Charlie

Good post, Joe. I would suggest a follow-up post covering the next step, the phase beyond empathy. What does the shop owner do next, how can they provide aid in various examples while not breaking the membrane between a business leader and team member. 

I feel many business owners naturally have empathetic responses, but also a healthy fear of "what's next" and for good reason. Mastering the next phase is where Culture is built. 

I might also add, to attract the best; sometimes we need to clean house. When I consider my past, I can remember several periods where I had a talented technician, maybe even a leader, who was just toxic. You know the type, the one with all the wrong body language while you hold your morning huddle? Out of weakness, I allowed those rotten apples to hang on the branch way too long; after all, they were producing hours, right? 

A-players only work for A-players. When we allow Buzzards within our flock, we will never be able to soar with Eagles. 

Sorry about all the idioms 😎

That's an interesting approach; I like it. In general repair, we all strive for a 60% GP, which I believe is what you are stating. I have found that P&L statements can be very misleading; the proof lives in the balance sheet and the cash flow statement. I remember when my P&L looked great, but I never had enough cash to pay taxes on April 15th; where did it go?

Going back to Joe's point: "The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels." Net profit is what we are after; it is what we need in order to grow our business. To have a great business, one that is sustainable, we are constantly refining our process and looking for intelligent opportunities. 

Joe,

I appreciate the fact that you are not just looking at the Labor Rate but also the operation as a whole. I believe we are all trying to reach a desired net profit, and how we get there involves hundreds of touchpoints. I would say that raising your labor rate is not the solution to low (or no) profitability; raising that rate is only part of the equation. 

Over the past few years, I have seen a dangerous level of arrogance creeping into our industry, a genuine threat. To achieve the actual profit we want/deserve, we must think like a CEO of a complex business. We must measure metrics throughout the process, looking for areas to cut costs and improve efficiencies. We must also listen to all recorded phone calls and perfect our technique rather than only adding more fuel. Here's a good analogy: How would a NASCAR team fare if, to win the Cup, they were hell-bent on more horsepower as the solution rather than suspension improvements, better aerodynamics, and improved traction? 

I know NASCAR governs everything, so my example is terrible, but we all get the point. Don't we?

Good advice