kent2112

Three years ago we required the techs to use a "cookie" and clean every wheel mounting surface, haven't had one since.

Having the confidence to charge the correct markup, deny customer supplied parts, and not compete with but beat mail order parts is the key. If you call your local dealership parts department and ask for the price on a water pump it will be list price. If you call the same dealership service department and ask for the installed price and then a breakdown you will find the part price is doubled. Nothing illustrates the difference in correct markup between the two industries and you need the same mentality and markup. When we are told "I can get it for less" we state that we can too. Then we calmly explain that a local service department and a warehouse in the Midwest have very different business models. Our service model have a heavy investment in floor space, technicians, overhead, the local economy, and most importantly local taxes. We are an integral part of our local community and support local charities, the highway department, the school district, state taxes and levies, state labor regulations, state consumer protections, and the list goes on and on. Unfortunately, the out of town warehouse model and it's inventory of Chinese parts does not in order to increase sales for their shareholders. That's why you can't go into red Lobster with your own lobster. (The local likes his road plowed, his children to go to school, etc. and will be willing to support that). When we are asked to install parts purchased elsewhere we explain we can't. Then we calmly explain the part markup supports the entire business and its employees as stated above. But the biggest reason is liability. When you supply a part not only do you forgo all consumer protections and warranty claims on the entire repair, you incur a liability most consumers aren't aware of. We have an insurance company and they require product liability coverage from our suppliers. If you purchase a Chinese part from an out of town supplier and heaven forbid someone gets injured when it fails who pays the claims? Your insurance company owns the right to sue anyone it wants to recoup claims including you, it's in your policy. If we use our part it is an easy claim because our insurance will pay it and then go after our supplier. If you hand someone a part and ask them to install it who is liable then? Most people don't understand the intimate details of running a service department and probably shouldn't learn as they go.

Your running a business and your techs will leave you for a better deal elsewhere, its human nature. It is OK for you to continually strive for a better deal yourself. Always search or advertise for technicians, you may find a better tech or deal and it is in your interest to take it. I have been burned with the "today is my last day boss" too many times to be unprepared. Now I have applications that are constantly refreshed and ready to hire. When I get an application and I don't have an open postion I interveiw the applicant and then notify them 3 days later the position is currently filled but I will contact him at the next opening. This works well and I can handle any unexpected departures. Also, strive to move your techs into a production pay plan. You know you have too much "salary" built into your pay plan when you feel your techs; produce 30-35 hours, don't buy tools, show up right at start time, don't clean a dirty bay or stay to finish a job, have weak diagnostic skills, and worst of all don't train.

This industry is constantly evolving and will continue to do so. One hundred thousand mile factory warranties, free maintance, lifetime tires, Etc., all mean you will have to adjust your business plan in the future. Be carefull limiting your opportunities by establishing a brand that doesn't include potential future customers. Once you establish your brand it is nearly impossible to change without rebranding at great expense.

Contact your insurance company and ask them for liability management or loss prevention. They will draft a policy, approve your policy, draft a disclaimer, or approve your disclaimer. You are then covered by your insurance company and have proof in writing. Insurance companies are difficult when you have a loss but are also loss prevention experts, use them its free.