Transmission Repair

Sim Another great post, Matthew. Similarly to you, I got into shooting videos a lot during the waning years of my career just before I retired. Yeah, the equipment was expensive, but I loved it. I started only after I learned of YouTube in 2006. I started posting on YouTube in 2007. Most of the videos were short, 3 to 5 minutes explaining what I found on the customer's transmission. Basically, I originally started using YouTube as a sales tool. Eight years later, I had over 2,100 videos on my YouTube channel. https://www.youtube.com/c/LarryBloodworth

A great post, Matthew, thank you. (LONG POST WARNING) In the earliest days of my career in the 1970s, I went from being an assistant manager at an auto parts store to being a general repair technician. Due to my exposure to a transmission shop owner during my auto part store days, I grew to like transmissions a lot. Although I made a decent living doing all the G/R stuff, it paled in comparison to the money I made taking on an automatic transmission repair. Somehow, I took to transmission repair like a duck takes to water. I read A LOT about any transmission job I was about to take on. Although my love of transmissions was what originally got me started on transmissions, it was the increased income that kept me there. If I was the owner of a G/R repair shop today, that same line of thinking is still what I would do today. First off, I would not change a thing with the way a shop does business today. However, I would job cost every single R.O. for at least 1 year. After a year of job costing data, I would shift my non-specific marketing/advertising to only the most profitable type of jobs. Even my signage on both the building and non-attached signage would only advertise my most profitable services. Another variable to consider in addition to the profitability is the risk factor. Let's face it, some jobs are inherently more risky than others. I believe that the complexity of today's vehicles demands that kind of thinking for G/R shops to prosper today. For the type of work that job costing shows little, if any profit, I refer that type of work out. Whether those jobs are sublet, or direct referral, would be a choice each individual shop owner to make. I once bought a list of DMV data from our state's DMV. I was forced to learn (as in a crash course) about spreadsheets and spreadsheet report writing. I made a lot of business decisions based on the data. The biggest shocker was to learn that ALL of European makes combined only made up 5% of our state's DMV registrations. Everytime a Euro job came in, it almost always ended up being a royal PITA. So, based on that data, we quit taking in any and all Euro makes. However, I still had 95% of the market and none of the Euro headaches and risks. In another shop specializing move before the internet, was by filtering for diesel engines. I created a list of only vehicles with diesel engines based on the 8th character of the VIN. We sent out mailers to only those diesels on the list for a loss-leader fluid and filter service. We ended up with a lot of service jobs, of which 11% converted to major transmission work. So, in a nutshell, I do believe the shop of today has to specialize in some shape, form, or fashion. Otherwise, it's very hard to be profitable beyond the shop owner's paycheck.

I have always issued a weekly paycheck based on actual hours worked, or salary, depending on our agreement when hired. I have never paid flat rate because I don't believe in that antiquated system. Because of that, it was up to me to market our shop well enough to keep everybody busy. In our shop, I managed to keep everybody busy, all the time. In my opinion, the flat rate system allows a shop owner to get away with poor marketing and sales at the expense of the employees. Early in my career, I worked flat rate in a dealership and quickly came to the opinion that the system is inherently unfair. I eventually quit the dealership and went back to work at an independent shop. That one experience of working flat rate is why I never did believe in paying employees flat rate.

We didn't have air conditioning, but we did have evaporative coolers (aka swamp coolers) out in the shop. Like you, we did have A/C in the office. Evaporative coolers only work in low-humidity areas and drop the temperature about 20F from the outside temperature. We are in the Salt Lake Valley and the humidity rarely exceeds 36%. To add to that, the valley floor is 4,500 ft. above sea level. As we say it around here, "High and Dry". Cold drink cans don't even sweat. We also had high ceilings with a 20' eve height roof. The lower the eve height, the easier it is on any A/C unit. The few shops I know of that did have A/C out in the shop, the A/C unit itself was massively oversized for the square footage. A lot of cold air is lost every time a garage door is opened to pull a vehicle in or out of the shop. With your shop being in Portland, Oregon, I don't think an evaporative cooler would be very efficient. I looked online and Portland's humidity is rarely below 63%, nearly twice our humidity. I'm originally from Houston where the average humidity is a sweltering 89%. I would like to think that any shop getting air conditioning for the shop area would be a great morale-booster. It would speak volumes about what you think about your employees. Good luck on your decision!

Some accounting issues can differ, based on the owner/bookkeeper preferences. This is such a case. There is absolutely nothing wrong with doing it the way you are currently doing it. If you choose to expense it all off, that's OK. All that matters is that you're aware of it and know what's going on. Some business owners want to know every little detail (sometimes called profit centers) about their business. I used to be that way, but because of it, my Chart Of Accounts was a huge list. I finally got tired of it and started consolidating some of the accounts. Judging from what you wrote, I think you are good to go just as you are. No changes needed.

So, you specialize in BMW and/or European vehicles? Eating the fee for U.S. brands is not a bookkeeping issue, it's a business issue. To be clear, do you also not charge BMWs because it's "programming is included in my tool's yearly subscription.?" Please clarify.

Help me understand you better. You're incurring an expense for programming, yet your shop receives no revenue for programming. Is that correct?

Your link doesn't work.

I group anything having to do with computers to run our business into one category. Another category is the same thing having to do with the shop computers to fix vehicles. I used to break it all out and had a butt-load of different categories in my Chart of Accounts (COA) that after a few years grew and seemed to take on a life of its own. After about 15 or 20 years, I had my COA list down to about 40 account categories. It's really easy to break every little thing down to its own category. I just got tired of all the account categories and the high likelihood of miscategorization it engendered. To me, a COA list is your own preference. Some people like to know every little thing, and some do not, like me. The only way you can get into any real trouble is from MISCATORIZING an expense or a Cost Of Goods Sold account. My acid test to answer the question of "Is it a COGS or is it an expense?" is this: "If you didn't have a single customer and did no repairs for a month, would you still have that expenditure?" You would have no parts, no labor, no towing, etc. If the answer is "yes", it's an expense. If the answer is "no" it's a COGS.

Here are some great ways to interview and hire prospective employees. In addition to having a job application on a shop's career page of their website, also have a video tour of your shop. Additionally, use FaceTime or Zoom for a "virtual" interview online. After that, if you choose, invite them down to your shop for an in-person interview. Make sure you have a list of questions for both the online and in-person interviews. Here's more on the WSJ article that made me think about hiring new employees. Few shops can afford an HR department and we, as shop owners, don't have a lot of practice in the job interview process. I think the best way to get high-quality prospects is by a referral from your current employees. With that being said, it still doesn't make a case for not using the need of video(s) in the hiring process. Make sure you don't over-promise and under-deliver in all facets of the hiring journey. Landing A Job

Here's an ad in the latest (6/24) issue of Transmission Digest. I've paid more. $2,000/wk. or $104k/yr.

Welcome to the forum! This is where we share and learn from our experiences.

First, I'd like to thank you for your monetary support of this group. Membership does so much more than merely pay the bills. Your two previous posts are very insightful. For our members who may feel they need help with setting up KPIs, they can go to https://www.kpi.org/ However, as Joe said, your previous example of helping techs acquire tools can also serve as a template for other member shops. Thanks for the tips! We need more members like you.

I've only hired 2 dealer technicians and was happy with the results because I already knew what to expect. The reason I say that is I was once a dealer technician myself. One tech applied for a job and the other one, I literally "stole" from a nearby dealership. Hiring a dealer tech gave me more than hiring someone out of a trade school. They know more than the old "righty-tighty, lefty-loosey". Even though they have more experience on a particular car line, don't forget that the vast majority of what they work on is a much newer year model. Their (hopefully) years of experience on a particular car line doesn't help much on the older car make(s) that are so common in the aftermarket and independent shops. They pick up on new things much quicker than trade school students. In both cases, the techs were grateful to NOT be on flat-rate. It was like an instant pay raise from their point of view. I can't think of anything negative about hiring a dealer tech. It may be in both cases, we were hurting pretty bad for a tech. Today, everybody seems to be talking about "the technician shortage." I think a lot of that is because of today's much better industry communication through the internet. Looking back on my 40-year career, I can't think of a time when good technicians weren't in short supply.

I thought this was a very good article. Before we sold our transmission repair business in 2015, my last hire was coincidentally hired at $104 K/yr. I don't regret it even though it was over 10 years ago. Now, more than ever, such wages have become closer to the norm, not the exception, for a top-tier technician. Read and enjoy. How to afford a $100,000/yr. technician

How our industry is currently paying technicians... https://www.ratchetandwrench.com/running-a-shop/human-resources/article/55038486/numbers-how-auto-repair-shops-pay-technicians

The lure of cheap rent is a universal rookie mistake resulting in a low/no traffic count. Cheap buildings are affordable for a reason. One of the best pieces of business advice I ever got was, "Expensive rent is the cheapest advertising you'll ever buy." From Roy H. Williams in Austin, TX. With a killer location, a shop won't need Repair Pal or Open Bay.

Try https://www.convirza.com/pricing/ for all of your call-tracking needs. It is very economical and accurate, letting you know what works and, more importantly, what doesn't. 🙂

With any paid advertising, the use of a call tracking pool is the only way to accurately measure the ROI.

The average household income in Draper is $164,948 with a poverty rate of 4.1%. The median age in Draper is 33.6 years: 32.5 years for males, and 34.7 years for females.

3:16

Here's what happened when we moved our shop's location from a lower-income area (Lindon, Utah) to an affluent area (Draper, Utah) Some of the links are broken because I wrote this piece in 2011.

I'm really impressed with Hireology.com A very good intro is a 1-hour video at https://youtu.be/2ZF1XWH94xc A 10-page .pdf is at

I used Google Pay-Per-Click advertising to grab the bull by the horns and CONTROL the work in our transmission shop. I've posted about this before. Normally, our ads would show within a 5-mile radius of our shop. If it got slow, I would increase the radius. If we got really busy, I would either reduce the radius or sometimes PAUSE all PPC ads. Over time, I got really good at it. The purpose of the ads was to get people to call, and we would set an appointment from there. Clicks were, on average, about $12/click and it would take about 3 clicks ($36) to set an appointment. We did that up until my retirement in 2015 when I sold the shop. We were consistently averaging $1.2M/yr. in gross revenue.

No wholesale for other shops. I avoided warranty companies like the plague, mainly because of the hassle factor of plugging up our production. We only did retail jobs and left the rest to other shops to do. We had plenty of work to do.