Joe Marconi

A friend of mine who owns a 6-bay shop in New York recently hired a tech. He was short a tech for months and was desperate. Without getting into details, the newly-hired tech lasted two weeks. Between his work ethic, bad attitude, and comebacks, it was a costly mistake. Have you hired the wrong person in the past? I know you need to fill an important decision, but is hiring anyone the right move, hoping that things will work out?

I don't think there is anyone that does not appreciate time off, especially during the holidays. However, balancing staff hours and time off does present a problem during the Christmas and New Years holidays. Some shops close down the entire shop from Christmas to New Year, other shops have extended days off, and some rotate staff. What has worked for you OR NOT worked for you?

Marconi: You Can (and Will) Survive an Economic Downturn Joe Marconi December 12, 2022 Speaking with shop owners around the country, it appears that the recent surge in business may be showing signs of vulnerability. For most automotive repair shops, the past few years have been a comfortable ride with sales and profits exceeding expectations. While no one can predict what will happen in the future, should we be concerned at this point? The COVID pandemic may have been a challenge for businesses in general. However, it proved to be a minor blip on the economic radar screen for most repair shops. Yes, there were some areas around the country where business slowed to a crawl and some repair shops had to close their doors permanently. But for the most part, the conditions caused by the pandemic created the perfect opportunity for most auto repair shops. Will this perfect opportunity lead to the perfect storm? Let’s take a closer look. Due to the pandemic, many repair shops received some monetary relief in the form of the Economic Injury Disaster Loan, the Payroll Protection Program, and more recently, the Employee Retention Tax Credit. The concern is what these programs are having on the economy. Another issue is this: Did these programs give us a false sense of accomplishment, boosting our cash reserve when most shops experienced an increase in business? If we are honest with each other, then we need to consider two things. How many of us were prepared for such an extraordinary event as COVID? And how much of the recent boon in our businesses resulted from anything we did? Most shops are reaping the rewards of ideal conditions caused by factors that were mainly out of our control Today, we face high inflation, rising interest rates, parts shortages, a technician shortage, rising wages and a possible recession. Is this all doom and gloom? No, of course not. As a former shop owner who spent 41 years working in the trenches, I have lived through many economic downturns and survived. From each economic downturn, the hardships endured led to valuable business and life lessons for those willing to view the tough times not as stumbling blocks but as stepping stones to a better future. The strategy now for shop owners is to build their companies to prepare and withstand the unknowns. You cannot assume things will stay the same. They never do. Complacency can be just as damaging as fear and negativity. Revisit your key performance indicators to ensure you continue earning a profit. Build a healthy cash reserve. If needed, adjust your pricing, margins and labor rates. Get your personal finances in order, too. Continue your marketing efforts, especially if you feel you are heading into a slowdown. Don’t make the mistake that so many companies make and pull your advertising budget to cut expenses. Bump up your training programs and invest in new technology. Perhaps the most important component in preparing for the future is assembling a great team of employees and creating a workplace environment that tells your employees, we care, and we want you to stay Our economy goes through wild swings, combined with good and bad times. The truth is that no economic situation is sustainable forever. The companies that prepare and grow their companies in the best of times will make it through the tough times. However, surviving is not the goal; thriving is. Become diligent with your approach to your company. Work hard today to grow your business in every aspect. Preparation, combined with hard work, will always pay off in any economy. https://www.ratchetandwrench.com/articles/13005-marconi-you-can-and-will-survive-an-economic-downturn?utm_campaign=10MMCD221212014&utm_medium=email&utm_source=newsletter&oly_enc_id=2793F8381667E8G

For automotive shop owners, tax planning is an ongoing process. You should meet with your accountant at least once a quarter to review your financials, expenses, major purchases, cash reserve, payroll, etc., and make needed course corrections. Below is a general list of tasks that should be done by the end of the year to prepare for tax season, which is right around the corner. Schedule a meeting with your accountant and ask if any information, reports, or documents are specific to your business. Update your inventory and run a report for December 31. Review your and your employee’s retirement accounts; fund them if needed before the end of the year. Purchase equipment, vehicles, etc., to reduce taxes ONLY after discussing with your accountant and coach. Check your accounts/receivables and print a report with a closing date of December 31. Prepare a list of any uncollectable debt for your accountant. Prepare your accounts/payables. Determine which bills will be paid in the current year. Ensure that all loan interest income and expense is properly itemized on your P/L. Ensure that all major equipment purchases are properly itemized on your balance sheet. Prepare any investment dividends documents. You may need to wait until January to obtain these documents. Make sure you have all receipts and records for any capital improvements or leasehold improvements made this year. Contact your attorney for any required corporate meetings, filings, etc. Discuss with your accountant how to payout any end-of-year employee or corporate officer bonuses. Ensure that all payroll information and worker’s compensation information are correct. Remember, preparing now may save you from paying too much in taxes and will relieve stress from your life.

We often speak of the "Customer Experience," which is crucial to the success of your auto repair shop. But equally important is the "Employee Experience." I don't have to remind anyone that happy employees make happy customers, but this concept goes even further. If you want to attract superstar candidates and hold on to the superstars you employ right now, you must do all you can to ensure that your employees have a healthy workplace where they are appreciated and can grow and enrich their careers. I know we have a lot of great shop owners on this forum. What do you do to create a great workplace environment that both attracts and retains top talent?

This is amazing! ASO members helping each other! The power of networking and the ASO forum! Great job!

National Pearl Harbor Remembrance Day, also referred to as Pearl Harbor Remembrance Day or Pearl Harbor Day, is observed annually in the United States on December 7, to remember and honor the 2,403 Americans who were killed in the Japanese surprise attack on Pearl Harbor in Hawaii on December 7, 1941, which led to the United States declaring war on Japan the next day and thus entering World War II.

One correction, sorry, I didn't mean to state the QB had a scan feature. I scan important documents to my computer in a drop box file. It is saved in the cloud and easily accessible. In fact, you can share the file with others if needed.

Agree, and we also need not to forget that EVs will still have the problems that cars have today: tires, wheel bearings, steering/suspension issues, wheel alignments, fluid services, cabin filters, HVAC issues and other mechanical issues.

I really don't have any magic bullets for you. I have been in business for 41 years, and I simply used the basic file cabinet system and organized the files in a way that I could easily find what I needed. I did use technology in the later years, scanning and filing on my computer and backing it up. I used the filing system Drop Box: https://www.dropbox.com/ Drop Box automatically backs up files to the cloud. And can be accessed through any computer you have, at home or work. I also had an accountant, an attorney, and a financial advisor who all had their own set of files, which was very helpful. Great question, I hope I helped.

Thanks for sharing, Larry.

Not to bring politics into this conversation, and whether we like it or not, the Electric Vehicle push is on. And in a big way. We need to prepare for EVs, implement EV training, and invest in new technology. The question is how aggressive do we need to be at this point?

I think that the labor side of this is much more important than the part side. Would you say that labor time can get eaten up fast when you come across a problem?

It's very common. We often get complacent.

Keep us updated on this. I know many of us are interested! And good luck!

As we head toward the end of the year and look to 2023, I thought it would be beneficial for all if we share the biggest challenges that are facing auto repair shops. Is it hiring new employees? Employee retention? The economy? Technology? Or perhaps, finding the right training for your employees? Let's start the conversation and post your biggest challenge!

It's a safe bet that nearly every auto repair shop is looking to hire an employee, most likely a technician. While I am a big proponent of a plan to recruit constantly, we can never forget about the employees we have right now. Do all you can to create a healthy workplace with high morale. Have a one-on-one with all your employees. Find out what they like about working at your repair shop and perhaps more importantly, what they would like to change. Ask your employees what they would do to improve your company. If you have never done this before, you may get the "deer in the headlights" look, but don't worry, keep asking and in time your employees will be a great resource for you. When people feel appreciated and know that their opinion counts, it helps them from looking over the fence for greener grass. What do you do at your auto repair shop to help retain your employees?

Will the TV ads match up to your demographic profile?

Great point; there isn't just one business model. I think it's important to hear different points of view. Everyone is motivated differently.

Shrinking Repair Outlet Population "Vehicle maintenance is becoming less convenient for Americans. There are fewer outlets repairing cars and light trucks, despite the increasing population and complexity of cars and light trucks on U.S. roads. The number of repair (DIFM) outlets fell by nearly 14,000 over the past five years (2016 to 2021), and future annual reductions are likely." "Nevertheless, not all types of repair outlets suffered losses. Repair Specialists, Foreign Specialists, and Dealers have grown in number, while the four other major types of DIFM outlets have endured thinning ranks. See the all-new 2023 Lang Aftermarket Annual for a ten-year history of the changing number of all major types of auto repair outlets across the U.S." 14,000 Fewer Light Vehicle Repair Outlets At mid-year 2021, there were over 211,700 car and light truck repair outlets in the U.S., down approximately 14,000 from 2016. At the same time, vehicles in operation (VIO) climbed by more than 18 million and grew more complex, increasing the diagnostic and repair challenges faced by repair outlets. Outlet Groups Growing in Number Although the light vehicle repair outlet population fell by approximately 14,000 from 2016 to 2021, not all outlet types have declined. Among the seven major types of car and light truck repair outlets, three increased in number between 2016 and 2021: Repair Specialists, Foreign Specialists, and Vehicle Dealers. These outlets groups grew even during the onslaught of COVID-19. Repair Specialists Focusing on a limited menu of vehicle repair and maintenance, Repair Specialist locations totaled just over 29,600 at mid-year 2021, up several hundred from five years earlier. Repair Specialists are the second largest DIFM outlet group. Foreign Specialists Foreign Specialists concentrate on the repair of foreign nameplate cars and light trucks. They achieved the largest outlet gain over the past five years and the greatest percentage growth in locations. There were just over 19,600 Foreign Specialists nationwide at mid-year 2012, up approximately 700 from five years earlier. Vehicle Dealers Vehicle Dealers recorded a small (less than 0.2%) increase in outlets from 2016 to 2021. This reversed a trend of declining Dealer locations in the years after the Great Recession of 2008. Asian nameplates have been the most successful in expanding their Dealer counts. Outlet Groups Declining in Number Service Stations & Garages, Tire Dealers, Discount Stores/Mass Merchandisers with bays, and Retail Auto Parts Stores with bays all fell in outlet count over the past five years. Service Stations & Garages Service Stations & Garages were battered by a significant population loss from 2016 to 2021, down by approximately 13,000 locations. This represented most of the repair outlets lost over these five years. Nevertheless, Service Stations & Garages remain the most prevalent type of DIM outlet. Tire Stores There were approximately 800 fewer Tire Stores in the U.S. at mid-year 2021 than five years earlier. Small Tire Stores suffered the brunt of this decline as growing competition from large, multi-outlet operations pushed many of them out of the market. Discount Stores/Mass Merchandisers & Auto Parts Stores with Bays The closing of hundreds of Sears Auto Centers nationwide contributed to the decline of Discount Stores/Mass Merchandisers with bays, which has been ongoing since 2011. The falling number of Auto Parts Stores with bays between 2016 and 2021 continued a trend that has been underway for several decades. COVID-19 Impact Most of the DIFM outlet loss between 2016 and 2021 occurred over the past two years (2020 and 2021), reflecting the impact of COVID-19 and the resulting changes in consumers’ vehicle repair behavior. Changes in the populations of the major types of DIFM outlets will continue, creating challenges and opportunities for a variety of aftermarket players. Six Major Takeaways The number and complexity of cars and light trucks in operation have continued to increase. Nevertheless, the population of repair outlets handling cars and light trucks fell by approximately 14,000 over the past five years (2016 to 2021). Despite the loss of car and light truck repair outlets between 2016 and 2021, three of the seven major groups of DIFM outlets expanded their populations: Repair Specialists, Foreign Specialists, and Vehicle Dealers. The number of Repair Specialists climbed by approximately 350 between 2016 and 2021, and approximately 700 Foreign Specialists locations were added. Vehicle Dealers posted a modest increase in number, reversing a trend of vanishing locations that began during the Great Recession of 2008. Service Stations & Garages suffered the most significant outlet loss from 2016 to 2021. The populations of Tire Stores, Discount Stores/Mass Merchandisers with bays, and Auto Parts Stores with bays also were battered during these years. The growing number and complexity of cars and light trucks in operation provide challenges and opportunities for the shrinking population of light vehicle repair outlets across the country. They must become more technically capable and productive to keep pace with the growing volume and complexity of vehicle repairs. See the all-new 2023 Lang Aftermarket Annual for the only ten-year analysis of the population changes sweeping across the seven major types of auto repair outlets in the U.S. View full article

GREAT QUESTION! I think we need to look at this differently. Always recruiting is not always hiring; it's building a pipeline of quality people. It involves creating relationships with your contacts and then finding out through them the top techs and top service advisors that you can reach out to and just have a conversation with. From there, you maintain contact with people that you have met and then put them in your pipeline. So, you build relationships over time. When the time comes when you need someone, you stand a much better chance at making the right choice by making an offer to someone you know and have a relationship with. One thing, if your existing people ask questions about this strategy, just simply tell the truth; you are always looking to expand your network of people and always looking to grow in the future. There is a lot more to this process, but I thought I hit on the main points. Not to plug Elite, but at the Eagles Fly with the Eagles course that I present, we spend a half day on this subject alone. Any questions? Let's keep the conversation going.

First, Auto Shop Owner is primarily comprised of aftermarket auto shop owners from around the world and also companies that support the aftermarket. You have a unique business and one that does not fit into the "normal auto repair shop," as you state. With that said, it's important to understand your numbers: your labor costs, material/parts cost, and operating expenses to start with. Then you need to establish your required gross profit on labor and parts in order to pay for your operating expenses. And of course, you need to have a decent net profit(bottom line) I don't want to trivialize your business model; I just want to start the conversation. I would like to hear from businesses that are similar to yours. I ran a traditional multi-store auto repair shop for 41 years, and now work as a business coach. Great Topic!!!

What are your Thanksgiving business hours this week? The balance between time off and responsibilities to our business and customers is a challenge. What strategies do you implement and how do you balance the Thanksgiving holiday for your auto repair shop?

There are many things to consider when creating a marketing plan. Among them are establishing a budget, what forms of media should be used, and whether traditional advertising, such as TV, radio, and print, is still relevant. And of course, how much should be allocated to social media and digital advertising? All the above are essentials to any marketing plan. However, the first step is ensuring that you have a healthy workplace and that your employees understand your company’s culture and the overall mission and vision. We all know that happy employees create happy customers. No form of advertising can overcome a toxic workplace with unhappy employees. If your employees are not creating an amazing customer experience, your marketing plan will not work. Advertising and marketing may bring in customers, but the people in your company creating an amazing customer experience will be the most important component of your marketing plan. It’s the customer experience that sells work and gives the customer a reason to return. Creating an amazing employee experience, which creates an amazing customer experience, is also the most cost-effective part of your marketing plan. In fact, it cost next to nothing.