Transmission Repair

I owned a transmission repair facility.  We would shoot ~3 minute video of every transmission we disassembled telling 3 things:

1. What failed.
2. What it's going to take to fix it.
3. What we are doing different to keep it from happening again.

We have over 2,200 videos on our YouTube channel.  Check out https://www.youtube.com/user/LarryBloodworth

If a transmission shop (or any shop for that matter) had the room and money to invest in ADAS adjustment equipment, it would certainly be another revenue stream for the transmission shop.  My fear is that it would become like  front end/4-wheel alignment equipment by which it isn't really profitable unless you sell front end parts.  What additional parts and labor can one sell with an ADAS alignment job?  The only thing I can think of is peace of mind.

I never offered a sign-on bonus per se, but what I did often was advance the new hire their first week's check before they even started working.  When the first week's pay period came around, they wouldn't get a check because I already gave it to them when hired.

20 minutes ago, Joe Marconi said:

I see one of your clients is Brian Bowersock. He is a good friend of mine and a fellow Elite business coach. Brian knows his stuff when it comes to advertising.  It's an endorsement of what you do.  

Although I've never personally met Brian Bowersock, I know of him and I'm impressed.  The thing that impressed me and had a great influence was his use of TV to promote his shop.  He had a TV show where people would call in with their automotive questions and he would be "the answer man".  Outstanding!  Through his influence, he gave me the confidence to use a TV personality to promote our shop.  Let me explain...

Just about every TV market area has a TV investigative reporter.  In our market area we have Bill Gephardt.  I approached Bill about doing a promo video for our website.  He said yes, under a few conditions.  A. Use the video only on our website.  and B. Give an $800 "donation".  And the rest is history.  Bill and his camera crew came out on very cold winter day and did the shoot.  His staff did all the editing, sound, and everything a promo video entails.  Here's the results...

1 hour ago, JChapman said:

I'd really like to hear from others what the names of the tradeshow/conventions available to auto repair shops & which are the best ones to attend. We want to start going to some but don't even know the names of them or which are worth the time. Any input would be greatly appreciated!

The only trade shows I don't like are the ones with low turn out.  IMHO, you can always learn something from any tradeshow.   I used to go to a lot of technical trade shows when I was young, but as I aged and my career advanced, I went to more sales/management/marketing seminars instead.  I haven't been to a technical trade show in 25 years.

1 hour ago, Joe Marconi said:

I can't argue with curb appeal. While you can't judge a book by its cover, the consumer likes to look at something appealing before they consider it. 

I wholeheartedly agree you can't judge a book by it's cover, the same goes with a new car dealership, or any business for that matter.  I will say this, we were at our former location 14 years before we moved to Draper and the best year we ever had was $498K.  After moving to Draper, we were doing a consistent $1.2M/yr.  We were getting so much work, I was seriously considering putting on a second shift of techs.  At that time, I was in my late 50s and didn't think I could handle it, so I never did put on a second shift.  Besides, we were netting $300K/yr. so I couldn't really used the excuse we needed more money.  Fond memories, for sure.

On 10/24/2022 at 8:01 AM, JustTheBest said:

100% -  If you can't track it somehow... don't do it. Here's a real simple every day example. Every time I put new batteries in something, I use a sharpie and scribble the date on them. Just a quick DDMM/YY. The next time you replace them, you'll be surprised at how long they lasted... or didn't 😞

When it comes to your advertising, track it or don't do it!

Like the old saying goes, "You can't manage what you don't measure."  What really amazes me is how CHEAP call tracking has become since I retired. I had a friend that was using call tracking for his five shops and he was paying $500 a month for 100 phone numbers.   At our shop we were paying $200 a month for 25 numbers.  Now call tracking phone numbers can be had for as low as a $1 apiece or less.  

What's amazing is the concept of a phone number pool connected to your website.  To give you an example of what this looks like, look at this spreadsheet at column A through tea and you could see all the fields that get trapped when somebody calls and you have a phone number pool connect you to your website.  This is for just one day at our shop.

I'm sort of old fashion.  We paid very well by the hour except for builders.  We paid our transmission rebuilders salary.  Nobody in our shop made less than $25/hr., and some made $40/hr.  Money speaks volumes when compared to a dangling carrot.

Once we were without a builder for several months and couldn't find one.  Finally one day I get a call from a guy out of Phoenix.  Long story made short, I had to offer him top Phoenix wages to get him to move up to SLC.  He was getting paid by the hour.  Some weeks he'd make $2K, most weeks it was $1,500 or less.  For $102K/yr. salary I hired him.  Money talks B/S walks.

6 hours ago, Joe Marconi said:

Before you spend a dime on any advertising or marketing, you need to realize that it's the employee experience that will determine how effective your overall marketing plan is.  Everyone in your repair shop and everything you do on a day-to-day basis is the foundation of your marketing plan.  

We have all heard, "Happy employees create happy customers."  This is more important today than ever before. 

 Remember this: Your advertising and marketing programs do one thing; it brings you, people. It's your job to make the sale, and more importantly, create a customer experience so amazing it gives your customers a compelling reason to return! 

The most important strategy that we had was our curb appeal.  We had to move locations to find the building that had very good curb appeal.  Our old shop had no curb appeal as did all of our competitors.  People see the curb appeal of any shop before they ever set foot in the front door.  The curb appeal sets the customers expectations.  We had 3/4 of an acre of paved parking that was double fenced.  We kept the parking spaces next to the front door always clear for our customers.  If somebody left a car there we would move it to keep it clear.  The customer waiting area was as nice as the outside.  I tried to have the curb appeal new car dealership.  I've been asked several times if we were a franchise because it looks so nice.  I had one customer say "This place looks expensive." speaking about our pricing.  Let's face it, most transmission shops have bad curb appeal.  Here's a video about our curb appeal.  I've posted the following video before.

It's against the law to pay less than minimum wage.  If flagged hours total less then minimum wage the minimum wage would be paid.  When I worked at a dealership, we had to both flag hours and punch a time clock for the actual number of hours were we were there.  If the total amount we were paid, in dollars and cents, divided by the number of hours worked was less than minimum wage we would get paid minimum wage.  That was our guaranteed minimum.

I have a rule to never do any kind of advertising without a tracking number attached to it.  Call tracking is a measurement tool let you know what advertising works and which ones don't work.  

On 10/22/2022 at 6:51 AM, Joe Marconi said:

Perhaps this is a trick question, but it's worth a discussion.  Many auto repair shops spend a lot of money to get new customers. But what about the ones we have already?  

What marketing strategies do you have to attract new customers and retain the ones you have now? 

In the transmission business, PPC is better spent getting new customers.  Repeat customers in the transmission business is usually either a warranty issue or somebody with real bad luck.

I agree!

On 10/20/2022 at 12:35 PM, Joe Marconi said:

I agree with Craig (bantar) 100%.

As a shop owner, we need to have a clear understanding of when charging for our time begins. It's ok to check someone's tire pressure or install a set of wiper blades that the customer purchased, but does know how to install them.  But, if we need to spend time chasing down a problem, we need to get paid for that. 

As a Business Coach, I can tell you that the biggest labor loss for too many repair shops is lost revenue when a tech is inspecting, testing, or checking into a problem. That time must be tracked, and the customer has to pay for that time.  

Not to bring up another topic, but the labor rate for testing and inspecting should be higher than your regular rate. The reason?  There are no parts involved when a tech is performing tests, checking, or working on complicated driveability problems. And that means no part profit.  Perhaps this is a topic for another post? 

 

Writing a ticket will let a customer know you intend to charge.

5 minutes ago, Joe Marconi said:

Thank you, Larry, for your kind words, and your endorsement. Before I began coaching and training, I was a client of Bob Cooper and Elite. Being coached greatly helped me in business too.  It's my time to give back, it's why I coach others today and cofounded Auto Shop Owner.  

Not to sound like a sales pitch here, but a coach can help a shop owner today, and through the process of preparing for an eventual exit. 

Thanks again, Larry! 

For the second half of my career, I was really big on sales and management training.  Elite was one of many in my career.  I used to think that the training HAD to be industry-specific.  Not so.  I had Roy H. Williams in Austin, TX as a trainer around 2014-2015.  He would say, "I don't care if your selling and managing jet engines, a donut shop, or a bookstore, the principles in sales and management remain the same."

12 hours ago, Joe Marconi said:

Glad to see you have a plan.  Please help this group of employees with the process.  Sometimes, their "desire" does not materialize into actual reality. I had two serious-minded employees that really want to buy the business but bailed out when the time came.  Looking back, I should have done a better job of helping them through the process. 

Joe,

You talk realities.  We would all like to think our crew at the shop could handle everything like we did after we're gone.  The truth of the matter is for former employees need to get strongly engaged in coaches like you.   Bob Cooper, and other shop coaches in your company.   I spent a lot of money with Bob Cooper's company years ago, but it was a great deal in the long run.  No regrets.

J. Larry Bloodworth, [email protected] (801) 885-2227

12 hours ago, Joe Marconi said:

You bring a grim perspective, but much appreciated.  When you think of the political push for EVs., it makes one wonder, what is the actual agenda?  EVs, and all so-called green engery, is big business, which means money is to be made. The question is, as you say, will the smaller shops be left with the scraps? 

Joe,

Remember the last time our Democratic White House enacted laws to tell us what we should be driving?

Cash For Clunkers?  It rated right up there with hurricane flood cars.  Both were "great plans."  Neither one worked. 😞

4 hours ago, JerryK said:

I have been a shop owner for almost 42 years. I have a good team that take great care of our clients and I am only in the shop a few days each week. It is a great time to be an owner! Why sell? 

Can't afford to retire or sell is a good reason.  Like Joe said, plan an exit strategy or life may give you a curve ball.  Joe has taught me a LOT.

In the transmission business, "Can you just"-type customers are few and far between.  It's basically a non-issue with us.

On 10/15/2022 at 9:24 AM, Joseph Collins said:

Hi guys I’m in high school and interested in becoming an auto technician from your experience what would the best thing for me to do my dad says I should get a job at a shop and build trust to make sure I really want this I’m thinking of getting a 2 year associates degree and certifications needed what kindve school should I go to if needed and what should I do right now to prepare? Thanks, Joe

Welcome, Joe!  This is the place to ask questions and even maybe, perhaps, pick up a job. Asking for career advice would be best answered by older shop owners like Joe Marconi, myself, and others.  I wouldn't put much weight on anyone's advice who is not heavily involved with running a shop.

My advice would be to get the most training and learning on electrical system, software, and electric vehicles (EVs) possible.  Today's vehicles are like a cell phone on wheels.  Your generation will see EVs, electrical problems, and software reprogramming issues rolling into the shop.  Our generation only got a taste of what's to come.  In my opinion, a formal classroom with textbooks is the best place to learn electrical theory and reprogramming procedures.  Engines, transmissions, brakes, and suspension... not so much.  A shop setting is best for those areas.  Personally, I chose transmissions and powertrains, in general... nothing else.  Specializing, in general, is more profitable.

My advice would be to also work in a shop setting to find out what type of auto repair specialization you want to be in.  In years long gone, it used to be a technician would work on all Makes, Models, and type of work that came into a shop.  Not so much now or in the future.   Pick areas of specialization that interests you.  Google my name.  Call, write, of text me if you would like more information. J. Larry Bloodworth, CMAT (retired) [email protected] (801) 885-2227  Draper (SLC), Utah 84020 

1 hour ago, tomkatv10 said:

Two years, I’m out. Some of the employees are forming a corporation in 2023 to buy the business in 2024. I’ve been in it for 28 years and at the 30th year, I will walk away. I will stay on, though, for about 6 months in a consulting role. After that, my plan is to consult younger shop owners to help them grow their businesses. I have been approached by a coaching company already, but they don’t fit my style so I’ll be looking around for the best fit. As for the real estate side, I own several residential rentals and have had no desire to own commercial real estate in the state of NJ. Leasing has always been the best option for me.

Tom, you say you have no desire to own commercial real estate in NJ, but in the very next sentence you say leasing has always been the best option for you.  My experience has taught me to play as a mortgage holder with a pre-payment penalty clause to where the mortgagor has to pay all unearned interest in the event of an early payoff.  I've done it both ways, lease and sell, but made the mistake of not having an early payoff penalty clause.  I don't know about you, but I'm 67 and have very serious doubts that I would outlive a 30-year mortgage.  J. Larry Bloodworth, [email protected], (801) 885-2227.

34 minutes ago, xrac said:

We will consider both options. I would prefer to lease the real estate. 

I started out by being the mortgage holder to the real estate.  $9,100 month.  Then the owner sold it all and the new buyer paid the mortgage off in one lump sum.   I didn't have an early payoff clause/penalty.  Sadly, we had to pay $400K in income taxes because the real estate alone sold for $2.3M.  Damit that hurt. 😞  Leasing is better.

16 minutes ago, xrac said:

I will be 70 in December and have ran a shop 24 years in March. My shop is for sale. Covid hit and killed a potential sale. Another sale was killed because another less expensive shop came up for sale during due diligence.  We have had five shops or body shops change hands here in the last year. 

Are you selling the real estate with the sale of the business or just the business?

We never had a formal onboarding program.  I would normally shadow the new employee for a couple of days answering questions.

2 hours ago, Joe Marconi said:

Last week, I had an interesting conversation with a shop owner friend of mine. He told me that he does not mark up his parts as much as he once did, mainly because of pushback from customers. He states that Google, Amazon, Rock Auto, and others, have hurt that part of the business.

I don't want to debate that fact right now, but what I told him is that It doesn't matter how you arrive at your required profit, but you need to maintain profits.

If you concede on your part margin, then the only way to maintain your required Gross and Net Profit is to increase your labor rate.

Your thoughts and opinions? I would like to know what other shops are doing with part margins these days. 

We would maintain 60% as gross profit/20% net profit.  People rarely price transmission parts.  I agree that if part margins go down, labor must go up to maintain a 60% gross profit level.