Transmission Repair

Yep. At least I have the time to do what I want.

How to calculate your Effective Labor Rate (ELR), 4:43 https://youtu.be/impbO1QXUIE HourofLabor.pdf

The second video at the bottom of this page will help members to calculate a labor rate. While this was specifically designed for dealerships, a lot of the same principles can be applied to our shops. No need to see what others are charging, we charge off our costs. https://chriscollinsinc.com/training-videos

F ord Issues Park Outside Warning for 2021 Expeditions and Lincoln Navigators

Risk of fire if left unattended...

Yeah, that video was shot in 2009. I've gained weight and aged a lot since then. 😞

The recall below says it all...

This is a repost from another forum. Things could be worse. There are two different transmission shop owners in the Salt Lake valley who are still working every day. The problem is that both of them are in their 80s. :-( I've done consulting for both. As soon as I get the ship turned around and leave, they go back to doing the same thing as before. Frustrating. It's a sad situation. One of them still works the counter and the other one runs around between his 4 locations. They both desire to retire but either can't afford to or don't want to. It makes me feel so fortunate that I was able to retire when I did. All I can say to the other members of this group is "Don't let this happen to you."

I found this handy-dandy shop valuation tool. Check it out! https://autoleap.com/business-valuation-calculator/

Joe, as I said in my original post, one of the conditions was that I would ONLY use the video on our website, and no other medium. In other words, no TV, social media, or other commercial use. The TV station was not involved. The guy did it "on the side" so to speak. It was difficult to quantify the results, but we did see a definite increase in business; about $35K/mo. As an update, soon after, the reporter left the TV station and his son took his place. The reporter then turned what was originally a side job into a full-fledged business that became known as Gephardt Approved His son is https://ksltv.com/our-team-members/matt-gephardt/

Depending on how many hours a tech is flagging, $40/hr. can be tough with the rampant inflation. My question would be, "why didn't the shop offer to at least match the dealership?" It may well be there's more to the story than just pay. How about working conditions?

Happy Mother's Day! There are lessons to be learned from my following post. Back in 2010, I contacted an investigative reporter for a local TV station. Most markets have at least 1 TV station with such an investigative reporter. I asked him if he would help me do a promo video for our shop. He agreed but said "a small fee" would be involved. The deal was for $800 and that I would only use the video on our website and no place else. I agreed. A week later he shows up with a camera crew and the video was shot. They did all the video editing. The video gave our shop instant credibility because it was done by a trusted local investigative reporter known for being a consumer advocate. We experienced a significant increase in business due to the video being on our website. That, coupled with having the top spot in Google search results was an awesome 1-2 punch. I'm not posting this to brag or say "Look at me." I'm posting this so others may honestly learn or possibly do something similar at their shop. 3:03 https://youtu.be/Loo6V7Nln-o?list=PL1ua0YI0uLXvZq0qWPNO-ujc7XTpgmLOV

I have no experience with Kukui, but I know of them. Personally, I would not hire anybody who doesn't use call tracking so you can SEE the effectiveness of your PPC. Paid call tracking is much better than Google's free call tracking. Not enough data with Google. Check this spreadsheet out:

Hiring a PPC company is how 95% of the shop owners handle their PPC marketing. You're not alone, there. I devoted a huge amount of time learning through reading, YouTube, and a lot of trial & error. The reason I spent so much on PPC was I was always #1 at the top Google whenever anybody searched anything related to transmission repair. I thought of it sort of like a "contest" to always be listed at the top simply because that's usually the default choice for most people searching. With that being said, most shop owners don't have the energy or time to learn PPC marketing like I did. I usually stayed in my office and once I got home, I would try to learn more or come up with more keywords. I started out with well over a 1,000 key words and over time, I whittled down to only 30 or so. It was a lot of fun while it lasted. However, when the new owner took over the business, one of the first thing he cut was PPC expenditures. Transmissions aren't like regular automotive repair shops where you develop relationships and get repeat business. If we get repeat business, it's more that likely a warranty job or somebody with very bad luck. 😞 I learned transmission are normally a 1-shot deal and a prominent listing at the top of Google is much more crucial than in general automotive repair. The only way I could actually measure effectiveness of PPC was to use call tracking That way, I knew what jobs came in from PPC and which ones didn't. I used edit[1]

Get A Life We sometimes get so buried in our day-to-day stuff, we often forget about promoting our business to keep us busy. Let's not confuse busyness with profitability. We juggle things at home and in our businesses. In the early days, I would commit to a full-page Yellow Page ad. However, I would put an unlisted number in the ad to where if the full page ad didn't work out, I could simply cancel the number and not have to be responsible for the ad. The full page ad was $1,000/mo. OUCH! I never found it to not be profitable until YP was replaced by the internet. I moved from Yellow Page thinking to internet thinking and it was quite the transition. I learned the internet was so much more powerful. With a few mouse clicks, I could turn off or turn on my paid ad. Wow! I hired internet ad agencies but wasn't happy with the results. I eventually decided to do all my internet advertising myself via a crash course in learning by trial and error. I not only watched a lot of YouTube videos on the subject, but I also read. A lot. More than a lot because I love to read. That's how I learned transmissions and now, it's how I would learn paid advertising online. It was an awesome change for me. My mouse and keyboard suddenly gave me an infinite amount of power. I became my own internet promoting service. I felt better about every dollar I was spending because I was in control. It cost me nothing except for the ads themselves. There was no need to pay someone else $$$$ to do for me what I learned to do for myself. It was great. I slowly learned the MORE I paid for Pay-Per-Click (PPC) advertising, the more business I would get. I eventually learned the ratio was 12-to-1. For every dollar I spend on PPC ads, I would get $12 worth of new business. Annual sales went from $700K to $1,2M seemingly overnight. And I was only spending about $50K/yr. for my advertising, all in. Spend $50K to get half a million more in business? I'm in. I suddenly (2 years) went from a builder to a PPC expert. Anything to get me off the bench. 🙂 lol! I was simply getting older and was happy about the change. My advise is for you to do the change. I simply learned that rebuilding didn't pay near as well as well as running my internet PPC ads. It was simple 2nd grade math. My best advice is to follow what I did. It will pay you ENORMOUSLY.

I wrote this over a decade ago and it answered 4 important concepts about virtually every problem that could happen in a shop or to a shop. It's titled "CLARITY".

Periodically, every shop needs maintenance in multiple forms. Ours included... Air Compressor Spray Cabinet Parts Washer Recirculating Solvent Sinks Water/Oil Traps Evaporative Shop Coolers (Swamp Coolers) Office HVAC Filter Changes Parking Lot Stripes I got really tired of training new employees on how to perform these maintenance duties. Training usually involved employees watching me doing all the maintenance duties. I had been using YouTube to sell transmission work since YouTube came out in 2005 and it finally dawned on me. Why couldn't I use YouTube for maintenance duties? So over the course of a year, I made about a dozen short videos on how to perform the various maintenance duties require around the shop. Suddenly, teaching new employees how to do maintenance became so easy. I'd assign them a chore to do and pull up the video for that task. Since I've retired, I deleted most of those videos but I did manage to find one on servicing our air compressor. I hope this gives other shop owners ideas to do the same. Here's the video... 1:44 Servicing The Shop Air Compressor 1:44 Cheers, Larry [email protected]

Here's multiple short videos on hiring techs from ActAutoStaffing.com Auto Jobs, Shop Jobs, Employment, Auto Jobs, Mechanic Jobs | ACTAUTOSTAFFING.COM Cheers, Larry [email protected]

Well put Joe. Some accounting software places the labor under expenses, including office payroll. I need to make it clear the office payroll and technicians' payroll are in two different categories. Technician's payroll is a Cost Of Goods Sold (COGS) account and any office payroll is under an expense account. Another is the owner's pay. If he/she works predominantly in the shop repairing vehicles, their payroll is a COGS account. If he/she works mostly in the office, then their payroll is an expense account. In either scenario, the shop owner's pay should be commensurate with what a normal employee would be paid for the same job. The owner's pay IS NOT the net shop profit. This was a hard concept for me to grasp early on. In the beginning, I thought my pay was what (if any) money was left over in the checkbook. Later, I began to think the net profit was my pay. Much later in my career did I finally learn the concept of my pay should be commensurate with what a normal employee would be paid for the same job. Throughout my career I was always learning more and more about accounting and that was a good thing. Cheers, Larry [email protected]

This article is 7 months old but nonetheless important. For those of you who use QuickBooks, now Mailchimp is part of QB. You can use the Mailchimp software and send Emails to groups of customers. Here's the article from the September 2021 issue of Fortune magazine. https://fortune.com/2021/09/13/intuit-to-acquire-mailchimp-in-12-billion-deal/ Cheers, Larry [email protected]

Like Joe said, that's not even relevant. We were (I'm retired since 60, 7 years ago) a transmission specialty repair shop in the greater Salt Lake Market area of Utah. 2015 was the last year I was in business. We based both parts markup and labor profit to obtain a 60% gross profit margin and a 20% net profit before taxes. We charged by the job, not by the hour, however, when calculating the job price for a routine repair we used $125/hr. and that was 7 years ago! Because of inflation, everybody expects things to cost more. Right now is an IDEAL TIME to recalculate your prices. If you've read any of my previous posts, you'll know that on the rare occasion somebody asks how much we charge per hour, I always say, "We charge by the job, not by the hour." That worked 100% of the time. Take your COST of parts and labor for any give period, the longer the period the more accurate your calculations will be. Divide that figure by .4 (inverse of 60% gross profit) to arrive at what you should be charging overall. You can break it down from there. Continue to monitor and adjust your prices until you reach a 60% gross profit. Let's say your parts and labor costs you $100K in a given period. (month) Divide that by .4 (40% costs) and that is what you should be SELLING parts and labor for. EXAMPLE: $100,000 costs divided by .40 (40%) = $250,000 revenue or $150,000 (60%) gross profit margin. That sounds like an awful lot, but isn't really. All your expenses including rent, taxes, insurance, tools, equipment, and etc. all come out of that $150K, so it's really not that much. Others may have an alternative method to calculate your prices, but that's the one I use in the transmission business. Many business accounting software packages like QuickBooks and others can help you monitor individual accounts for profitability. Separate accounts may be higher or lower than the 60% gross profit number but just remember what you really need to track is the OVERALL profitably of your shop target of 60% gross profit. Cheers, Larry [email protected]

Covering The Cost Of Marketing After quite a few years in business I learned the inverse of the rule that a business's price should cover all costs. Early on, whenever I considered something new, or something that would make my job easier, or improve business, I would often think "I can't afford that." After a number of years in business, I slowly learned I could afford any of those things as long as I raised my pricing structure to cover those new costs to doing business. I soon learned very few people were giving me price objections when closing sales at a newer, higher price. I felt good about my prices because I knew they were rightfully justified and not some willy-nilly price increase. This was especially true when considering any new technology for your shop. What once was considered as a luxury item is now very essential. Shop Management Systems, Digital Inspection, and Text Messaging soon became our industry's norm. Soon, I proved to myself that SEM (paid Search Engine Marketing) coupled with call tracking was just as essential. SEM is sometimes referred to as Pay-Per-Click (PPP). Here's a little history... Our annual sales at our transmission shop had plateaued at $700K before SEM and call tracking. Cautiously, we dipped our toe into SEM at first. Later, we tried call tracking with only 10 phone numbers. Combined, we were spending about $1K/mo. and we saw an $8K/mo. increase in business. To make a long story short, I came to learn the more I spent, the more our sales grew. Eventually, we were spending a combined $5K/mo. on SEM and call tracking with 100 phone numbers. I have to explain why so many phone numbers. Ninety-two of those numbers were in a "phone pool" with a 10-day cookie attached. Whenever somebody did a search for anything transmission-related, they would have one of those numbers attached and display on our website. Each different search would get a different number out of the phone pool shown on our website. It would take too long to explain the technology but let it suffice to say that the call tracking company handled it all with a couple of lines of JavaScript added to our home webpage. After 10 days, the cooking would expire and go back into the Phone Pool to be used for another search. The rest was all done behind the scenes on their servers. It seemed to me, the more I spent, the more sales went up. I leveled out at $5K/mo. only because of the limited size of our Salt Lake City area market. We appeared on every search and the very top listing on most searches, if we weren't at #2. I learned there were only about 1,300 transmission-related searches per week. I couldn't pay any more simply because there weren't any more clicks to be had. In the course of a year, our sales went up from $700K/yr. to $1.2M/yr. which is a $500K increase for less than a $60K/yr. investment. During this year of learning and growing, I slowly raised our prices to cover the new increased cost of doing business. In my mind, I wasn't paying for it out of my pocket, my customers were paying for it. It worked out to cost 12% of the $500K/yr. increase in business or 5% of the $1.2M/yr. in total sales. I ended up raising our overall parts & labor prices about 8%. Nobody even flinched, let alone complained. I think this sort of mindset when considering any new technology should be the norm. I don't know of a shop that doesn't try to cover its' cost of doing business. Just consider raising your prices to cover any new tool, equipment, or technology. In my next post, I'll talk more about SEM and call tracking.

My biggest piece of advice is to own your own shop and real estate, along with your home. That will come back to you in spades. That's the situation we were/are in. Like I've said before, we have no monthly payments to speak of. Property tax, insurance, groceries, utilities and a little gas is all we have monthly. We paid off and cancelled our credit cards because we don't need them. My wife calculated that if we made ZERO on our investments, we could still afford our lifestyle till our mid 80s. We're in some investments that will never lose the principle. That's good enough for me.

When I worked for Aamco, they had a similar lead sheet. However, one of the owner's complaints were how the store manager was judge and jury of what constituted a lost lead. The manager would often classify lost leads as a telemarketing call. Very few, if any, lost leads. I think every shop should use call tracking. I could enumerate all the benefits and features, but that would take too long to do it justice. Check out the call tracking company I used. They'll give you a 30-day free trial with 10 phone numbers. https://www.convirza.com/ Some of the things they can do are: Record and score caller and respondent. Tell you the lead source. Tell you both the raw search term and keyword source of the call. How many calls. Custom-tailor it to your needs. I had the scoring where the AI engine had to hear the word "appointment" at least 3 times on our end to have a decent score. At one time, I had over 100 phone numbers in a "phone pool" because we had so many calls. 300 to over 500 phone calls a month were not unusual. We kept a spreadsheet on it only for a couple of years until I had proven to myself our system was off the charts. We were using paid ads on Google, Bing, & Yahoo to the tune of $50K/yr. (4.2% of gross revenue.) You can check it out here and ask any question here, or Email me at [email protected] Phone Calls vs. Sales 2011 & 2012

Yeah, Joe, we had different profit levels on different parts, labors, and whole jobs. What I learned to pay attention to was the overall gross profit of the business. It was very easy for me due to learning accounting through an early SMS I invested in named Digitree out of Colorado. They were eventually bought out by Mitchell and Mitchell quit supporting the repair shop version and only supported the body shop version. Later, I eventually went to a transmission shop-only software program called TransShop 1-2-3 by Larry Kuperman. (now retired) He stole the idea from Lotus 1-2-3. I learned a lot of easy management tricks through DigitTree. At the end of the week report, I would also print (remember dot-matrix printers?) out checks for that week's sales tax and 941 tax. At the end of the month, I would pay my 941 with 4 checks. We paid sales tax quarterly and I would pay that with 12-13 checks. That kept our bank balance from looking overly inflated giving me a false sense of security. Even worse, I wouldn't spend the money on something non-essential. It simply blows me away at the number of small business owners who don't know accounting. Reminds me of a young rebuilder I hired (early 30s) who had been building transmissions for about 10 years. Depending on the year model of a certain transmission, the steel plates and friction plates were of different thicknesses. I told him to measure the old ones to know which ones to use. I then learned he couldn't read a mic. I asked him how he could go so long not being able to read a mic. He said his old boss had a digital read-out mike, dial calipers, and a dial indicator. He had never learned to read a mic the old fashion, but standard, way. That young builder reminded me of small business owners who don't know accounting nor do any in-house accounting. Many have an accountant for all of that and the P&L and balance sheets they get from their accountant are basically an obituary as to their financial picture. They are often a month, a quarter, or heaven forbid, a year old. There are plenty of ways to learn accounting. Online, books, and even YouTube can all teach standard accounting principles and practices. It's not that hard and definitely not rocket science. Even the numbering of groups of accounts is standardized. For our members who don't, I would strongly suggest bringing all accounting in-house and only using an accountant, or CPA like we did, only annually.