Transmission Repair

What does it matter what other shops charge? To me, that's not even relevant. I base OUR labor on OUR costs. I say piss on the competitors' labor rate. Their labor rate is mostly based on competition and what the market area can bear. I base our labor charges on the job, not by the hour because we are a transmission repair specialty shop. There's a whole lot of the same thing over and over. Business volume, production capability, and efficiency rate will affect labor rates. I use the following profit model: Parts = 20% Labor = 20% Expenses = 40% Profit = 20% And I work backwards with those percentages to calculate parts and labor rates. G/R is different but that's how it's done in the transmission repair industry.

We use YouTube to help sell transmission work because transmissions are usually big money. I shoot a short 2-3 minute video and either Email or text the link, followed with a .pdf of the final estimate. Final estimates are always written in stone. If we find something else that needs to be done, we eat it. The video is basically a bench sale after a teardown of the customer's transmission to let them know what the parts will run. They already know the labor. In only 7 years, I ended up with over 2,200 "Show-N-Tell" videos on my channel. ( https://www.youtube.com/user/LarryBloodworth ) Transparency sells. Half the time I either get a phone call, text, or Email giving me an indirect approval by the customer asking "When will it be done?" No conversation needed. The other half the time I need to handle sales objections, usually over price. YouTube is our secret weapon for transparency and increased sales. I like assumptive sales much more than conversational sales because I'm not that good of a talker.

The best way to find out if they pay their rent on time is to ask their current landlord. Look at how they pay their property taxes; it's public record in most states and readily available. I would think twice before I sold or lease to someone who has never been in business before. List you business/property on BizBuySell.com and LoopNet.com. They work really well. I had a buyer for our real estate within 3 weeks on LoopNet.com. You can also find buildings/real estate to lease on LoopNet. Today, in 2022, it's much easier to find something to lease or buy than ever before. It sure beats the old fashion method of just driving around and looking. Another thing to consider is the daily traffic count. We were blessed being on I-15, the only north-south interstate in Utah. The daily traffic count was around a quarter of a million vehicles a day. A good location with a high traffic count is very important to the success of any shop. No matter what, do your due diligence whether you buying, selling, or leasing a shop. Don't do like I did and half-ass it.

To add to my previous post, I also learned that by pausing and unpausing our AdWords campaign, I was able to somewhat control the influx of business to match our production capabilities. I was never able to do that before. It was like they say, "feast or famine" with absolutely no control over it. It was difficult, if not impossible, to give every customer a great experience with an uncontrollable work load. With phone numbers becoming so cheap ($2 ea.) I was able to get enough tracking numbers to see what campaigns worked and which ones weren't. I used a company named Convirza (https://www.convirza.com/solutions/by-industry/automotive/ ) for phone tracking to see where calls are coming from. I also used their feature of Call Analytics which would score phone calls. They even customized their analytics to where they had to hear the word "appointment" at least 3 times from our end of the conversation to see if we scheduled an appointment. I would use a different phone number on each campaign, advertising, and even business cards. After a year, I learned specialty advertising like pens, calendars, and refrigerator magnets don't generate any phone calls so I quit all that nonsense. I would even have different phone numbers for different keywords in AdWords. By far, the hottest keyword was "transmission repair" followed by the same keyword with the prefix of a car make. All phone calls were also being recorded. I would listen to high opportunity calls where we didn't set an appointment. It was great. If you haven't used call tracking before, Convirza has account managers that will set you up, teach you, and walk you through the whole process. Try it and you'll never go back to the old way again.

I only half-assed qualified him. I saw he was years behind in property tax on 3 of his other locations. So, I set the rent with an extra $1K/mo. more at $11K/mo. which gave me enough money to pay the property tax. Everything else, like you suggest, he let go to hell in a handbasket. In 5 years, sales went from $1.2M/yr. to $400K/yr. That now made his rent 33% of his revenue and was the reason for him skipping out of a 10 year lease. I should have exercised more due diligence. Let this be a lesson for all.

Yes, this is true. While perhaps not so true with G/R shops, here's what worked best for us: A self-managed Google AdWords program. The average click cost us $11 bucks and it took about 3 clicks to land an appointment. 75% of those appointments turned into major work. Our total customer acquisition for a major job ended up being about $44 bucks. We were averaging about 350 calls a month. Now remember, we're a transmission-only repair facility with only 4 lifts. We got so overloaded sometimes that I would actually pause all campaigns to just let us catch up and catch our breath. Like Joe said, a great customer experience is key. It's really hard to give a good customer experience when you're 3 weeks behind. When a transmission fails, people need their vehicle NOW!

I never knew this until today! 3:01 I thought I'd share.

I'll say! It's terrible, sad, and pitiful all at the same time. I don't really like talking bad about anyone, but this guy takes the cake. I've been taken to court by a customer ONE TIME in my career and that's where I met this guy. He had 2 customers in a single day. He goes to court regularly, usually monthly. He usually wins because his R.O.s and warranty have so much "fine print" and conditions. Half his shops don't even have lifts, they have oil change pits with drive-on ramps. How'd you like to R&R a FWD transmission without a lift? Most of his installers are novices and don't know any better. I've never been a landlord before selling my business and leasing my building to this guy. I couldn't have picked a worst tenant if I'd tried. Lucky me, huh? I sold my building to a young plumber with a fleet of 40 trucks that was a pure pleasure to deal with. I only wish I could have had him as a tenant. If I had to offer some advice to others, I would suggest to do a background check on tenants and not just take money from the first guy that has it like I did. Investigate the buyer. Be selective.

Thanks Joe. I've always rented and didn't start owning until 2013. Better late than never. The guy I originally sold the business to just turned 80 and is still in the daily grind with no relief in sight. He once had as many as 10 transmission shops. He's now down to only 4 shops. He has a stack of customer complaints, law suits, and an 'F' rating with the BBB. I have an $85K judgment against him that isn't worth the paper it's written on. He's in a sad, sad, sad position. I feel sorry for him and his wife. Even his son quit and went to work for somebody else. Here's a lesson on how to single-handedly wreck your own retirement: https://www.bbb.org/us/ut/salt-lake-city/profile/transmission/tanner-transmissions-inc-1166-85050006

When do you sell? In my 40-year career, I've owned 3 different shops, all with the same name, and in the same business of transmission repair. In the first two, the top line was growing, but the bottom line kept shrinking. I thought I could "turn things around" and hung on to the bitter end. I ended up with nothing to sell because who wants to buy a job? I had nothing but equipment to sell. My 3rd shop was the charm. However, I saw the same pattern start to happen all over again. Instead of hanging on to the bitter end, I chose to sell why I still had something to sell. I was 60 and had enough. It took me 7 months of doing mental gymnastics to finally decide to pull the trigger and sell. I called my 3 largest competitors and told them I was selling. They all knew our shop was the highest grossing transmission shop in the state. My competitor with 6 location came over the next day. A week later he sent his CPA in to audit the books to make sure I wasn't blowing smoke about our numbers. From the time I decided to sell to the day we signed the papers with the multi-shop owner and I got my money was only 6 weeks because I had something to really sell other than equipment. I had cash flow and an accountant for a wife and business partner. Having impeccable books is key, especially if you choose to sell. My advice? Don't hang on thinking you can turn things around. Sell your business while you still have something to sell.

I retired 7 years ago at the age of 60 after 40 years of transmission repair. I'm currently 67 and my wife is 69 and an accountant w/2 degrees. Let it be known that she was as much a part of our success as I was. She was a single mom raising 3 boys while working 2 and 3 jobs at a time. Although I was a production transmission rebuilder for the first 15 years of my career, I've been self-employed for the majority of my life. We sold our business in 2015 to a local multi-shop competitor. Another stroke of luck for both of us is that we met in 2007 on Match.com. Crazy, huh? She invested most of the real estate proceeds into high-yielding mutual funds to give us a nice monthly income. The house and cars (including her 2021 RAV4 Hybrid) are all paid for. Before we met, I didn't plan, save, or set goals much. I just lived week to week with a management style I call "management by checkbook". Enough can't be said for the women in our industry. If I had to offer some advice, I would say to own your own shop real estate. We bought ours from our landlord on an owner-financed deal. We rented the first 5 years. Call it luck or destiny, I still think it was more luck than anything. J. Larry Bloodworth, CMAT Draper, Utah 84020 [email protected]

Thanks Joe. Like I said, I just got lucky. Tripling my money in only 7 years of owning real estate is more the exception than the rule. Just to be clear, I only cleared $1.9M. J. Larry Bloodworth Draper, Utah 84020

I got really lucky. I retired 7 years ago after selling the business and leasing the real estate. Joe's right about that not being enough to retire on. However, last year I sold the real estate and that ended up being my retirement. One year ago I sold the property for 3 times what I paid for it in 2013 for $2.3M. THAT was enough to invest and retire comfortably on. Once again, unlike our president, Joe's right. Here's what I sold. 3/4 acre parking with a double fence and 243K/day traffic count.---> https://youtu.be/V89FJzM7KCg

Use a PowerProbe to find out. It's not very hard. Power Probe 4 Master Kit

Most shops can't afford radio but radio recruitment ads are the only thing that works in market area SLC. Our starting pay was the "hook".

I'm currently 66. I retired at 60 after 40 years in the transmission repair business. I feel sorry for many older owners (70s-80s) who are WAY PAST retirement, but still working because they have to. 😞 The guy I sold the business to was 80. That's no way to live, in my opinion. I feel humbled and blessed for my situation. I some owners who don't have a business, they have a job. Ever try to sell a job? Those types usually just sell the tools and equipment because that's all they can find a buyer for. Nobody is willing to buy a job. During my last 7 years, I maintained accurate records to prove I had $1.2M/yr. in sales with a 21% net profit (before taxes) because I knew I was going to retire. I just didn't know when. My wife and I paid ourselves $100K/yr. collectively, before the 21% profit. The guy I sold the business to folded after 5 years due to sales falling to $400K/yr. The $11000 monthly rent became 33% of sales. I purchased the building in 2013 for $860K. After he folded, I sold the building for $2,3M+. We had a small shop (3K sq.ft) but a HUGE parking lot. This is the only shop I've seen that didn't have a parking problem. Here's a short 1:07 video of the shop:

Rent was 11% of sales. https://www.bbb.org/us/ut/salt-lake-city/profile/transmission/tanner-transmissions-inc-1166-85050006/complaints https://www.yelp.com/biz/tanner-transmissions-salt-lake-city-17 The reason he closed was business got down to $400K/yr. due to many complaints. He also closed a second shop.

"Rent was 9% of sales. The shop was doing $100K/mo. consistently. The new owner let it fall to $30K/mo. Rent became 36% of sales due to low business. He closed this shop and another one he had for the same reason. Lack of sales, management, and marketing. Big parking lot, high traffic count, near a 12-dealership auto mall. https://youtu.be/V89FJzM7KCg

Expensive rent is the cheapest advertising you can do. We were located right on the I-15 freeway in Draper, UT, which is a suburb of SLC. 260K/day ADTT. We were doing $1.2M almost immediately. Bought the building in 2013 for $860K. Retired in 2020. Sold the business and real estate in 2015 for $2.6M, mostly cash. Buyer folded after 5 years and now it's now a plumbing repair shop. MyBuddyThePlumber.com paid all cash.

First, we are a transmission repair facility and nothing else. No GR. What's your definition of your customers saying your prices are too high? Is it when they say "No" when trying to sell a job or, when they vocal with you and tell you straight up? I'll assume it's the latter. I choose to ignore price complaints because they are simply irrelevant for the most part. Transmission prices are all over the map. -HOWEVER- I worked hard to keep tabs on my costs. Everything is changing, and at a faster rate. Every single time I calculate our costs, it has gone up. Never fails. Early in my career I was scared and performed a cost analysis every month. As the years rolled by, the frequency slowly got shorter, then quarterly, and now I only do a cost analysis once or twice a year. As long as the front counter staff knows and believes in the shop's pricing structure, you can easily defend your prices. Most of the time, it's simply either a miscommunication, or comparing apples to oranges. I remember one time a customer blew a gasket over a transmission fluid change price of $500. It was a Euro vehicle with combination oil pan/trans filter rolled into one. To get the pan off, you have to fully drop the exhaust system. It takes special fluid. I just ignored the guy. Something like a month later, I received an Email off of our website. It was the same customer calling me on our prices. "The dealer wanted almost a thousand dollars for a fluid and filter change." the customer said. He learned a lot from doing his own research. J. Larry Bloodworth, Draper, Utah [email protected]

I don't think I can speak intelligently about which scanner to use because I have only known a couple scanners in my 45-year career. Virtually all my scanners over the years at the shop has been Snap-On. More recently I have been using the BlueDriver sold on Amazon. It's a little more than $100 bucks and does everything I need in retirement at home and on the side. The best feature I love with the BlueDriver scanner is that you can lookup fault code history on Identifix. It works with both iOS and Android phones/tablets.-->>BlueDriver Scanner At Amazon BTW, it's rated at 4.7-stars with 30K reviews on Amazon.

It would be Snap-On if I could only have one. I also like BlueDriver because it not only can do it all, but it has links built-in to the IdentiFix database for free. This would be for either a shop add-on or one to keep at home.

I always say there's nothing like reviving an old topic. 🙂 Yes, phone technology has grown by leaps and bounds over the last 5 or 6 years. I use RingCentral for my phone and Convirza for call tracking. RingCentral costs me about $75/mo. for 3 numbeers. Convirza call tracking depends on how large you want your pool of phone numbers. I was in a 6-shop chain and our phone pool was $500/mo. for 100 phone numbers. It's too long of a story to try to fully explain how call tracking works. Let it suffice to say it tells you the source (ad, radio, website, Google, Yelp, etc.) of the call as well as all the callerID info, it records the call and there's an algorithm that "scores" the phone call as in "junk call" or "legitimate sales lead", Here's a sample of the info. available with call tracking. Look at the links provided and decide for yourself.

We did our shop floor ourselves before we ever moved into the building. We did 6 bays, approximately 3,000 sq.ft. with 6 gallons (three 2-gallon kits) of Rustoleum floor epoxy. Each kit comes with a bag of 2-color flakes to sprinkle on the epoxy and gives an anti-slip surface. Back when we did the floor, the kits were only $99 each, but now they are $163.02 per kit. It would take about $500 to do it today. It lasts for 5 years, then the area under vehicles when on the lift begins to chip. We didn't have to redo the whole floor, only the lift areas. We are a transmission shop and the techs have been known to drop crossmembers, and sometimes transmissions. (OUCH!) Here's the link to look for yourself. I've also a closeup of our floor. https://www.homedepot.com/p/Rust-Oleum-EpoxyShield-2-Gal-Gray-Garage-Floor-Epoxy-261845/202963950