Transmission Repair

Once we hit 1.2M/yr. in annual sales, I didn't have much to worry about. We were at our production limit without putting on a second shift. Just the thought of that kept me up more at night than anything. We were at capacity and were hitting $1.2M year after year WITHOUT setting a goal. I just simply had it in my head to do more and more and more with no real number in mind. But when we hit our production maximum, wanting more was a moot point. We were a transmission repair only shop, no G/R. I learned from a good friend who worked for Aamco corporate for 33 years that we were #5 in the nation for gross revenue. I couldn't believe it. We were #1 in our state. Until he told me all this, I just sort of took it for granted. I didn't really lose sleep during those years because everything was so automatic. Most job were repetitive. Most jobs were "canned job" and all we had to do on each job was to edit the parts list as needed. We sold by YouTube. I would shoot a short 3-minute video after the transmission was disassembled and either Email or text the link to the customer. Once viewed, I would send the final estimate which was always spot-on. In the seven short years we were at that location, our YouTube channel had grown to over 2,200 videos. It was the assumptive sale. Half the customers would either Email or text me back asking when their car was going to be done and the other half would call. Remember these are big tickets. Half of all customers would give me their CC info over the phone before we even started the repairs. That was from being in an affluent area with a freeway location with a traffic count of 250K vehicles per day. Lucky us. To see our "Show-N-Tell" customer videos, check out https://youtube.com/user/LarryBloodworth Now that I'm retired, nothing keeps me up at night. 🙂

Thanks, Brian. You appear to be a great marketer. I love your location. Is the car wash I see next door on Google maps part of your operation? If so, I commend you. Keep up the great work. I was born & raised in Houston but at the age of 33 in 1988, I moved to Utah and have been here ever since. I love it! Low moisture, no roaches, mosquitoes, hurricanes, tornadoes, or other natural disasters. J. Larry Bloodworth, CMAT and RETIRED! Draper, (SLC), Utah 84020 [email protected]

As most of us already know, Aamco went into General Repair. But did you know that was back in 2006? I have a 2017 franchisee brochure from an Aamco insider who is a good friend. His wife was the general council (attorney) for Aamco although they are now both retired. Here's he brochure. Aamco Franchise Information Pay particular attention to page 3 where they say transmissions are only 34% of their business and G/R is 66%. Wow! That's incredible.

Yeah, it's a really old ad I ran across years ago and saved it. For whatever reason, Carl Icahn thought he could build an automotive empire. Like you said about Sears being out of touch, I think the same thing is happening among Icahn Automotive subordinates who make the management decisions. Look at it; none of them have any automotive experience. They are all a bunch of retail customers trying to run what their idea of what an automotive business should be. Fairy Tales. One thing for sure, all of his automotive investments are heading south.

Here's an ad out of the old Sears catalog. This was waaay before baby seats and seat belts. https://drive.google.com/file/d/1nO9OhyHJVT4hC1LVWx-uN-fLtWhTH-e_/view?usp=sharing

Yes they were. The last Sears location in Utah was at their downtown SLC location and it became a Sears parts depot for Sears and Craftsman. It soon closed after the one I had applied at closes. Reminds me of Carl Icahn's automotive holdings. He bought Aamco, Cottman, Precision Tune, Pep Boys, Auto Plus, Just Brakes, and CAP (Consumer Auto Parts). I've worked for the first 3 in the past and wasn't impressed. Aamco used to have 900 locations. Now they're down to 400. A very good friend of mine worked for Aamco as their operation manager. His wife was their general council (lawyer). I was talking to him yesterday and he said all but 2 people in corporate are working from home and it looks like a ghost town at the corporate office. Many of Carl Icahn's automotive holdings have gone down in value since he purchased them. Like you said about Sears, I think he's (they) are out of touch as well. See https://www.icahnautomotive.com/leadership.html

I sold my business in 2015 and leased the real estate to the buyer for $11K/mo. on a 10-year lease and I paid property taxes. I guess you could call it "Double Net". I was 60 years old at the time. Like Joe M. said, it's not enough to retire on because I was still in 7 years deep on a 10-year owner financed purchase. Long story made short, the business dropped 2/3rds and the buyer skipped out after 5 years. We were able to get an $85K judgement against him but we can't collect it. Where we made our retirement was selling the real estate for $2.3M in 2020 to a plumbing company with a fleet of 40 trucks. We carried the paper on it for $9,600 on a 30 year note. 5 months later the plumber sells his business and the buyer paid the whole mortgage off. We didn't have a prepayment penalty clause in the contract. Silly me. $400K in state and federal income tax instead of paying just a little bit each year. Be very careful when you sell.

Today was one of the most painful days of my life. We picked up our taxes from our CPA. My wife is an accountant and already calculated our taxes but decided to let the CPA do it to make sure. She was only $1K off. We sold our shop real estate last year and today was the day we paid the piper. Nearly $400K in federal and state income tax. OUCH! Damn it!. It was a once-in-a-lifetime event and the IRS is now recommending we pay $83K in quarterly estimated tax. No way, Ray. What pisses me off is the way it all came down. We sold the real estate and owner-financed the mortgage ourselves for $9,600/mo. for 30 years. 5 months after we closed the deal, the buyer sells his plumbing business. ( https://mybuddytheplumber.com/ ) He has a fleet of 40 trucks. The buyer IMMEDIATELY pays off the $2.3M mortgage so we got a huge tax bill all in one year. The mistake I made was NOT including an early payoff penalty clause. Let this be a lesson to all.

After selling my shop, I needed something to keep me busy. In 2016 I applied to be an Auto Center Manager. The qualification tests were grueling. Spreadsheets, employee scheduling, merchandising, P&L analysis, and on and on. I spent a full day online going through the wringer. In a couple of weeks, they called me in for an interview. During that call, I was informed my starting salary would be $41,600/yr. Do what? Practically be in business for myself for $600/wk. take home pay? Ridiculous. I never went in for the interview. The following year, that particular Sears location in Salt Lake City closed down. Oh, well!

Do You Use Call Tracking? Call tracking is one of the best kept marketing management tools around. It tells you what advertising works and what doesn't. Call analytics and conversation analytics give you insight to phone calls. All calls are also recorded. You can tell which keywords in Google AdWords get calls and which ones don't. It can be used on ANY type of advertising. I had a phone pool of 100 local phone numbers. Total cost of phone tracking was $500 including the 100 phone numbers. Recently I checked and it's down to $3 per phone number. I could write a novel about it but I won't. Check it out for yourself at https://www.convirza.com/

The technical training classes might have been less than optimal, but the training trip was great for team building and morale.

In one word, CONTAMINATION. No matter the number of updates, upgrades, and billet parts are used, rebuilt transmissions simply never last as long as the original. Check this out... https://drive.google.com/file/d/0B6naMtwBgwRKV2NUTzM4ZnZZdmM/view?usp=sharing&resourcekey=0-9iUg4dF3vASGDqe7yRIOjQ

We did constant training at our shop, mostly in our weekly shop meetings. When needed, we would discuss a job that kicked our ass during the previous week while it was fresh on everybody's mind. Additionally we would attend seminars, trade shows, and Expos when offered. During the annual Transmission Expo in Vegas, we would close the shop for 4 days and I would pay everybody to go and foot the bill on the Expo and hotel. They had to cover transportation costs. (Vegas is a 5-hour drive from the shop.) The only thing I didn't like about training, especially the Expo, is when they talk about transmissions that either just barely came out, only in production, or transmissions we won't see for several more years. To me, that's wasted training because by the time we see the transmission, everything we learned has been long forgotten. In a nutshell, the timing of the training makes the training irrelevant. Ever have that happen? It seems like our weekly shop training in-house is more relevant and did more good. I was really disappointed when they had the Expo in Washington DC way back in 2012. $15,605 for irrelevant training. (See https://docs.google.com/spreadsheets/d/1HgSZveVF154bgxxHJX91NpxLMR96voZn/edit?usp=sharing&ouid=116584774469407774432&rtpof=true&sd=true ) While the sales and management sessions were good, the technical training missed the mark. One of my employees even skipped a couple of training sessions to go sightseeing and take pictures in DC. At least he gave me and my wife a photo album of it all as a gift. 😞

What does it matter what other shops charge? To me, that's not even relevant. I base OUR labor on OUR costs. I say piss on the competitors' labor rate. Their labor rate is mostly based on competition and what the market area can bear. I base our labor charges on the job, not by the hour because we are a transmission repair specialty shop. There's a whole lot of the same thing over and over. Business volume, production capability, and efficiency rate will affect labor rates. I use the following profit model: Parts = 20% Labor = 20% Expenses = 40% Profit = 20% And I work backwards with those percentages to calculate parts and labor rates. G/R is different but that's how it's done in the transmission repair industry.

We use YouTube to help sell transmission work because transmissions are usually big money. I shoot a short 2-3 minute video and either Email or text the link, followed with a .pdf of the final estimate. Final estimates are always written in stone. If we find something else that needs to be done, we eat it. The video is basically a bench sale after a teardown of the customer's transmission to let them know what the parts will run. They already know the labor. In only 7 years, I ended up with over 2,200 "Show-N-Tell" videos on my channel. ( https://www.youtube.com/user/LarryBloodworth ) Transparency sells. Half the time I either get a phone call, text, or Email giving me an indirect approval by the customer asking "When will it be done?" No conversation needed. The other half the time I need to handle sales objections, usually over price. YouTube is our secret weapon for transparency and increased sales. I like assumptive sales much more than conversational sales because I'm not that good of a talker.

The best way to find out if they pay their rent on time is to ask their current landlord. Look at how they pay their property taxes; it's public record in most states and readily available. I would think twice before I sold or lease to someone who has never been in business before. List you business/property on BizBuySell.com and LoopNet.com. They work really well. I had a buyer for our real estate within 3 weeks on LoopNet.com. You can also find buildings/real estate to lease on LoopNet. Today, in 2022, it's much easier to find something to lease or buy than ever before. It sure beats the old fashion method of just driving around and looking. Another thing to consider is the daily traffic count. We were blessed being on I-15, the only north-south interstate in Utah. The daily traffic count was around a quarter of a million vehicles a day. A good location with a high traffic count is very important to the success of any shop. No matter what, do your due diligence whether you buying, selling, or leasing a shop. Don't do like I did and half-ass it.

To add to my previous post, I also learned that by pausing and unpausing our AdWords campaign, I was able to somewhat control the influx of business to match our production capabilities. I was never able to do that before. It was like they say, "feast or famine" with absolutely no control over it. It was difficult, if not impossible, to give every customer a great experience with an uncontrollable work load. With phone numbers becoming so cheap ($2 ea.) I was able to get enough tracking numbers to see what campaigns worked and which ones weren't. I used a company named Convirza (https://www.convirza.com/solutions/by-industry/automotive/ ) for phone tracking to see where calls are coming from. I also used their feature of Call Analytics which would score phone calls. They even customized their analytics to where they had to hear the word "appointment" at least 3 times from our end of the conversation to see if we scheduled an appointment. I would use a different phone number on each campaign, advertising, and even business cards. After a year, I learned specialty advertising like pens, calendars, and refrigerator magnets don't generate any phone calls so I quit all that nonsense. I would even have different phone numbers for different keywords in AdWords. By far, the hottest keyword was "transmission repair" followed by the same keyword with the prefix of a car make. All phone calls were also being recorded. I would listen to high opportunity calls where we didn't set an appointment. It was great. If you haven't used call tracking before, Convirza has account managers that will set you up, teach you, and walk you through the whole process. Try it and you'll never go back to the old way again.

I only half-assed qualified him. I saw he was years behind in property tax on 3 of his other locations. So, I set the rent with an extra $1K/mo. more at $11K/mo. which gave me enough money to pay the property tax. Everything else, like you suggest, he let go to hell in a handbasket. In 5 years, sales went from $1.2M/yr. to $400K/yr. That now made his rent 33% of his revenue and was the reason for him skipping out of a 10 year lease. I should have exercised more due diligence. Let this be a lesson for all.

Yes, this is true. While perhaps not so true with G/R shops, here's what worked best for us: A self-managed Google AdWords program. The average click cost us $11 bucks and it took about 3 clicks to land an appointment. 75% of those appointments turned into major work. Our total customer acquisition for a major job ended up being about $44 bucks. We were averaging about 350 calls a month. Now remember, we're a transmission-only repair facility with only 4 lifts. We got so overloaded sometimes that I would actually pause all campaigns to just let us catch up and catch our breath. Like Joe said, a great customer experience is key. It's really hard to give a good customer experience when you're 3 weeks behind. When a transmission fails, people need their vehicle NOW!

I never knew this until today! 3:01 I thought I'd share.

I'll say! It's terrible, sad, and pitiful all at the same time. I don't really like talking bad about anyone, but this guy takes the cake. I've been taken to court by a customer ONE TIME in my career and that's where I met this guy. He had 2 customers in a single day. He goes to court regularly, usually monthly. He usually wins because his R.O.s and warranty have so much "fine print" and conditions. Half his shops don't even have lifts, they have oil change pits with drive-on ramps. How'd you like to R&R a FWD transmission without a lift? Most of his installers are novices and don't know any better. I've never been a landlord before selling my business and leasing my building to this guy. I couldn't have picked a worst tenant if I'd tried. Lucky me, huh? I sold my building to a young plumber with a fleet of 40 trucks that was a pure pleasure to deal with. I only wish I could have had him as a tenant. If I had to offer some advice to others, I would suggest to do a background check on tenants and not just take money from the first guy that has it like I did. Investigate the buyer. Be selective.

Thanks Joe. I've always rented and didn't start owning until 2013. Better late than never. The guy I originally sold the business to just turned 80 and is still in the daily grind with no relief in sight. He once had as many as 10 transmission shops. He's now down to only 4 shops. He has a stack of customer complaints, law suits, and an 'F' rating with the BBB. I have an $85K judgment against him that isn't worth the paper it's written on. He's in a sad, sad, sad position. I feel sorry for him and his wife. Even his son quit and went to work for somebody else. Here's a lesson on how to single-handedly wreck your own retirement: https://www.bbb.org/us/ut/salt-lake-city/profile/transmission/tanner-transmissions-inc-1166-85050006

When do you sell? In my 40-year career, I've owned 3 different shops, all with the same name, and in the same business of transmission repair. In the first two, the top line was growing, but the bottom line kept shrinking. I thought I could "turn things around" and hung on to the bitter end. I ended up with nothing to sell because who wants to buy a job? I had nothing but equipment to sell. My 3rd shop was the charm. However, I saw the same pattern start to happen all over again. Instead of hanging on to the bitter end, I chose to sell why I still had something to sell. I was 60 and had enough. It took me 7 months of doing mental gymnastics to finally decide to pull the trigger and sell. I called my 3 largest competitors and told them I was selling. They all knew our shop was the highest grossing transmission shop in the state. My competitor with 6 location came over the next day. A week later he sent his CPA in to audit the books to make sure I wasn't blowing smoke about our numbers. From the time I decided to sell to the day we signed the papers with the multi-shop owner and I got my money was only 6 weeks because I had something to really sell other than equipment. I had cash flow and an accountant for a wife and business partner. Having impeccable books is key, especially if you choose to sell. My advice? Don't hang on thinking you can turn things around. Sell your business while you still have something to sell.

I retired 7 years ago at the age of 60 after 40 years of transmission repair. I'm currently 67 and my wife is 69 and an accountant w/2 degrees. Let it be known that she was as much a part of our success as I was. She was a single mom raising 3 boys while working 2 and 3 jobs at a time. Although I was a production transmission rebuilder for the first 15 years of my career, I've been self-employed for the majority of my life. We sold our business in 2015 to a local multi-shop competitor. Another stroke of luck for both of us is that we met in 2007 on Match.com. Crazy, huh? She invested most of the real estate proceeds into high-yielding mutual funds to give us a nice monthly income. The house and cars (including her 2021 RAV4 Hybrid) are all paid for. Before we met, I didn't plan, save, or set goals much. I just lived week to week with a management style I call "management by checkbook". Enough can't be said for the women in our industry. If I had to offer some advice, I would say to own your own shop real estate. We bought ours from our landlord on an owner-financed deal. We rented the first 5 years. Call it luck or destiny, I still think it was more luck than anything. J. Larry Bloodworth, CMAT Draper, Utah 84020 [email protected]