ATLAuto

Wow. Big change for you two!! Congrats. Let me know if you're ever in Atlanta.

To add to that... Gross Profit should be above 60%. Net Profit should be above 20%.

Agreed. I think you are confusing gross and net profit... Gross Profit = Total Revenue - Parts Cost - Labor Cost Net Profit = Total Revenue - Parts Cost - Labor Cost - Overhead

I would call each shop and anonymously price a standard job (ie an alternator). This will give you a rough idea of their labor rate and parts matrix. My guess is that most in a small community are not matrixing parts.

The thing with net profit is that it is not linear. i.e. if you are making 20% on $500k ($100k), you will not make double on $1M ($200k). You will make more than double, because your overhead is already covered. Likely 30-40% on that additional gross.

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%.

Your first step is to minimize all expenses. From a banks perspective, your two houses are a major liability. Drop one or rent it out. In order to get a loan, you will need to have a solid down payment, a good business plan, and a large stash of working capital to get you through the startup.

Agreed. Do not get a partner. Hire the skillset you need. Ultimately, it will be your leadership that determines how well the shop is run, not your technical ability.

http://www.mamsoftware.com/usa/vast-enterprise I have investigated shop software heavily, as I implemented software prior to opening our shop. After reviewing 20+packages, Vast and RO Writer are by far the top two.

We run MAM VAST, which has an Enterprise side that supposedly does this very well. A large tire dealer in our city runs VAST at all his multiple locations. I could probably get you two in touch. PM if needed.

hahahaha, nice. If our techs are ever test driving a car with expired tags / no tags / headlights out / etc, we print out a copy of the RO to bring along. Never had a problem yet, but if they get pulled over, at least they can show that they are with a shop in the middle of a repair.

Agreed all around. I didn't push the argument with him, since it would have fallen on deaf ears ...

Agreed. We were in St. John in the Caribbean a few years ago, and I met a tech at a small shop down there (actually, I think the only shop on the island). I asked him where he was from, and he said, MICHIGAN! I was shocked and asked him how he landed a tech job in paradise. He said he saw an ad online, and he just flew down and started working. Nice geography change!!

Nice. I've done the same thing, but I always feel awful getting a part number from the dealership and using that to price shop online. Our local Jaguar dealership actually has a policy to not give part numbers over the phone for this very reason. I wish there was an easy way to find these part numbers / schematics online without the dealers phone call ....

That's amazing! 2 day shipping from Korea. Shipping cost?

Try grabbing the wiring harness near the sensor when warm, and seeing if the engine hiccups. Also, yes, I agree. You need to scope that sensor not just look at the datastream. I'd also scope the fuel pump for a bad spot on the motor.

I was talking with a shop owner near us, and the topic of Parts Matrix pricing came up. I casually asked him what type of margins he typically got on parts. He replied, "we just charge list price on all parts. Whatever the customer would pay at the parts store, we charge." Shocked, I asked him how he kept the doors open with such low margins (15% roughly). He replied, "well, you know it's illegal to markup more than 50%, right?" I said, no, I've actually never heard of that in my life. I asked him where he heard that from, and he looked at me like that is common knowledge to everyone, and I should be in jail right now for matrixing our parts.....! Has anyone ever heard of this law, ever, anywhere??

That is absolutely amazing. Wow.

Wow. I am truly sorry to hear that. We have certainly not seen that in our area with the cursing in the reviews. Hope it stays that way. Regarding the Google Maps and Apple Maps - I do not know their SEO algorithms and all the variables involved. However, I do know that if you search "car repair" in the Google Maps app, your G+ reviews will show up in the results. Same when you click your shop in Apple Maps, your Yelp reviews come up.

That is an incredible deal. what is their average turnaround time for delivery to the states? Most of our customers would rather have their car back ASAP and pay a bit more money.

Also... More to add... Today, people search for shops based on their smart phones. They open up Google maps or Apple maps, zoom to an area, and type "car repair." Guess what the number one factor influencing your ranking on this map search is. You guessed it... If a user is using Apple maps, the ranking is based of your yelp score. If a user is using Google maps, it is based off your Google+ review score (which is another topic all together)

Anyway, with that said, yelp is by faaaaaar the best form of free advertising any shop in an urban area can use. Hands down. Without yelp, our revenues would be down at least 30%.

Yelp is more powerful than word of mouth in urban areas. Think about it ... You have a high density of people that don't really talk to each other. Additionally, many of them are new to the area and did not grow up with "that garage my parents have always gone to." Thus, they head to the Internet to find the best shops in their area. I would say over 90% of our customers either find us on yelp or check out our yelp reviews before coming in. In regards to yelp being flawed, I disagree. Yelp either keeps your review or filters your review based on the following: -- how many reviews have you left? Just one? Filtered. -- how old is your yelp account? Just made? Filtered. -- how many yelp friends do you have To? None? Filtered. -- is your yelp account linked to your Facebook account? No? Filtered. ...etc Notice I did not mention "did you leave a positive or negative review." To yelp, it's irrelevant. All yelp wants to know is whether or not you are a legit user or just someone creating an account to leave one review and the moving on. Our shop has 50+ reviews. 9 of them have been filtered. Of the nine, there is no correspondence to their review rating. Rather, all were new accounts with only one review left. I have actually seen yelp review move from our filtered reviews to our unfiltered front page reviews once a yelp user starts using yelp more and leaving more reviews.

What prompted this audit? Sounds terrifying, and I'd like to avoid it at all costs. In regards to paper, our POS system and CC system is linked together. So, in theory, we could go completely paperless with the exception of the customer receipt. However, we print a copy for ourselves, which they sign and we file away. I just chuck all the signed receipts into a manilla envelope every month, and stick it in a cabinet. Same with delivery and parts paperwork. ...hope we never need to take them back out of the cabinet like XRAC...

I'm dealing with EXACTLY the same issue. New guy, great attitude, good at his job. However, extremely slow. He is also on salary (hourly). I'm contemplating doing the same thing ... moving him to flat rate.