AndersonAuto

I agree with Joe, it's getting pretty convoluted these days. Fortunately Kansas has left these things alone, so far. Lawyers love to make work for lawyers.

We do 4.5% for shop supplies with a $51 cap, and don't have any complaints. I used to try charging for every item, but I found that techs will often forget to write down how many butt connectors or bolts they used. I also can't charge out oxy/acetylene gas etc. The small parts and fluids that were going out the door without being documented ended up being significant, and I found myself constantly having to monitor it. I had better things to do, so I implemented a shop supply charge. Now I have a shop supply sales line on my P&L, and a shop supply COGS line as a sub-account of parts COGS. Now I can simply look to see if my supplies charge is in line with what we're spending. At my current shop supply rate, I made 50% GP on shop supplies last year. Probably could have done slightly better if all those items were billed individually, but at what expense to productivity while my guys are tracking those items, and me tracking them tracking those items? I'll take the 50% GP and be happy about it.

I don't use the online version, and I know it's considerably different than the stand alone version, so your mileage may vary. I also use a payroll service that generates my GL entry for me and we simply import it, so again, what I tell you may not apply to your situation. I don't believe QB will allow you to simply change an expense account to a COGS account. You'll have to create a COGS account for technician labor (not all payroll goes into COGS, only technicians), then pick a date for how far you want to go backward, like the first of the year or first of the month. Now simply open each payroll entry and change the account for your technician pay to the new Tech Pay COGS account. If you don't have your tech pay separated already in your payroll GL entry, you'll have to calculate tech pay for each period and make a new entry in the payroll transaction for tech pay, and reduce the expensed payroll by that same amount. Of course, anything you do will screw up your bank account reconciliation, so you'll have to undo and redo those. It should be really fast because you're not changing any amounts coming or going from your checking account. You're only changing where that amount shows up on your P&L. Hope this helps, or at least gets you started.

I've been telling people this for years. It's stunning the number of jobs that require proper training and a test to get certification to do the job. It's really crazy that working on cars for a living isn't one of them. Unskilled people masquerading as qualified technicians devalues the worth of what real technicians do. That being said, it's a double edge sword. Inviting the government to come in and decide who can do the job an who can't leads to stupidity like the Cosmetology board inspections to make sure a spray bottle with water in it has a label that says "Water". There are very few things in life that the government can't make worse, and charge us a wheelbarrow full of money for the privilege.

Thanks. I scanned through it, and it looks like a pain to deal with. I'll have to read it more thoroughly later. If I get the jist of it, it looks like CA has mandated "rest and recovery" breaks, and now mandates how much you must pay for the mandated breaks. Looks like you'd have to recalculate break period wages every week.

Funny you say that. I was actually looking at selling the BMW. I got a dog that comes to work with me and she's not allowed in the nice car, so I drive my old beater Audi. The 650 has become a rapidly depreciating garage queen. Makes sense to just bump all RO's. Couldn't see how you were going to determine reliably who would get a loaner prior to bidding the job.

You've convinced me to give it another go. I have some larger expenses coming up, so I won't pull the trigger this year, but next year I'll start building the fleet. I preach to people all the time to make it easy to do business with you. This is definitely part of that philosophy. Do you add 10% across the board to cover the cost of the fleet, or is it only when you'll be putting someone in a loaner?

That's a lot of loaners. I'm impressed. Obviously it's working for you much better than it did for me. I never shy away from spending money if I can put a number on the ROI. I'm not sure how you do that with a loaner fleet. The expense side is easy enough, but how do you put a number on the additional sales attributed to the loaners? Edit. You just answered my question. Thanks!

I listened to Pre-suasion first. Should have done Influence first.

Best way I've found to jump start business? Bring your own car into the shop, and tear it apart so it's stranded on the rack and tying up a bay. The shop will instantly fill and you'll be in desperate need of that rack. Every friggin' time.

My favorite story about me learning how the way you ask a question dramatically influences the outcome. I was a young Marine hanging out in bars on the weekend hoping to find a young lady who would like to spend a little time together. What I tried many times with almost no success. Chat up a girl, and deliver this stunning line: "Would you like to go out on a date with me sometime?" She had to wash her hair or something equally urgent for the foreseeable future. Then, without realizing it, I stumbled upon the difference between asking a yes question and a no question. First, the setup. Me: "You know, you're a lot of fun. I really like hanging out with you!" Her: "Thanks!" Me: "We should go out sometime, shouldn't we?" Her: "Yeah, we should!" 100% of the time. I was very fortunate to have recognized what I did differently to cause the outcome. It was then that I realized that everyone needs sales training in their life.

You should write out your entire business plan and philosophy on what to own, and how to best own it, employment, finding great managers. All of it. I'm not kidding. I'd buy a copy, and not cheap either.

Zurich is good. I'm currently with Federated, who are equally good. Your garage keepers liability is going to be based on your sales or expected sales, and the value of the vehicles under your control. My garage keepers runs me about $850 a month, but yours should be considerably lower on a new shop with lower sales.

I had a soft January. I was 30K down from January '16, but January '16 was an exceptional January. Since then we've recovered and we're up 26K over last year, and my GP% is up 6% as well. Overall car count is up 7% YTD. This month feels soft, but the first part of April always does. We're up 16% month to date over last year, but I need more to continue making up for January and hit my 11% increase over last year by the end of the year. On cheap oil change marketing I might add. 😀

Influence by Robert Cialindi. It's about the psychology of why we do or buy certain things and not others, and the triggers that cause us to do it. Listened to it in January. About to do it again because there's just so much great stuff in there.

What's your loaner car policy, and do you have a written loaner agreement for the customer you'd like to share? I used to do loaner cars, but I never had a strong policy or written agreement for the customer to sign. As a result I ended up with a number of customers who thought it was OK to take a loaner out for a coupon oil change, and bring it back out of gas. After the second time my Cadillac came back needing a new front clip, I'd had enough and bought a shuttle car. Now if someone really needs a loaner, I'm happy to drive them to enterprise or hertz and get them a great rate that I've negotiated with them. I know they can be done successfully, but in the chaos of rapid growth, it was something I never did correctly.

Great designs overall. I'm not a fan of the cursive font. It would be hard to read from the road at any kind of speed. I like Alex's pick and Harry's pick. Alex's pick certainly conveys the message better than most, Harry's pick is just clean and easy on the eyes. I'd want to scale a few of those up and see what they look like from the road. How eye catching is it when driving by and not thinking about auto repair? I think I might also experiment with other colors. The colors you picked are easy on the eyes, but may blend into the background a little too much. I'd want a bold color that stands out. It seems that most of the time logo designers think about how it's going to look on letterhead, but where it really has to look good is on the single most expensive piece of advertising you'll buy. The sign by the road.

I'm interested in knowing if he sued you under CA law, or if it was under a DOL rule. Which law exactly? I'd like to read it.

You're absolutely right, the bottom line is the bottom line no matter if your labor is COGS or an expense. For that matter, you can expense your parts purchases too, the bottom line won't change. I just have a hard time imagining how doing so makes management of the business easier. Maybe it's just a matter of no one explaining it to me in a way that makes more sense to expense than COGS. I used to struggle with discounts as well. I listened to all the management experts who told me I'd get nothing but the wrong customer who will leave you at the drop of a hat. I've found that I get the same great customers I've always had, and no more bottom feeders than I've always had. The shops that are a black eye to the industry will always be a black eye. We have a chain in KC that was started by a guy who was some sort of management for Midas. He's all about discounts, all the time. People hate his shops mostly for doing crappy work, but also because of what he advertises for a discount. If I advertise a $29.95 oil change, there's an excellent chance that you're getting out of here for $29.95 plus tax. But if I advertise a $59.95 brake job like he does, there's an almost 0% chance of getting out of there for $60. Good customers know that $60 is an unrealistically low price for a quality brake job and won't go to his shop. Bottom feeders salivate at the sight of such an ad, then are pissed when they're hit with an estimate for $700 brake job.

It's possible that I can be a bit opinionated. 😀 At the same time, it's exasperating to see so many shop owners say that you can't possibly make any money with cheap oil changes, and that you'll only attract the "wrong" customers. I've turned cheap oil changes into a thriving business with a great bottom line. The last 5 years have been fantastic compared to the previous 15 years of working much harder for much less. Since I've seen a lot of data from other shops, I know that my customers are as loyal and spend as much as shops that refuse to use cheap oil changes as a marketing tool. Cheap oil changes are nothing but a tool to get people to notice you. I think it's a mistake to see it as anything other than that. I'd love to see the Bosch trainer's reasoning for taking technician labor out of COGS. If you're not paying on flat rate, I can see it, but it makes way more sense to me to include flat rate techs in COGS. Every management system I've seen also calculates labor as COGS by default when looking at sales summaries.

I actually had my numbers confused when I said I don't pull in 50 a month. 70ish is normal. I was thinking of the numbers from my mailers, which is about 35-40 per month. Most of the rest are from internet / website marketing, and a few more from other sources like referral etc. Sorry about that. A customer is considered lost when I don't see them for 13 months.

I agree that cars need much less maintenance per mile driven, but we all drive a lot more miles than we used to. My dad scrapped his 10 year old car back in 1979 with 129,000 miles on it, and he was happy with how the car had done for him. I remember him saying that "the old girl doesn't owe me a dime". Now that's the average car we see in the shop, and people would be pissed if it was ready for the scrapper at that mileage. People keep their cars longer, and drive them further, giving us more opportunity to service that car later in it's life. You certainly don't sell mufflers on 3 year old cars anymore, but those cars still have a lot of life left in them at 150,000 miles, and a lot of maintenance that will need to be done to keep them on the road. The key is identifying the repair needs, which is where the oil change comes in.

I think you have a golden opportunity here. You have a bunch of people who've been in your shop, know you, and like you. They have another shop now, but after seeing data from a bunch of other shops, I know that every shop loses a lot more customers than it thinks it does. For instance, last month I lost 87 customers, and gained 73. A net loss for me. That means for every tire only customer you have, they're a customer at a shop that's very likely to lose them in the next year or two. All you have to do is pick them up as a repair customer as well as a tire customer. I'd be in front of them every month, literally for years. Then on the day they happen to be mad at their current shop, guess who's mailer they have in their hand?

My thought on the area being oversaturated with repair shops is, where are your 50 new customers a month coming from? How can an area have too many repair bays for the population, yet you pull 50 NEW customers a month? Don't they already have a shop? I feel like I do pretty well getting new customers, and I don't pull that many in a town of 130,000. Yet at the same time, my revenue and profits are growing. Something doesn't add up.

Ideally, if someone needed to order a part there would be three people involved. One person needs the part. The second person orders the part. The third person pays for the part. The person paying for the part doesn't pay for the part until they can see that the person who needed the part got the part, and checks the paperwork from the second person to make sure there was a legitimate reason to have the part. I don't know anyone who has reached this level of separation, but at my shop we're close, every single part that gets ordered must be input into the shop management system. Even shop supplies that the advisors order from a part store. That data is imported to QB every day by the bookkeeper. If the bookkeeper gets a part bill that doesn't have a corresponding entry into the management system, she raises hell. Same is true with returns. RO Writer has a great built in return system. Any part that needs to be returned gets returned through ROW. A part return slip is printed and ROW keeps track of what parts have been returned. We put the return slip in a bin for each vendor, and require that the drivers check their bin and return any parts immediately. The driver signs our return slip, in addition to filling out the one he does for the parts store. When we get the credit slip, the advisors pull out the stack of return slips and match them to the credits, the mark them as being credited in ROW. The bookkeeper of course sees all of this when she imports the data, and everything better match or there's hell to pay. She really hates it when she has to fix errors in her books. The bookkeeper has the greatest opportunity to steal from me. She and I go through all the books monthly, and of course I just have a glance at the bank account every few days. Still, she could clean me out and be gone to Mexico before I knew what happened. Good thing I trust her.