alfredauto

No I don't matrix dealer parts. I should, but it seems way too expensive to the customer. I put them up to list but 20% isn't close to the normal 55% in my matrix.

I have an energy logic el200. Pros: (1) free heat (minus the electricity cost) This equals about $5000 a year in savings. (2) unit paid for itself after 2 years. (3) no worries about getting rid of used oil. Con's: (1) free heat runs out about mid January and then I gotta go find more oil which is time consuming. (2) unit is loud. (3) unit takes up a fair amount of shop space, including the storage tanks. Really, the noise is the only problem. With gas I can barely hear the furnace running, the waste oil unit sounds like a jet plane.

I pay the same way, no flat rate. No bickering, no drama at all. All the cars that come in need to get fixed. Its pretty simple really.

I think the issue is the 10/100000 warranty. I needed some rotors and tie rods for a 2012 the other day and nobody had anything in stock, even the warehouse was showing nothing. Seemed unusual until I read this. I got hooked up with a dealer over an hour away, they network with a couple dozen dealers and deliver daily. 20% off list isn't best but better than no part.

I take it for free, I even pick it up for free. I burn it so I welcome as much as I can get.

About the only thing we say no to are modified cars. I can't work on someones home engineered backyard mechanic's wanna be race car and expect a good outcome. We don't do engine swaps either. It hurts to turn away money but getting bogged down with a motor job is really bad for me with only one tech at the moment.

I had a guy bringing me junk for years. One day we got talking and I said to him, "Jim, you work hard, go buy yourself a new car. For what you pay me a month in repairs you can be driving a new car" Later that night I thought wow that was dumb for me to say that, what was I thinking? This guy is now one of my best customers, we service his new car. It worked out much better for both of us.

This topic has been fresh in my mind the last couple weeks, billy bob's backyard repair has been advertising absurdly low prices in my area. I rationalized every possible way to complete with him on price without ruining my reputation or my customers vehicles and came up short. This dude charges $20/hr you bring your own part. Theres a few guys working there too. I saw the same thing when I ran a towing service, bob's wrecker service $25 any tow any time up to 25 miles. They are like mosquitos at the BBQ one burns out and a new one takes its place. I've tried to just not even think about it, but its frustrating to have to explain why I'm 5x this cowboy's price over and over again. Workers comp, liability ins, service manuals? Professional service equipment? No way unless the magic free fairy lives there. What are your thoughts?

I would set your labor rate at 3.5x the highest paid tech. So as an example Joe tech makes $20/hr, you should charge $70. I've been using this strategy and it has worked out well. If you are just starting out anticipate what the techs pay will be in 24-36 months and use that figure. You don't want to keep changing your posted labor rate. Parts gross profit margin (ignoring labor) needs to be close to 50% on average. Your chart above is great. Remember profit margin and markup are different. To achieve 50% GPM you would markup your part 100% or cost x 2. I use the labor multiplier because it simplifies things, a tech that earns $20/hr probably costs $30/hr when you figure in all the expenses of not only insurance and taxes but soap, gloves, shop supplies, mistakes that cost you money. Its also important to charge for his/her time. The book might call for 1 hour to do a hub bearing, if he's hammering on it for 2 hours charge 2 hours. It seems simple but I hear owners crying all the time they can't make any money. In the above example say your a nice guy, you charge 1 hour for a bearing and 50% on the part. Its your good customer so you throw him a 10% discount and use a cheap bearing. The part cost you $100, you charge $270 for the job. With the discount you got paid $243. Customer is very pleased. Minus $60 tech cost. Minus $100 for the part. Your shop made $83 on the job, assuming it took 2 hours that's basically an effective rate of $41/hr to pay overhead. If it costs $40/hr to keep the open sign on you made zero for yourself. The bearing fails under warranty 10 months later, customer is shaken up and is angry he paid over $200 and has the same problems. The labor time your not getting back and you also lose 2 additional hours to work on a new job so now it ended up costing you money to do that job. Nice guy 10 months ago is now the bad guy. Let's revisit that same job. You insist on a OEM bearing or equivalent. $200 cost for the part, 2 hours labor. Now the job is $540. You need to present to the customer some valid reasons to justify charging this amount. It still takes the tech 2 hours. You still kept the open sign lit for 2 hours and paid your counter man. You made $280 or $100/hr money you actually keep*. The chance of failure under warranty is greatly reduced. The customer has long forgotten what he paid to get his car fixed because its still fixed. You are the nice guy now, really. * after all expenses you might cut this number in half or worse. Its important to have good percentages, but real money is what pays real bills and earns you a living. Every job needs to be scrutinized to maximize the real dollars earned, don't discount yourself out of business.

I'll start off admitting I am bald. And stubborn. The other day I wasn't doing so well, spilled my coffee, forgot to charge my phone, forgot my lunch, all the parts ordered arrived either wrong or damaged. I should have taken the day off. It was pretty clear that the moon phase was NOT in my favor. Nope, even after all the gumption drained out I continued on until I wished I could rewind. I was inspecting the rack bushings on a e430 and pressed my head against the catalytic converter. Based on the hole in my head it was over 600 degrees. Doh! Sometimes I just don't get it.

I think you need at the minimum a monthly profit/loss spreadsheet. Say you gross 100k a month, minus 8,000 for sales tax, minus $10,000 payroll, minus $2000 credit card processing fees, minus $50,000 for the parts, minus $10,000 for rent/utilities there's $20,000 left in your bank. If payroll is $15,000 and parts is $70,000 there's no money left oops. If people owe you money you are really screwed. Its super important to manage every category of expenses and whittle them down a couple % each. Same goes with gross profit margin bump them up a couple percent. Take a salary, and don't spend anything over it. I take a fixed salary rather than a percentage but everyone's different. My personal expenses are very low so it works.

What does boosting the post do? I'm new to the business side of Facebook.

We call them hawk-eye's. I usually tell them mistakes are more likely to happen when I'm distracted, please have a seat in the office. Sometimes I lose patience and make a stern request, as in "your not covered under my insurance so when a car falls on you I'm going to have to hide your body in the forest and I don't have time to do that so please wait outside"

I was thinking about oil changes pretty hard the other day, we did 46 oil changes 2 weeks ago (before memorial day travel). There was no time left to do any real work. I worked nights and weekends getting the profit jobs done. Almost all the lof's were good regular customers, so what would the cost be to turn them all away? Its a catch 22. I don't lose on oil changes but I don't make as much as other work.

Elons article sums it up perfectly!

It certainly is frustrating to hear "my muffler is rattling and now it has an oil leak...(10 months later) what are you going to do about it? It never should have passed inspection that way." People fall in love with their new used car, once the romance is gone and they filled it up with cigarette butts and dorito bags and neglected the maintenance for 15,000 miles their new love looks the same as their old junker. With no money or credit to buy a new car they are angry. And it's all my fault. Because they are in the exact same spot they were in before they expected me to solve all of their problems. Then tax time hits again and we start all over.

Washing the salt off weekly is really the best bet. Touch up bare metal immediately. Once the metal starts to oxidize its too late. I sell fluid film undercoating which is a lanolin based oil, I like to believe it works.

Craig's list is probably the best bet.

Its not the techs fault the parts were defective. Its not the customers fault either. Nor is it the shop owners fault. Its really not the parts stores fault either. Can we blame the machinist? The warehouse staff? The global economy? The happy customer ultimately signs everybody's paycheck, and who makes sure they are happy? Hddm3, You expect to be paid for your hours worked but when the job isn't finished where's the money going to come from?

I liked flat rate when I worked as a tech. Because I worked for a publicly traded company, cash money in my pocket compensation was my only motivation to work harder. There was no loyalty to the company. When I worked for a local guy I did well on hourly pay. He hired me out of tech school and I appreciated the opportunity he gave me. What I'm getting at is if your techs have a solid work ethic and care about the success of their company they will work very efficiently. Take their connection with the company out of the picture and money becomes the only motivator. I pay hourly with a guaranteed 40 hour week. Nobody gets sent home early, and if they do they still get paid a full week. I started a bonus plan last year and my top tech likes it. I pay Him 1% of gross monthly, it amounts to an extra paycheck for my guy and he gets motivated to crank out 6 digit months.

Now that i think of it, The last dayco timing kit I bought from AZ the tensioner wouldn't expand after the pin was pulled. It was stuck in the retracted position. I used the old one because it worked better. I rarely do timing belts though because of the liability.

I've had some bad ones but none ballsy enough to ask for $40 straight time plus lol

I'm a pretty good Service writer thanks to Mitchell's parts matrix. I'm the owner but I don't give away parts or labor, for free I can do other things that don't involve working. Normally YTD parts margins need to be around 50% after discounts. The best thing I did for my business was set up direct deposit pay for myself, I earn a weekly salary. My wife earns a weekly salary. My savings account gets a weekly contribution. Before doing that I gave a lot of money away and just lived off of what was left, if any. By paying myself and my wife what we would make working for someone else really opened my eyes to the high cost of undercharging.

The SOHC 2.5 rarely bends valves. Its listed as an interference engine but I've put about 7 or 8 timing kits In cars that snapped the belt on the highway and they ran fine.

Thanks Elon. Unfortunately I don't have good systems for anything else but I'm working on it. .