Joe Marconi

According to economic reports, inflation has eased in 2023, which is largely based on commodity items and certain other goods. But, does this mean auto repair shops should lower prices? Sounds crazy? It is. I am making this post to remind everyone that auto repair shops in general have been too cheap for too long. Additionally, repair shop owners must continue to track their expenses and ensure that their labor rate and pricing is where it needs to be. Shop owners deserve a great income for several reasons: A business must turn a profit Profit allows a business to grow Profit allows the business to pay their employees the wage they earn and deserve. Profitable auto repair shops help with attracting and retaining employees.

With technology moving at light speed, it is a monumental task for technicians to keep up. What training do you require, and is that training mandated?

Most of the members in Auto Shop Owner are probably independent auto repair and service shops. All do oil changes, and many may have quick lanes in their model; I did, I had two quick oil change bays in my large location. It was an 11 bay facility. I think that oil change only these days is a tough model. This is my opinion. If I were expanding today, I would focus more on preventive maintenance, EVs, hybrids and also general auto repair and service. I also believe that, unlike years back, to be All Makes/All Models is going to be a tougher business model in the coming years. Contact the Oil Change Franchise companies for their research. You will see that they are changing their model too.

I am going to borrow a quote from billionaire, Warren Buffet, “The best investment you can make is in yourself,” This statement, while simplistic, speaks volumes. A shop owner is much more than a boss, a shop owner is a leader. And leaders are solely responsible for the success of their team. This means that you must work hard and commit to a life of continuous learning and improvement. It also means that if the team fails, a leader must always blame himself or herself for that failure and find ways to improve. For your business to flourish, you must invest your time and energy in understanding what your role is in your company. It also means that you must be committed to continually improving your level of competence. This does not mean that every task is your responsibility. However, it does mean that the buck stops with you. If your business is not where it needs to be, or you are looking for increased growth, then it is your obligation to do the hard work and set goals, have the vision, perform the research, and develop the plan to achieve your overall objectives. When you invest in yourself to become the best leader and the best businessperson you can be, others around you will feed off your energy and your passion. This sends a strong message to everyone on your team that you have what it takes to bring the company to the next level. One last thing, another obligation to your company is assembling the right team of people around you. Once you have the right people, you need to invest in them too. Find what truly motivates them, not what you believe inspires them. Be a coach to your employees and always strive to bring out the best in them. Be strong with your convictions and expectations, build strong relationships with your employees, and don’t be afraid of admitting when you drop the ball. While Warren Buffet is best known for making billions of dollars with his investment strategies, I want to believe that this quote has its basis in something that money cannot buy.

I agree with you 100%!

Great story, thanks for sharing. It is hard to believe that this stuff happens. And to your point, in some way of anther we all end of paying for this garbage.

I don't know what's worse: the tech shortage, the lower than needed rate of young people becoming techs, or the fact that there are many technicians leaving our industry. I guess all three topics are serious issues, but techs leaving the industry has to move to the top, in my opinion. What can we do as Shop Owners to provide a healthy work environment and career that tells techs we care and we want you to stay?

Yes, I listened to it also. The fact is that if every auto repair shop hired one apprentice, we could solve the tech shortage. We, the auto aftermarket repair shops have to do this. No one will do it for us. And I also agree that we need to pay our people better. However, we need to improve the bottom line for repair shops and owners too.

Another excellent point!

Great point about workers comp. No one enjoys paying taxes, but as you point out the risks are too great, and as I mentioned earlier, how does this help raise the bar for our profession?

1099? Seriously! That is just as bad, might be worse!

Good for you! And you are right on target! 1099? Seriously! That is just as bad, might be worse!

A shop owner friend of mine recently interviewed a technician he was looking to hire. At the end of the interview, the tech turned to my friend and said, “If I get hired, I would like half cash off the books, and half by check.” My friend replied, "That’s not happening.” I hope to not sound naïve, but does this still happen? Please, I have been around for many decades, and years back this was common. But I hope that we have progressed as a profession through the years. Tell me I am wrong. Tell me I am right. But tell me how are we ever going to raise the level of professionalism if there are shop owners paying people off the books? Doesn’t this also hurt the actual pay scale by lowering it from what it is? How does help to attract new people to our industry? Please let me know your thoughts on this.

I know it's rare but if OSHA walked into your shop today, would they find violations? I remember when I was getting my company ready to sell, I asked my electrician to inspect my buildings to see if there were any Code violations. He came back and said, "Good news, bad news," There are no code violations, but you have many OSHA problems. How do you ensure that your workplace is safe for your employees, and also avoid any issues with OSHA?

Marconi: There’s No One Size Fits All Repair Shop Business Model Knowing your business and your customers safeguard your shop against trends that may not benefit you. Joe Marconi The year was 1973 and, like many from my era, I started my career working as a technician in a gas station. The typical gas station had two to three bays, and at least two to four gas pumps. Part of my job description was to pump gas if needed. Self-serve was not yet the norm. By the way, we were open seven days a week, with half days on Christmas, New Year's, Easter and Thanksgiving. The automotive repair industry has changed dramatically over the past few decades. There aren’t many gas station/repair shop business models these days. Today, there are franchises, tire stores, off-road shops, specialty shops and other niche businesses. In many markets, the independent general auto repair shop model dominates the typical modern-day model. No matter what business type, it seems shop owners crave benchmarks and guidelines. While there is merit to this, there’s no one size that fits all business model. And there shouldn’t be. Numbers Vary Between Shops The reason why I bring this up is that there are a lot of discussions these days about certain standards that auto repair shops should aspire to. Perhaps the most popular is setting a standard for the right KPIs and profit margins. Also, many industry people are promoting the five-day workweek as the standard, with some saying that a four-day work has benefits that outweigh the five- or six-day work model. Additionally, it’s common to hear that technician production and efficiency standards need to fit into a certain range to determine the overall success of the company. We all understand the value of benchmarking as a way of analyzing what we are doing compared to other similar businesses. However, auto repair shops are like fingerprints; no two are alike. And from my experience as a former repair shop owner and now a business coach, trying to fit your repair shop into a neatly formed benchmark-based model may be more detrimental than beneficial. If we look at KPIs and margins, for example, it’s typical for a general repair shop to strive for 70% or better on labor profit and a 50% part margin. But everyone reading this understands that percentages and dollars are not the same. Some shops do not fall into the typical percentage range, but their business model produces remarkable results to their bottom line in terms of “profit dollars.” Customers Trump Trends Let’s talk about the four and five-day workweek. As I mentioned earlier, back in the '70s, the gas station I worked at was open seven days a week, with half days on holidays. When I started my own business in 1980, I was not about to be open seven days a week, and holidays were out of the question altogether. But being open six days a week was something I felt I needed to do. I had to be there for my customers. Through the years we tried to close on Saturdays, but it just didn’t work for us. This is not to say you must be open six days a week or even five days a week, which is the point I’m making. Some point to employee morale and increased production by not working a five- or six-day workweek. This may be true and probably is for many shops. But can anyone say that this is true for every repair shop, in every area of the country? Know Your Shop Here's the bottom line. While there is a benefit to having standards and benchmarks, every repair shop is different. Learn what others are doing but understand your business model and the KPIs that drive dollars to your bottom line. Then decide for yourself what makes the most sense for your business, not someone else’s. View full article

You bring a lot of great points. The transmission business is different, such as collision shops. It would have been interesting to see if you could have gotten customers back after a major repair for a fluid service, health check or some other way to keep in contact. As you say, a one and done type customer base has no real value.

I like to refer to CRM as Customer Retention Marketing, which is nothing new in the auto repair business. And everyone reading this understands its value. However how many shops consistently implement a CRM process that boosts future service appointments? Which will help to reduce slow times for your auto repair shop. An effective CRM starts at car delivery. Inform and BOOK the next appointment for your customers. Also, inform them of upcoming needed services, and discuss a timeline for any deferred and declined work. Fill your calendar in advance with future appointments from your existing customers. A VERY AFFORDABLE way to market your company. Lastly, this strategy is nothing new, but it needs to be revisited from time to time. Especially since the last few years have been banner years for most repair shops. A consistent CRM process is perhaps the most effective and affordable way to market your business. What CRM strategies to you use to boost your future business?

You make a lot of sense Larry, and I agree. The culture of the shop starts at the top!

The aftermarket has always and will always find a way. Agree!

Gary, True Leadership Wisdom. As you state it IS all about the culture of the company, founded in hard work, team work, integrity and just doing the right thing for the right reasons. There are a lot of shops like yours. I have the highest respect for every shop owner on the planet, however, our responsibility also rests with the future. We, as an industry must do all we can to ATTRACT and RETAIN qualified and passionate people.

My son is not in the automotive industry. He is in the commercial real estate business. However, the workplace problems are the same. Recently, his frustration with the heads of the company reached an all-time high. When I asked him why he doesn’t speak up and let the leadership know how he is feeling, he responded, “Anyone who has voiced concerns or issues has been viewed as weak and incapable of doing their job. I don’t want to be viewed like that.” This is an example of a toxic work environment. If you are a shop owner, you are a leader. And leaders must be approachable. That means that you are willing to hear the concerns of others and have them express themselves. It also means that while you may not agree with someone’s perspective on an issue, it is their perspective, and that viewpoint needs to be recognized and respected. Make it known that you want to hear the opinions of others. Literally, ask for input from others. And thank those that speak up. Now, I am not saying that you need to act on every concern or opinion. That would not be realistic. But just listening may be enough. And you never know, someone in your company may have an idea that you never thought about and even improve your business.

You bring up another rather sticky point, but valid; our pay structure, and the flat rate system. Also, very impressed, Adam Smith and the Wealth of Nations, a timeless classic!

On a recent podcast, I listened to a technician complaining about the repair quality from some repair shops. He also stated that we don't have a lack of technicians, we have a lack of quality repair shops to choose from, which is pushing techs out of the industry, and a reason why we don't attract enough qualified people. I understand that this his perspective, and one point of view. But does he have a point?

As long as the aftermarket continues to give value, we will be in good shape. That does not mean, cheap, we need to charge what we deserve.

From speaking to shop owners, clients and friends, it appears the summer months have been very good. Banner months for many. My question is, do you think this is a trend? Or is it an anomaly? As cars age, and with many shops closing the past few years, there is great opportunity. In addition, there are a lot of cars on the road these days, and motorist art taking to the roads more now than ever. How do you view the auto repair and service business? What trends do you see?