Transmission Repair

I ran across a quote from a Batman movie, The Dark Night. I almost immediately thought of this thread and wanted to add it. ============================= "If you’re good at something, never do it for free." The Joker, "The Dark Knight" (2008)

The problem you guys are experiencing sounds eerily similar to the Right to Repair legislation for the automotive industry we have in our country. (R2R) I've yet to see this issue pop up in any published article. I don't even know if the European Union deals with this issue. Read this article and see if it doesn't sound the same as what the American farmers are dealing with...

Had our industry not had representative lobbyists in D.C., the same thing that happened to the American farmer would have happened to us. Read what happened to the American farmers here:

Before I sold our shop and retired in 2015, I handled ALL of our marketing efforts, which were primarily Pay-Per-Click (PPC) advertising. By a huge margin, Google outperformed Bing. To make a long story short, Google PPC was the only kind of advertising we did. Google PPC advertising wasn't cheap, at about $50K per year. However, it generated an additional $500K in revenue. It cost us about $12/click, and to get an appointment, and we averaged about 3 clicks. Essentially, new customers cost us about $36/ea. Google PPC advertising has changed greatly since then. I tried to help a shop I used to work for and was blown away at how much had changed. It effectively rendered everything I knew and had learned rather useless. What I learned is that it is a field of business that you have constant contact with, and you learn to stay good at it. Like everything else in technology, Google PPC advertising changes often. Overall, it cost us about 10% of the new business revenue that PPC advertising was generating. Not a bad deal, in my view.

Thanks for recommending Carm's podcast on hiring. I learned I really don't know how to conduct a technician interview. Why? Out of all the seminars, trade shows, and classes I've taken over the years, NOT ONE CLASS ever covered the hiring process. I have come to the conclusion that I've been "flying blind" for my entire 40-year career. The closest I've ever come to training in human interaction was with the sales training I've taken. Of the few great hires I have made, I believe it was more due to sheer luck than anything else. The most common challenge shop owners discuss between themselves is finding and hiring a great technician. Like me, few shop owners receive any training in this area. Most larger companies have entire Human Resource (HR) departments to handle recruiting and hiring. Since I retired, have I seen any training in this area, mainly through podcasts. https://gopromotive.com/ and https://hireology.com/ are two podcasts that come to mind, but they were trying to sell themselves as somewhere between a recruitment service and a complete HR department. Of course, today's Carm podcast, but he wasn't trying to sell anything. I'm interested to see what other ASO members' experience is like.

Whenever I saw low productivity, I would try to diagnose the cause. Not only that, I would also ask myself the question, "Is the low productivity within my power to control?" Most of the time it was within my power to control. Occasionally, not. I've never been a fan of the flat-rate system, although that's the main tool I use to measure productivity or the lack thereof. Ironically, the majority of the time, I would cure the problem with an adjustment that's made on the front counter and not out in the shop. What I was able to do was done with changes I made to more accurately written estimates and invoices. Because we were a transmission repair shop, we billed by the job and not by the hour, although we used time as a common reference point. Our estimates and invoices never had the number of hours or how much an hour it was for any particular job. Using that method of billing made it easier for both my techs and myself. Of course, I wouldn't start billing with reckless abandon for fear of pricing ourselves out of the market. I understand that most shops do have an hourly labor rate and bill by the hour. I'm not saying to follow my method because it's not for everybody and every shop. Customers usually have some vague idea as to how long a job takes and how many hours sounds reasonable. Major transmission repair work is not that way in the eyes of the customer. They have no idea and generally just look at the bottom line, including sales tax. Our customers had a written estimate upfront, so there were no surprises. 99% of the time, our estimates were written in stone. Because of this, we rarely had price objections.

I don't think there is only 1 way to calculate a shop's costs, etc. I see shops setting prices based on the prevailing competition more often than any other method. I was a transmission technician at a local Chevrolet dealer in the early '80s. Unknown to me at the time, I received a great job costing lesson that really opened my eyes. A new car dealer has many revenue streams, including parts, new cars, and used cars. Most shops have only 1 or 2 sources of income. I quickly learned that we HAD TO have a higher labor rate than any dealership. It took me at least 6 months of constantly editing our costs because as soon as I thought I was done, I'd discover a new cost that I hadn't thought of before. One killer hidden expense is core handling. We were constantly handling high-dollar transmission, transfer case, or differential cores. For example, when we buy an Allison transmission for a medium-duty GM truck, the core price alone could surpass the price of the Reman unit. GM provided "core management training" for the parts guys. Look at all the cost increases due to supply chain issues and/or inflation. If you think it's bad now, wait until Trump gets in office and starts slapping tariffs on imported parts. We might as well start buying tickets to the circus because that's what will seem like what is happening. Many shops, owners, and managers have a hard time selling for top dollar, but that's what it's going to take to be successful now and beyond. My advice would be to start with a living document (spreadsheet) of all the costs you know. When another new cost pops up, merely add it to the list. Keep doing that to the point where you feel like you've finally captured all your costs. Even then, some other new cost you've never thought of before will surface. Lastly, don't be afraid to be significantly higher on your labor rate than the dealer. Larry in Draper, Utah [email protected]

I just discovered this topic from back in October and I see nobody has made a comment since. I didn't have very much luck with a shop foreman. The main cause, in my opinion, was twofold. If I hired one, right off the bat they wouldn't be productive. If I promoted one of my techs, they had no practical experience running a shop. Eventually, if not sooner, their productivity would also end up as nothing. Either way, I ended up losing one of my best techs. If I ran the shop, it would run the smoothest and most profitable. However, that meant I had to delegate the front counter responsibilities and phone answering. I had my greatest success doing this because it was a lot easier to find someone who fit that job description. I quickly learned from that experience that I had to write a job description for every position. Easier said than done. Over the course of a year, I was constantly editing and updating every job description until I was happy with the employees' outcomes. The old adage about 20/20 vision applies here. Looking back, I should have written a shop owner's job description and included that with all the employees' job descriptions so they would know what to expect from me instead of assuming.

Here's a good article from Ratchet & Wrench on how your shop's numbers compare to other shops in a recent survey. https://www.ratchetandwrench.com/running-a-shop/finance/article/55250653/numbers-how-does-your-shop-compare-in-annual-revenue-gross-and-net-profits

Speaking of shops experiencing an uptick in labor costs, has anybody allowed for bonuses? What about a holiday (Thanksgiving, Christmas, etc.) bonus? What do you consider if and when a bonus is warranted? Has anybody noticed the massive layoffs and businesses that are closing locations? I don't understand why shipping companies are laying off a lot of employees at the busiest time (holidays) of the year.

I would send the customer an email with the subject line "How Did We Do?" asking about choosing our shop. At the bottom of the email, I would provide a link to our Google Reviews page. It worked for me at the time until other rating companies crowded the market. Although unpopular in some parts of the country, Yelp slowly became just as important, if not more so.

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Here's Carm Capriotti's list of business books he recommends for shop owners... https://remarkableresults.biz/books/