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What New Equipment are your Planning on Buying?

Joe Marconi
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bantar Community Regular

bantar

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Well, I'm in the middle in installing 2 new (made in the USA: Fort Worth, TX) lifts (for a total of 6), and 3 Big Ass Fans (1 12' and 2 smaller spot fans).   All should be turned on Monday after the electricians wrap up.   Our building is not conducive to AC, as it is a wind tunnel with doors on both sides.   Works well in the heat when there is wind, but when it's still, it's terrible.

I think I've turned away enough 1234yf AC jobs already this year that I might hit my magic number of 10 declines later this year.   Next up (spring of '23) is a 1234yf rig, with multiple leak detection upgrades (nitrogen tank, Inficon Stratus leak detector, digital Fieldpiece manifold set).   I've told my MAC tool truck that if he can help me sell my Hunter SmartWeight Touch Tire Balancer, I'd buy his unit immediately.    (My business is not compatible with Tires, so we gladly refer them to the tire stores and generally, they refer folks back to me.   I think this is a GREAT tradeoff. )

I don't have the clearances in my shop to tackle ADAS, so we are turning away ADAS jobs while looking for a reasonable outsourcing solution.

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bantar Community Regular

bantar

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10 hours ago, Joe Marconi said:

Question: When you say your business is not compatible with tires, why?  To play devil's advocate; won't tires and related repairs become an important part of our business with the increase in EVs? 

Tires are labor intensive.  Used tires require storage.   This means moving them somewhere, which is more labor. Tire machines require floor space.  I have 6 high volume, low margin tire stores within 3 miles of me.   Tire delivery is slow... today or tomorrow, sometimes requiring shops to go pick them up for faster delivery.   Tires are often a need-it-now.  Failed state inspection and want to pass today.   I have a few friends that have added tires, but it's not been a strong revenue stream.

Using less labor, I can generate more profit in my QL than I would with tires.    We do paid tire rotations, but even this is labor intensive and ties up a lift.  We only do this to be a single stop for routine maintenance.   Luckily, most folks are not regular tire rotating types, or they get it done for free at the high volume tire stores.  I charge more for stand-alone tire rotations as a disincentive.  I don't want to be a tire store, but also, it increases the profit of these slower services, so I grumble less.   Overall, this is more of a pick your battles exercise than an actual distaste of tires.

So, wrapping this up in an EV umbrella....   my revenue streams are not EV and I won't be selling tires to EV's.   I might have to pivot at some time in the future, but for now, EV is not my bag of tea. 

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bantar Community Regular

bantar

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We have 3 main revenue streams: 

  1. Quick Lube - Oil Changes, Batteries, Wipers, Brake Fluid, Coolant, Power Steering Fluid, Transmission Fluid, Differentials....   I call this one the farm
  2. (1a as it's tracked as QL) State Inspections - I used to hate these, but it's a high volume, low $ cash cow and brings in lube business too
  3. Repair Shop - Mechanical, Driveability and Electrical Repairs - No body, no glass, no tires, limited transmission repairs (no rebuilds), no more project cars (have 3 sitting here now that need to leave)

Revenue between QL and Repair is about 55%-45% leaning either way.  Some months repair leads and some months QL leads.   While I lump state inspections into my QL profit center, by it's self, it's 10% of my monthly revenue.   With labor and machine costs burdened in, it's runs about 91% GM.   Profit wise, the repair side still owes me more.   We're now doing enough steady work that it will start performing better.   YTD, QL profit has outpaced Repair, but 2 of the 6 months, it was opposite.  Still 45%-55% flip flops.  I'm hoping for repair to steadily out-perform the QL.   What makes this difficult to explain is that QL dominates in volume and it's not fully tapped yet.

The QL allows us to establish a trust relationship with our customers and this helps to feed the repair side.  The real magic is that we are indeed trustworthy and not a badly run QL.  Some of our repair work is farmed routine maintenance, but the bulk is broke cars.

We're still growing both businesses.  Adding the lifts should help us with throughput.  We already use the spaces outside of the bay doors as flat bays... being creative with space.  But the Texas sun won't let you work outside without melting.

--brian

 

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