Transmission Repair

True. Investing in your shop's real estate won't take your time away from the shop. It will only enhance it.

A million bucks isn't near the money/amount we grew up with. TODAY, it's simply not much. A dollar doesn't go as far as it used to. Take it to the bank.

Like many males, what I did for a living was my identity. Since I retired, I feel as if I have lost my identity. I’ve been self-employed for the majority of my adult life. I semi-retired at 60 and fully retired at 65. I’m currently 67 and don’t have any worries outside of the feeling of my loss of identity. It’s funny how that works. Retirement is nothing like I had envisioned when I was younger. I’ve become a couch potato and don’t do anything to speak of. No schedule, no calendar, and no obligations. My wife does more than I do. My stepson lives with us and is turning out to be more of a caregiver than a 38-year-old. I can say the same can be said of my 64-year-old brother who lives in his motorhome parked on our property. Neither one pays us rent; we exchange free rent for caregiving and household chores. =========================================================== WHAT I LEARNED BY RETIRING: A comfortable retirement is what you’re really working for. (mindset) Don’t let your daily work chores & live drama shorten your vision. Many shops have nothing to sell other than tools and equipment.=poor or no retirement planning.=no retirement plan. (Only if the property is worth owning.) 10-year Lease to own = higher rent. Investment into your future. Turn your rent into mortgage payments albeit higher rent. No rent, property taxes, repairs on bldg., etc. for the owner, triple net disappears Do it legally through a title or escrow company; no personal owner finance. Get in 1st lien position. No early payoff penalties, no accumulated late charge fees. (Accumulated late charges can be equal to or surpass payoff amounts.)=bad deal. Divide the number of monthly jobs into the rent: (example 25 jobs a month / $11,000 = $440 per job in just rent, not parts, not labor, not utilities. Do your own math.

I have a friend who owns a transmission shop in Coeur d'Alene, Idaho. He's rented all of his life because it was cheaper. He's getting ready to retire. What he has done over the years is invest in residential rental properties. Although the shop isn't providing any retirement to him, his rental property investments are. There's always more than one way to skin a cat. 🙂

If you have a good location, keep it. It will pay off handsomely. Approach your landlord about buying the place on an owner-financed note. If not, seek bank financing. If he doesn't want to sell, keep that in mind for when it comes time to move. That's what I did. When my lease came due, I told our landlord we were thinking about moving because the rent was so high ($8K/mo.). That same week, he came back to me and said he'd sell on an owner-financed deal. We bought the building and property in 2013 for $860K on a 10-year note. When I fully retired in 2020, our great location sold for $2.3M. (Say hello, retirement!). We cleared $1.9M after paying of the mortgage, $1.5M after paying our income tax on the sale. We sold our business only back in 2015 for $330K and that tenant moved out in 2020. We used a title company to close the deal and make it legal. It was cheaper than an attorney. QUESTION: What state are you in? We're in Draper, Utah.

I've told this story before. Upon retiring I sold our shop's real estate for 2.3 million. After paying off the mortgage and income tax I cleared 1.5 million for retirement. Enough said.

That's too bad. I don't know what to say other than lick your wounds and move on. Sounds like you and your shop are great people to work for. Good luck on your next hire.

I have 40+ years in the transmission industry. I've sold consulting gigs locally, in Texas, and North Carolina; Aamco, Mr. Transmissions, and independents. I've turned all of the shops to profitability. What makes me feel bad is after the gig is up, the shop goes right back operating their business in the same manner that put them in the shitter in the first place. I'm either a crappy trainer or I choose poor clients. My vote is people are creatures of habit. They do what they want to do. I have to sleep at night. I choose to not be involved in consulting because I have a conscience. Seeing shops struggle doesn't work into my retirement plans.

My kids live out-of-state 1,500 miles away, so I rarely see them. However, my wife and I spend time doing what we like. She loves to cook, sew, work puzzles, and play computer games. I spend my days sitting on our deck, reading books, reading the newspaper, watching YouTube news stories, watching TV and reading and answering forum posts. It's a life of leisure with no schedule or commitments outside of the Honey-Do's. I do occasionally go to the senior center to eat lunch and mingle with other retirees. My sister once told me, "Larry, you do a whole lot of nothing." And that's the way I like it. 🙂

I couldn't find a way to reply to your R&W article, so I'm making a separate post. Being in transmission repair, our labor is in different world that G/R. We use book time which is always more than actual time. Our labor efficiency is always more than 100%. It was my job to keep the bays full for maximum efficiency. 150%+ was not uncommon. The only time we dropped below 100% was when I couldn't keep the bays filled. The better I did with marketing, advertising, and promotion, the higher the efficiency. For me, maximum labor efficiency relied on me more than the staff themselves. My staff worked their butts off when the work was there. As far as pricing goes, as of 2015, we were at $125/hr. For canned jobs, we would have just a fixed fee on labor. When calculating the fixed fee, I would use $125/hr. in the calculations. I feel blessed because most customers have no idea of what a transmission costs until I tell them. The vast majority of them just go, "When will it be done?" Our sales procedure included a YouTube video of our findings and an estimate written in stone. It was a pretty bullet proof sales procedure. Unlike G/R, I didn't have to build value because the video said it all. Most people have no idea what's inside a transmission or what's involved until I show them via video.

TEST

It's bad for retirement accounts. 😞

A PBS special on autonomous vehicles.

I also hired an engineering student from the local university. Great success, but he was expensive.

Thanks. My business transaction-based, not relationship. Different animal.

I don't know if PPC would work for G/R. G/R is relationship based. PPC worked like gangbusters for me. I increase our sales $500K/yr. with PPC. It cost me only 10% of my increase in sales, or $50K/yr. I got addicted to it like a drug. I would pause it to control customer flow. If we started to get caught up, I would un-pause it. If it got really slow I would increase the radius of PPC around the shop. It allowed me to control the workflow in the shop. I did all my own PPC advertising; I didn't pay anybody else.

Great article out of Automotive News magazine.

Transmission repair is transaction-based. Google PPC paid ads worked best for me. YouTube was my next favorite. This is all easy to track if you have call tracking installed. Here's an example of just one day's phone calls...

Sadly, I agree with both Mike and Joe about the obvious: the technician shortage. However, the shortage is not as profound (but it is still there) in the transmission repair industry. I'm plugged in to my local market and I know of at least 2 transmission builders I could hire in a heartbeat... If I weren't retired. Optimistically, I look at the other side of the coin. There was once a time where I was spending a lot of money to market our shop in an effort to keep all the bays full and the ample tech supply busy. For example, $50K/yr. for Google PPC advertising, and more! In years gone by I remember having to let a technician go because I couldn't keep him busy due to my poor marketing skills at the time. Today, there's not near the pressure on shop owners to market their shop because of the technician shortage. I can't think of one example today where a shop owner has their existing techs standing around in an empty bay waiting for work to come in. They are all busy. Granted, now there's empty bays with no techs to fill them. In the early 2000s, I hooked up with WyoTech, ( https://www.wyotech.edu/programs/ ) a for profit technical college specializing in automotive, collision and diesel. They were a 500-mile, 8-hour drive from SLC, UT. They had a class graduate every 90 days. The school hosted a job fair every 90 days as well. It was a great source for green techs. The problem I had back then was too high of expectations. I should have picked up where the college left off as far as training was concerned, but I didn't know or become aware of that till years later. Like most, I had unrealistic expectations of the graduating student I hired. If I had it to do over again, I would have continued with an apprentice program in my own shop to finish training the newly hired students. But I didn't. 😞 So, my vote is with you guys: an apprenticeship program, but in our own shops. It's easy for me to say that looking back. My vote would be to hook up with a post-secondary technical college to get apprenticeship material. I know of a local transmission shop owner who used to work for me who did exactly that. Believe it or not, the technical college ended up hiring him as an instructor! His comment to me was, "It's a hell of a lot easier and a lot less travel than trying become a shop consultant. Kids believe me and don't have any preconceived notions." Wow. What an eye-opener. Just don't make the same mistake I did and let opportunity pass you by.

Today I called a former transmission shop owner to check on him and his wife are doing since they retired 15 years ago. Everything was fine with him and his wife. However, he gave me some depressing news about a common friend we both knew. The common friend's name is Rod and he had a transmission shop in Idaho. He informed me that Rod's business had just slowly dwindled down to nothing. No more employees, few if any jobs. Rod is now putting all of his tools, equipment, furniture, and fixtures up for sale soon. How sad. We had become good online friends through a transmission repair website. I really like the guy. We only met in person face-to-face one time at the Transmission Expo in Vegas. What's sad is Rod didn't own his shop real estate; he only rented. His business had shrunk to the point he had nothing to sell except the had assets of the business. No customer list, no vendor list, no company name... nothing. That really tears me up. For those of you who own a shop and are still working, don't let that happen to you. I have made enough posts about what to do when planning your retirement that I don't have to say it all over again. Just plan better than Rod did. UPDATE: Rod contacted me and filled me in; straight from the horse's mouth. I pretty much had the story straight. However, instead of investing in his shop real estate, he invested in residential and commercial real estate for his retirement. That great news made me feel a lot better.

Work Specialization I recently shot a 6-minute video about doing transmission work on highly modified cars and trucks. After I posted it, I suddenly realized, that I was kind of specializing without even realizing it. When I was younger, I really liked high-performance hot rod-type jobs. The more “over the top” they were, the more I loved it. As the years went by, I slowly grew tired of being on both the transmission job itself AND the front counter. That’s a hard way to make a living. There would be times when I would announce to everybody in the shop, “Once I get this transmission done, I’m through with building!” I must have made that statement at least a dozen times as I would inevitably go back to the bench and build one or more units. Eventually, I did finally quit working on transmissions and/or the installation or reprogramming. I was spending more and more time in the office and trying to learn how to run the business, and not the shop. I had employees handle the work in the shop. I remember the Michael Gerber book that said “Don’t work IN your business, work ON your business. That was my “Ah-Ha!” moment. I started crunching numbers, counting jobs, doing job costing, and all manner of learning “the business” of transmission repair. After a couple of years, I was able to see my business in a whole different light. All of these jacked-up, high-performance, and highly modified vehicles were taking twice as long as other plain-vanilla jobs. Wow. That was a real eye-opener. In my mind, I should have charged 2X on the labor. Later, to my dismay, is eventually learned that those same jobs had 3X the number of warranty claims. Sometimes warranty claims were of a minor nature and sometimes they had to be towed back to the shop. Either way or anywhere in between, warranties on those highly modified vehicles were 3 times that of stock cars and trucks. What I eventually learned was that 2X more labor X 3X more warranty claims meant I should charge 6X the price of a pure stock normal job. I remember the job that the 6X price came through so clearly to me. The job was a 1969 Pontiac GTO with a 4-speed Muncie transmission. The customer wanted me to convert it over to a 700R4 automatic overdrive transmission and everything had to work on it. Shifter, TV cable, and oh yes, the speedometer had to read dead-on with +or- 2%. Long story made short, I undercharged the guy because, at that point in my career, I didn’t have sufficient sales skills to sell a job a 6X the price. There’s a transmission shop just outside of Denver that specializes in stuff like that and his prices are through the roof. The owner gave me a tour of the shop and I got to see his operation. I thoroughly enjoyed the tour of ATS transmissions. It’s been over 20 years, but I still remember it. A common transmission swap then, as well as today, is to take out the factory Cummins diesel transmission in a Dodge truck and install an Allison. To give you an idea of how that owner has come, check out this price range for supplying everything you need for that swap. It doesn’t include the R&R labor; you have to do that yourself. Notice the price ranges from $4,650 to a whopping $17,759.34!!! The ATS became my “ticket” to higher prices on transmission jobs that involved ANYTHING that wasn’t stock. I never said “no” to a job. I would price the highly modified jobs from anywhere starting at 2X labor to as high as 4X. I never did develop the nerve to charge 5X or 6X, but I definitely learned to charge more. On occasion, a customer would say “no” to the price and would go elsewhere. By that time in my career, we had a lot more work than we could handle, so losing a job was no big deal. A side benefit of charging more is that our productivity went up and our warranty claims went down. Even with only rebuilding the same transmission that came out of the truck, it too was expensive. Take a GM Duramax with an Allison transmission. Without R&R labor or a torque converter, an Allison transmission bench job would run anywhere from $5,363.95 to $10,611.45! Fluid, converter, and installation labor were NOT included. So, in a round-about way, we were indeed specializing in what we did without even knowing it. We simply used price to “throttle” what we did.

That's great! Good for you. Because we specialize only in transmission repair, I haven't seen a need for a DVI. In it's place, I use YouTube. https://youtube.com/user/LarryBloodworth Before I retired I had put over 2,200 videos on my channel and it really worked well for me. Rarely a price objection. This is the shop I sold at the time of my retirement: https://youtu.be/V89FJzM7KCg

This story is a 2,600-word, 7-page epistle about the ups and downs of trying to make a comfortable retirement. I'm talking about a retirement where you aren't a burden on any family member(s). A retirement where you are self-supporting and living unassisted. Here's the story... https://docs.google.com/document/d/1vh5dIxeJOk36mKMVFmtkLO5JjlOeYhfO_ULJL7WqLSo/edit?usp=sharing And here's a 1:07 video of the shop we sold: https://youtu.be/V89FJzM7KCg

Like you, Bantar, I have never used a DVI system. What worked best for me, in my situation of transmissions repair, was YouTube videos. If we saw anything outside of the transmission, we would shoot an additional YouTube video. YouTube is free and as far as customers are concerned, seeing is believing. If you haven't already read my post about using YouTube to sell work, go back and take a peek. We had a separate video camera for the videos. Nowadays, you can upload a video directly out of your phone to YouTube, A desktop or laptop machine isn't needed. Personally, I don't care for the narrow format video the phones use, but it's not a big deal for most people. To me, DVI = money, and YouTube = free. I would Email/text the YouTube video link to YouTube first. Later (ideally after they view the video) I would send the written estimate as a .pdf. The written estimate to me is as good as a DVI report without the cost. In 8 short years, my YouTube channel (https://www.youtube.com/user/LarryBloodworth) amassed over 2,200 videos. Because I recently retired, I've been adding a few non-sales videos to my channel. I recently tried to upload a YouTube Short (15 seconds or less) to see how much YT has changed since I retired. It changed a little, but it's not that different. Showing a transmission disassembled on the bench usually averaged around 3 minutes. Some longer, some shorter, but 3 minutes is the average. Heck, test it out for yourself. Make sure you have a YouTube channel and the YouTube app on your phone. You can Google on how to do it for yourself. Good luck!!!