Transmission Repair

Once again, you're right. We received about 20% of our business from referrals. We received multiple comments on our website and YouTube channel because they were full of good information. I had a customer that actually wanted to watch his transmission getting rebuilt. He sent us multiple referrals. Below is a local investigative reporter, Bill Gephart, who works for a one of the local TV stations. (3:04) https://youtu.be/Loo6V7Nln-o

I agree with points #1 & #2. However, unlike #3 repeat transmission business is very difficult to predict, unless it's an annual service. Repeat business in the transmission business is usually either a warranty job as in leaks, a malfunction, or a very unlucky person with multiple vehicles. But that's just me. It's very different from the general auto repair business. In a nutshell, while I do try to make all customers feel good about the repair and communicate effectively, it's more of a transactional business model than a relationship business model because I rarely see the customer again. I can easily imagine how critical customer retention is in general auto repair, and I agree. Our business is usually (as we call it) "won & done."

Here's a Florida school teacher who had her homeowner's insurance go up more than 80%. California is having the same problems as Florida when it comes to homeowner's insurance. 3:46

I saw a news story where a Florida homeowner dropped his $7,600/yr. homeowner's insurance premium and instead, is putting $7,600/yr. into a savings account to self-insure himself. There hadn't been a hurricane in 6 years and he has over $45K in his savings account. He also said that it normally takes 90 days for the insurance to process a claim, and even longer to start on the repairs. He reasoned that by being self-insured, he can repair any hurricane damage in less than 90 days because he can start on the repairs immediately. Florida and California are 2 states I wouldn't want to live in or do business in, but that's just me. Here's what Monica/ChatGPT says about self-insuring: ========================================= 1. Cost savings: By self-insuring, you can save money on premiums that you would otherwise pay to an insurance company. You can set aside a portion of your budget to cover any potential damages or losses. 2. Flexibility: With self-insurance, you have more control over your coverage. You can choose which risks to cover and how much to allocate towards each risk. 3. Customization: You can tailor your coverage to fit your specific needs. For example, if you live in an area prone to hurricanes, you can allocate more funds towards wind damage coverage. 4. No deductibles: With self-insurance, you don't have to worry about paying deductibles when making a claim. This can save you a significant amount of money in the long run. 5. Peace of mind: Knowing that you have a plan in place to cover any potential damages or losses can give you peace of mind. You'll be able to rest easy knowing that you're prepared for the unexpected. Overall, self-insuring your home in Florida can be a great option for those looking to save money and customize their coverage.

Black Hills Tire of Rapid City, South Dakota is approaching training students even earlier than most. They are holding Camp DRIVE, a two-day automotive camp for kids aged 12 through 15, which was launched to teach kids about automotive maintenance and to meet professionals in the field. Check out the article at https://www.ratchetandwrench.com/shop-life/repairer-profiles/article/33012914/camp-drive-i-wanna-do-this-when-i-grow-up

When we use the phrase "check-in" most of us think about checking-in a new vehicle and the inspection process. Here's a short article that gives new meaning to the phrase and found the majority of shop owners skip a proper check-in. https://www.ratchetandwrench.com/running-a-shop/operations/article/33011339/most-auto-repair-shop-owners-skip-checkins

I've always believed prices are like a 1-way check valve; they go up but never come down. The problem I've seen with the shops I've worked with the most is improper pricing. They don't keep current pricing and they don't use a markup matrix. The result of these two issues is somewhere between leaving money at the counter and giving work away. In the transmission business, prices change every day, which means checking the price on every part, and every invoice. Auto parts in general also have different pricing levels that can change based on the invoice. A shop pays Level 4 one day and pays Level 3 the next day. Watching each invoice is a tiresome job that must be done every day. Another pricing strategy that causes problems is fear; the fear of asking for the money. Never let fear enter into a pricing issue. The antidote to fear is confidence. You have to have confidence in your pricing structure. Confidence comes from believing. You have to believe in your pricing to have confidence. The bottom line of the invoice may seem like a lot, but if you believe in your pricing structure, it will only seem like the fairest price. Fair to you, your employees, and your customers.

A great article about Gen Z people coming into this industry and becoming leaders in Ratchet & Wrench. https://www.ratchetandwrench.com/site-placement/trending-stories/article/11462823/the-next-generation-of-shop-leader

Lost production, too. The transmission industry has been hit really hard with inferior parts. Many transmission shops now only buy parts from the dealer and learn they are not only better, but competitively priced, too. Soft parts (overhaul kits, clutches, seal kits, etc.) are often less expensive than the aftermarket. If a transmission shop was to exclusively buy parts in the aftermarket, half of them would be imported. 100% of aftermarket transmission filters are imported and I see pictures and hear horror stories about it. Because a transmission filter is on the suction side of the pump, it's not uncommon to hear a transmission won't even move after a rebuild with a defective aftermarket transmission filter. Of course, the less experienced techs think they did something wrong and pull the transmission back out and tear it down only to find a bad filter. Lost Production City.

Yeah, the inferior part problem is as bad as you're hearing. It's not just automotive parts, either. It's all over, in different industries. Everybody tries to save money, and in the end, it bites them in the ass. I recently saw a news story where 4 airlines grounded their 737s due to "fraudulent parts." Instead of buying engine parts from the OE (GE) they bought them from somebody in the UK. As it turns out, the FAA certification papers that come with each part were bogus. Some of the parts were critical engine parts. (turbine fan blades) Check it out... 4:21

Q: Are you making the income you need, deserve, and expect from your auto repair shop business? A: (Long Answer/Story) Yes. After 17 years, we moved from a poor location/income level in Lindon, Utah to a great location/income level in Draper, Utah when I was 53. (2008) I knew retirement was just around the corner and with intent & planning we became the highest-priced transmission shop in Utah. (even higher than the dealer) We had such a long warranty and great service; we didn't have a problem getting our price in such a high-rent area as Draper. https://www.draperutah.gov/276/Demographics Lorraine (wife) and I paid ourselves paychecks collectively $100K/yr. She's an accountant and reported every penny we took in. She was still able to draw money into a savings account that averaged $125K/yr. In 2013, we bought the property for the appraised value of $860K. In 2015, we weren't doing as well and only broke even that year. We then decided to sell the shop (asset sale only) to http://www.tannertransmissions.com/ which had 5 locations and we would be the 6th location. We sold only the assets of the business for $330K and charged $11K/mo. for the building lease on a 10-year lease. In the summer of 2020, my wife went by the shop and noticed there was no sign on the building. Long story made short; the last 3 years we had the shop we were averaging $1.2M-$1.3M/yr. In the 5 years Tanner had the shop, the revenues continually dropped to only $400K in their last 12 months. That made rent 33% of revenue and no shop could withstand that. Of course, near the end, we were having a hard time collecting a lease payment. By the time we found out he had closed and taken all the assets with him. He still owed us a little on the assets but the big debt is he broke a 10-year lease after only 5 years. We took him to court and have an $85K judgement against him we can't collect because the business entity he did business as has no assets/money. I put the building up for sale in 2020 and we still owed $320K on the $860K mortgage. The building had not grown in appraisal value during the 7 years we owned it, but I felt it was worth A LOT more. The more I looked, the more I found out there was absolutely NO REAL ESTATE for sale on Interstate 15 at all. That's including Salt Lake City and Draper. I did find some undeveloped land way-off the freeway that had a $2M-$3M/acre asking price. I then listed our $860K piece of property for $3.2M. (THINK TRUMP) I listed it on LoopNet.com and BizBuySell.com for that amount. I also had a sign made/installed to put on the building that didn't list the asking price. It took only 2 weeks to get a bite from a plumber driving by who saw the For Sale sign on the building. He had a fleet of 40 trucks and some digging/trenching equipment. It didn't take him long to learn I was asking almost 4 times the appraised price. He negotiated the price down $900K to $2.3M. (2.7 times appraised value (again, THINK TRUMP) He put $500K down and signed a 30-year mortgage contract for $9,100/mo. I've previously posted what happened to that deal and I had learned NEVER to finance anything without having an early payoff penalty clause in the contract. NEVER run a TV ad like this in Utah... 0:30 http://www.tannertransmissions.com/media/tanner_30.mp4

In my experience, techs leave their jobs, they rarely leave the industry. The few that leave the industry just aren't cut out for this type of work. In the transmission industry we need to do all we can to attract and TRAIN quality employees.

Yeah, you're right Joe. We are a transmission shop and RARELY had a wait customer. Perhaps 2-3 waiters a week, rarely more. We wanted 10-year-old and newer vehicles for obvious reasons.

Joe, all of this is very true, especially about employers being underpaid. I could never pay top wages until the shop as a sole & separate entity made a decent profit. After that, I was able to pay $25-$50 per clock hour, not flagged hour. ($1,000-$2,000/wk.) All my guys (except the manager) punched a time clock.

I left out the part about training, manuals, & seminars in #2. Skills Gap

I agree with Joe that an oil change-only is a tough business model. Follow Joe's recommendations.

The shortage of workers in the trades is a complex issue with several contributing factors. Here are a few reasons why the trades may struggle to find workers: 1. Perception: Over the years, there has been a societal shift towards placing greater emphasis on obtaining a college degree rather than pursuing a trade. As a result, many young people may not consider the trades as a viable career option, leading to a smaller pool of potential workers. 2. Skills Gap: The trades often require specialized skills and technical knowledge. However, due to the lack of emphasis on vocational training in some educational systems, there is a gap between the skills required for these jobs and the skills possessed by potential workers. This disconnect can make it challenging for employers to find qualified candidates. 3. Aging Workforce: Many skilled tradespeople are nearing retirement age, and there may not be enough new workers entering the trades to replace them. This demographic shift exacerbates the shortage and further highlights the need for attracting and training new talent. 4. Perception of Job Stability: There may be a perception that jobs in the trades are less stable or have limited opportunities for career growth. This perception can deter individuals from pursuing careers in the trades, leading to a smaller labor pool. Addressing these challenges requires a multi-faceted approach. It involves raising awareness about the benefits and opportunities within the trades, promoting vocational training and apprenticeship programs, and bridging the gap between industry needs and educational curricula. Additionally, offering competitive salaries, benefits, and career advancement opportunities can help attract and retain workers in the trades.

No inflation easing here in Salt Lake City suburb of Draper. It's just as expensive as always.

I would require 5 full days a year for training. They were the same organization putting on all the training. Of course, On The Job (OJT) Training was also required. The shop paid all expenses.

The days of quick lube places doing just oil changes have passed a long time ago. For example, here's a clip from Jiffy Lube's website. So, my question would be which one (or all) of the services do you plan on doing? How will you go about hiring techs to perform the more difficult services? Then--I looked on your website and you are already offering A LOT OF SERVICES. Auto Save Tire and Service Center

I looked but couldn't find a copyright date on this handbook. While the framework of the apprentice program is really good, the length/compensation of the program could use some serious updating. The AutoCare Apprentice Program is supposed to last 24 months and I think that's too long. Secondly, the pay scale is really outdated. I suggest plugging in your own numbers.

Article date: Sept. 25, 2023 5:30 am ET This is a Wall Street Journal article that you can either read, or click on the "Listen to Article" near the top of the article. It takes 6 minutes. The authors of the article are suggesting the labor shortage is not a short-term issue; it's long-term. Reading/listening to the article will give you the "big picture" view of the problem. It's easy to think that the automotive aftermarket is one of the few industries that have a labor shortage, but it's not. It's all over. Read on... WSJ - Why America Has a Long-Term Labor Crisis, in Six Charts

I agree with you, Joe. I like the Warren Buffet quote, “The best investment you can make is in yourself.” I think the quote not only covers shop owners, but it really covers anybody who believes in continual education. During the first half of my career, I would attend technical training events. The second half of my career, all my training was sales, management, and marketing training. I feel I made the transition from a working boss to a real business person only when I started attending non-technical training. I believe non-technical training is crucial for a business owner. Think about this: For every given market area, there are shops that stay packed with work and there's also shops starving to death. Not coincidentally, there are shops that are the highest in town and shops that are the cheapest in town. The dichotomy of these two extremes can be found in EVERY market area. Based on my experience, the busiest shops also tend to be the highest in price, while the shops starving to death are normally the cheapest. Which type of shop do you want to be like? If you want to be the shop that's always loaded with work, you can't get there from here without investing in sales, management, and marketing training. Great business people and leaders aren't born, they're made with training. Proper training can help solve a multitude of challenges a shop may be going through. Take staffing for example. What top tech wants to go to work for a cheap shop that's starving itself to death? By the same token, how can a shop afford a compensation package that attracts, hires, and retains top talent? I firmly believe that a shop can attract, hire, and retain top talent only by being the very highest priced shop in their area. I don't mean being equal to the highest-priced shop, I mean BEING the sole high-priced leader. A lot of problems can be absorbed by having substantial revenue. Like providing a free rental car during a warranty repair. Or giving a customer all their money back if they are impossible to appease. And the list goes on. When it comes to running the shop, a shop owner can't afford to be a great leader with insufficient revenue. Anybody can be a boss, but not everybody can be a great leader.