Vegas14

Yes, you are absolutely correct about knowing your breakeven and in looking at what your gross profit is on your parts sales and labor etc. But what I am talking about and I appologize maybe I wasn't clear enough, is that I am looking at my profit and loss statement for 2010, the previous year and looking at what percentages have been spent in those specific catagories that I stated, parts, labor, admin, expenses etc. I look at this as a tool to see where maybe we overspent in one area, so now I can take a look and say, "Wow! it cost me 28% on parts for the 2010 year when really it should be at 25%" or "I'm only spending 15% on labor rather than 17%." So now I know or maybe need to do some tweaking for the following year. That's the percentage breakdown that I was talking about. Looking back to make any needed adjustments for current year. I hope that I am making sense? Wondering if anybody knew that percentage formula.

It is harder to make a profit nowadays so my question is if anyone knows what the breakdown of percentage spending should be on your shop? This is what we have been told in the past when taking management classes. We are finding hard to stick with the 20% on cost of parts, it's more like 25% to 28%. We are $92hr so we can't really raise our prices anymore. Any input would be great! Here is breakdown we have: Cost of parts - 20% Cost of labor - 20% Office Admin - 10% Expenses - 30% Owner Salary - 20%

We have postcards made up where you can check off what service will be needed next time or "other" recommendation that you can write in. Then each time the customer comes in we write in their name and address and postcard is checked off with what service will be needed in the future and date is written on top of card when they should come in next, eg: 3 months from today's date. Then we file it in date order and mail them out on a weekly basis. I'm sure there are more sophisticated, streamlined ways but it works for us. This is one of the best ways to keep them coming back and we find that the customer really responds to and appreciates the reminder.

In prior conversation about dealer price slashing, it sounds like everyone is on board in keeping up with dealer specials in order to keep the customers from going there. We came up with what we hope is a good solution and we'll keep you posted as to how it goes. We send out a newsletter to all of our existing customer base every month. In the newsletter there are always two coupons in it with two specials for that month. Rather than looking on the internet and trying to keep up with all the dealer specials going on, one of our coupons will simply be a "Dealership coupon meet or beat-athon" with a picture of a fish trying to lure in a shark (tried to add a little humor to it). This way any dealership coupon the customers gets in the mail or internet they now know that they can bring it in to us and we will honor it. We figured this would be the easiest way to keep up with the dealerships trying to take away our business with all their price slashing deals. We'll run it for a couple of month and again we'll keep you posted as to how it turns out.

I absolutely agree with you. People want convenience regardless of how good your shop is. The problem I see is that if you do have a smaller shop like you said, is manpower. But I think in order to get over that hump you need to be inconvenienced for some time before you see the rewards of being open on Saturday and then after at some point you can increase your workload to hire another tech or writer in order to rotate so they don't get burned out. Right now we are open every other Saturday, because or rotation issues. We are starting to see an increase of business on Saturdays so we are hoping that soon we can do some new additional hiring and at that point we can offer every Saturday.

4 Bays - average 210 cars monthly Mon - Fri 7:30-5:30 Every other Sat 8:00 - 2:00

That's exactly what I'm thinking. I would rather not make as much profit off of the services but at least have them walking through the door and keeping them as a customer. Just wanted to know someone else's opinion and see if they are on the same page as I am. Thanks for the input.

I always look through ads to see what other shops are charging for their services. Here is something I've been running into. The dealer in our area is now charging $52.95 for a minor service, $119.95 for an intermediate service and $179.95 for a major service. Now, I know that normally we should be too concerned with dealer pricing, but what I've noticed lately is that we've been getting quite a bit of "but the dealer is charging so much less." Under normal circumstances, I wouldn't worry too much about the price difference. But, the reality is under these financially difficult times our customers that wouldn't usually question our pricing are starting to look for better deals that the dealers are offering. If we were to offer these prices, quite frankly we would be making hardly if any profit. What is your take on this?

In my opionion, if you desire to become a tech and eventually run the business, that is what you should focus on. It sounds to me like you are passionate about this profession. I agree that you are right on track about running the business more so that working in it. Keep getting as much information as you can about managing and marketing your dad's automotive shop. This website a great resource for answers to all your questions...THANK GUYS! There are several automotive management and automotive marketing companies that will be helpful in running and marketing your business. I hope it's ok to name of few, I'm not trying to sell any of them but just listing the resources that I know of. There is ATI, Management Success, Cinron, Dan Cricks, Autoprofitspro. These are just a few that I have heard about, but again, this website is especially helpful because your questions are answered by people that are in the same field. And, it's great input and advice on what has/is working for them and what hasn't. Good luck!

So do pay a base salary and then an additional bonus based on the above factors?

I have a question in regards to how your service advisor should be paid. Our Service Advisor currently is being paid a flat weekly salary. I'm thinking of changing it to performance based in order to put a little more motivation into his sales. Any advise out there on how other shops are paying their Advisors and how is it working for you.

Great response to your customer. When we are asked a price over the phone and the customer wants to know how much? we ususally respond with it will cost you about 15 minutes of your time to bring it in and have it diagnosed properly. But being that it's so hard to keep up with dealership coupons, on our website we state that we will honor any dealership coupon, that way we can have them come to us regardless of what the dealer is offering