Charlie

www.americanprideautomotive.com

We pay a Hybrid program that is based on 20 years of experience. Each of our shops has two service writers, gross revenue per shop is between 80 and 120 thousand. Each shop has a manager and a writer (basically they are both writers but one has more authority). We pay a base pay of 700 to 800 weekly with a 4 point monthly bonus. Both writers will get paid 1% of their gross for having 52% of total revenue in labor, 1% of their gross for having a 50% GPM, 1% of their gross for having an average ticket of $275 or above. The second in command also gets 1% of total company GP to ensure teamwork while the manager get's a healthy bump based on total gross revenue tiered by GPM. It sounds more complicated than it really is, what it does very well is train the guys to focus on the metrics that matter while rewarding for success. A service writer should make between 47,500 and 55,000 while the manager should make about 70,000. This plan puts our expense above the much talked about 8% but my goal is to have quality people in place that allows the business to operate well in my absence. I think where you are in the country can make all the difference and every shop is different. I'll be glad to spend extra time with whomever if you would like further descriptions.

Here is some good information for research: http://www.businessnewsdaily.com/6780-best-business-phone-systems.html

Unanswered calls because all lines are in use? Do you have voicemail in a central point?

My research showed VOIP phone systems are totally unreliable in service (lots of latency). The cell phone idea scares me, $250 per month for 3 lines sounds reasonable and definitely don't give up the old phone number.

The major trade publications for two years now have been warning us that our industry (independent repair) is ripe for consolidation, they just didn't say how. Think of the local hardware store from 30 years ago, the family doctor or the local pharmacy from 15 years, all gone due to consolidation. I'm afraid that our industry will be consolidated to the AAA, Goodyear, Firestone etc. driven by consumer demand made possible by the internet. As many of you have already stated, the real question is how do we change with...

Mike, Have you brought these concerns to your Advance account manager? Reliability is a huge concern for us and we must have confidence in the parts we install, a failed repair may mean a lost customer and that is a price we can not afford.

Jim, what shop management system are you using? I do remember a time when several parts were priced way out of line back in early 2014. After some investigation I learned that there were some computer glitches as the Advance inventory management tool was absorbing CQ parts. If I remember correctly AAP has stuck with the CQ inventory system because it was better designed for wholesale distribution. Have you found a replacement for TECHNET tools and support, mainly CTI training?

As an owner of three shops here in Virginia and a TECHNET member I too had my reservations. I was concerned when I saw friendly CARQUEST faces disappear and new ones show up, I was concerned when the Gates line of belts was dropped and replaced with Dayco but I must say, what I have learned is that Advance wants to grow their commercial sector and they are willing to invest in the growth of TECHNET substantially to make it happen. Like you Joe I voiced my concerns in a respectful manner and what that gave me was intelligent responses to my questions and a better understanding of the work and organization required to blend two multi-billion dollar companies.

Tire sales can throw off your numbers, artificially increase your ARO and decrease your GPM, ideally you should separate your tire sales and car sales since you are not treating it as a separate business. A metric I find useful is 25,000 per month, per tech, P&L. I have found this is a good expectation of a solid tech. Personally I look to see an average RO of $275 and a GPM of 50% (this includes all repairs). I am also looking for 52% of total revenue to be labor. We have three locations and service about 940 cars monthly in general repair. We also have two dealerships but we treat those cars as a separate customer and charge a discounted ticket (not too much) but to gauge the success of sales they need to pay like everyone else...otherwise why am I selling cars. I do not believe there is any one formula that works for everyone, We use to do a lot of heavy work and at that time my numbers were totally different. In the end you need to be happy, have time with your family and be able to retire well while helping those around you do the same. Keep up the good work!

New York and California are very restrictive and yes it is much easier in Virginia. Shop rent runs $9 to $11 per sq foot. Franchises tend to run 1.5 times as much since the property for them is a profit center.

Supply charges would apply to all of your consumables and recyclables. There are many things we all supply and never get paid for, it may be a sealant, grease, connectors etc. Our supply charges are 8.5% of ticket with a cap of $43.19 and we never have a complaint. Our charges cover our rent.

Most operating systems have a parts pricing matrix that will give stair step pricing to your individual parts cost. There are always those items that are considered more of a commodity such as tires, batteries, wiper blades etc. Your over all parts margin should be 55%. Keep in mind that the dealer does not stick to dealer list. The parts department will sell the part for a profit to the repair division, they then adjust the price to meet their matrix which is often over the part list. Some will complain, by far the majority will not. How are you doing on shop fees? our shop fees should cover your rent...no kidding!