mmotley

We do not install customer supplied parts. The risks and headaches mentioned above are the reasons we avoid them (tied up stalls, warranty issues, etc). The only time I would ever entertain the idea would be something like performance parts, but there would be a clear understanding about what warranty came with the job. Also, labor would probably be marked up 50% like Joe said.

I agree. Just to follow up and maybe explain a little more of how I was originally taught effective labor rate, here is a quick youtube video I found... http://youtu.be/2mDzFLgza3k Either way, like you said, it's probably best to find a formula that you like and applies to your situation best and stick to it so you can track it.

*Commented on wrong product!

I'm not sure if I'm missing something here, but I always understood effective labor rate as being calculated another way. Labor sales dollars / flat rate hours paid out to techs This way, it accounted for your .5 hour oil changes, .5 hour tire rotation, etc. and would give you a figure that represented an average labor rate, or effective labor rate. A quick google search for 'effective labor rate formula', and I now have about 3-4 different methods of calculating it, none of which are really similar...

I have not read his books, so this is just me asking an honest question. I see the book was written back in 2003. Do you feel like the figures provided in the book apply to a shop in 2014?

Curious how many other shops are paying attention to their 'effective labor rate' in their shop. I heard that industry standard is 90% of your 'standard flat rate'. That sounds great, but I wonder how realistic that really is. Also, how do you personally go about raising effective labor rate at your shop? Did you cut hours paid to technicians for certain jobs? Raise labor rates on menu items?

Any part over $50, yes. I've had customers pay for $300 parts and let them sit on a shelf in my shop for over a month before finally coming in to have the work done.

Thanks! I just briefly looked at their site, lots of great information to go back and review. How easy is it to implement in your shop? Is it a hassle to get the techs to clock in and out? Do they tend to forget?

That is a big reason why we specialize. Two other reasons, 1. It really does make it easy to be a 1 stop shop. Since we only work on Toyota and Lexus, we can cut and program keys, reflash ECMs, diagnose airbag and theft modules, etc. 2. It immediately establishes a level of trust with our customers. Since this is all we do, they automatically feel like we can be trusted with their cars and diagnosis is easier to sell. As far as techs specializing, I can see pros and cons. If your transmission guy is sick, calls in, or quits, your SOL. However, when all you do is transmissions, you can get pretty quick at fixing them and diagnosing probably becomes easier.

Great! Thanks so much for the reply. Very helpful! I wish Mitchell had a time clock built into it, so techs could clock in and out of individual jobs on the computer.

I would have said sure. Get authorization for 1 hour diag, diagnose the concern, then doubled whatever the labor guide told me to make up for your parts.

Agreed, I wouldn't pay more than $100 for one of those plastic totes

We have a 275 gallon container. Sell it of 50 cents a gallon. We use a container like this... http://www.tank-depot.com/product.aspx?id=3268

Joe, did you ever end up getting some license plate frames made up? If so, do you think it has benefited your business any? Or did you try key chains?

Most 'economical' advertising we have done has been in the newspaper. It is cheap and we got a surprisingly good ROI on it (don't have an actual figure, just know I was surprised at how many people mentioned the ad). Mail outs had a good ROI, but you need to pay a professional to design them and send them out in bulk to get a good enough discount.

Curious how others are keeping track of technician productivity. Is it something built into your shop management software that you are able to run a report on? Do you have a simple equation you run at the end of the week or month? Are you having guys punch a time clock? Do you even track productivity? If you do, do you mind sharing what your productivity numbers are? And do the fluctuate much?

I have 2 dannmar 10k lifts in my shop. Haven't had an issue yet out of them. Would advise getting the 'extra-wide' model if they offer it.

Don't give up. 6 months is not enough time to tell really. If you are really doing everything you say you are doing, you should be fine. If it was easy, everyone would do it. I had a pretty good dip right about 8 months after opening, followed by some pretty good months. I say keep at it for at least a year. Funny timing, I just finished watching 'Pursuit of Happyness'. Watch that, then ask yourself when you should give up.

Curious if anyone has a procedure for reaching out to customers who haven't returned to your shop in a while. Maybe they came in for an oil change, and check engine light diagnosis, or oil leak issue. They had the work performed, but you never hear from them again (outside of maybe a follow up call). Does anyone have a letter template they maybe send out after 6 months or whatever time period if the customer hasn't returned? Do you include a coupon for an oil change, or percentage off? This doesn't necessarily need to be for recommendations made on the last visit, just trying to get them back in the shop. How are you guys handling this, or do you bother at all?

Why is it so hard to justify raising your shop rate? It seems like a lot of people think they should be able to mark up their parts 50%, but hell will freeze over if they raise their labor rate?

1 man shop bill out 6 hours a day??? Not consistently, no way.

I started out as a 1 man shop with 1 lift. I'm now a 2 man shop with 2 lifts. Looking to move to a better location here very soon.

Why are you charging list prices? Raise your labor rate to account for this and charge regular prices on parts.

Keep us updated, I'm interested to hear how this turns out and what the options are.

I agree, but I'm also one of the few around here who doesn't pay much attention to parts markup and related ratios... And I'm a specialty shop... And I'm a small 2 man shop...