dfrisby

I believe tech pay will be going up rapidly, but so will shop labor rates. With the low unemployment currently, wages are going up in every industry. With the average tech pay of $41,000, if a tech was at work 40 hours a week all year he's only making $19.71 an hour. While that's a decent wage for many, most techs have to invest in a lot of costly tools. I was in a McDonalds a few months ago and saw signs all over the store advertising for employees with starting wage of $14 an hour. Of course my breakfast there gave me sticker shock also. The same will have to happen to the automotive repair industry or there will be no more techs. I see shops all around going out of business. It's not because of it being a profitable business. It's because the shop labor rates throughout the area are to low to be able to pay techs well enough to attract them and keep them while most customers gauge the cost of one shop vs. another entirely on the shops labor rate. Hands On says we have to have the same knowledge base of a doctor. Considering they only work on one make and two models, I'd say we may have to have a larger knowledge base in our profession. If we operated as doctors, we would also have a specialist for heater blower motors, and a different specialist for hood release cables and yet another specialist for brakes. The same tech that replaces the spark plugs wouldn't even consider working on the exhaust system. If we are going to keep techs coming to our industry, it will not be long before it will have to be an 80K or better per year profession. That will be achieved as shops either raise the average shop labor rate significantly or go out of business placing more demand on the shops that survive.

I am certainly in a different situation of many shops. My shop is 1 of 3 businesses in our metro area. We are an extremely small town. The two larger towns in our area are 20 miles east or 20 miles west of here. I couldn't survive on just my local market area so customer retention has always been my highest priority. I have customers from 150 miles away (the twin cities) that are now loyal customers returning for work on a regular basis. EVERY customer should be treated as the MOST important customer. We try hard to provide that as without them we couldn't be here. Because of our loyal customers we have been able to expand our services year after year. I agree with you. I believe I do understand and expect in most areas where there is a large pool of NEW customers, many shop owners don't do everything possible for retention. Even here every month shops are folding because they aren't profitable. They probably would be profitable with better customer retention. My question would be where is that 27% number coming from? Customers that were here a year ago that came again within 12 months? New customers from last week that haven't been back yet? I just watched the video referring to the 27%, and I agree with the theory of what you are saying. I know alot of the customers I get tell me horror stories of shops they have been to. I am thinking that my business doesn't fit the statistics just because I already put so much emphasis into building a long standing relationship with EVERY customer that comes through my door.

Or did we just fix their car to well? Most cars don't need repairs every month. Other than routine maintenance it's not uncommon for cars to go years without the need of any major repairs. I believe at least in our area, alot of customers perform their basic maintenance themselves, and even basic repairs like brake jobs. We end up with the more difficult jobs and the jobs requiring expensive diagnostic equipment. I'm not concerned when I don't see a customer for several months. I'm confident our service and reputation has made them a customer for life. I'd be more concerned about a customer that has the same vehicle visiting us multiple times in one month with different concerns we hadn't spotted and discussed prior. If they have to bring the same car in week after week or even every month for yet another repair, eventually they are going to shop elsewhere hoping for a better result. Our customer retention is good, but because they don't need service every week, new customers are necessary every day. Of course customer retention is important. But I know my percentage of new customers becoming loyal returning customers is also important, and I'm pretty sure it's alot higher than 27%. We try to build a relationship with every customer that comes through our door.

We hit last years January total revenue on the 15th of this January. Pushing double last year if all keeps up. It seems customers are more willing to spend the money on repairs as the confidence in the economy is better, at least in our area. Hoping this trend continues! Good luck everyone!

I just got an Atlas Edge 601 Pro and so far I'm very happy with it. Last week a Hunter salesman stopped in cause somebody mentioned to him I was getting an alignment machine. I told him he was to late as I just got one. He hadn't seen an Atlas and asked if he could take a look. I had just pulled a car on the lift to do an alignment so he stuck around for a few minutes. He seemed impressed by how fast I had the measurements on the screen, as well as not having to do the runout procedure. I wasn't sold on the not needing to do the runout at first, but the first two cars I ran through, I pulled measurements with and without the runout procedure and found that all the measurements were within a couple hunredths of a degree either way. I haven't worked in a shop with an alignment machine since the mid-90's, and we rarely used it as it was already 25+ years old. If I remember right, we had to modify the wheel clamps to use on something without wooden spokes. The new Atlas I had up and running in just a couple hours and feel quite proficient with it already. Two of the fast clamps were defective and I called Greg Smith Equipment where I bought the machine from and they overnighted me two new ones. Customer service is exceptional.

I've had the problem several times. I have a $10 a day storage fees after 3 days sign posted, but have never actually charged the storage fees. One customer had always been a good paying customer. Last car repair had to wait till next day for parts. He had a doctors appointment he needed to get to, so we finished the car, I had my mechanic and service writer take car to his house along with bill. He claimed he would be in the next day cause he needed to use his card to pay. He finally came in and paid $50 on a $400 bill and told me he didn't have the money because he had to put new tires on his car (which he didn't buy from me). Next time he came in with $50 and a story about his cat with cancer and a thousand dollar vet bill. Last week he came in with another $50 and then asked if we could do more work on his car this week. He still owes me money from work we did in July that we still haven't been paid in full for and I don't really like cats. Every time I try to be a nice guy I seem to get burned, so it's back to payment in full or the car stays on my lot.

I use Nest. They seem to work well and I have to say the video quality is great. I'm adding more cameras as I go. Currently have 7. My building has two furnaces and I have two of the nest thermostats as well. Plan to add 3 more cameras as well as the Nest deadbolts on two of my doors. I prefer to be able to unlock a door for someone when I am away than to have to hand out keys. I'm hardly ever away as I live in the same building. I went wireless because of the amount of wire I'd have to run to get cameras everywhere I want them. Only downside is it only holds 5 days worth of video and that is subscription based. Can get longer storage, but it's quite costly. 5 days has worked ok so far, but I can see where that could be a problem in some cases.

The issue I've had recently is people ordering their tires online, and then wanting us to drop everything to install them today. My tire prices are competitive with all other shops around and even the big box store. I can't and won't attempt to compete with online prices for the tires. My mount and balance price is $80 for a set of 4 plus disposal and valve stems if required. My markup on automotive tires is a minimum of $20. When they buy online, they are in turn taking $80 away from me. Yes, I'll still install the tires. No, I won't drop everything to do it. Schedule at least a day or two in advance to drop off car and it'll get done same day. I'm not going to move a profitable job to the side for a customer that wants to bring his own steak to the steakhouse to save a couple bucks.

I'm curious on this one as well. Thinking about doing something to make ths shop look better this coming spring.

After the trial and a better understanding of what it's doing, I've decided to subscribe to my shop manager. The inspections work great. Feedback from customers has been very positive. It fills the holes that were lacking in the Alldata Manage Online side. I think it will add to our bottom line enough to make it worthwhile.

I worked as a tech on flat rate. I worked as a tech on hourly. And I worked as a tech on salary. For me, I always preferred flat rate. On hourly, as soon as I hit 40 my employer wanted me out of there. In order to earn more I would have to find another job. Of course I am a work-a-holic and see 80 hour weeks as a part time job. On Salary, it would have been fair pay for a 40 hour week, but my employers were never satisfied with me only putting in 40 hours. It was 60, 70 and sometimes 84 hours a week. On Flat Rate, if I wanted or needed to earn more, my employer was thrilled if I worked around the clock. Currently I have a mechanic that's been with me 3 years tell me he would Never go back to hourly. He comes in at 8:30 when we open, and is usually out of here by 3:30 or 4 every day. He busts his butt the entire time he's here, but at 7 hours, he really is done. Even if he stayed another hour, it would NOT be a productive hour. I work with that and hold no grudges because he's flat rate. Of course I also pay significantly higher than even dealers per hour for my techs. I don't have health insurance, 401k's or paid vacation. I'd love to provide all that, but then I'd have to cut his pay. He doesn't want that. I think just as every shop owner has different needs and reasons to operate however they do, every tech has different preferences. Recently I had to let a tech go. He only worked for me a little over a month. He'd get 2 days in good in the week. Show up 3 hours late 2 days a week and hardly get anything done while he was here those days. Then complain about his paycheck on payday. If I have a tech short on hours for a week (usually from a job running over the weekend), I often pull hours from the following week so he still has a livable wage. After doing that week after week and having overpaid this particular tech close to 50 hours in a month and a half, we had to have a separation of ways. He'll never make it in the flat rate world and that's ok. I'd never make it paying him straight hourly or salary with performance like that.

My techs are flat rate. My Service Writer is hourly plus a commission. With Warranty work, it depends on the situation. If it's something that returns because of a tech, then that tech ends up doing the warranty work without time added. If it's a parts failure, I end up paying the tech twice to do the work. If I have a different tech do the job for some reason.... then I pay them the hours whether it's a parts failure, or a tech failure. Not getting paid to do the job a second time is the motivation part of doing it right the first time. If there is any question of blame, my tech get's paid. Using this method has kept my techs accountable for their quality of work at the same time as paying flat rate keeps them accountable for their efficiency. I tried once going to a straight hourly pay structure and found quickly that a tech would rather make $28 an hour sweeping the floor and polishing the wrenches than fixing cars quickly and efficiently. Billable hours dropped almost immediately and without me micro managing their time, I just couldn't get the production needed to stay in business. I also tried an hourly with a smaller commission, and still found that a couple of the techs that could survive on just the hourly would be here 40 hours a week and only book 12 to 16 hours. Went back to straight flat rate, and my shop might not be the cleanest in town, and the techs tools might not be blindingly shiny when their drawers are opened, but the production that keeps the shop profitable and open is there.

We are up 26% year to date in gross sales, which is great after 3 years being fairly flat. The number on my books I find surprising is we are up 81% Net Income. We eliminated a salary service writer that wasn't pulling his weight. My wife filled in part time there, and I put in a few more hours keeping up with the work orders. and after a year we replaced that service writer with one that is on hourly plus a commission. I'll never have an employee on salary again, and there will always be at least a portion of their pay based on our sales. Amazing the difference a pay structure with incentives does for employees.

Update. My call today went really well. It was my input while exploring that sent the text message and now I know how to keep it from happening. The inspections are still going well. Have a phone call Wednesday with the rep and we'll see how that goes. Seems like it should generate the extra business to be worth it and I haven't had any customers having negative reactions to the text messaging besides the one that was confusing because of me. I lose a few minutes in the morning responding to some of the texts coming back to us, but those responses have also added more work to the schedule.

I'll know tomorrow morning if we will continue on with them or not.