Joe Marconi

On 4/19/2024 at 6:41 PM, Transmission Repair said:

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.

Thanks for the info. I think you made the right decision. 

6 hours ago, Transmission Repair said:

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.

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?

A critical strategy that should be consider by shop owners!  Excellent podcast! 

Once again, Hunt brings clarity and great information to shop owners! 

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. 

2 hours ago, Transmission Repair said:

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.

I think all of us have been down that road.  We sometimes get in the way of our own success, when it's right in front of us. Great point! 

I had a recent discussion with a coaching client, who was complaining that sales are off. But, when we looked at his car counts, it was steady with no decrease. In fact, car counts were slightly higher than normal for last month. 

Another thing we noticed was that his calendar was booked out about a week and a half out. Reviewing the calendar revealed that many of the customers had previous recommendations and deferred work that was not addressed at the time of the current appointment. 

After a proactive approach of reviewing the appointment and vehicle history, the service advisors were able to discuss with their customers past recommendations and increase sales. 

Do you use your calendar as a way to prepare for your customers and increase sales opportunities?  What strategies can you share that helps you to increase sales by using your calendar or other technologies? 

When I look back at my 41 years as an auto shop owner, 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. 

If you want to truly achieve great things in business, you need to have great people around you. Take a hard look at the people you employ now. Would you hire them again?  

Think about this: If your auto repair shop is reliant on your skills, your intellect and solely on you, your business will eventually plateau and stall.  You need great people around you to build your empire.  The strategy of finding the right people for your company is ongoing. 

Lastly, once you have assembled the right people, then you need to do all you can to give them the training, the coaching, the support, the praise and recognition to bring out the best in them.

1 hour ago, newport5 said:

Re: Should we get back to the art of selling, taking care of customers, offering options and making sure we create an amazing experience? 

Should we get back to the art of selling? NO! Customers don’t need to be "sold." We need to sell ourselves. Google search: “nobody likes to be sold.” More soon

taking care of customers: YES !

offering options? Such as?

and making sure we create an amazing experience? OK. What makes for an amazing experience? I read online somewhere: “Today’s customers want an exceptional experience, one that puts you and your shop above the competition. Which means: easy scheduling, a fast turnaround, open communication, fair and transparent pricing, and repairs that are done right the first time.”

To me, that is NOT an exceptional experience. That is the minimum. That is a routine experience.

Thoughts?

You are right.  Here is my take on this.  Creating an amazing experience is nothing more than building strong relationships, being nice, friendly and making sure that you are taking care of the customers needs. You are right, as we build value, we sell ourselves.

I don't think the customers "expect" any experience. They get beat up everywhere, and now they are just looking for a someone who truly cares. For example, I am dealing with a knee issue. I called the doctor three times, left messages, got hung up on twice, and it took days for someone to call me back. And this is a doctor's office!

Again, this is no brainer, just be nice, do a quality job, and the rest takes care of itself....for the most part. 

Great advice! Sound business strategies! 

On 9/6/2023 at 5:43 PM, Transmission Repair said:

They say everything costs more these days.  I found more evidence of this when looking at Ratchet+Wrench Management Conference registration fee of $999.  Wow.  Add in airfare, hotel, etc. and this event for even just ONE person in a shop will be at least $2K, if not more.

Although I'm sure the event will be worth it, to me it simply drives up training costs that needs to be calculated into a shop's pricing structure.  QUESTION: Do you have Training Costs as line item in your P&L?  As a percentage of sales, how much should be budgeted for Training Costs?

In our shop, we had 1% (~$12,000) of sales budgeted for Training Costs, but in reality, it ended up being almost 2% (~$20,000) because we trained ALL employees.  Because we were a transmission repair specialty shop, a year didn't go by without 3 or 4 new transmission models added to the mix.  We would close the shop for a total of 4 days just to attend our annual Transmission EXPO.  Most years, the EXPO was in Vegas, but not every year.  One year we really blew our budget when the EXPO was held in Washington, D.C.  OUCH!!

Tell me your story on training or continuing education.  

Costs are rising, and every shop owner needs to make the decision on where to spend and how much. Events like the R+W can be valuable in terms of knowledge and networking, and morale. 

As for the P/L, there needs to be a line item for Training and a budget. That budget will depend on the level of your team and your goals.  I would look at my total overall expenses (not including tech pay), and my goal is keep total expenses no more than 40% of total revenue. You business model, was different.. 

On 3/25/2024 at 4:42 PM, jadetrost said:

Hello guys I’m Jade Trost 56 years. New  on this forum 

Welcome to Auto Shop Owner! 

The fact that inflation is under control is a good thing But that does not mean that the normal operating expenses have gone down. In fact, rising rents, utilities costs, insurance costs, etc. are much higher today than just a few years ago, 

How will you as a shop owner respond to this economic situation? And what about your employees? They are feeling the pain of increased prices too. 

A great recap of some of the events and scenarios that could happen. Life may throw us a curve ball, are we ready?

A important and worthwhile podcast for shop owners! 

16 hours ago, TheTrustedMechanic said:

Not to mention if they want to get a bank loan or a credit card or anything that might depend on their "income." Sure, it might feel nice to have that "extra cash," but anyone who wants to or is willing to work "under the table, " or "off the books" is really cheating themselves, including shop owners who skim the cash payments and only report what has a paper trial, ie checks and credit card receipts. I mean, cash payments aren't that big of a piece of the pie, are they? So, what's the big deal if I take the cash from quick jobs, it's not hurting anyone is it? (For the record, all italics are meant SARCASTICALLY and I am in no way advocating it.)

 

You bring up great points. To add to your comments, this mindset of hiding cash also gives the shop owner a false sense of financial security, and leading to so many other negative consequences, as you mentioned. 

17 hours ago, Transmission Repair said:

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.

Interesting point. Your business model relied on this strategy. For many long-established business, retention through delivering a great customer experience is also a solid strategy. For many business models, it's more cost effective to retain customers. However, every business needs an infusion of new customers too. 

20 hours ago, DUFRESNES said:

Good morning.  February was a record month.  The Service writer kept saying February stinks, had to eat his words.  March we are full for the day and after, but don't have the long term waiting appointments.  Still a good month.  We send out rebate letters in 3 mailings Feb, Mar and April.  That helps us ins the winter months easing into summer

.  

Sometimes perception turns into reality. I have seen this all too often, "Feb is always slow, there is nothing we can do." Just by thinking this, it become the reality. A key thing you did was to be proactive, not giving in to the mindset that Feb stinks. Great job!

When I was in business, we had a plan starting in Sept to flood Jan, Feb and Mar with Service reminders, backed up with reminder phone calls. Again, be proactive, not sit on your hands!

A few weeks back, I was at Vision in Kansas City. I spoke with many shop owners who were there with there entire staff. Others brought either all their technicians or their service advisors. The objective was to get three packed days of training. 

Is this something you would consider?  What are the pros and the cons? 

This may be a sensitive discussion, but many companies, especially restaurant chains, are considering Dynamic Pricing - Charging hire prices for meals during busy times. Hotels and airlines have been doing this for years. 

I am not a fan of this, but I am being naive? With rising costs, and rising cost of payroll, is this something the auto repair shops should consider? 

Speaking to many shop owners, I get the sense that sales are slowing lately.  Is this so, or has the ramp up in sales the few years made many shops complacent?

Should we get back to the art of selling, taking care of customers, offering options and making sure we create an amazing experience? 

10 minutes ago, newport5 said:

I'm not a fan of scheduling the next appointment because "I" don't want to schedule anything 6 months away. I GUESS if it's in their appointments, when 6 months comes around, its a nice reminder.

Every shop has different needs, I get that. My feeling is that too many consumers today don't think about maintenance as they once did. Some drive well over a year and over 12,000 mile without an oil change service, tire rotation, etc.  And then when the maintenance light (or sometimes the oil light) comes on, that drives them in for service. 

I guess what I like to see is what dentists do, for the most part they schedule your next cleaning and checkup, it's a maintenance visit, to avoid things going wrong, It also helps to control the schedule. 

48 minutes ago, DUFRESNES said:

The only thing I know for sure is   YOU DON'T PLAY AROUND WITH PAYROLL.  You do it the right way always.  It will come back to bite you really bad.

Agree! it always does. 

2 hours ago, Transmission Repair said:

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

I may have missed my point.

I have shop read and heard on podcasts that if the shop creates an estimate for a check engine light analysis at 2 hours billed to the customer, but the tech finds the problem in one hour, the shop adjusts the labor down to one hour. MY QUESTION is, if a customer is billed 3 hours for a Water Pump Job, but completes it in two, we would never reduce the price. Right? So why do it on a Check Engine light or similar job. 

I hope I am making sense. 

When a tech completes a timing belt in 3 hours, but the job is billed to the customer at 4 hours, we don't reduce the labor charge.

BUT, if we project a check engine diagnosis to take 2 hours, but the tech completes the testing in 1.5, why do so many shops reduce the labor charge to 1.5 to the customer?

We need to get away from selling time, to selling what the job is worth.  We need to factor in that highly complicated jobs require your top tech (the most expensive too), the most expensive equipment and information programs, more service advisor time to explain, and have NO part profit.

Your labor rate also has to be based on your top tech's pay rate, plus your average gross profit percentage added to your labor rate, at minimum. 

Your thoughts, comments, opinion? 

Great advice! And very relevant!