CTC

On 3/11/2022 at 9:02 PM, Transmission Repair said:

I sold my business in 2015 and leased the real estate to the buyer for $11K/mo. on a 10-year lease and I paid property taxes.  I guess you could call it "Double Net".  I was 60 years old at the time.  Like Joe M. said, it's not enough to retire on because I was still in 7 years deep on a 10-year owner financed purchase.  Long story made short, the business dropped 2/3rds and the buyer skipped out after 5 years.  We were able to get an $85K judgement against him but we can't collect it.  Where we made our retirement was selling the real estate for $2.3M in 2020 to a plumbing company with a fleet of 40 trucks.  We carried the paper on it for $9,600 on a 30 year note.  5 months later the plumber sells his business and the buyer paid the whole mortgage off.  We didn't have a prepayment penalty clause in the contract.  Silly me.  $400K in state and federal income tax instead of paying just a little bit each year.  Be very careful when you sell.

Very good insight, not many of us would include the prepayment penalty. That is rough!

Be careful unless you list yourself!  Ask around on the value, based on loan values.

12 hours ago, rpllib said:

I believe some owners have just checked out, especially if they have a stable crew that takes care of most of the day to day, the bills are being paid, the owners are getting paid, ect. Maybe no one is getting paid what it is worth, but everyone is comfortable. 

This is the case with my friend, but does not explain the younger owners that surround him. Techs turned business owners I suspect. Maybe even DIY owners/staff running the front counters. One of the best things I ever did was to get off the front counter.  

Our flat rate guide labor multiplier has varied from 15% and now at 30%. This is to insure that the guide built into our POS is at the top of the labor times when the three(or more) guides are compared. It also covers some additional time for the rust/corrosion we have to deal with in the upper northern tier.  Our POS system also matrix's our labor rate up $40 (33%) over our base rate, over the first 10 hours of labor. This is to cover the lower parts GP$ that typically go along with higher labor hours. I have no doubt that customers notice how much higher we are than our competitors, but we seem to find more than enough work to keep a staff of 10 busy. I won't allow my techs to be tied up on marginally profitable work, if I have a choice. 

I am probably the opposite of my friend. I refuse to have nothing to show for our efforts. I may close the doors one day for being too expensive and refusing to budge, but I won't have any regrets in the process. 40 plus years in business and no debt does offer freedoms that many may not have the options for. Yet I truly believe there is always room for all shops to improve, every single year.

I hope we are able to kill the acronym TLDR(too long, didn't read) in our industry. There is no room for that thought process. Better we go to GPFR (get paid for reading)

Best Wishes All

 

Well said!!!

Can’t understand why people are scared to raise prices in tight labor market, everything on average right now is up between 7.5-16% on average, that’s everything! Go up marginally if you like but go up! If not you better realize your fixed expenses are increasing all around you! Recognize the vacuum! It will suck your profits up! Also your employees costs are rising, they may not be asking for a raise, but I can guarantee you they see fast food paying $15-18 per hour! Why get dirty & buy tools plus all the headache, if they can make close to mechanics pay & flip burgers! Pay attention folks!

Base these numbers on the math not on what everyone else is doing. Each marked is different 

Easiest thing to do is use a multiplier & see if there is any blowback, example—each hour multiply by 1.25. Try for month or so, then go to that. Then you can give your guys cost of living raise. Don’t go slowly broke, it’s pointless, sell or quit prior to. Make business decisions based on needs not on what community says. We are ultimately like the coroner, no one comes to see you because they are having a good day!  Stop worrying about the internet, they aren’t growing mechanics/technicians on trees. These schemes are short lived, it’s someone trying to make a quick buck. At the end of the day, be a business owner, know what it takes, get some training if needed! There are some free resources available, all you have to do is READ! 
 

We all are concerned with the future but, all we can control is today, tomorrow will be enough trouble on its own without anyone worrying about it.  

Have tried both with no success.

On a side note….don’t trust the attorneys, just ask the labor board. Seems scary enough to call but they will steer you in the right direction whereas a labor attorney will offer advise, but will balk when fines are issued & leave you holding the bag!

Paying flat rate & hourly you must punch clock & pay overtime, otherwise you are setting your self up for fines & backpay. Just a word to the wise, be careful!

I understand everyone has a different pay plan, I also understand bonuses, I am saying that federal labor laws are easily violated by pay plans. Flat rate is cut & dry & shouldn’t be a problem, however I was specifically told that bonus plans are a problem & I paid heavily for having one. The easiest way to explain it is to say that if you are paying flat rate, don’t deviate without speaking with someone with the federal labor board. They will answer your questions if you ask.  If you pay hourly, or any thing close, you better make sure your people punch a clock & you better pay them for every hour they punch including time & a half over 40. Bonuses change the overtime rate you owe, that’s why if you have a specific plan, you have to account for it while factoring overtime.

Be careful with bonuses….had my hand slapped by federal labor board! She said we should never have a bonus plan that says if you do this you get this. Only applies to bonus, not flat rate, they consider that piece meal pay, which is entirely different. Take or leave the advice, will just tell you that it cost me a lot of money!  My suggestion is to ask your local labor board, if you have questions prior to them checking in on you.

Use Mitchell & Bolt on currently, works ok. We are primarily HD, no one has anything other than Mitchell. Have tried autovitals in the past, it’s a good system, feature wise, just very unstable, crashes a lot. Always looking for a better alternative, maybe someone will eventually develop a better alternative!