mspecperformance

There is something to be said about having a fair price for an oil change. Your car count might take a hit however the quality of customer you get will certainly be better. That customer that is willing to spend a fair price on an oil change is probably going to be more receptive to any recommendations from your inspection process. I like to be competitive with my oil changes, or within the ball park as some say. Definitely higher than most but not pricing myself out to the point where people look the other way.

Having your team members have personal cards gives them a feeling of investment into your company. How it plays out when they actually hand cards out and such would be up to the company culture and what you are teaching your staff.

There are several things in a shop that if you CHOOSE you can menu price. A/C Recharge, Tire Replacement and Balance, Alignments, Oil Changes are some. For A/C recharges I charge a flat 129.97 and every spring I send out a 99.97 special. It also includes a VISUAL inspection of the system. If there is anything extra such as fan problems, component problems etc then that would go on our regular diagnostic and repair rates. As for Oil Changes, they are a difficult point of contention. Most general repair shops practically give away oil changes. Depending what your ARO and car count goals are, cheap oil changes may not work for you. A person coming in for a cheap oil change is most likely not a candidate to spend money on other repairs. The main purpose for a LOF from our point of view is the inspection process. It gives us the reason to thoroughly inspect a vehicle for any other possible problem areas and to present out findings. This is what fuels the shop and generates high ARO. The other model is get as many cars in the door and let that average out with a low ARO. I personally charge what I feel is a fair amount of an oil change. With what I pay my technicians for the inspection process and the labor to perform an oil change I always lose money. It is a loss leader for me however my goal is to make sure my inspection is AMAZING so I can sell it.

Donny,

what are you typical vehicles you see? General repair and see everything?

Installing used parts you always lose. You double lose with the comebacks. You exponentially lose if the customer who is already not an ideal on since they want to use used parts decides to blame you and drag your shop name in the mud over a used part not working properly. Remember that its always our fault lol.

What irks me is the prevelance of discount dealer parts from dealerships with econmerce parts sites.

ill pay ya later customers suck so much....

Figure $1000 per bay per working day gross revenue as a guide. A 6 bay shop with 3-4 techs will put you where you want to be with a fat wallet. Its a trick to actually pull it off, I certainly don't.

 

This is the reason most 1 or 2 bay shops close after a few years. Economy of scale is very important.

I agree with alfredauto here. A 1-2 bay shop needs to cranking out serious work in my neck of the woods to survive due to the high cost of living and expenses. Rent here is ridiculous. I have however read up on several small footprint shops with 1-3 bays that absolutely KILL it. They have the staff, the customers and the systems and processes to be ultra efficient. If I find some of the articles I'll post them up. Really makes you think if these guys can do it then you can to.

I can't wait to hire a super star Service Advisor. CAN.NOT.WAIT.

CORRECT! I guess I'm not there yet lol

Dad's Auto, your SA filtered all the crappy customers you didn't want anyway!

 

I would go after an SBA loan, as a new business. 10-20% down is normal, depending on your business health and previous year financials.

 

In terms of getting that cash together ($300k+) ... this is really the reason why most guys go with franchises. The franchise will foot a lot of this bill in return for you paying them 5-9% of gross yearly.

 

 

20-30% net profit is the golden standard. Tire shops will hit 15%. Well run import shops will hit 30%.

Thinking of 30% my nose will start to bleed LOL

If you are doing everything "right" according to industry standards ideally you would be walking away every year with at least 20% net. That equals to 200k. Depending on who you ask the target net profit goal may be different. I believe average nationwide is around 2-5% whilst some consulting firms aim for 10-15%. I am more comfortable with shooting for 20%.

What do your numbers look like compared to last year? When did you hire the SA?

I wonder if you guys experience this... I would say 8/10 people that call the shop have such a hard time carrying on a simple conversation. It is understood their guard is up. They are testing the waters, asking questions to feel you out I get all of that. What I don't understand is the awkwardness of how people speak and their tonality.

"Yeah... uhhh... I need to uhhh... bring my car in today... uhhhh I got a check engine light... uhhh P1234 code"

"So you uhhh... can't just check it like... uhhh real quick?????"

Then I get apprehensiveness when it comes to asking for name/number/e-mail for my scheduler. Its like everyone is a criminal and doesn't want to give out their personal information. SO STRANGE!

Do you guys experience the same thing? Or is it just people that grow up here in the jungle??? I just don't get it...

Been doing a lot of research on parts margins and currently use a matrix for my parts that I'm happy with.

 

I'm curious though, what are your margins for things like fluids? engine oil, coolant, etc.? I'm getting almost 35% GPM on engine oil, my biggest consumable. And I use a flat 50% GPM for all other fluids.

 

Oil filters, another big consumable. If I put oil filters through the parts matrix, oil change prices sky rocket. I've been keeping them at list if it's a dealer sourced part or 50% GPM if it's aftermarket.

 

Also, how about batteries? I'm currently at 30% GPM

 

Tires? I fluctuate between 10%-20% GPM on my own matrix

 

Just curious what other shop owners are doing.

 

Thanks!

AJ

I have a similar issue with tires and batteries. I have since changed my strategy on tires and package them with a tire protection program through ATD. I run tires through my matrix which usually leaves me above 30% GP on tires. I have only started doing this and my tire sales were abysmal to start with so I'll know in 6 months or so whether or not my efforts are netting me better results.

Batteries I try to mark up at least to list+ a few percent. Batteries are a sensitive area since like oil changes, wipers, and tires they are seen as "commodities". Consumer's thoughts are "why buy a gallon of milk for more money." The biggest hit I take is dealer batteries. I work on all German especially BMW and BMWs do not respond well to non dealer batteries. My clientele also expects we use genuine BMW batteries so it leaves me in a pickle when it comes time to mark up batteries without causing a potential problem over price with my customers.

I have a robinaire coolant exchanger. I use it decently frequently. Mostly because we only work on German and a lot of cars come in with green garbage coolant that we recommend to flush out. Its easy money. Its amazing how uninformed and ignorant so many shops are out there. Factory recommends certain fluids, stick to it!

 

 

Thank you,

 

For me, it was going good, even though I had Goodyear sign on my building, my tires sales only counted for 30% of my business. When I acquired this shop in the year 2000, I was only affiliated with NAPA as an Napa AutoCare Center - I wanted my customers to have an umbrella coverage for nationwide warranty but felt too many consumers did not perceive Napa as an auto care center, they thought NAPA and associated it to a parts store.

 

In 2004, I was looking into other options and I chose Tires Plus. Just when I went through their training and getting ready to convert my building to become a Tires Plus franchisee, everything came to a stop and things dragged out for months, come to find out Tires Plus corporate stopped their franchisee program and they became all corporate owned stores. Then I selected my 2nd option, to become a G3X dealer.

 

Why I selected Tires Plus first, well within my demographic area, I felt Tires Plus would give me a better selection of tires in respect to price range, a broader spectrum from economy to premium to performance. The G3X program has their fair share of economy line tires but I think in a customers view point, coming to a Goodyear dealer would cost them more than going to a Tires Plus or Tire kingdom.

 

Again, demographics plays a big role, and Goodyear has the largest OE fitment tires on vehicle's today - but how many consumers stick to those OE tires??? With all these leased vehicles, they just want the most affordable tire's they can get away with and unfortunately I feel very limited when I'm quoting a tire from the Goodyear family. The G3X program changes annually, making it harder and harder to meet quota, especially if you want to be part of their Tire & Service Network, of which I believe is 2,500 units annually.

 

As for now, I'm currently looking into different options, need to start making changes as we all see the tide has changed in respect to how consumers are buying and spending. you still have a select few customers that are truly loyal but for me, that number is dwindling away. Some have passed away, others have moved, etc... and this new breed of clients have no loyalty, they see something for as little as $5 less somewhere else, they go there.

 

Just ranting.....

 

George

George,

I think your concerns are shared across the board. Customer loyalty is paramount as well as differentiating your shop from your competition. Thanks for sharing!~

Negative comments will always leave out what the customer did wrong of course.

I am going to the NAPA expo in Vegas. May 5th to the 8th. I hardly buy anything from NAPA but I bought some equipment and I am getting a free trip out of it. There are several business classes throughout the 3 days which I'll be attending. I hope they are worthwhile.

If you do have a partnership you need to define clear expectations and responsibilities. If your partner is going to have an everyday role in the business he needs to have a job title and description. This will avoid any confusion as to what their role is and what is expected of them. Of course this does not guarantee a successful relationship as your partner may have different views on the direction of the business, have less motivation, etc...

In your shoes I would just hire. Possibly offer incentives such as profit sharing or some sort of growth perks.

how much added business do you see from NYS inspections?

Awesome!!!!!

I just sent out a mailer this week. A small one to get my feet wet with DM again. hopefully I'll see some return.

I have poor talent in my area. The good ones are usually out for their own hustle. I like the idea of importing techs from other states. NYCers are just not good quality people LOL