Joe Marconi

Wow, great article. I agree, depressing. But don’t give up. I believe that the tied will turn soon. I can’t believe that the American people are that stupid. There are however, fooled by the political climate. I still have faith the traditional small business that made this country great. We hold all the cards, we just to know it.

I charge more for any alignment that requires more labor. For example, if I need to install a ball joint shim on a Ford truck, I will charge accordingly. If I need to drill out the rivets on an upper strut mount plate under the hood on a Ford, I will charge more. I also have different prices for 2 wheel, 4 wheel, light truck and Hi-end cars such as Mercedes, Jaguar, BMW. ETC

Please keep us posted!

I believe the only way to become successful is to slowly work yourself out of the bays. It’s hard for some, I know it; it was very hard for me. But when I was tied up all day long to the day to day operations, I did not grow. I reached burnout in my 30’s. I was a slave to my own business. I did not realize that I was not a business man but merely owned a job. When I finally realized that I needed to run my company and not just work in it, my company began to grow. Find the best techs; find ways to increase shop production and provide the best service you possibly can. Eventually I hired enough people to take care of every task and operation my company performs. This freed me up to do what I need to do…and that’s to continue to grow my company and look for other business opportunities. I may have switched gears a little on the topic, but I feel that this needed to be said.

It’s truly amazing how some people view our industry. What other business allows this to happen. I never hear my plumber, oil burner service man or carpenter complain about people wanting to install their own parts. Is this a “left over” vestige of times long ago? Or are there still a lot of shops out there that are so desperate or ignorant that they think they need to take in every type of customer?

Thanks for the tip. That’s a lot of great info. One thing I'm not too sure about and that's discounting. How do feel about discounting in good or bad times? I prefer building packages that give the customer value, rather than a discount. For example, we sell a “Seasonal Maintenance Package” for $69.95, which includes: LOF, tire rotation(with the balance), BG engine and BG fuel additive, top off fluids and a 30 point inspection. We sell a ton of these and promote them 4 times a year. Thoughts?

GREAT suggestion, great advise, I have the read the E Myth twice and actually took the E Myth Master Course. It helped me understand that we need to build a business that runs on its own and one that can grow with the right people in place and by creating systems and polices. The beauty of the E Myth is that it applies to all types of business. When the owner of the shop is nothing more than the hub of the company and everything is dependent on him/her, the business will suffer. The bottom line is that shop owners need to be more than just technicians tied down to the day to day operations. Remember, just because someone is a great chef, does not mean he knows how to run a restaurant. The same holds true for mechanics.

It’s a bit involved but I will do my best to explain. First, all newly hired techs are told that we track productivity and for the first month or so we keep carefully track of their productivity and efficiency. This is done to find what they are capable of doing. In other words if a tech works a 40 hour week and is producing an average of 35 hours per week, we make that number his minimum level of expectation. The goal is to get this tech producing 40plus hours in a 40 hour work week. This strategy works because it gets the tech to compete against himself, rather than worrying about what other techs are doing. After about 4 to 6 weeks we put the tech on commissions based bonus. The tech will receive a bonus when the tech books any over his minimum level. So, if a tech is rated at 35 hours and he books 40, he will get a 5 hour bonus (based on his hourly rate) for that week. Every month the tech will be bumped up 5 percentage points. After that A techs must achieve 110% efficiency and B techs must achieve 100%. To be eligible for bonus the tech must work a minimum of 40 hours. All comebacks that are clearly the techs fault will come off their bonus. If a tech cannot achieve these levels, the tech needs to find another job. Please note; if the shop has little work due to a snow storm or other reason, we do not count those hours. I hope this explains my system. I tried to trim it down to make it easy to understand. Please let me know if you need anything clarified.

Evan, first, welcome to the forum! It’s about time you joined in. For those of you who don’t know Evan, he was very instrumental in helping me during my expansion project working on getting my focus directed in the right direction with respect with understanding customer demographics, marketing to “My Customer”, branding and understand value proposition. As usual, you clarified princely what needed to be said, nice job. Question; do you think that some shop owners resort to "desperation marketing" when the see their bays empty and perceive that other shops may be doing better?

It is what AutoShopOwner..com is all about...spread the word!

I totally agree. I tell my advisors to always ask questions such as; is the car due for rotation, how are you wipers, etc. If there is very little vehicle history we will also ask if they are up to date with all scheduled maintenance. The key is to ask...

I agree on both points, xrac. BBB is a scam, nothing more than robbing money from any business willing to pay the membership. I too cannot believe that selling yourself short can last for long. You may struggle for a long time, but it must take it's toll in the long run. I don't want to see shop owners caving in and get into a price war, that will kill us all.

I know we have spoken about this countless times, but I need to hear again ideas on handling comebacks. There are 3 types of comebacks; Part failure, communications or procedure breakdown, and tech failure. Part failure we have no control over. However when a pattern develops we need to look at the part supplier and question the quality of the part. Communications error between advisor and tech or between customer and tech can be solved, that’s relatively easy. Now, what about tech error? Do you make the tech accountable for the error when it’s clearly the tech’s fault? And, how do you handle part failure with your supplier?

Wow! This is a side of the industry that drives me crazy!!! There are too many shop owners that should not be in business. They hurt it for the rest of us. Let me ask you a question...How is staying in business????

I read your thoughts on page 168 and you are right on point. It’s unfortunate but “sensationalism” will always win over “journalism” and a few bad apples in any industry will always be the focus of the media and the public. I particularly like you comments on the Better Business Bureau. Again, right on point! It’s the number one reason why I will never join. The BBB promotes the negative and never reinforces the positive. Like I said, and will repeat over and over….Our industry is filled with dedicated, hard working people who sacrifice each day to keep this country moving. THEY deserve the respect they have dearly earned. You know what really kills me: The president of the U.S. or a star athlete can commit the most heinous crime and all he has to do apologize and he is made into a hero. Just wait, Tiger Woods will be back and he will get a standing ovation the first time he steps onto the green.

Great saying...I do think that before you motivate your customer, you need to motivate yourself.

I completely understand what you are saying. We too, believe that growth is our number one goal; but how you get there depends on making a profit. No company can grow without making a profit. To say, growth all cost, may be one way to achieve that, but I do believe that a company can be competitive and profitable by having a strategy based price structure and not give the farm away. You need to remember that a business like mine which has been around for 30 years has gone through many recessions and growth spurts. We recently built another facility and for the large part, adhered to you paradigm. Building a strong customer base is vital to you growth and survival, you are 100% correct. For me, building my customer base with the right kind of customers is equally important.

I am taking the plunge and will soon hire another advisor. My top advisor will become the facility manager and under him he will have 2 advisors. After 30 years in business and with our new facility, I feel that I am being stretched to the limit and putting in the hours I did when I was in my 20’s. We need to increase sales a bit to support the new advisor, but I need to make it work. At this stage in my life I want to completely take myself out of the day-to-day operations in order to continue to grow my business and work more on AutoShopOwner.com. Please tell me your thoughts….

Why is it that a “writer” for a magazine is the so-called expert? I agree with xrac. I have read too many articles that are very similar, almost word for word, like this one. The articles always expose the negative things that happen, never promoting the good. The truth is, and I know you all agree, that most shops work extremely hard at insuring that they do the best job they can. I have nothing but respect for my fellow mechanics and shop owners, and resent those with little knowledge of our industry telling the public questionable information.

I feel that people don’t always view money as the only motivator. Once the basic needs of an individual are met, money no longer is the anchor that keeps them working at a particular company. For many young people when given a choice, having time off vs. overtime…they choose time off. Above all people want to be respected, treated fairly, make a decent wage and feel like they are making a contribution to the company. When all those are met, most people will not strive for more, whether it is money or higher position.

Yes, signage is important. College towns are tough. Is it possible to contact the local colleges, maybe give a consumer clinic or fund raiser, student dicsout card? Just a few thoughts.

No matter how I hard I try, my mind always drifts to business. Many of you may know that I just returned from a 7 day cruise. While on the cruise, everyday around 3:00, I would go to the coffee bar on deck five. I know many of you are probably thinking; COFFEE? What about the margaritas? I drank many margaritas too, don't worry... Anyway, back to the story. Everyday day I ordered my coffee and the person behind the counter would ask, "Would you like a pastry with that coffee?" After getting my coffee I would sit down and I could hear the guy ask everyone, "Would you like a pastry with you coffee"? Most said no, but everyone 4th or 5th person, said, "Sure, what do you have". Here is the lesson; ask for the sale. It's like I always say; "Never tell, never sell".

I love that joke. I actually told it to a doctor friend of mine.

Welcome and good luck to you on moving to a new location. I want to cover a few things. Try not to fall into the trap by setting your prices and labor rate by what other shops are doing. I know you need to be competitive, but you also need to know what it will take to be profitable and nit just merely survive. You need to sit down and find out what your breakeven is and what return on investment you need to make. This may take a good accountant to calculate. Xrac mentioned that a 20% mark up would drive him out of business. I would bet that there aren’t too many shops that can survive on that. Parts mark up should be in the 40 to 55% range and labor needs to be the 70% for the average shop. Again, sit down with your accountant and do the math. I know firsthand a few shops that went out of business because they either beat of matched the price of the cheaper shops in their area. The reality is that the other shops never did their homework and they all suffered. I like to be a leader and set the tone in my area. I worry about my bottom line, not the low-ball shop down the road. As far as new business; I did very well when I expanded and built my new shop by using radio, TV, direct mail and getting involved in local business organizations. One last thing; market to the customer you want, never try to be everything to everybody.

Thanks everyone for the warm welcome back. Good to get away, great to get back. I was so tempted to use the ship's computer and log on to AutoShopowner, but I think my wife would have thrown me overboard. And not being a good swimmer, I thought it would be best to wait untill I get home. So here I am!