Transmission Repair

8 hours ago, pfseeley442 said:

For me the most difficult one is Failure to Adapt to Market Changes , While running the shop day to day it is difficult to look down the road 3 months, 6 months or longer. We tend to make adjustments reactionary not proactive, :  OMG its busy lets hire a tech, OMG were dead, lay off a tech. So I have learned to have about 30k in the bank for winter just to be safe. Proper planning is the key. I will always remember a story about a toy store that would have a line of credit to make it through the summer, then pay it off during the holiday season. The problem was a couple of slow holiday seasons and they could not repay the loans and lost their business. so save money for the slow times and it helps to keep the cash flowing. 

I used Google Pay-Per-Click advertising to grab the bull by the horns and CONTROL the work in our transmission shop.  I've posted about this before.  Normally, our ads would show within a 5-mile radius of our shop.  If it got slow, I would increase the radius.  If we got really busy, I would either reduce the radius or sometimes PAUSE all PPC ads.  Over time, I got really good at it.  The purpose of the ads was to get people to call, and we would set an appointment from there.

Clicks were, on average, about $12/click and it would take about 3 clicks ($36) to set an appointment.  We did that up until my retirement in 2015 when I sold the shop.  We were consistently averaging $1.2M/yr. in gross revenue.

4 hours ago, Joe Marconi said:

Did you do wholesale work, work for other shops?  And also for warranty companies.  Were there different labor rates for these, and how did you maintain a decent profit margin?

 

No wholesale for other shops.  I avoided warranty companies like the plague, mainly because of the hassle factor of plugging up our production.  We only did retail jobs and left the rest to other shops to do.   We had plenty of work to do.

17 minutes ago, Joe Marconi said:

With labor rates going up, one concept me also need to consider is multi tier labor rates. For example, performing jobs on heavy trucks is different than work on a Honda Civic, or Toyota Corolla. Also, if you do complicated computer work, electrical and driveability, that requires your top tech with the most expensive tools and training. And those jobs have no part profit. Shouldn't this be billed at a higher labor rate?

Do you have a tier labor rate strategy?  I would like to hear from other shops. 

 

We had different labor rates for different jobs.  Sometimes it was because of the difficulty, and other things like risk.  We had our labor rates at the lowest, plain vanilla, straight jobs.  If the vehicle had been chipped, twin turbos, high flow heads, exhaust, or deleted emissions, part labor for those types of vehicles carried a higher premium labor rate.  For me, it's not just about the money as it was about managing risk.

We commonly found when customers make a horsepower/torque range change, the first thing that goes is usually the factory original transmission.  With diesels, this is especially true.  The transmission simply is the weak link in the drivetrain.  They were never meant to handle that much power.   Sometimes it was the extra hard parts/upgrades that drove the price up, which is additional parts on top of the increase in labor.  Our ARO for major jobs was about $3,600 as of 2015.

2 hours ago, Joe Marconi said:

there is a direct link between my best and most profitable years to the quality of my employees. Contrary to that, the years I struggled in business was directly related to having the wrong team, more specifically, a bad apple or a few bad apples. 

I agree, Joe.  I experienced the same thing.  Often, I wouldn't know how good of an employee I had until they were gone.  Essentially, I took them for granted and assumed anyone could do what they did.  It was definitely a "trial by fire" learning experience.

Welcome Jade!

I've said it before and I say it again, we use our Google PPC advertising radius to "throttle our business."  Normally, we would be listed at the top of a Google search within a 5-mile radius of the shop.  If it got slow, I would increase the size of the radius.  If we got slammed, I would even pause our Google PPC ads altogether.  If it got slow, I would increase the size of the radius.  The largest I've ever gone with our Google PPC program is a 100-mile radius.

I know beyond a shadow of a doubt, the Google PPC program works for a transmission repair shop.  That's because, in our line of work, it is transactional-based.  How it would work for other automotive businesses, where it's usually relationship-based, I can't say for sure.

If anybody wants to know that this works, make sure you get hooked up with a call-tracking company and use call tracking where you know, beyond a shadow of a doubt, it's either working or not working.  This is true with any type of advertising.  Each lead source has a different tracking number.  Otherwise, every phone call is just that, another phone call.  You have no way of knowing the source of that sales lead.  Without call-tracking being a part of any advertising campaign, advertising is just another bill you'd rather do without.

Yes!  I would shut the business down for 4 days and take my entire crew for them to learn not only technical stuff but also learn about business.  It was a great time for everybody.  Most years the trade show would take place in Vegas, but one year it was in Orlando, Florida, and another time it was in Washington D.C.

All in all, we had a good time.  Airfares I covered, I would also cover the hotel and the rental car. We would not cover a rental car in Vegas, I just sprang for the gas down there and back.

Speaking of business, one of the best business experiences I've had the pleasure of attending was The Great Game of Business by Jack Stack.  

The only training was how to read a P&L, and balance sheet, and forecast a budget.  Look them up online with the link below...

That is a good topic starter.  I have been doing what some may think of as dynamic, or surge pricing, but I never did it regularly.  However, I see nothing against it.

We (I) used dynamic pricing only to cull jobs I didn't want such as leaks, noises, vibrations, and jobs that were either high-risk or extra difficult.  Plain vanilla jobs would get our regular pricing matrix. 

Speaking of matrix, there are quite a few SMS that have a pricing system built into their software.  That tells me more than a few shops are using dynamic pricing.  I always measured my pricing by the week, month, or quarterly.  The longer the time frame, the more accurate your measurements are.

As an industry, everybody likes to talk about numbers, but few put their P&L out.  I'm going to break that pattern with a P&L of my own, attached below.  The bottom line is all that matters...
 

2011P&L (6).pdf

On 9/20/2023 at 12:14 PM, nptrb said:

Well, you don't get quality techs who want to get paid "off the books".

Also, you'll never see a long-term employee being paid off the books.  Paying off the books almost automatically induces high staff turnover.  Needless to say, in retirement, a tech's social security payments will be greatly reduced.  People who get paid off the books are not looking to the future. 

For those shop owners who think they can trick the system by paying with a 1099 at the end of the year, I've got some news for you.  When the IRS catches up (and they will) and discovers you misclassified an employee as a subcontractor, the would-be employer is on the hook for ALL the back taxes, including the matching S.S. and F.I.C.A.  It's UP TO YOU AND YOU ALONE to try to recoup from the employee.  Good luck with that one.

I don't specifically know of a lift remover near you, but let me tell you how I found one in my area 35 years ago.

I found an automotive lift company that would sell me and install any new lift he had in stock.  He only had a minimal level of inventory, so most of the lifts he sold had to be ordered.  This worked out for him because he would simply have the lift(s) delivered to the shop's location; with less handling.

This same company had a "side hustle" where he would remove, move, and reassemble lifts for a set fee.  As I later found out, he used this side hustle job to keep his installers busy.  But that was only good for a while as his lift sales grew.

HERE'S THE DEAL: He would put me on a waiting list.  His lift sales took precedence over moving an existing lift type of job.  That's understandable; I got it.  So, my advice to you is to find who sells and installs lifts near Costa Mesa.  You can Google it.  Offer him the moving job and ask for an unofficial bid.  You can negotiate from there.  The 3 times I had my lifts moved, I always called him.  The last time I used him was in 2008 and it was $500/ea. for each lift moved.  They were the 2-post design with the overhead equalizing cables between the two posts.  4 lifts = $2,000.  You may get a better deal than I got.

THE CATCH: Neither he nor I could predict his slow times.  His territory was Utah and the surrounding 5 states.  He would only participate in moving the lifts when his installers were all caught up.  The longest wait for me was about a month.  If you were near SLC, Utah, I'd simply give you his name and number but I think you would be better served by a lift company in California.

23 minutes ago, NATURE said:

I'm a buy once guy.

They both look like excellent choices.  At this point, I would say, "Pick your poison."  I'm still leaning towards the Trinco blast cabinet because that's all they make and sell.  And, as a bonus, they sell the blast media as well.  Don't forget to order a few bags with your machine because it will more than likely save you money on the freight.

I looked at the Trinco Model 24 blast cabinet online and it looks like a very good choice.  I didn't find a price but if it falls into your window of features, then I vote to go for it!  That unit seems like the dust collector portion of the machine could be put outside the shop if need be.

I come from an automatic transmission repair background where excessive dust is not allowed.  Upon further research, all that Trinco makes are blast cabinets.  They've been making them since before I was born. 🙂  Additionally, they are only a 1-day drive from your shop.   They even sell a lot of different blast media.

Thanks for letting all our members know about Trinco.

Here ya' go.  Only ~$245 w/tax.

https://www.harborfreight.com/40-lb-capacity-floor-abrasive-blast-cabinet-68893.html

While you're at it, you might as well get these ceramic sandblaster nozzles.

This video gives great ideas for how a shop can protect themselves.  It's solid advice that should be performed before any vehicle gets pulled inside the shop.

12:01

With many smaller shops, the first customer contact is usually with the shop manager.  With larger shops, it's usually the service writer.  No matter your shop size, I ran across a great article from Gallup.com about the behaviors a great shop manager should have.  In our shop, I've had the best luck hiring managers from OUTSIDE the automotive industry.  They are usually from a 1-on-1 personal interaction position.  Here's the Gallup article that you may find useful in your business...

https://www.gallup.com/workplace/272681/habits-world-best-managers.aspx

Trying to oversell your customers almost always generates uncomfortable feelings in your customers and possibly bad reviews.  Here's a good example.  Listen to the first 30 seconds of this video...

https://youtu.be/jBpMe36GoW0?t=173

2 hours ago, Joe Marconi said:

I hope I am making sense. 

You are making sense, Joe.  We advertise "our estimates are written in stone" and we stick to that.  I've posted this before, but here it is in our promo video.

Although I've never actually calculated how much we win, or lose, on each job.  I just looked at the monthly/quarterly/yearly totals and compared them to my production payroll numbers.  I would adjust up if we were losing but I seldom adjusted down.  I believe that it's easier to do with transmission repair than it is with general repair.

Different shops tend to write/sell labor by whatever method makes them feel the most comfortable.  I'm no different.  Behind the scenes, we calculate the number of hours X hourly labor rate.  However, on the printed estimate or invoice, we show a lump sum with the quantity of ONE.  That way we don't get into any discussion about the number of hours or how much we charge per hour.  If anyone asks, we simply say, "We don't charge by the hour, we charge by the job."  End of discussion.

Since I've retired, I let my Adobe subscription lapse so I don't have a way of redacting a sample estimate to black out the customer's personally identifiable fields.  Please bear with me as this estimate was written 11 years ago.  You can see from my sample estimate exactly how we did it.  We did give the customer his AAA discount because that's how we got the job in the first place.  I never got into an hourly discussion with any customer.David Breding Revised Estimate.pdf

28 minutes ago, willydmax said:

At my shop if someone comes in for an oil change, they get a general inspection of brakes, front wheel bearings, steering parts, all the fluids etc marked out on the ticket as either green, orange or red. If all they want is me to drop the oil and change the filter, then I’m the wrong shop for them. I’m not a quick lube. 

I mean no disrespect, but you may be hurting your business instead of helping it.  How would you feel if you went into a shop for something minor and they came back with a laundry list of needed repairs?  If it were my shop, I would only mention safety-related items. 

Just by virtue of the customer coming in for an oil change, tells me they want to take care of their vehicle.  I would be treating the customer like I would want to be treated.  If they get hit with big-ticket estimates trying to be sold every time they pick up their vehicle, I would hazard a guess they would eventually find another shop to do business with.

I'm not trying to tell you how to run your business or find fault how you position your shop in the marketplace.  If I offended you, please forgive me.

4 minutes ago, Joe Marconi said:

I know two things about booking the next appointment. First, many struggle with it. And those that do book the next appointment at car delivery increase sales, maintain car counts, and have a better ROI. Why, they focus on the customer right in front of them. We all know that retention is less costly than new customer acquisition.

So why do so many service advisors struggle with this?  

This post is slightly off-topic, but I feel there's a lesson I could pass along.

We've discussed transmission repair as being a transactional "one and done" event.  While we don't sell the customer for their next major transmission job per se, we do sell and schedule the customer for their next ~10-day recheck.  Our service writers never had a problem with doing so. This is not only to road test and check for leaks, but it was one of the stipulations of our 5-year/100K mile warranty.  A minor leak today could turn into a major transmission repair tomorrow.  It would be on our dime, too.  

Something for shops to consider is having a BBB-sponsored arbitration text box on the warranty document or repair order.  Check with your local BBB and see if they could help.  Our BBB required the BBB arbitration clause to be in a separate text box prominently displayed on the front of the RO or warranty.  If they sign the RO/warranty, the customer will receive our 5/100K mile warranty.  If, for whatever reason, they don't want to sign the warranty, then they get our 1-year/12,000-mile warranty.

 By signing the text box, if a disagreement arises, the customer is giving up any legal means of remedy in favor of a BBB-sponsored neutral arbitration.  We never had a problem with it, nor did anybody want to use the BBB as an arbiter.  Below is our BBB text box disclaimer.  The shop named below is the shop we sold our business to.

Concerning DVIs...

A customer once told me, “I went to the shop for an oil change, and they came out with a list for thousands of dollar's worth of work. All I wanted was a damn oil change.”

Has anybody else experienced this?

Joe, that's a terrific story!  I sold my business for $330K in 2015 which was not enough to fully retire; I only partially retired.  I bought the building and real estate in 2013 for $860K.  In 2020 the buyer folded and skipped out on a 10-year lease.  Luckily, I was able to sell the building and real estate 7 years (10-year mortgage @5%) after I bought it in 2020 for a whopping $2.3 million.  THAT gave me enough for both my wife and me to fully retire.  We were able to maintain our pre-retirement lifestyle in our retirement.  I wish you all the luck and success with your journey in your career.  BTW, please consider becoming a full-fledged member for only $30 bucks a year!  I have no financial interest in AutoShopOwner other than my $30/yr. membership.

Thank you!

Wow!  I just looked you up on Yelp! and you had an incredible 4.9 stars with 34 reviews.  That speaks volumes not only about your pricing but about your service as well.  We need more posts from shops like yours.  Share some more and consider joining our group for only $40/yr.  I have no financial interest in AutoShopOwner other than my $40 annual membership.

1 hour ago, RYAN B said:

The Aligner and the rack total is probably close to 90,000. But we use the rack as a lift, we do a fleet of ambulances that get the brakes changed every 10,000 miles and several other fleets that the rack now allows us more headroom and service ability on these fleets. The ceiling height in my shop isn't great so the flush mount rack gives you a few more feet of height plus its 16,000lbs.  

Wow!  That's a great investment.  I can't disagree with your business decision.  We all would like for you to share more.  Why not blow $40 for an annual membership to AutoShopOwner?  You'll make another return on your investment.  Just sayin'.  I have no financial connection to this forum other than my $40/yr. membership fee.