oil change and I doubt it will look very profitable. That is with very high liability of the work done. I think the most money the quick lubes make are in the upsell of the other services like air, cabin, whatever filters etc. It turns into much longer than 10 minutes and $29.99 oil change for the customer, but perception is still "a quick lube" place I am sure we have members here that can set you up with some rough data.

If i had a choice, i'd prefer the customer to get the oil change elsewhere, but come back to me for everything, and I mean everything, else.

I suspect you can find a much better use of your "real estate" than quick lube.

I believe in communication, maybe not always but most of the time.

Invite the customer to the shop when there is nobody but you and the customer. Do not start with the apologies, because it sets the wrong tone to the conversation in my opinion.

Try to show him

a. The age of his car

b. In general what are the chances that engine would overheat regardless

c. Chronologically show him the benefits he has gotten from your shop. There is no saying, he might have the original engine overheat or clunk on him the very same day if he did not even show up at your place.

Make a plan for the "Damage Control" regardless of the outcome of your meeting.

btw, was there any warranty on the engine you have installed for him?

Good luck!

I think majority of the current shop software has an inventory control option.

Mitchell and Alldata just a couple that you can't escape noting. But, if you were doing it in pencil, and don't have the software, just move to the Excel or Google Docs (probably even better). This way you can blame the software instead of yourself

How big of the inventory we are talking about?

Thank you,

This helps tremendously!