Joe Marconi

I have always been a firm believer of taking care of my customers as if they were family members. If my customer comes to me with a problem on their car and the car is still under factory warranty or needs reprogramming, we will take the car to the local dealer and handle the transaction. I don’t want my customer to make a separate appointment with the dealer; I want to remove that burden, if at all possible. What happened this week opened my eyes to a tactic I was not completely aware of. Please read on, I must share this with you. A longtime customer brought his Mercedes to us for a noise in the dash when operating the heater. We found a faulty blend door motor, a very extensive job. The customer authorized the job and everything was fine, except that the car needed to be reprogramed after the repair. We set up an appointment and shuttled the car to the local Mercedes dealer for the reprograming. Two days later after numerous calls and no return phone call, we finally reached someone in service and the advisor told us they had to remove part of the dash to repair a broken wire. No call to let us know, no authorization, no consult…..nothing! My shop foremen and lead tech worked on this car and took digital photos thru every step. They are both master techs. Both of them are outraged and said the dealership is lying. But wait, it gets better. After we picked up the car, an email and phone call went out to my customer! The email was a satisfaction survey and the phone call was to inform the car owner the reason why the car was at the dealer: The Reason: TO REPAIR A BROKEN WIRE IN THE DASH! The customer immediately called us to let us know. At this point I was furious and called the dealer. You have to leave a message whenever you call this dealer and I left four messages. It took another day for someone to get back to me. The service advisor told me that they are obligated under the terms of their Mercedes franchise agreement to call all of their Mercedes customers. THEIR CUSTOMER! I had to remind him of two very important facts: First, this is MY customer, not yours, and any obligation you may think you have does not include fabricating the truth. I don’t want to condemn or prejudge all new car dealers. We have great relationships with the local Chevrolet dealer, Nissan Dealer, Ford Dealer, Hyundai dealer, etc. I just thought it was important to share this story with other shop owners. I am not one to draw a line in the sand; I feel we should all get along. I will never know the truth about the broken wire, but this Mercedes dealership tactic has left me with suspicion.

I want to thank everyone with thier input on loaner cars. I will take all advise and make a final decesion. ASO has great talent. Thanks!

Gonzo, we all at times either ignore or are afraid to admit that we went into business to make money. That’s not a bad thing, it’s a reality. The issue, and we have discussed this in the past, is that our business focus is oriented toward car repair and service. And, where ever our focus is will determine our direction. We also spend large amounts of time taking care of customers and finding ways to “prove” to them that they are getting value when their car is in our shop. As an industry, have we trained the motoring public to react the way they do? Take a franchise, any franchise, and you will find a detailed plan based solely on profit. The plan may include all the warm and fuzzy things that we all declare when it comes to customer service, community, great prices and quality. But, the root of their business model is profit. I am not opposed to profit, but I feel some customers whether they knowingly realize it, are.

I find it real interesting that the 100 year old company Pep Boys is selling to the investment firm, Gores Group. What’s more interesting is that Pep Boys will no longer be a publicly traded company and will become a privately held company. As the dust settles, the reasons will be reveals and perhaps lessons can be learned from this story.

Thanks FranK, I am glad I have you around!

Labor drives the business and needs to be tracked. Each tech should produce enough labor hours so that the business remains profitable. There are a lot of benchmark numbers, but it depends on the mix of the type of jobs you do. If a shop does mostly major repairs, the labor hours should be high. I have two facilities, a traditional repair shop and a quick maintenance shop. For my repair shop my labor production goal is 100% or better, in the quick maintenance shop, we look for 75%. That's because we do many small jobs such as state inspections, tires, tire repairs, LOF's, etc. Many of which are While-U-Wait. But with this model, we can upsell any major repairs and shift it over to our repair shop. My Labor to Parts ratio is: Gross Labor Sales 45% of total sales, Gross Part Sales 55% of total sales. Many experts will tell you that the mix of parts and labor needs to be 50/50, and some may tell you that labor sales should be more than your parts sales. I am not in total agreement with that. With my Total Car Care concept, I sell a lot of related products: additives, wipers, accessories, mirrors, bumper covers, filters, etc. This tends to inflate part sales. I have no problem with that, since I am also a believer in total profit per car. You can earn much needed profits with sales of related products. In other words, a customer is in your shop for a check engine light and you happen to notice he also needs a set of wipers, a headlight and an air filter. Those additional items, may not add to you labor column, but will add dollars to your bottom line profit. Hope this helped.

A couple arrives to your service counter, husband and wife. The man begins to speak and starts to explain why they are bringing their car in for service. You begin your questioning process and direct all your attention to the man. The entire dialogue is between you and the husband. You never speak with the women or even turn to look at her. What you don’t know is that the car the husband is referring to is his wife’s. I don’t want to get into all the reasons why some men feel they must take the lead with car repair, but the lesson here is not to assume that the women is not involved in the decision making process when it comes to authorizing work. In fact, simply including the wife during the initial write-up will increase your chances of making future sales. Ask questions such as, “Who is the primary driver of this car”? Addressing both the husband and wife equally will send the right signals that you respect both the wife and husband as equals. It will go a long way at establishing a firm relationship with the couple. What you don’t want is for the wife to walk away feeling alienated, which may cause feelings of mistrust.

No, do you anything about it?

No, I have not. I think the engineers underestimated battery life. I just read in Tire Business Magazine that TPMS sensor batteries can last up to 10 years.

Cancer is a subject we all know too well. My mother was a real tough lady, but even she could not fight that evil scourge and fell victim at the age of 47. I am happy to see that Bo has such a good chance for survival. As far as the cancer in our industry, if there was one thing I could change and one thing only, it would be to raise the level of business awareness in our industry. I know most of us are techs, and we got into business because we were good at fixing cars. But the lack of business skills is too often hurting too many hard working shop owners. We need to collectively work toward changing that cancer you speak of. Once we took possession of the keys to the shop, we crossed over to a different world, the world of business. Like it or not, guys like you and me are mechanics by trade, business owners by choice. Gonzo, I hope all our members read your heartfelt story and learn a valuable lesson on life and business.

As TPMS sensors age, we are seeing more and more issues with seized sensors, that need to be replaced. The issue becomes explaining to the customer. The dissimiliar metals that are used in the core and stem are corroding, leading to the seizing after time. Also, people are putting the wrong caps on some sensors and that's an issue too when the cap seize. We have adopted a strick policy for some time now that when ever we service tires, tire repair or tire replacement we inform the customer PRIOR that the vehicle has TPMS, and that sometimes sensor or sensor may need to be replaced. We have brochures to help with the explanation. We also try to explain the relearn process and the re-program process. Not a lot of fun for us to be honest, it's takes time to do explain all this. This helps a lot, although we still get the occasional customer that says: "You touched it, you broke it, you buy it".

You have just described my worst fears....

Great questions. Determining monthly costs can be difficult, but essential to projecting sales, breakeven, return on investment and calculating the amount of techs needed to support the company. I think I would like to give you an overview, and then you can reply back to the post to break down the items further. I will give a list of standard expenses (at the end of post), but what you need to talk is to speak with all the right reps for all companies and utilities you will be dealing with. Prices are different for different parts of the country. A shop in Los Angeles or NYC will pay appreciably more for insurance, for example. So, speak with the electric company, call uniform companies, insurance agents, etc. You will need an accountant, and he or she will let you know what payroll cost will be per employee, tax liabilities, etc. You will have to allow for all these payroll expense when determining your cost of doing business analysis. As far as projecting sales, that could be difficult too, because it depends on car counts, productivity, tech expertise, shop layout, the type of work you plan on doing, among other factors. My original shop, before I expanded, was a 6 bay facility. I expected averaged monthly gross sales of $110,000 to $140,000 per month from that facility, and at times we would hit $150,000. When I expanded to 10 bays and now 11 bays, those number increased accordingly. However, you need to remember that my business was started in 1980. It takes time to build up to that. So I expect each bay to gross 4K min per week. Now, that does not mean I have a tech for each bay. With eleven bays, I have 6 techs and a working foreman. The extra bays are for cars waiting for parts, waiting for authorization, etc. Let me stop here, and let you review all this first. And, you can relpy back, hopefully other shop owners can join in also, to give you different percpectives. Here’s a basic list of fixed and variable expenses: Rent/Mortgage Property/School Tax Manager payroll Technician payroll Service advisor payroll Training/meetings Utilities: phone, electric, heating, water General Maintenance Computer updates & vehicle information systems Supplies Security system Maintenance/Support Staff Personnel Payroll Payroll Expense-FICA, Med,Disibility,UI Property/Liability Insurance Workers comp, Projected Auto insurance Health/Medical insurance (company pay) Other Insurance Equipment Purchase Payments/align, etc Small Tool / supply expense Uniforms Building/equipment repairs Public relations/warranty expense Waste removal/environmental management On-going advertising/marketing Rubbish removal Professional fees-Accountant, Attorney, Finance Advisor Meals, misc Auto/Truck Expenses Office/General supplies ROI /Corp fees Contingency Other, misc. & one-time expenses

That is great news! How do you account the increase? Did you do anything different?

Wow, now that was a line up! I remember those classic years in the late 60's and 70's!

First of all, you are not nuts. One of keys to success is to realize two things: What is your passion? And what are you really, really good at? Those are first ingredients to opening up a business and to being happy. You have a great background in cars, which will help you. The fact that you are putting together a business plan is excellent. Your business model must be put down on paper. Many techs, who have turned into shop owners, have had tough times making the transition from tech to shop owner (myself included). I was a great tech, but a poor business man. When I finally woke up, I used my background as a tech, combined with a new set of business skills, to propel my business and grow. I realized that my skills in business were important to my overall success. So study business and learn, learn, learn. As far as which way to go, either total car care or specialize, you will need to do a demographics study to see what will fit into your market and business model. But, never try to be everything to everyone one. For example: You can’t be a discount store and plan on building a business marketing to Mercedes, BMW, Jaguar, Land Rover and Bentley. As far as being scary….it is. If it were easy, everyone would be doing it. But, don’t let the fear of failure hold you back. Minimize the risk through a well thought out plan. Please, don’t be a stranger on ASO, we are here to help. And check out all the great information on this site. Also, check out my blog. My earlier blogs feature the steps taken when I built and opened another facility. If you are a premium member, there are downloads that you will you find very helpfull. I intend to add a lot more business downloads in the coming months. Good luck, glad to have to you aboard!

I will work on that...

April is National Car Care Month If you are looking for a great way to promote your shop and to promote the concept of total car care and preventive maintenance, you should consider holding a Car Care Event. I can tell you from personal experience, that you will get a bounce in sales for months following the event. This is an excellent way to feature your shop and what you have to offer to your community. The key is to promote the event weeks prior. For more information, please go to http://www.carcareindustry.com/

You are probably right, Frank. I just hate to dilute my culture and my brand. But, things are different today and people are so frustrated with economic conditions that they are looking for ways to save. In the past, I would not even concern myself, but maybe I need to find a way to beat them at their own game. We hold consumer clinics throughout the year, I am thinking of holding a seminar; "Save Money! Simple Car Maintenance You Can Perform Yourself" The basis behind the class would be to highlight the need for preventive maintenance, and to promote the fact that there are a lot of things the average person cannot do themselves. I would offer, at the class, discounted items and services and make my shop the go-to place for that segment of the motoring public. I don't want to draw a line in the sand. That may have worked in 1989, but not today. Your thoughts????

That's really great Frank. It has to mean that you are doing a lot of things right! Keep the momentum going!

AutoZone is due to open up soon right around the corner from my shop, within walking distance. Lucky me, right? Right up the road, again within walking distance from my shop, is an advanced. So there will essentially be an AutoZone and an Advance Auto right next door to each other, and right in my back yard. The funny thing is that there are two Advanced Auto stores in my town and neither are making any impact with the local parts store, CARQUEST, that services the local repair shops. So who are these stores catering to? I can’t believe that there are that many Do it Yourselfers in the area. But I could be wrong. One thing for sure, it will be interesting to see AutoZone and Advanced go to battle with each other.

As usual from Gonzo.... Pricless!

I am a firm believer in offering value to my customers. I am not here to promote any particular company, however, in this very competitive market; shop owners need a way to bring more value to their customers. In particular, a program such as the BG Lifetime Protection Plan is one benefit that can protect your customer’s vehicle for life for major components. This has great value to the motoring public. There are many other products that are available to us. I think it would be beneficial to all if we could share some of the programs and products we offer to our customers that help grow our business.

We all know that shop owners go through many challenges each and every day. We purposely moved this forum to the top in order to make sure that every member knows that ASO is here to help with all business and shop issues. So, if you get frustrated and need to reach out, just log onto AutoShopOwner.com. Also, if you know of other shop owners that are not familiar with ASO, let them know. Remember, if you have a question, issue or just want to vent, ASO is just a click away…