mmotley

I'm curious how many shop owners on here have an actual WRITTEN budget for their operation expenses. Not just a budget for advertising, but for all expenses. Last year, my sales grew quite a bit, but I managed to ignore the expense side of things. I would also be curious how some of you came to set budgets/benchmarks for things such as uniforms, utilities, accounting, shop supplies, office supplies, phone/internet, etc. And how often do you review your expenses.

I'm currently toying around with a spreadsheet, but I kinda feel like I don't know where to start on something like this. Any input/advice would be appreciated. 

I should add, when I moved my techs to commission pay, I did the math to make sure I was going to hit my margins, no matter how many hours they ran. I made a spreadsheet with formulas and entered all sorts of different combinations of hours...

There is a podcast called 'remarkable results'. Listen to episode 193 with Kirk Richardson. You might get some ideas from that

Intuit also

This week my techs are starting a base salary + flag... I told them Thursday at lunch time. My SA told me Friday morning he can already tell they are turning out work quicker :/ ...I shouldn't have waited so long

I agree with working based off your technicians pay, at least for a starting point. 70% GP is the standard I was taught (not loaded). That gets you where you need to be to make your proper margin. From there, shop around. You might be leaving some on the table. I called a few other shops around town and once I explained who I was and why I was asking (I didn't want to the 'that shop' that isn't charging enough), everyone was glad to share their rates. 

I ended up raising my labor rate and I never heard any complaints. Sure, there are some jobs I probably lose to pricing, but only to those customers who care about the price and price only... and those aren't my ideal customers

Agreed with what everyone posted mostly. At the end of the day, you have to make your margins to stay open. That means you're not always gonna get the job. Focus on getting quality customers through the door and the rest should take care of itself

Bolt on digital multi-points are the best.

Garage equipment supply just delivered our 4th lift 

Mark, would you mind sharing some details on your profit sharing pay scale? 

Oh man, if someone took the time to go through my post history from beginning to now, you'd see what kind of help you can get from this forum. I've almost been tempted to go back and delete some of my 'less than impressive' posts! But hey, we all start somewhere, right?

1 hour ago, Marksas said:

We have experimented with several products (brush and spray) and I can't even remember the names of most. We have all the 3M buffing kits and products (which we no longer use except for the sander). All you really need to make it faster is the small 3" DA sander and make sure the the adjacent painted surfaces are masked off to prevent sanding damage. We charge $99 and just mask off the lamps,  sand them with 500-600 grit paper and spray them with spray can clear which works as well as any of the products we have experimented with. We inform the customer that they will last 1 -2 yrs at best. Yes over time they will sometimes peel , and the results will not be as good as headlamp replacement, but if you inform the customer up front it's not an issue. They know they are getting a temporary fix. We give the price for the alternative and that usually seals the deal.  They are typically delighted with the finished product. We are also located in South Texas so getting them to dry is not an issue. 

And if you're thinking about using aftermarket lamps I would not recommend it. I also have a Collision Shop and pretty much they are the standard for insurance replacement if it is not a current year model car or if you don't have an OE rider on the policy. Those things are absolute junk from the quality and fitment.  I can't tell you how many failures and lamps we warranty out. They are cheap and that's what some people want. Just understand what you're selling. 

Don't know why we didn't think to use a DA. I have one laying in the shop, just collecting dust. Any particular brand clear coat you recommend? And are your guys spraying 1 coat, or multiple coats?

I was charging $147 and still dreaded selling the service.

Unfortunately, we work on a lot of luxury vehicles. I've seen a RX350 set of headlights cost over $2,000 just for the parts, not counting labor, so selling a new set is out of the question sometimes 😬 and I'm over the comebacks. At this point, we've stopped selling the service. Until we can find a better solution that is profitable and doesn't have as many comebacks, we're going to continue holding off.

Curios to hear what other shops are doing for headlight restoration services. We used to just wet sand then polish with a bottle of some turtle wax headlight cleaner. They looked great when we finished, but the problem was it didn't last. We then started using a product called Light Rite. It takes much longer to use this product since you are having to tape off a good bit of the surrounding area when you spray on the clear coat. It looks great most of the time, but we've had issues with it flaking later one, or not going on real evenly. It's also difficult to charge enough and still come out ahead time-wise. 

So I'm curious, what is everyone else doing and what are you charging? What kind of warranty are you offering on the service? I'm to the point that today I told the guys we are not selling the service anymore until we find a better way.

I also loath discounts. I have no advertised discounts right now and we're staying busy. I'd go with what wheelingauto said. Offer something of value. Free pick up and delivery? Car wash with any service? Longer warranty? Shuttle service? 

I'd also look up if they have a 'national nurse day' or something like that. I'd make sure to send tons of cookie trays, goodies, and business cards on that day to the hospital. I'd also look into a teacher day or do a school supply drive for the university. Or see if you and your crew can do a volunteer project at the university... Anything but discounts.

Jeez, I wish I got that!!! O'reilly's hardly gives me any discount. I've seen where it's cheaper for a customer to walk in and get it. I'm getting ready to drop their certified auto program because of it and look more towards worldpac. Worldpac delivery is hard for us since we don't have a local one, but sometimes it's worth it. It's certainly not worth O'Reilly's threatening a $100 membership fee if I don't buy enough.

I think on the old forum, you would be told who liked a post you made. The new style just tells you 'somebody like a post'... I thought it was nice to know who agreed with you. Any chance we can have that feature back?

I would think if you are hitting the proper margins (while paying yourself an appropriate salary), doing enough in sales, and not living an extraordinary life style, becoming a millionaire (in the bank) is not impossible.

Based on what I've seen you post, I would bet that you are pouring a lot of your money back into your business to grow. That's fine, but it will certainly hinder how soon you can have that much money saved up.

A saying comes to mind “If you will live like no one else, later you can live like no one else.” - Dave Ramsey. He is talking about watching your personal expenses and habits right now and saving, so later on in life you will have enough saved up to live life comfortably.

If you can forgo the 5 year deadline, compounding interest will definitely get you there. Plenty of good books out there that touch on this topic (again, Dave Ramsey does a great job at explaining it).

If you're not hitting the proper margins and sales goals in your auto repair shop, I would think it would be a bad idea to go getting into other business types. Personally, from what I've read, I'd say having 3 months of operating expenses saved up would be the best starting place, then look at investing in the market. I'm nowhere close to what you would call a financial advisor, but I have read a few books on the topic.

To answer your question though, I'm not a millionaire. And I don't think it happens overnight for most people either. I think it's probably a slow, methodical, well thought out plan that you have to continue working at. 

Edit* Thought I would add this one thing. When you have a goal you want to achieve, I've found it's easy to work backwards. IE, Your goal is 1 million dollars saved up in 5 years. That means you will need to be accruing $200,000 each year.  Or, $16,667 a month. With that, you can figure out ,based on your margins, how much you need to do in sales to be saving that much a month. You can also calculate daily sales requirements, how many techs you're going to need to do those sales, etc, etc. 

3 minutes ago, John Fabrega said:

(If you are accessing the forums via a PC, there should be an 'Edit' button for your previous posts in the lower right corner)

Which method are you using to send the link to customers?

Strange, the message I just posted ' Hmmmm, don't know how to edit on this new forum layout, but make that 3 5-star reviews in 2 days!!!' has the edit option, but my first post does not. I only have the option to quote it...

I use Kukui, which generates an automatic follow up email when we close out a invoice. Anyone who leaves a five star review through their system I send another email asking: 

"Mrs. Jones, thanks so much for the review you left on our website! If you have a spare moment, I'd really appreciate it if you would take the time to share it on Google, also. A lot of people look at our rating on Google, but never take the time to check out our website. You can leave us a review on Google at:

Hmmmm, don't know how to edit on this new forum layout, but make that 3 5-star reviews in 2 days!!!

Got two 5-star Google reviews in the last 2 days thanks to this. Definitely going to add it to my daily check list

WOW!!! Thanks! I was already doing the link shortening part, but had no clue about adding the 5!!! GREAT TIP!!!

Haven't seen the video and didn't go to the conference, but yea, I can't tell you how many times I've been told Autozone or O'Reilly's ran a diagnostic on a car... Like that means something! Yea, I stopped using the word 'diagnostic' a while back started telling customers we need to 'test' or perform a certain procedure. As for the customers who still don't get it ("but Autozone already hooked it up!"), I use this script:

"Look, nobody wishes it more than the techs in the back that diagnosing cars was as easy as just plugging in a computer. Unfortunately, that only gives us a code, and that code refers to a table that tells us what tests we need to perform in order to isolate either the faulty component, wiring, or module. That's why my guys attend classroom training at least once a month and complete 8 hours of online training every quarter."

It also helped me move away from having a flat rate diagnostic charge. Now, I look more at what tests we are performing and can better capture the appropriate charges

3 hours ago, Shopcat said:

What made you decide to take action? How did you make the change? What result were achieved?

I had a business coach (John Wafler (great guy, made it in R&W a few years ago)) who told me to implement the '300%' rule. 100% of the cars get 100% inspected and present 100% of the findings. I didn't like the idea at first. I felt I would be running off my customers. I thought it would come across that we were just trying to sell extra work. Turns out he was right and I was wrong. Customers love it. I've actually got new customers because they heard about how well we do inspections. 

We use tablets with Bolt-On to do digital multi-points. Like Jay Huh said, it does make the oil changes a little longer, but most customers are understanding that we're not just doing an oil change, but an actual service. Obviously, ARO went way up. From the month we started, we blew every previous month out of the water. It's a no brainer

Convenience store coffee, 1 scoop Casein Protein (creamy vanilla flavor), 1 scoop Whey Protein (vanilla ice cream flavor), about a 1/2 cup heavy cream. Tastes fantastic. Not hungry until lunch.

Haha, holy cow, is it thick enough you need to use a spoon to eat it, or is it still liquid form?