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I was taught a valuable lesson in pricing back in the 1980s by a fellow shop owner. Tom (not his real name) owned a five-bay independent auto repair shop. We met in a training class and became instant friends. The discussion of labor rates and pricing came up often, and his opinion was spot on. He would tell me, “Joe, we will never get paid what we deserve until we put a higher value on what we do.” This leads me to the reason for this blog: The mindset that auto repair shops should price themselves lower than new car dealerships, is a myth. Tom would emphasize, “Look at your expenses, your payroll, the benefits you give to your customers, and don’t forget your payroll and company profit. Then, do the math and set your prices.” What influenced me was not only his forward-thinking but the fact that he would call the local dealers, to make sure his labor rate was ABOVE theirs! Positioning your prices lower than the dealer just because you are an independent auto repair shop is selling yourself short. Your labor rate and prices should be determined by you, factoring in your overhead operating expenses, payroll, financial goals, the amount of net profit you desire, and the value you provide to your customers. Another thing: don’t be everything to everyone. Understand your key profile customers and build your marketing plan around them. Cater to those who are loyal to you. Here’s the bottom line with pricing: sell value, not parts and labor. When the value increases, the price fades as an issue.

About a year ago I hired a service advisor that I believed at the time would be a great asset to my shop. He had a lot of experience, knowledgeable about the business and well-spoken. He showed all the right credentials. Soon after being hired, I noticed something that I did not pick up in any of our three interviews; he did not smile. How was it possible I did not notice this? A few more days turned into weeks and I could see that this person’s personality, or lack of personality, did not fit the culture of my company. We had a few meetings together and I would ask him, “Is everything ok? You never smile”. He didn’t think too much of it said that everything was fine. Personally, I had my doubts. Shortly after I hired him, an equipment rep came to see me said to me, “Joe, your new hire, you do realize he never smiles”. Well, this began to worry me. As time went on I could see that his demeanor did not go well with the other people in the shop, or with the customers. People feed off other people’s personality. When someone walks around with the look of doom and gloom, it affects the attitude of others. And it surely affects how the customers react also. It actually affects our ability to communicate and sell. I knew that if something was not done soon, it would have tragic consequences. It also bothered me that no one in shop really liked him. I later found out that was because he did not treat people nicely and would berate the techs. I tried all I can to help this person to change, but nothing I did could crack a smile on this guy’s face. Time went on and I hoped for the best. I soon learned that hope is never a plan for success. Soon, customers began to complain. After a while it became apparent that the negative behavior from this person was having a negative effect on the customer’s behavior. In other words, people feed off of other people’s personalities. If someone walks into a place of business and is greeted with a warm smile and a big friendly hello, it puts that person in warm and friendly frame of mind. When the opposite happens, things will go downhill and turn bad. As usual, I waited too long to pull the trigger. I gave myself every excuse why I should keep this person, when the truth was it was also affecting my personality and my ability to remain upbeat. For the sake of everyone I finally fired him, but not after the damage he had done to my company. The sad fact is that he will never see what his personality is doing to himself and to others around him. Why he was so unhappy remains a mystery, I hope in time he can release those demons. For me, I learned a valuable lesson. There are times that you cannot get people to change. For the greater good of everyone, stop the bleeding and fire the person. You are doing the best thing for that person, for others in your company and for yourself and your family.

“Leave your problems at home” is a common expression. The thinking behind it is that if you are having a problem at home, it will affect your performance at work. So, change gears when you get to work and put the problem out of your mind. However, can people just shut it off? Can they leave their problems at home? Consider this example; your technician and his wife have a very sick child who is getting worse. Their doctor is concerned and wants to refer the child to a specialist, fearing that something is seriously wrong. In this situation, do you truly expect your technician to shut it off, and simply put it out of his mind? Problems at home are part of life. As a shop owner, you need to be more understanding and have empathy. You also need to build a solid relationship with your employees that allows them to approach you in times of need or crisis. This is a key component to building the right culture with high morale. Here’s another scenario to think about: Let’s say your service advisor is overwhelmed at work. She is having a hard time keeping up with all the work and reaching the point of burnout. In addition, she works with a problem technician that is always complaining about something. Do you think this service advisor can shut off her work problems and not bring them home? The bottom line is this; as shop owners, you need to reach your employees on an emotional level. Yes, you are running a business and you have your own set of issues and problems. I get that. But your success is directly related to the success of the people around you. That means that everyone must feel that they are people first, employees second. The next time you see something off with one of your employees, don’t assume the worst. Pull them aside, show them you care, and ask if there is anything they need and if there is something that you can do to help.

Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple? The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels. Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer? And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs. Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.

Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best. At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me. I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired. Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with. With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters. Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.

No, I have not lost my mind. You and I both know that the oil change business is different today from what it was years ago. If we go back to the 1980s, and up through the 1990s, we judged customer visits by a factor of 4 to 5, which meant that we needed to see a customer at least 4 to 5 times a year, an indicator of customer retention rate and loyalty. Back then customers brought us their vehicles every three to four thousand miles for the traditional oil change. That business model no longer holds true. Today, the customer mindset has changed. Plus, oil change mileage intervals are a lot longer. For many, they don’t think about the oil change service the way consumers thought about it years ago. Just look at your customer base. How many customers drive well over the suggested oil change mileage interval? How many customers wait until the Maintenance Light comes on? Or even worse, the Engine Oil Light! I am not suggesting that you don’t perform oil changes, what I am suggesting is that you take a different approach. First, for those customers who drive well over the oil change mileage interval, it is in the best interest of the customer to educate them on the value of preventive maintenance. Instead of selling an oil change, promote the value of the vehicle’s scheduled maintenance service; for example, a 15k or 45k Service. This is not new; we all know this concept. Selling a maintenance service will help to ensure that we are doing all we can to protect our customers, promote vehicle safety, and extend the life of our customer’s vehicles. This concept also lowers the overall cost of vehicle ownership over the vehicle's life. Lastly, you have the perfect opportunity at vehicle delivery to educate your customers about the importance of preventive maintenance. Review with all customers, the service interval that is due next, and book that service with your customer. If we focus on what is best for our customers, we can’t go wrong. I frequently tell shop owners, “Every vehicle in your shop today will need a future service or repair. Make sure that your customers return to you.”

While the United Auto Worker’s strike may be over, this won’t be the last time Detroit will hear from the UAW. As a result of the contract agreement, the Big Three (General Motors, Ford, and Stellantis) will now have to find ways to pay for the increases in wages and benefits, which are estimated that it will add $850 to $900 to each vehicle produced. Putting politics aside, the effects of this strike are far-reaching, with no clear winner. Here’s a quote from UAW President Shawn Fain, “We wholeheartedly believe that our strike squeezed every last dime out of General Motors.” Can you imagine your technician or service advisor saying that about you after a performance review? While the UAW is taking a victory lap, the Big Three will not just roll over without making key changes. No doubt, we will all pay more for new cars, and perhaps used vehicles too. Plus, even though many car companies don’t have union workers, the consequences of this contract agreement will impact the entire auto industry. But, enough about the UAW and The Big Three. Let’s focus on some of the lessons that many large corporations don’t seem to ever learn. At the heart of this strike is the relationship between big corporations and rank-and-file workers. As companies grow, they sometimes lose touch with their employees. All too often, the focus on profits, instead of people, becomes the main driver for decisions, and unfortunately, employees are sometimes used as pawns. Let’s be clear, I am not supporting the UAW, the union workers or the Big Three. There are problems on all sides. However, we need to understand that the power of the unions can only happen when management moves in a direction that the employees feel is unstainable. Which is a direct result of poor leadership. Here’s the biggest takeaway; as you grow your company, maintain the culture that has laid the groundwork for where you are today. Never forget about the people who come to work with you each day. Continue to create strong relationships with your employees. Continue to treat them with respect and find ways to pay them the salary you would work for and a benefits package you would want. I know everyone reading this knows all this, and in fact, I have more faith in you as a shop owner and your company’s future than I do in the Big Three. Perhaps The Big Three should take lessons from Auto Shop Owners!

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 am a firm believer in providing employees with a competitive wage and the opportunity to earn more through incentives. However, any additional incentive bonus must pay for itself. That means any additional incentive compensation must not eat into company profits. While we typically look at payroll as an expense, everyone in your company must be productive enough to support their compensation plan. This is especially true with service advisors. Too often, shop owners don’t properly establish sales and gross profit goals. What occurs then is that the incentive pay, which is above the base pay, reduces overall gross profit, which decreases net profit. Here are a few guidelines when considering a pay plan for service advisors. First, you need to know your breakeven and calculate it at least twice a year. Remember breakeven is never a goal, it’s just the sales number your company must attain BEFOFE it makes any profit. Next, you need to establish sales and net profit goals above breakeven. Many shops shoot for a 20% net profit, so you need to determine your desired labor and part gross profit. If you don’t know how to calculate your breakeven or gross profit, please reach out for help from your accountant or a business coach. After that, you need to establish minimum sales and gross profit goals that must be achieved consistently before any incentive is to be paid. In other words, if you determine that achieving a 20% net profit requires on average $30,000 in sales per week with an overall gross profit of $20,000 per week, then that becomes your minimum required weekly goal that must be maintained by your service advisor team every week. This is important because you don’t want three weeks where your sales and gross profit were below your goals, and pay an incentive bonus in the fourth week, just because your service advisors had one good week. Additional pay incentives can only be paid when the company is consistent in achieving its required sales, gross profit, and net profit. One thing, if the goal is too high and perceived as unattainable, your service advisors will give up. Lowering the bar in some cases may be needed, just have a plan in place to incrementally raise the bar to ultimately achieve your desired financial goals. Please also note that for you to have a consistently profitable business requires a healthy work environment, training programs, systems, processes, and of course a great technician team. One last thing, the service advisor’s base pay must meet the individual’s basic needs in life. And as I said earlier, incentive pay is the opportunity to earn more. However, they must consistently produce, after all, incentive pay should be earned, and never an entitlement.

There’s a lot of talk these days about finding quality employees. Creating a continuous recruiting process to find and hire quality people is essential for your overall success. However, shop owners also need to consider their existing employees and create a work environment where people feel wanted. The truth is you cannot afford to lose the people you have now, especially if those employees are superstars. Another reality is that with so many shops looking to hire, they may be trying to recruit and hire your employees! To attract and retain employees, shop owners must create an amazing workplace experience. A great pay plan must also be a factor, along with benefits, but it’s not the entire reason why people stay employed with you. The truth is, people don’t quit businesses, they quit their boss or their manager. This is not to say that a pay plan is unimportant. It is, especially these days. However, to get your employees truly engaged and want to continue working at your company requires having a workplace environment where people feel appreciated for the work they do, are encouraged, and have a feeling of shared purpose. This will help anchor your employees to your business and help prevent them from looking over the fence for greener grass. Lastly, get more involved with your employees on a personal level. Find out what matters to them. Find out what their goals are. When you align employee goals with company goals, you are well on your way to having a winning team. You will also create a strong bond with your employees. This strategy will help you retain employees, with a stronger and more profitable business in the long term.

This article is from my business partner, Terry Keller, who owns Keller Bros. Auto Repair in Littleton, CO. For more information about Terry, you can check out his free ebook on our website, "Is My Story Your Story?" Click here to get it! I can just imagine some of you thinking, “Why waste time reading this when I’ve already tried everything to train my people to act right and perform well AND IT CAN’T BE DONE?! Why keep beating my head against the wall?” Or, maybe you’re not so cynical and would like a couple of tips on how to improve. Either way, I believe that your investment of the next couple of minutes will be well worth it! For the first 25 years in my career as a shop owner I tried every kind of training for myself and for my employees I could find. Of course there was a lot of technical training out there and we pretty much did it all. We could fix cars well, but the rest of the operation was not performing as I would have liked. In fact, it was in chaos most of the time. Why Training Didn’t Work! It seemed that every management or sales class we went to created some hope and motivated us to change. However, after a few weeks, things had drifted back the way they were except everyone was even more frustrated. I was angry because my team couldn’t or wouldn’t make the new ideas and systems stick. And they were upset because I expected them to do things they were incapable of doing – because of their lack of aptitude, or because of my poor communication/teaching skills or my inability to manage or lead them properly. It was the little things that drove me nuts: parts returns and credits, parts not billed, customers not taken care of, things forgotten, and many other broken rules or procedures. I didn’t know it at the time, but I was not fit to lead. Yes, I got very upset every few months and threatened everyone in a fit of anger, but that only produced a momentary improvement in performance. They all understood my routine and knew within a few days they could slack off again...AND I LET THEM! On the surface, it appeared I was the only one who understood what I wanted. However, the truth was that no one was committed to making new training knowledge stick. I repeatedly stated I did not want it this way, but the proof of my actions (or should I say inaction?) and those of my staff overpowered any thoughts, feelings, or vision of sticking to a better way of doing things. Why couldn’t we pull this off? What was missing? Stay tuned...I'll post the missing piece of the puzzle next time!

I recently chatted with Seth Thorson from Eurotech Auto Service in Minneapolis about the topic of Sophisticated Service. As professionals in the auto service industry, each of you plays a significant role in shaping the client experience. Whether you run a Euro shop like Seth or an all-makes-and-models shop, your contribution to the sophistication of the client experience is invaluable. In today’s competitive landscape, providing a sophisticated client experience is no longer a nice-to-have but a necessity for professional auto service shops seeking to stand out. A sophisticated client experience goes beyond merely meeting expectations – it captivates, delights, and forges lasting connections between your brand and your valued clientele. By crafting a sophisticated client experience, you can set your business apart from the competition and position yourself as a trusted advisor. This means going beyond the surface-level interactions and delving deeper to truly understand your client’s needs, goals, and pain points. It’s about anticipating their requirements, delivering personalized solutions, and fostering a sense of partnership and collaboration. A sophisticated client experience is built on a foundation of attentive communication, attention to detail, and a genuine commitment to your clients’ safe and reliable transportation. It’s about creating a seamless, high-touch journey that leaves a lasting impression and inspires loyalty. When you get it right, your clients will keep coming back and become your most powerful advocates, driving referrals and growth for your business. Implementing a sophisticated client experience requires a multifaceted approach. Seamless digital interfaces, personalized communication, and anticipatory service are just a few elements that contribute to an elevated brand experience. Investing in these strategies demonstrates to your clients that their needs and preferences are heard and actively prioritized. Your team must be on board and buy-in to the value of this improved experience. Increased customer loyalty, positive word-of-mouth, and a strengthened brand reputation are tangible benefits that can propel your business to new heights. Delivering a sophisticated client experience that sets you apart from the competition cannot only elevate your brand’s engagement but also unlock a world of possibilities for growth and expansion, instilling a sense of optimism in your business journey.

It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door. While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox. Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator. One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.

You’re out to dinner with a friend. The service was horrible, the meal took forever to get to your table, and it was not what you expected. You get the check, pay the bill, and start heading for the door. At the door is a woman, a staff member, holding it open and saying in a monotone voice, “How was everything?” You pause for a second, look her in the eyes, and reply, “Everything was fine, thank you.” As you walk to your car, you turn to your friend and say, “That’s the last time I go to that restaurant!” It's often said that the kiss of death for any business is what your customers are not telling you. Most people avoid confrontation. If they don’t like the service, the price, or the product, many consumers will not say anything. They would rather leave it alone and move on and try another company. Think about your auto repair shop. Think about your customers. How many of your customers, after having a less-than-perfect experience, will not say a word to you or your staff? How many of these customers will come back to you? How many will not? It’s important to understand that your customers are not only judging you by comparing you to your competition but also by the combined experiences of all companies and the interactions they come into contact with daily. And most of those experiences are not good. So, it would be in your best interest to create an experience that tells your customers, “We care about you, and we want you back!” There are two things to consider regarding customer service and ensuring that you have met your customer’s expectations and created a memorable experience. First, when someone does give you critical feedback or post a negative review, use that feedback to learn and improve. How the customers view their experience may not be aligned with what you believe you have provided, but their opinion is their reality, and that’s all that matters. The other thing to consider is having open and honest discussions with your employees, especially service advisors, to understand what excellent customer service is like, and try to look at that experience through the eyes of the consumer. This may not be easy and will take training, but it is essential. Remember, it is the customer that ultimately determines what an amazing experience looks like.

A recent study, done by Harvard Business School, concluded that the real problem with attracting and retaining employees has more to do with the workplace environment, not pay or benefits. While the study did find that an adequate pay plan and offering an attractive benefits package did help with recruiting and retention, it’s not enough to satisfy the needs of employees, especially those of front-line workers. The study also stated that in 2021, many companies were convinced that giving raises, sign-on bonuses, and other perks would solve the worker shortage problem and prevent people from quitting. However, this strategy did not work. So, what does work regarding attracting quality people and keeping them employed? Essentially, it all comes down to the culture of your company. Management: do all it can to consider the individual needs of your employees. Your employees want to feel that they have a voice, that their opinion counts, and that their role in your company is both respected and recognized. Yes, pay and a great benefits package will go a long way toward making your employees feel secure, but that’s only financial security. People want more than money. To attract and keep top talent requires creating a company that people feel proud to work for. You need to reach the hearts and minds of your employees. Become a leader that people are enthusiastic about working for. You want your employees bragging to their friends and family that your shop is a great place to work! Step one to attracting and retaining quality employees: Create an amazing workplace environment for your employees! Trust me, happy employees make happy shop owners too!

Have I got your attention? Great. Let me start by saying that I believe in giving praise when deserved and letting employees know when they dropped the ball. However, the truth is that no one enjoys being reprimanded or told they messed up. The question is, what is the appropriate balance between the right amount of praise and the right amount of critical feedback? According to studies done by Harvard Business School, the ratio of praise to critical feedback should be about 6:1 – Six praises for every critical feedback. I am not sure if I agree with that. From personal experience, I would recommend a lot more praise. The exact ratio doesn’t matter. What’s important is that before you consider giving critical feedback, ensure you have given that employee a lot of recent praise. If not, whatever you are trying to get through to an employee, will fall on deaf ears. When you do have to give critical feedback, remember a few things: Focus on the issue or behavior; never attack the person, and remain calm in your actions and words Ask the employee for feedback, their side of the story Speak to the employee in private Address the issue soon after it happens; never wait Don’t rely on second-hand information; it’s always better if you have experienced the situation yourself that you want to correct Have an open discussion and find things that both of you can agree upon Have an action plan moving forward that the employee can take ownership of Use the experience as a learning tool Make sure you bring up positive attributes about them Remember, you don’t want the employee to be angry or upset with you; you want them to reflect on the situation and what can be improved. One last thing. Everyone makes mistakes. We need to be mindful of this.

Typically, when productivity suffers, the shop owner or manager directs their attention to the technicians. Are they doing all they can do to maintain high billable hours? Are they as efficient as they can be? Is there time being wasted throughout the technician’s day? All these reasons factor into production problems, but before we point fingers at the technicians, let’s consider a few other factors. Are estimates being written properly? Are labor testing and inspections being billed out correctly? Are you charging enough for testing and inspecting, especially for highly specialized electrical, on-board computer issues, and other complex drivability work? Is there a clear workflow process everyone follows that details every step from the write-up to vehicle delivery? Do you track comebacks, and is that affecting production? Is the shop layout not conducive to high production? For example, is it unorganized, where shop tools, technical information, and equipment are not easily accessible to every technician? Are you charging the correct labor rate and allowing for variables such as rust, vehicle age, and the fact that most labor guides are wrong? Also, is there effective communication between the tech and the service advisor to ensure that extra labor time is accounted for and billed to the customer? These are a few of the top reasons for low productivity problems. There are others, but the main point is to look at the entire operation. Productivity is a team effort. Blaming the techs or other staff members does not get to the root cause in most cases. Maintaining adequate production levels is the responsibility of management to create the processes that will lead to high production while holding everyone accountable.

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.

This past weekend, Sirius XM played the top 100 Beatles songs, voted by their listener. During a busy weekend, while in the car, Ann and I had a chance to listen in segments. I love to hear the story behind the music. What inspired the song. How many sessions did it take to get it ‘right’. What instruments were used, among other great trivia. I heard the segment starting with song #7 and the Abbey Road Medley. My favorite stretch of Beatles music is Golden Slumbers, Carry That Weight and The End (all on Abbey Road). I could listen to that over and over. I started to guess what were the top songs heading to #1. The car radio made us button pushers. We do the same with our smartphones. We look for something fun and familiar that matches our musical taste or instant boredom; then, we push a button. We were discussing that when the song In My Life came on. We both said, “it was a song you would never push a button.” How many songs or memories would you never push a button? We went about our chores and errands and we missed the final segment of the show. Since I had not listened to the entire 100 list, I figured that Yesterday, Hey Jude, In My Life, and Let It Be had to be there. Back at the house and finished with errands, I looked up the top 100 and realized that 95% of those songs were complete listens. I would not push a button. They worked and brought back memories that were created years ago. How could the 229 published Beatles songs all be so different? That got me to think of how quickly we move from one thing to another because we are bored or unfamiliar. I’m somewhat guilty but have learned that taking in the whole documentary or podcast is a discipline that usually pays off. I’ve always called it: “Listen To Learn Just One Thing.” Start collecting your ‘One Things’ and build a stable of insights and ideas you can use for a lifetime. In a rut? Is it groundhog day, every day? Then think of how you can create something new each day. The Beatles did it with every song. Unique, fresh, different. Move from your same old routine and refresh, tweak and improve you, and the world around you. Bonus: Link to the 2020 Sirus XM Top 100 Beatles Song List https://bit.ly/3mof7Ci View the full article

Contrary to what many people believe, having a perfect 5-star Google review rating is not something a business should expect to achieve. After all, no company is perfect. And Google realizes this too. There’s no denying that consumers look at online reviews and base part of their buying decision on these reviews. A great online review rating on Google is essential to draw traffic to your website and your business. However, it’s better to have a mix of great and not-so-great reviews. To consumers, a perfect 5-star rating looks suspicious; they expect some negative feedback. While most business owners get distraught over a negative review, how a business responds to the review is what’s most important. For automotive repair shops, a rating of 4.4 to 4.8 is probably what you should strive for. I am not suggesting that you don’t provide world-class service and quality repairs. However, the reality is that you are not going to please everyone. Another thing to consider is that negative reviews don’t hurt a business as badly as we think. Rather than worrying about negative reviews, shop owners need to focus on engaging and replying to all customers who leave reviews, which tells your customers, and Google, that you care about what your customers are saying. Responding to all reviews will also help your search engine ranking. The next time you get a negative review, remember that you will never please everyone. Use the negative feedback as an opportunity to learn from the feedback and positively promote your business.

Early in 2021, I interviewed the recipients of the first annual AAPEX 2020 Awards; Shop Owner of the Year, Service Advisor of the Year, and Technician of the Year. I’m so grateful that AAPEX for the first time created these award categories to start this important recognition. I also had the honors to present the awards at Virtual AAPEX. I pulled the honorees together for a podcast not just to pay homage to their awards, but to talk among ourselves about the relationship between the owner, technician, and service advisor. As with 99.5% of all the podcasts I’ve done, there is always one thing to learn from every episode, sometimes two, three, or four. This one is no exception and has a very powerful message. You can hear it in our voices when Norm Schultz, who won the Technician of the Year honor, talked about re-inventing himself. It was a very special moment. I don’t want to preach to you about listening to this episode, but I want to strongly suggest that you invest the time. You may think, it’s just an awards thing. You will be wrong. If you listen completely to this episode you may see why and how you need to re-invent yourself. You may just have yourself a lightning bolt moment and possibly be inspired to jump over the hill you’ve been trying to climb. If this is not you, then someone you know deserves to hear this story. Thanks to Brian Sump, Norm Schultz, and Jason Sexton for being on the podcast, and congrats to them for picking up the 2020 top honors. https://remarkableresults.biz/e606/ View the full article

The new 5,500+ page Covid Relief Bill is massive, and it will take many weeks to digest everything included in the legislation. Here's what we know about business relief and PPP funds: There is now streamlined forgiveness for PPP loans under $150K. This is a significant development for many so check with your lender about how they want that now to be handled. There is also now an additional $284B in PPP funding for impacted businesses to access. More on this in days to come...

Superstar shop owner and Elite Business Development Coach Rudi Rudloff shares why giving back during the holiday season is a win for people in need, for your community and for your auto repair business. For additional help building a more successful auto repair business, learn how you can team up with a superstar shop owner like Ron through Elite Top Shop 360: Top Shop 360

Here’s a marketing idea I wanted to share with everyone. Auto shop owners and marketers are focused on targeting the local residential community. But what about all of the businesses that employ people who work in the area but don’t live in the area? These employees are all great prospects for auto repair services. The challenge is effectively targeting and reaching them. One idea is to create a flyer that doubles as a break room poster. The poster should have a use case explicitly telling the business owner what you want them to do with your poster. Let them know they simply need to hang it in their break room to share the savings with their colleagues and employees. We recommend clipless coupons or specials, which increase the lifespan of the poster and keep it intact for longer than it would if employees were tearing coupons off. Employees will simply take a picture of the coupon they want to use and show it to you upon redemption.Tear-off coupons destroy posters and ultimately result in them being thrown away as soon as the coupons, offers, or specials are torn off. Using break room posters requires some legwork on the part of shop owners, since you’ll need to visit the businesses you want to target. However, the actual cost of the printed flyers is minimal. Let’s say you want to print 100 of them. At around $1 per piece, your total investment is $100 (give or take) depending on who does your printing. There really is no downside to giving break room posters a shot. Put a call tracking number on your poster to keep track of anyone who comes in to redeem your coupons to track ROI. There are plenty of companies that can print cheap flyers, so call around. Attached is an example of a popular layout that Mail Shark has been supplying shops with. Josh Davis Executive Vice President of Sales Direct: 484-948-1611 Mobile: 484-269-3715 www.themailshark.com Example BreakRoom Poster.pdf

There is an expression that has been around our industry for decades that says if you run a good, ethical business, the one thing you should never do is “steal” employees. If you agree with that philosophy, this is one article you may want to read. First of all, in order for any of us to steal employees, by definition those employees would need to belong to someone else. Slavery was abolished in America in 1865. None of us “own” other people, and I am sure if you asked any of the employees who are presently in our industry, they too would agree they are not the property of anyone. So putting first things first, we need to accept that the statement itself is flawed when someone says we are trying to steal their employees. Now let’s look at the argument that it’s not right to solicit employees from another business. The majority of successful companies do this! The world is filled with head hunters, and without question; they’re not looking for people who are unemployed. They are looking for the superstars who are presently employed. So if most people accept that recruiting employees from other businesses is an acceptable practice, you have to wonder why shop owners look at the practice with such disdain. It’s because they are so afraid that someone will recruit their employees that they start living by the code that it’s wrong to solicit employees. It’s their own misdirected way of trying to shelter their employees from hearing about better opportunities. If you were a superstar technician, and if you were solicited by another shop owner who could provide you with a better opportunity, I sense you would consider the offer a compliment, and not a violation of ethics. I would also sense your family would be happy to hear of the opportunity as well. So when you stand back and look at the bigger picture, as a tech you would be happy that another shop owner is offering you the opportunity, your family would be pleased to hear about it, and the shop owner who reached out to you would be excited to speak with you. The only one who would deem it inappropriate would be your existing employer, who just happens to be the one who runs the risk of losing the most. If you step into the shoes of the employer living in a world of ethics and who cares about each employee as a person, wouldn’t you want that technician to take a job that provided a better opportunity for him and his family? However, I feel there are a few situations where it would be inappropriate to solicit someone from another shop. If the employee works at a shop that is owned by a good friend, then of course you need to respect the friendship, and assume that your friend is taking proper care of their employees. The other exception is when you know in your heart you would be unable to provide the employee with a better opportunity than what they presently have. On a personal note, I have never been afraid of someone “stealing” the people who work with me. I have learned over the years that the first thing that leaves your business is the employee’s heart, and once their heart is lost, then their mind will begin to wander, and other opportunities will become attractive. When they find the right opportunity, the toolbox will inevitably follow behind. This is why I always work very hard to keep their hearts, and why I consider it nothing more than a compliment when other business owners attempt to recruit my superstars. It’s much like a marriage, in that there isn’t a person on the planet who can take your spouse from you if you do the things you should be doing. On the other hand, if you don’t, then don’t blame the person who you feel took your spouse away, because in reality, you gave them away. So rather than being outraged when someone tries to steal your employees, I ask that you understand the ethics of recruiting, and that you do what you need to do to properly care for the hearts and minds of your employees. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers coaching and training from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can learn more about Elite by visiting www.EliteWorldwide.com.

Most shop owners have learned a lot from their mentors, including the importance of listening to their customers, fixing cars right the first time, and never putting money ahead of people. Unfortunately, in far too many cases their mentors pass on some information that actually shouldn’t be followed. The most common example, which we see on a daily basis at Elite, is misinformation on how a shop owner should properly advertise. I am not suggesting that their mentors didn’t have good intentions when they passed their advertising guidance along, but it is safe to say that in most cases their advertising knowledge was obtained through their own trial and error, rather than marketing research. At Elite we know there are a lot of people outside of our industry that we can learn from, so reach out to the top universities in America in order to discover what they have learn from world-class companies like Starbucks and Apple when it comes to marketing. While the insights from these experts are usually reserved for our coaching clients, I wanted to pass along one discovery that I feel every shop owner needs to be aware of, as it may very well change the way you market your shop. In the most general sense, in the world of marketing there are two forms of advertising: Brand awareness, and CTA (Call to Action). Examples of brand awareness advertising include key chains, glove box folders, outdoor signs and sponsoring community events, while CTA campaigns like direct mailings, online coupons, etc. encourage immediate action (offering a special price or service package, for example). As I am sure you are aware, the overwhelming majority of shop owners invest almost all of their advertising budgets into CTA campaigns for one simple reason: they will predictably see immediate results in the form of phone calls and new customers. However, most shop owners are unaware that study after study done by leading universities has consistently drawn the same conclusion – You will get a better return on your investment with brand awareness than with CTA ads. The mistake we see most shop owners make is they will start a brand awareness campaign (such as signs at sporting events in their community), but then they’ll pull those signs in a few months because they feel that few, if any, customers have come into the shop because of the signs. What they overlook is how many people saw those signs, and the impact it will have on those potential customers when they are in need of service. While you will not see the results as quickly with brand awareness advertising as you will with CTA campaigns, you will not only see a better ROI in the long run, but the added benefit of brand awareness campaigns is that they put the focus of your potential customer on your brand… rather than on a price. At Elite we encourage all of our clients to embrace brand awareness campaigns, and to wean themselves off of their dependency on costly CTA campaigns. Is there a place for CTA campaigns in the auto repair business? You bet! But please don’t make the mistake that so many shop owners make, and rely solely on CTA ads. So do this: Identify your ideal customer, put together a well-designed brand awareness strategy that will reach your targeted customer, and stick with it. If you do, you will be thrilled with the results. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers coaching and training from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can learn more about Elite by visiting www.EliteWorldwide.com.

Source: Got a bad apple in your Repair Shop? Remove it!

By Bob Cooper 1. When first-time customers approach your facility they’ll typically be anxious, so anything you can do to reduce their anxiety will help them be more receptive to your recommendations. On your entry doors, or in a prominent location they’ll easily see, you should have clear indications of your professional affiliations, and any financing options you offer. 2. Inside the customer waiting area, rather than having cluttered walls and giving your customers sensory overload, you will be far better served by having your Mission Statement prominently displayed. This will give your customers good insight regarding the type of people they will be working with. For decades we here at Elite have argued that people do business with people, not with businesses, so anything you can do to humanize your company will help put your customers at ease. In addition to posting your Mission Statement, another great way of humanizing your business is by creating a 10x12 plaque for each of your employees, and putting a photo of the employee in the upper left corner. To the right of the photo, you can list their credentials, certifications, awards, etc. Across the bottom, you can include a brief bio of the employee that addresses their personal life (“Jim is a native of San Diego, has a wonderful wife, three children, and two Golden Retrievers. On the weekends Jim loves to go biking, and camping with his family”). You’ll find that not only will these plaques help your employees feel appreciated, but your service advisors can use them as sales tools when they are telling a customer who will be servicing their vehicle. 3. At Elite we have always preferred service kiosks (stations) rather than counters. Not only do counters and desks serve as barriers between your advisors and their customers, but your advisors need to come from behind the counter to greet the customer. Kiosks also allow your advisors to stand next to their customers when looking at the computer screen. Again, putting your customers further at ease. 4. The clocks, newspapers and current event magazines need to go. The clocks will have your customers timing you and your techs, and the newspapers and current event magazines are filled with both negative news and the ads of your competitors. Instead, you should have magazines that address sports, hobbies, home & gardens and entertainment. You should also have point of sale literature that explains the value of vehicle maintenance, other services you offer, etc. Lastly, you need to have magazines and books for your small “future” customers, as well as self-contained toys that can keep those kids occupied when mom and dad are busy with you. Wi-Fi? Cellular phones are quickly replacing the need for Wi-Fi, but if your core customer base has a strong need for it, you should consider making it available. 5. You need to have fresh coffee available all day long, along with bottles of cold water and soda. When I still had shops we would offer our customers a cold drink, and it would always be on us. It’s your call, but I feel it’s a small price to pay for the relationship that you can and will develop. 6. In addition to having signs on the outside of your building, you need to have prominent signs in your waiting area that reflect your professional affiliations, state that you accept all major credit cards, and communicate that you provide financing options, if applicable. I have learned over the years that when customers are under stress, they can easily forget that credit card that they have tucked away for emergencies. You’ll be surprised when you see the relief on their faces after seeing the signs. 7. Your customers do not have an expectation that the furniture in your waiting area will be top of the line, but they do have an expectation that it will be well maintained and clean. Over the years customer panels have told us that if shop owners don’t care enough about their own furniture to keep it clean and presentable, then why would they care about their customers’ automobiles? Lost sales are guaranteed. 8. Lastly, your waiting room needs to have smiling, well-groomed employees that greet your customers as soon as they arrive. No matter how clean and well-appointed your waiting area is, it’s the people who work with you that will have the greatest impact on your customers’ decisions, guaranteed. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers coaching and training from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You learn more about Elite by visiting www.EliteWorldwide.com.

By Bob Cooper There was a time in our industry when shop owners were the only ones who knew the cost of their parts. Additionally, the amount they charged for their repairs and services was typically not public knowledge. If customers wanted to know how much it would cost to perform a specific repair, they had limited options; they would have to either call for an estimate, or visit a repair facility. The service advisor would then page through a catalog, find the price, and then share that price with the customer. As we all know, times have changed, and after decades of confidentiality in pricing, technology has now done more than just change how we diagnose and fix automobiles; it’s actually made pricing transparent. The days of holding your prices close to your chest are not only gone, but if you continue to follow that age-old policy, you’ll more than likely struggle in the coming years. As we all know, the web has dramatically changed how you operate your business. It’s changed how you market, how you communicate with your customers, how you order parts, and how you diagnose and fix automobiles. Yet the one thing most repair shop owners are reluctant to accept is that unlike in the past, pricing on every conceivable repair and service is now available within moments online. Now we all know that those prices found online can be as incorrect as often as they are correct, but the reality is this: as we move forward, more people are going to be turning to the web, not just for finding the right repair facility, but for a range in pricing as well. It’s currently happening in every other industry, so there is no reason to believe that it won’t become even more commonplace in our industry as well. Here are the things I am going to encourage you to consider… First of all, you should accept the fact that an increasing number of your first-time visitors will have either already searched the web for a range in pricing, or they will do so within minutes after you provide them with an estimate. In many cases, they will do their price comparisons with their Smartphones, and they’ll do it while they are still at your facility. This brings me to the second point that I am going to hope you consider, which I refer to as integrity in pricing. With the ease of access that consumers now have to pricing information, in the coming years the top shops will be competitive in pricing, and they will be proud of the value delivered. Now before I go any further, I am not suggesting that a shop can’t charge more than its competitors do, but if the prices they charge are viewed as out of line with other well run facilities, there is no question: they’ll lose their customers, and their reputation, both at the same time. The proof is in every other industry, because history has shown us that no matter how good the hotel, airline or restaurant may be, if their customers don’t feel that the pricing is comparable to similar service providers, those companies never survive. So here are my recommendations for those of you who want to grow more profitable, successful businesses in the coming years. Start doing what your potential customers are already doing, and survey your legitimate competitors. I’m referring to facilities that offer services and benefits that are comparable to yours. Secondly, ensure you are competitive with your prices. This doesn’t mean you can’t charge more, but you have to be comparable, and you have to believe in the value delivered. Finally, I am not suggesting that you should quickly provide a price to every price shopper, or that you should provide a price before you have built value in the service. What I am suggesting is that you need to embrace the fact that your customers are no different than you and me. They have access to pricing info 24 hours a day, 7 days a week, and they not only expect transparency, but they demand it. There is no question: transparency in pricing is now a mandate, not an option, for every shop owner, worldwide. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. To learn more about Elite, visit www.EliteWorldwide.com.

We all know it’s getting harder and harder to find the superstar techs, but finding those stars is just the beginning. Once found, you need to interview them like a seasoned pro. Here are some interviewing tips that we share with our Elite Coaching clients: #1. Impress the applicant with your professionalism. When you are interviewing a real superstar, they will be interviewing you at the same time, so you need to really wow them. One way is by being well prepared, and ensuring you have a well-thought-out list of questions that you will ask. In compiling your list, ensure you ask questions about their goals, their interests, and what they feel the hallmarks of a good employer are. The more they realize that you are interested in them, their family, their success and their opinions, the more interest they will have in working with you. #2. The superstars look for opportunities, not jobs. There is no question that the superstars can easily find jobs. As a matter of fact, with rare exception they already have one, and have little interest in moving from one to another. On the other hand, the superstars are always looking to advance their lives and careers. This is why you need to not only offer them an opportunity, but you will need to spell it out in very clear terms. Let them know that they’ll not only have some wonderful growth and income opportunities, but they will be a part of a vibrant, growing company that will be good for the industry, and community, for years to come. #3. Have a key employee participate in your second or third interview. This will allow you to obtain a number of insights from your employee, will send a powerful message to the applicant that you value the opinion of your employees, and will let the applicant know that you want to ensure they are a great fit; not only for the position, but as a part of your entire team. #4. At the conclusion of the second or third interview, ask if you can meet with them again, along with any spouse (partner, better-half, etc.) they may have. By asking to meet the applicant’s spouse you are sending a powerful message that you care about the family members of all of your employees. Not only will this meeting allow you to learn a lot more about the applicant (and their family), but you will have the opportunity to make a positive impact on someone that will have a strong influence on the applicant’s decision. You should also have a package ready to provide them that contains general information on your compensation and incentive program, your Mission Statement, your team and your company’s accomplishments. This way they will have something concrete to review at home, rather than trying to recall what they may remember from your conversations. If you do your job correctly, you can rest assured that on their drive home the spouse will more than likely be selling the applicant on two things: You, and the opportunity you are offering. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. To learn more about Elite, visit www.EliteWorldwide.com.

By Bob Cooper You don’t have to be in the auto repair business long before a customer asks you if they can supply their own parts. Although there is no one technique that will work in every case, here’s one approach you may want to consider. First of all, you’ll need to bear in mind that a customer is making this request because they feel it’s a legitimate one. They are simply trying to save as much money as they can, which is perfectly normal. With rare exception, these customers are unaware that you need to make a profit on your parts to stay in business. The reasoning for not installing a customer-supplied part is really pretty simple: It’s not in their best interest, because if that part fails, the responsibility will be on them. They’ll not only be responsible for the part that failed, but for all the ensuing labor costs, their loss of time when their vehicle is down for the second repair, etc. So rather than telling them something that makes them feel cheap or uncomfortable, the next time a customer asks if they can supply their own parts, you may want to say something like this… “Well, Mr. Kost, I appreciate your interest in helping, because it’s very kind of you to offer. Unfortunately, here at Elite Auto we’re unable to install customer-supplied parts, and here’s why: The very moment we install any part on your vehicle we become responsible, not just for that part, but for a lot more. If that part were to fail while it’s under warranty, we’re responsible for removing it, paying a tech to determine why it failed so it doesn’t happen again, buying a replacement part and having it delivered to us, and then installing it. We’re also responsible for any towing that may be required, and for any other parts that would be damaged due to its failure. And when you think about it, Mr. Kost, this is the way it should be, and it’s why we have so many loyal customers that send their friends to us. It’s our job to solve problems, and then stand behind our solutions." "On the other hand, if we were to install a part that wasn’t one of ours, then we wouldn’t be responsible for it, or anything that may occur if it were to fail. I have to tell you, I’d much rather tell a customer that we’re unable to install a part they’d like to provide, than tell them we just installed their part, it failed, and now it’s their problem, not ours. Now here’s the good news for you: If we do the repair, I can have you back on the road by ___o’clock, and you’ll have the peace of mind in knowing that you have safe, dependable transportation, and the entire repair, including all the parts and labor, will be backed up with our full ____ year _____mile written warranty. All that I need is your go ahead, and I can get Mike started on it right away.” This technique won’t work with every customer, because there is no one technique that will. The good news is, it will work with the kind of people that you would like to have as your customers. Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses.

By Bob Cooper Over the last 22 years I've been amazed to discover just how many shop owners are lost when it comes to knowing and understanding “the numbers". In order to build a successful auto repair shop, you are going to need to know two sets of numbers: Your “financial" benchmarks, and your “operational" benchmarks. Without a clear understanding of these benchmarks, it becomes quite challenging for shop owners to pinpoint where they are falling short of their goals, and where improvements need to be made. Far too many times I've seen shop owners finally start monitoring these numbers closely, and quickly realize that for years they haven't been charging enough for parts, have been overpaying their employees, have been operating inefficiently, etc. There's no doubt about it: a clear understanding of your shop's financial and operational benchmarks is critical to effective auto shop management. Since your part cost is one of your largest expenses, it's something you need to monitor continuously. At Elite, our top clients spend no more than 52% of the dollars they bring in through their part sales, on part cost. This means that if they bring in $40,000 in part sales by the end of the month, the cost of those parts should not exceed $20,800 ($40,000 in part sales X 52% = $20,800 part cost.) If you find you are spending more than 52% of your part sales on part cost, then you need to take a good hard look at how you price your parts, any parts that are being replaced at no charge, your warranty failures, purchasing habits, and the possibility of theft. When it comes to your direct labor (the cost of your techs), the top shops we work with spend no more than 35% of the dollars they bring in through labor sales, on technician pay. This means that if they bring in $40,000 in labor sales by the end of the month, their technician payroll does not exceed $14,000 ($40,000 in labor sales X 35% = $14,000 labor cost). You also need to pay close attention to the cost of your service advisors, and here at Elite, we like to see that number at no more than 8% of your total part and labor sales. For example, if your shop generates $80,000 in monthly auto repair sales, your advisors should not be costing you more than $6,400.00 ($80,000 total sales X 8% target = $6,400 advisor cost). You'll need to watch your “operational" benchmarks very closely as well. One key indicator is your labor hours per repair order, and our top clients consistently generate at least 2.5 hours of labor sales with their average repair order. If you are not seeing 2.5 hours per repair order at your shop, you need to review your vehicle inspection process, what's being recommended to your customers, and the declined services. As a shop owner you also need to pay close attention to your technicians' “efficiency" rate. This is a powerful key indicator that will show you just how good your techs are at getting the work done in a fast and effective way. It's easy to discover your efficiency rate by simply dividing the hours you billed for the repair, by the amount of time it took your tech to complete the job. For example, if you bill a customer 2 hours, and your tech gets the job done in 1½ hours, they would be 133% efficient (120 minutes billed/90 minutes to complete the job = 1.33, which is 133% efficient). The top shops are typically operating at an overall efficiency rate of 125+%. There are a number of things that can bring down the efficiency of the technicians in your shop, including a lack of experience, the lack of proper technical training, and one of the biggest culprits, the wrong compensation programs. And then lastly, after you pay all your expenses, there's the money that is left over for you. In business we call that profit, and the top shops will typically earn a profit of 15 - 20% of sales. So if your shop is generating $80,000 in monthly sales, in most cases, you should be able to earn $12,000 - $16,000 per month in taxable income. The good news is, if you know your numbers, and if you never put money ahead of people, you should be able to generate these profits in a professional and ethical way. Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while having a positive impact on their employees, customers and communities. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can learn more about Elite by visiting www.EliteWorldwide.com.

Source: Shop Owners: Has your repair shop reached success?

Source: Be consistent with what you say and do

Source: Get rid of the bad apples and improve morale

Source: A Priceless Chicken Salad Sandwich

Source: Cardone Part Failures: Rack and Pinions

Everyone has their own perception on life and the world around them. This perception becomes reality and it’s the only reality that matters. At least for most. This does not always hold true for shop owners. As shop owners, we don’t always have the luxury of viewing things from our perceptive. There are other people around us and their families to consider. As the owner, and the leader, our concerns and issues take a backseat to the concerns and issues of others. This is something I know we accept and we do our best everyday to look at things from the perceptive of others. For me, it’s been 33 years since I put the key in the door of my repair shop for the first time. And I can tell there are times when I feel like it’s the 12th round of a 10 round boxing match. I am not complaining, mostly because my position does not allow me to complain. Leaders and business owners have to remain strong, positive and put the interest of others before themselves. This is in part what makes a leader a leader; the ability to put one’s interest aside for the greater good of others. However, this makes it very lonely at times. Leaders must have vision and work to not only improve themselves but improve the lives of others. Leaders also must look to praise and recognize the accomplishments of others. Moral building and team spirit become the essential building blocks of any organization. We as shop owners are well aware of this. I am not asking those who are employed to understand all of this. But please, is it too much to ask for just a little consideration and understanding of what WE go through? I am not going to get into all the petty situations that drive us crazy. It really does not matter. I also realize that the words I am putting on paper will do more good for me, and hopefully for you, reading this. It will not, I am sure, change the way many people think and act who simply go to work each day and expect a pay check at the end of the week. Ok, that’s off my chest. I feel better. To be honest, things are not that bad. I have a great family, great wife and three amazing children. I have built a company that I am proud of; a business that was only a dream decades ago. I entered this industry as a mechanic and was transformed into an entrepreneur. I have achieved a lot of the years. And I am not done yet. There is still much more to do and will work hard to achieve my goals and aspirations. Maybe I try too hard. Maybe I judge others by how I was and how I am today. Maybe that’s wrong. Perhaps, I am not the leader I think I am. Leaders must find other potential leaders and cultivate them to become future leaders. Leaders must also be understanding and find the good in others, and not focus on the negative. Maybe I needed to write this tonight to remind myself to stop complaining and get back to work. If something isn’t right, then I should take a long hard look in the mirror. The answer to my problems and questions can be found in the man staring back at me. So, let me get back to work. Yes, a leader can be real lonely at times. But I would not want it any other way!

AutoShopOwner.com is proud to announce it now has over 1000 members! This truly is a milestone and exciting to see how ASO has grown in just a few short years. AutoShopOwner.com was founded on the concept that there is a wealth of business knowledge among automotive shop owners, and by bringing these shop owners together, great things can happen. Thanks to its loyal member base, AutoShopOwner.com has exceeded expectations. It is within the forums that shop owners engage in dialogue, communicate ideas, voice opinions and help their fellow shop owner through difficult issues. What ASO also discovered is the dedication and commitment shop owners have to the industry. AutoShopOwner.com will continue to bring exciting posts, content and information to keep its members up to date with the latest business challenges faced each day. ASO is OUR website. It’s our online voice to collectively work to help raise the image and level of professionalism of the auto service industry. As a fellow shop owner, I am proud and honored to be part of this extraordinary group of business people. Joe Marconi AutoShopOwner.com, Cofounder

A good customer called me the other day to let me know that he has concerns regarding the quality of our work. Last week we installed an exhaust system on his Maxima and two days later it sounded like the muffler had fallen off. There was so much noise he was afraid to drive the car. We went to his house to pick it up. We found that the baffles had broken apart in the brand new muffler we just installed. About two month ago this same customer had to bring the Maxima back due to a grinding noise from the brakes. We had done front brake pads and rotors a week prior. We replaced the defective pads along with a new set of rotors at no charge and everything was fine, or so we thought. With each incident we did a follow up call to insure that there were no additional issues. Apparently, these two situations did not sit well with this customer. During his phone call he reminded me that he was a loyal customer and that our customer service is exceptional, always going above and beyond the norm. However, he went on to say, "Exceptional customer service can’t make up for the quality of the repairs." He was very candid and honest. He said he would not “jump ship”, but he has concerns, and that if there are any more quality issues, he will look to go elsewhere. He even mentioned the dealer as an alternative to us. I did not make any excuses, only apologized and assured him that we will do our due diligence to find the root cause of these issues. I thanked him for calling me and let him know that most people would not make this call, and how we welcome the opportunity to know how our customers feel. This situation was a real eye-opener for me. I always believed that exceptional service can save you when things go wrong, but obviously this is not necessarily so. There is no doubt that due to our “above and beyond” customer service culture, we are able to sustain most negative cases. But, I guess even the best customer service can’t save a restaurant if the food is continuously bad. I now need to take a more proactive approach with respect to where I purchase my parts. We also need to track every part issue and see if there are any trends or patterns to the failures. We will bring it up to the parts supplier, but if the parts supplier makes no effort to fix the issue, I will have to seek other companies to do business with. In this business climate, too many things can go wrong. We, as business people, need to understand the perspective of the customer. And, no matter how much we preach customer service, the quality of our work is the signature of our brand and our company.

Losing My Patience, Never My Passion As a shop owner, that began his career as a mechanic 36 years ago, the effort of building a business has taken its toll in many ways. While I have not lost my passion for what I do, I have lost my patience with many of the things I see around me. I have built a business from a small 2-man operation to a 2-facility company with close to 20 employees. It’s often said that you need great people around you in order to achieve success. But the truth is without leadership, vision, passion and a whole lot of determination, nothing will ever get accomplished. It also takes risk, with countless sleepless nights. All of which must come from the founder or owner of the business. Here’s my frustration. I hold myself accountable each and every day. If I screw up, I admit it and work twice as hard to rectify the issue. Why don’t others in the company hold themselves accountable? Not for me, for themselves. Take for example, a technician misdiagnoses a problem and costs the company money in lost time, wrong parts installed and an upset customer. Now, mistake happen, we are all human. That’s not my issue. My issue is the lack of remorse, the lack of concern, the lack of sense of urgency to make things right. I see too many times after a mistake has happen, that nothing changes in the attitude from the tech that made the error. He does not work any extra to make up for the loss. He does not come in early to try to make amends. And when I try to bring it up, I’m the bad guy and the tech gets upset at me! Upset at me? I have to suck it up and keep it inside me? And, Heaven forbid if I even suggest that the tech come back from lunch a few minutes early or maybe forgo his “natural birth right” of spending time on the tool truck. In their defense, my techs work very hard. They endure the cold, the rain, the sweltering heat of the summer and the daily bodily punishment of being a mechanic. I guess, what I want is just a little of the passion I have. That show of concern and the paying attention to all the details of the business. Also, I would love to see people have the same energy level as I have. I have more than 20 years on some of my employees and there are days that they can’t keep up with me! I guess, maybe it’s a lot to ask. My techs are great people. The morale is great and we are profitable. Some people tell me that it’s impossible for an employee to care like the owner cares. I don’t agree. Before I went into business, I took my work personal. When I worked for someone, I worked like it was my own business. But, that was me and to be honest I didn’t stay in the workforce long, starting my own business at the age of twenty five. Maybe I have been doing this too long, maybe I need to ignore some things. Maybe I just need a break. But, I am who I am and I can’t see myself changing. My passion will continue to be the force that drives me into the future. I will continue to work hard to bring out the best in me and in my employees. I am dedicated to my family, my business and to my employees. I will not push my ways on anyone. People need to show respect for themselves first. Only then can they truly grow with others.

A Customer Teaches Me About Life I will always remember the first day I met Mort Rubenstein. He was in his early 70’s at the time, about 18 years ago and used a walker to get around. He told me that he preferred to wait with his car while it was serviced and that he didn’t mind waiting, no matter how long it took. I remember as he was leaving my office for the first time, I offered to help him to his car and tried to hold the door open for him. Since he used a walker, I felt I was doing the right thing. He sternly told me that he did not need any help. For the next few visits after that I would always offer to help him and he would emphatically tell me, “Joe, I appreciate the offer, but believe me, I don’t need the help”. Then, he turned to me and said, “Joe, let me tell you a little about me. I grew up during the great depression of the 1930's and lived though those tough times. When the Japanese bombed Pearl Harbor in 1941 I enlisted in the Army. I fought my way through North Africa, landed on the beach of Normandy during the invasion of France and fought my way through many battles in Europe during World War II. I survived the war without even getting a scratch. Two years after I got out of the Army in 1947, life through me a curve ball; I contracted Polio. That’s why I use a walker today. I have accepted it, and will not let it defeat me. So Joe, when I tell you I don’t need any help, that’s the reason why”. I didn’t know what to say. I remained silent as I watched him walk to his car. Over the years, Mort became more than a customer, he became a friend. When he brought his car in for service, we would talk about the War, about business and about life. As his polio progressed he was confined to a wheel chair. But that never stopped him. He purchased a van with a special seat and ramp and would get in and out of the van by himself with the aid of a motorized wheel chair. He was in his late 80’s, still driving. Mort never gave up and lived life to the fullest and was always positive. As the years past I knew, from talking with his wife, that the polio was getting the best of him, but he never showed it. He was always upbeat and smiled. Mort died recently. He was 91 years old. Some would say that Mort lived a tough life. Not me. Mort was part of that generation that never asked for anything. Mort, like so many from that era, was willing to go to war for our country and ready to make the ultimate sacrifice. They didn’t have much but were happy and thankful with what they had. They endured the hardships of the great depression but never complained. That’s why they are called the Greatest Generation. I will always remember Mort and what he taught me about life. How to live life to its fullest, how to remain positive and get the most from the cards you are dealt with. I only hope that I can be as strong as Mort was if life happens to throw me a curve ball.

Everyone has core beliefs; those values and ideals that determine your personal success. Notice I said, “personal” success? That’s because success is defined by your goals, your desires and your individual talents and potential. Not by the achievements of others. A great athlete may study other great athletes to see how they achieved their success, but ultimately it’s the talents, work ethic and the potential of the individual that will determine personal success. Below is my list of core beliefs: 1. Never judge your life or your achievements by the achievements of others. 2. Always go the extra mile when performing any task, even at the risk or perceived risk of short term monetary loss. 3. Commit to a life of continuous improvement and learning. 4. Never give up when a problem arises; whether in your private life or in your daily work. Work diligently to find solutions. 5. Never dismiss someone’s perception of you. While we should not govern our lives by other people’s opinions, how others view us should be considered. Are we respected and considered credible by the people we associate with? 6. Spend more time listening than talking. 7. Analyze what goes wrong in your life and learn from your mistakes. 8. Never hesitate to make a key decision out of fear of making a mistake. 9. Make decisions based on your gut feelings; which is founded on past experience, expertise and personal judgment. 10. Accept responsibility of your life, your family, the world around you and your coworkers. 11. When things go wrong in your business or in your life, blame yourself first. Ask yourself; “Was there anything that I could have done that would have prevented what happened?” 12. Think beyond your job description, always be willing to help others, the more you understand the concept of the team, the better individual you will become. 13. Be a leader, find other leaders and help others achieve their personal greatness. 14. Don’t look for praise or recognition. Knowing that what you do in life matters is recognition enough. 15. Find happiness in your life. If you spend your life looking elsewhere for happiness, you will never find it. 16. Focus on your strengths, not your weakness. Do what you enjoy, but also do what brings the greatest return of fulfillment in your life. Joe Montana, famous quarter back for the San Francisco 49ers, devoted his life to becoming one of the greatest quarter backs of all time. Although he was a great football athlete, he did not spend his time perfecting his skills in tackling and catching the ball. That would have been a waste of his time. This is my list; you may agree or disagree with these core beliefs. The key thing to remember is that we all need to know what makes us tick. Who are we and what do we stand for? We may never know completely who we are and may never reach our personal definition of success, but, as we all know, life is a never ending journey, not a destination. Striving continuously in achieving our very best is what defines us and defines life itself.

Last Saturday, I cleaned out my car…after putting it off for over two weeks! What is it about the smallest of tasks that we just cannot drag ourselves to do? I mean, isn’t it crazy that we’d let something we’re putting off, sit in the back of our minds and eat away at our enjoyment of everything we’re doing until we get it done…just because it’s less fun than watching TV, reading your HOA rules and regulations, or cleaning the cat’s litter box? What a nice feeling to have it done, though…I can actually get more than one person in my Yukon XL now… Now that you’re thinking about the things you are putting off and how they are affecting your well being, I’d like you to take a step further into this thought and ask you how this relates to your current financial life, and your future plans…such as retirement. We all know the stock market is a mess, and that it’s scary to invest out there…even banks we’ve long trusted have taken nose-dives. So what’s a hard working earner to do? Well, I can’t be the one to tell you that, but I am willing to share with you a few of the most critical changes I’ve made in my own finances lately. I am not a financial advisor, I am not an expert. I am simply a guy in his 40’s who refuses to start all over again, or watch his 401k and other investments dissolve, dilute, or shrink…and I don’t want to work past 50, so I have no time to sit this out and hope things change. I have to be proactive and aware of what is going on around me or I could be in some real hot water, and that’s just not an option at this point in my life. So…first of all, in order to understand what you can afford to invest, you must first take a real inventory of your situation. I know what you’re thinking… “What if I don’t have ANY money?” Or, “What if I am in serious debt?” Or maybe even, “Investing isn’t a reality for me!” It’s ok…no matter WHERE you are in the list above, what I am going to share with you will help you snap out of your current state and into more control of your personal situation, so that you may pay off debt, reduce expenses, find better rates on your money, and help you feel free. To get a clear picture of where you’re at, there are several resources I recommend! First register at www.Mint.com, it’s free and it could truly change your life if you are honest with yourself and take action on what you find there. This is a site that will allow you to see ALL of your money matters at a glimpse…every account in one place…and that’s just the start. I can’t begin to explain it all (and this is no infomercial), so just trust the author a touch, and go there and register…almost every one of you will be impressed, I am sure. Second of all, consider setting up an electronic savings account with a good, solid, well reputed bank that offers superior rates to your local savings and loan. I am here to tell you, I have been investing cash into my ING Direct Orange Savings account for years at www.INGdirect.com, and have consistently earned rates far above ANYTHING my bank offers, and we run literally MILLIONS of dollars through the local bank every YEAR! I like to sweep about 3-5% of every deposit into a high yield savings account, or even a money market (as long as there are no fees). That way I can sweep some or all of it back into my business checking when needed for the business (tax time, crises, etc.). I also deposit a minimum of 10% — and try to push closer to 30% — of my take home pay into a separate higher-yield savings account or money market checking account. Third of all, consider investing in metals. I personally like gold coins. I do not recommend numismatic coins…instead I do “semi-numismatic coins.” Those are the ones that are minted pre-1933, and therefore are not subject to government recall as they did with the gold bullion in the 1930’s (and could again)! I do not recommend how much a person should invest there, but have heard form very reliable sources that it should not be more than 5-20% of your total investments…so be careful. If you want a great broker that I have worked with for some time, email me and I’ll give you his number and name. The most important thing here, is to do a TON of research and talk to several people before you buy…be particular in your understanding of the “spread”, which is the commission you will be charged to purchase. It can be truly exorbitant, and ruin the chance of a decent return on your investment. Also avoid listening to all the hype on metals…find a good broker and start there. Finally, I suggest that you list every budget item…all your monthly expenses and get RID of as many as you can. Start with the highest interest credit card you have. Take it out of your wallet or purse, and then begin to pay more off on that each month. Pay as much as you can while still saving some money in the savings account. You can find expenses that you do not desperately need every week…take the money you save form avoiding them and write a check every week to your highest interest debt. It will change your life and free you. I sold my ATV this year, which got rid of a $200.00 per MONTH storage unit! Now I can take that $200.00 and put it toward more important things, like SAVING and INVESTING in my FUTURE! So…no excuses left…get at it, and PLEASE comment below and I’d really love it if you came back and commented over the next few months…lets help each other keep the commitment and make the recovery in our own homes!