Joe Marconi

I was talking to a shop owner at the Elite Fly with the Eagles course this past week, and said that he feels that his service advisors do too much, and sales are suffering. Between answering phones, scheduling customers, checking in customers, building estimates, finding the parts, car delivery, on and on, it's a whirlwind of tasks. I tend to agree. I know is may be hard to do, but how can we get the help the advisor needs, or redefine the position?

Let's face it, no one or no entity will help us with the Tech shortage. The truth is, this is not new. This shortage has been created largely from decades of steering young people to college, and not the trades. I believe we need to get involved with apprenticeship programs. Below is an article in Motor Magazine. Your thoughts? Comments?

You bring up a lot of great points. I am sure we have all seen situations where the issues of low production can be traced back to a poor process that originates at the intial write up.

Great points! The key thing is to dig deeper when issues with production arise. Experienced techs are efficient; they have control over that. However, writing the job correctly and other factors play into low production. As we have all learned, productivity and efficiency are not the same.

Typically, when productivity suffers, the shop owner or manager directs their attention to the technicians. Are they doing all they can do to maintain high billable hours? Are they as efficient as they can be? Is there time being wasted throughout the technician’s day? All these reasons factor into production problems, but before we point fingers at the technicians, let’s consider a few other factors. Are estimates being written properly? Are labor testing and inspections being billed out correctly? Are you charging enough for testing and inspecting, especially for highly specialized electrical, on-board computer issues, and other complex drivability work? Is there a clear workflow process everyone follows that details every step from the write-up to vehicle delivery? Do you track comebacks, and is that affecting production? Is the shop layout not conducive to high production? For example, is it unorganized, where shop tools, technical information, and equipment are not easily accessible to every technician? Are you charging the correct labor rate and allowing for variables such as rust, vehicle age, and the fact that most labor guides are wrong? Also, is there effective communication between the tech and the service advisor to ensure that extra labor time is accounted for and billed to the customer? These are a few of the top reasons for low productivity problems. There are others, but the main point is to look at the entire operation. Productivity is a team effort. Blaming the techs or other staff members does not get to the root cause in most cases. Maintaining adequate production levels is the responsibility of management to create the processes that will lead to high production while holding everyone accountable.

You can't pick up a newspaper or watch the news on TV without reading or watching something about the state of the economy. No matter how this was caused, or whether we are in a recession now, or it is coming, will the state of the economy affect the Auto Repair business? Are we recession-proof as so many say we are? Or should we prepare ourselves for tough times ahead?

Yes, Mitchell is not cloud-based, and while the system does do an auto backup, Mitchell reps have told me also to do a daily back up too. This is a headache, plus for multi-store owners, Mitchell does not work. Trust me on this, I had multi locations. I do believe most all other programs are cloud-based now.

When you say "on-premise system" are you referring to a non-cloud based system?

All business systems have access to labor and parts guides. I can't speak to the cost for each system, sorry. But, it is not significant when you think about its value. Please bear in mind that a labor guide is just a guide. And sometimes they are way off. Also, the parts guide gives OE prices. With this said, it will be important to understand YOUR DESIRED labor and part margins. One step at a time; don't get overwhelmed. Put first things first, shop around, get demos and make a decision. And don't worry about a wrong or right decision. No business system is perfect and will do all you want it to do.

Great advise!

Let me add something. I used Quick Books along with Mitchell. Quick Books is a full accounting program and works really well for most small businesses. And most systems can export the data to Quick Books, such as labor sales, part sales, inventory, and sublet sales. Quick Books will allow you to pay your expenses and together with the information from your business system; you can generate reports such as Profit Loss, Balance Sheet, and cash flow statements. Among other reports. The reason why you need a Business System for other reasons: Looking up labor times, parts, tech time, the use of can jobs, managing estimates, scheduling, and so many other tasks that Quick Books does not do. My opinion. Choose a business system (look at previous posts for companies) and also use Quick Books for the accounting side of your business.

You are 1000000% correct! I was really referring to my age. Those cars broke down a lot back then, and we did capitalize on it.

Many shop owners have increased their labor rates in the past year or so. That is great news. Now, what's your next move? Anyone who knows me knows that, in my opinion, in general, we have been too cheap for too long. But, determining your labor rate is not the only consideration to attaining a profitable business. What about productivity, efficiency, keeping expenses in line, gross profit, and net profit? What are you doing to ensure you are meeting the financial needs of your business and also paying your employees the money they desire?

There are many programs out there, and some are better than others, depending on the size of your business and the type of work you do. From what I hear around the industry, a few of the top names are Tekmetric, Shop Ware, Protractor, Micthell1 (only to be used with Bolt On Technology), Auto Leap, and Shop Boss. There are others, but I would say these what I hear are the most popular. I used Mitchell, but there are a lot of drawbacks. Now that I coach, from my perspective, many clients are happy with Tekmetric, Protractor, Auto Leap, and for smaller shops, Shop Boss. Let's see what other ASO members say about this. By the way, any company you are interested in will do a demo.

Anxiously waiting, thank you.

Wow, fascinating how those images were generated, and thanks for your take on the future. And sad to admit I worked on those cars! Years back! Question, do you think the auto repair business is as "recession-proof" as people claim it is?

I sold my company and the land a little over a year ago. Made out good with the sale of two locations and property. However, one of the things I did (on the advice of my financial advisor) was to also fund a retirement plan over the past 25 years. Your question is valid and right on target, but you need advice from a CPA accountant and your financial advisor. For me, while the sale was good, I had to pay capital gains tax, but it wasn't that bad since the property was redeveloped in 2008, and I still had a lot of depreciation that helped reduce my tax liability. Another thing to consider is how your money will be invested. I moved my investments to more slow growth over the years as I got older and added the proceeds from the sale to this portfolio. You don't make large gains in a good market with slower growth investments, but when it turns bad, you don't lose as much. The point is that you need to sit down, do your budget for after you retire, and then determine how much your money will last with different scenarios. A good financial advisor can help with this. Only after that can you determine if the dividends will be enough. Sorry for not giving a direct answer, but I want to be honest from what I have learned.

Qualified techs are in demand and demand high pay. Cant blame them. As shop owners, it is crucial that we know our numbers and adjust for the higher payrolls. And all shops need to do this. The days of undercutting your labor rate must end. Let's face it, in general we have been too cheap for too long.

What are your predictions for 2023? Will it be that we will face an economic downturn? Will EVs increase market share? Will the tech shortage get worse or better?

Having lived through many evolutionary steps in the auto industry, I have faith the auto aftermarket will always find a way to succeed. EVs will bring big changes, but not anything that we cannot overcome. Great information.

Thanks for the update. And, thankfully you found out soon enough.

I have to admit, this topic is a little different from the usual topics posted, which are from the perspective of the business owner. However, it is an interesting post! There might be a great opportunity here, but there are a few red flags too. And you need to move cautiously. Mostly to protect yourself. You did a good job at outlining the details, but something tells me there is more to this story. From my perspective, as a business owner, to reach out to someone that I don't know and offer them a deal like this, would be extreme. I would want to build a solid relationship that takes time to develop. And there are a lot of steps in between to make an offer like this. Trust me, I have been there with people that I knew, that I "thought" were good candidates to run my company and someday buy it, but it did not work out. I don't know you, but I would bet that based on what you said in the post, you are a qualified person who has the experience, talent, and skill level to run an auto business. I would suggest that you seek advice from a business attorney, an accountant, and a business consultant knowledgeable in the franchise model and independent model. Also do a lot of research on this person, his business, and anything else relative. This is a big deal in your life, and if it leads to ownership someday, you need to do all you can and perform your due diligence to protect yourself. I don't want to sound negative, in fact, I wish you the best of luck and hope this is the opportunity of a lifetime. Just move slowly. Please keep the conversation going, and hopefully, we can all help you.

There is some truth to what you said, referring to not being a car guy. The best service advisors and front counter people I have hired were not former techs.

Good for you! I also agree with multi-tier labor rates. And I also agree that in spite of what shop owners think, most people do not question labor rates. Parts are a different story, thanks to the internet and part companies marketing to consumers.

AUTOMOTIVE BUSINESS OWNERS! Want to experience the most powerful Shop Management Course on the planet? Join Kevin Vaught and me, Joe Marconi, in San Diego as we present the Elite Fly with the Eagles! The course will be held Feb 7th to 9th, and you have our promise; you will come back reenergized and ready to take your business to another level! Improve your skills in time management, leadership, and goal setting · Fully understand your shop's financials and key performance indicators · Find and hire superstar service advisors and technicians · Turn your existing employees into self-motivated superstars · Fill your bays with the right kind of customers through new marketing programs · Utilize your step-by-step Action Plan to ensure your ongoing success Elite clients can attend at no charge. To enroll and to get more information: eliteworldwide.com/eagles