Joe Marconi

1 hour ago, Jerrys Auto Center said:

So apparently I’m the kid here at 66😬, 

I still work Monday-Friday, 8-5 but have toned things way down! We’re a shop of 2 1/2 techs and myself. We’re in the community since 1979, on 3rd generation customers. We’ve had no issues closing for extended weekends and at least 2-3 weeks a year for “Mental Health” time off. 
If I close, Yes, my guys get paid. 

We’re actually talking about going to a 4 day work week, possibly with alternating 4 day weekends. Week 1 would be Monday to Thursday, Week 2 would be Tuesday to Friday. 
I have found that if you stay profitable, and loyal customers allow you to do that, you don’t need to work like an animal. 
My wife and I both take weekly salaries, I pay myself a real rent every month and I really don’t mind going to “Club Jerry”  during the week.
I have typical Motor Head hobbies… motorcycling, snowmobiling, hot rods, etc. and all the friends that go with it!!

I’m enjoying life just as it is. 👍

Every shop owner has different needs and approaches life and business differently. It sounds like you have done an amazing job at building a solid business while creating a great workplace environment. For me, selling my company last year, was the right decision for me, to pursue other interests.  Although, I do miss the shop, can't deny that. 

Great to hear from the "kid"

I will be presenting the Elite Fly with the Eagles course with my fellow Elite business coach, Kevin Vaught.

The course will be held in Indianapolis, Oct 4 to 6.

This is Elite's premiere shop management course for shop owners and managers. 

Hope to see you there.

For information and to enroll:

If you are going to the Ratchet and Wrench Conference in September, please let me know. I am honored to be selected as the keynote speaker.

I will be speaking about my message and takeaways to the industry after selling my company. 

Hope to see you there! 

Joe 

With the massive push from car makers to build more electric vehicles in the coming years, does it make sense now to install an EV charging station?  

What percentage of your current customers own EVs?  And do you have customers asking questions about EVs? 

Do you use a digital inspection program? If so, how do you feel it helps your workflow and sales.

What are the pros and cons of the program you are using? 

On 7/18/2022 at 9:34 AM, Transmission Repair said:

Like many males, what I did for a living was my identity.   Since I retired, I feel as if I have lost my identity.  I’ve been self-employed for the majority of my adult life.  I semi-retired at 60 and fully retired at 65.  I’m currently 67 and don’t have any worries outside of the feeling of my loss of identity.

 

It’s funny how that works.  Retirement is nothing like I had envisioned when I was younger.  I’ve become a couch potato and don’t do anything to speak of.  No schedule, no calendar, and no obligations.  My wife does more than I do.  

 

My stepson lives with us and is turning out to be more of a caregiver than a 38-year-old.  I can say the same can be said of my 64-year-old brother who lives in his motorhome parked on our property.  Neither one pays us rent; we exchange free rent for caregiving and household chores.

===========================================================

WHAT I LEARNED BY RETIRING:

A comfortable retirement is what you’re really working for. (mindset)

Don’t let your daily work chores & live drama shorten your vision.

Many shops have nothing to sell other than tools and equipment.=poor or

 no retirement planning.=no retirement plan.

(Only if the property is worth owning.)

10-year Lease to own = higher rent.  Investment into your future.

Turn your rent into mortgage payments albeit higher rent.

No rent, property taxes, repairs on bldg., etc. for the owner, triple net disappears

Do it legally through a title or escrow company; no personal owner finance.

Get in 1st lien position.

No early payoff penalties, no accumulated late charge fees.

(Accumulated late charges can be equal to or surpass payoff amounts.)=bad deal.

Divide the number of monthly jobs into the rent:  (example 25 jobs a month / $11,000  = $440 per job in just rent, not parts, not labor, not utilities.  Do your own math. 

Wow! Thank you for sharing this. After 41 years as a business owner, and nearly 50 years in the business, I sold my last location this past Dec. 2021. I really thought it would be easy, but it isn't. 

I agree with you 100%.  My work was my identity. And even with all the struggles and challenges and disappointments, I have no regrets about being an auto shop owner. In fact, I do miss it. 

Luckily, I am involved in the industry, working with Elite Worldwide as a coach, trainer, and other duties. And I write for Ratchet and Wrench Magazine, And Of course, cofounder of Auto Shop Owner. 

I am also 67 years old too. Get involved with something, we all need to have an identity, and sometimes that is worth more than money. 

It won't totally replace being a shop owner, but it helps. 

Most shop owners I speak to are having banner years. They are as busy as ever and booked with quality, profitable work. 

With the uncertainty of the economy, will it last? Should shop owners prepare for a downturn? 

Moonlighting, side jobs, side-hustle. It's all the same.  Many techs work after hours to earn more money. How do you feel about that? Does it interfere with the job you employ them for?  Do you feel it lowers the professionalism of our industry? Other comments and opinions? 

Throughout the years, I purchased either Ford F250 or Chev 2500. Both HD. The last truck I purchased was a Silverado 1500, with HD package. And that worked out fine for us too. I felt that these trucks suited my business needs.  I needed a truck for general use for the repair shop, road calls, plowing and hauling. Hope this helps. 

One other point, speak to your accountant on how to expense any truck you purchase. This can help you on taxes. 

1 hour ago, bantar said:

We have 3 main revenue streams: 

1. Quick Lube - Oil Changes, Batteries, Wipers, Brake Fluid, Coolant, Power Steering Fluid, Transmission Fluid, Differentials....   I call this one the farm
2. (1a as it's tracked as QL) State Inspections - I used to hate these, but it's a high volume, low $ cash cow and brings in lube business too
3. Repair Shop - Mechanical, Driveability and Electrical Repairs - No body, no glass, no tires, limited transmission repairs (no rebuilds), no more project cars (have 3 sitting here now that need to leave)

Revenue between QL and Repair is about 55%-45% leaning either way.  Some months repair leads and some months QL leads.   While I lump state inspections into my QL profit center, by it's self, it's 10% of my monthly revenue.   With labor and machine costs burdened in, it's runs about 91% GM.   Profit wise, the repair side still owes me more.   We're now doing enough steady work that it will start performing better.   YTD, QL profit has outpaced Repair, but 2 of the 6 months, it was opposite.  Still 45%-55% flip flops.  I'm hoping for repair to steadily out-perform the QL.   What makes this difficult to explain is that QL dominates in volume and it's not fully tapped yet.

The QL allows us to establish a trust relationship with our customers and this helps to feed the repair side.  The real magic is that we are indeed trustworthy and not a badly run QL.  Some of our repair work is farmed routine maintenance, but the bulk is broke cars.

We're still growing both businesses.  Adding the lifts should help us with throughput.  We already use the spaces outside of the bay doors as flat bays... being creative with space.  But the Texas sun won't let you work outside without melting.

--brian

 

You have a lot going on, with the potential to grow your base business and revenue streams. I think the key thing here is what you said earlier, "I might pivot sometime in the future..."  Great content, thanks for sharing so much info!  Every business is different, no such thing as a cookie-cutter repair shop business. 

On 7/17/2022 at 8:12 PM, bantar said:

Tires are labor intensive.  Used tires require storage.   This means moving them somewhere, which is more labor. Tire machines require floor space.  I have 6 high volume, low margin tire stores within 3 miles of me.   Tire delivery is slow... today or tomorrow, sometimes requiring shops to go pick them up for faster delivery.   Tires are often a need-it-now.  Failed state inspection and want to pass today.   I have a few friends that have added tires, but it's not been a strong revenue stream.

Using less labor, I can generate more profit in my QL than I would with tires.    We do paid tire rotations, but even this is labor intensive and ties up a lift.  We only do this to be a single stop for routine maintenance.   Luckily, most folks are not regular tire rotating types, or they get it done for free at the high volume tire stores.  I charge more for stand-alone tire rotations as a disincentive.  I don't want to be a tire store, but also, it increases the profit of these slower services, so I grumble less.   Overall, this is more of a pick your battles exercise than an actual distaste of tires.

So, wrapping this up in an EV umbrella....   my revenue streams are not EV and I won't be selling tires to EV's.   I might have to pivot at some time in the future, but for now, EV is not my bag of tea. 

It is obvious you have a good handle on your business, and you don't try to be everything to everyone.  One last question: What is your income/revenue driver? In other words, what type of services are generating the greatest amount of sales and profits for you? 

1 hour ago, juanpablo4219 said:

Yes and no😁

My thoughts it depends on the area and the age and conditions of the vehicle.

At some point the owner have to make a decision to continue with his old car or consider buying a new one, new/used.

We have seen cars in our shop with hi mileage.

13 challenger 441K miles 

17 Tahoe 290k miles 

15 Durango 300k miles.

Worst people but these hi mileage cars instead of new ones. 

Very few new cars.

Agree, good points.  For people with money, it may not matter. But, do you think for people on a strict budget, maintaining their existing car will pay off down the road? 

9 minutes ago, Jerrys Auto Center said:

Bottom line is there has to be some kind of long term financial plan/ goal/ exit/ retirement strategy in place….
With some kinda safety/ secondary plan in place because there is no guarantee of anything anymore! Just my take on the world today. 🤷‍♂️

Well said!

It would be good to hear from the group what steps they did to help secure their financial future. 

1 hour ago, Transmission Repair said:

I have a friend who owns a transmission shop in Coeur d'Alene, Idaho.  He's rented all of his life because it was cheaper.  He's getting ready to retire.  What he has done over the years is invest in residential rental properties.  Although the shop isn't providing any retirement to him, his rental property investments are.  There's always more than one way to skin a cat. 🙂

Exactly what I was referring to.  Many shop owners that rent, have used the business to provide for their families and to build wealth while they are in business. I agree; there's more than one way to skin a cat. (Can you say that these days?)

10 hours ago, TheTrustedMechanic said:

I am located in a building that houses 5, soon to be 4 other businesses and my landlord bought the building about 4 years ago to base their two businesses in, so buying the building will not likely be available for purchase.  I am located in Traverse City, MI.  My rent for a 2000 sq. ft. space is only $1058/mo. so any purchase will be far more expensive on a monthly basis but still my desire.

 

 

I understand the position you are in.

Whether you rent or own the property, you can still plan for your financial future.  I am not a financial advisor, but I do know many shop owners that have rented their entire career but invested their money, and some have actually purchased other properties, which will pay off in the future.  Speak to a financial advisor or business coach.  And continue to keep your eyes open for opportunities. 

19 hours ago, bantar said:

Well, I'm in the middle in installing 2 new (made in the USA: Fort Worth, TX) lifts (for a total of 6), and 3 Big Ass Fans (1 12' and 2 smaller spot fans).   All should be turned on Monday after the electricians wrap up.   Our building is not conducive to AC, as it is a wind tunnel with doors on both sides.   Works well in the heat when there is wind, but when it's still, it's terrible.

I think I've turned away enough 1234yf AC jobs already this year that I might hit my magic number of 10 declines later this year.   Next up (spring of '23) is a 1234yf rig, with multiple leak detection upgrades (nitrogen tank, Inficon Stratus leak detector, digital Fieldpiece manifold set).   I've told my MAC tool truck that if he can help me sell my Hunter SmartWeight Touch Tire Balancer, I'd buy his unit immediately.    (My business is not compatible with Tires, so we gladly refer them to the tire stores and generally, they refer folks back to me.   I think this is a GREAT tradeoff. )

I don't have the clearances in my shop to tackle ADAS, so we are turning away ADAS jobs while looking for a reasonable outsourcing solution.

Wow!  You have a lot going on. But, all good....moving forward.  

Question: When you say your business is not compatible with tires, why?  To play devil's advocate; won't tires and related repairs become an important part of our business with the increase in EVs? 

19 hours ago, bantar said:

We allow our customers to talk to our technicians, but ONLY IF a manager is present.   Manager's job is to keep it brief.    For instance, today, my lead tech and myself discussed why one of my better customers' Jeep was saying HOT OIL during a grueling 4WD mountain climb.   Short and sweet and he got personalized service.   A new or basic customer would not get such a privilege, unless a manager deems a specific topic to have value.   Sometimes, we'll have folks walk into the shop after hours (they see an open door among the many closed ones) and we have to chase them away.  Techs are generally nice, so, will take an interruption and offer to help, but I will nicely be the meanie / protector.

You make good points.  And having a manager present is a good protocol.

With regard to customers walking into the shop or standing behind the bays, I was adamant about getting that customer back to the customer service office.

I remember way back when I was a tech, before a business owner, if a customer stood over me, or behind the bay, I was bold enough to tell the boss, "Get that guy away from me." 

19 hours ago, bantar said:

After 2 days of being here, my rehire, Carl, has generated two 5 Star Google Reviews!!   

These will help balance the 1 Star review that we received because we could not bust the oil drain plug loose on a Subaru that was last changed at the dealer.   Subaru finally extracted it and said that we bent the oil pan.  I have pictures of his oil pan.  Not bent, not leaking.   But, they wanted to sell him a new oil pan and get me to pay for it.  They poisoned his mind and he's now mad at me.   I declined and referred him to his Dealer and told him that they are over-selling.    We've seen 3 Subarus over the past 3-4 weeks from this same dealer with over-tightened drain plugs.

First, great news about the 5-star review that Carl generated! 

As far as the situation with the Subaru oil drain plug, I have been down the road all too often.  Hate it. Stand your ground, and always protect yourself with photos, videos, and documentation. A lesson for all. 

We all know that techs and service advisors have two distinctly different roles. And both get different training.  Service advisors are on the front lines every day taking care of customers, selling work, organizing work, and a lot more.  

While most customers don't engage with the technician, is there a time when we should allow the customer to speak to the technician? 

According to Kelly Blue Book, new car prices hit an average of $48,000.  Will auto repair shops see a surge in business, as consumers choose to keep their old cars, rather than purchase a new car? 

With technology dominating our industry and all the new tools and equipment now available, what new tools and equipment are on your wish list this year and next year? 

Many repair shops are experiencing an uptick in business this year. This may also increase your tax liability on your next tax return.  

Obviously, waiting until the start of 2023 to begin thinking about planning for taxes is not a wise move.  So how often do you meet with your accountant to discuss tax planning?

2 hours ago, Transmission Repair said:

I've told this story before.  Upon retiring I sold our shop's real estate for 2.3 million.  After paying off the mortgage and income tax I cleared 1.5 million for retirement.  Enough said.

Wow! Amazing accomplishment! 

21 minutes ago, NATURE said:

I got lucky and purchased the property in March of 2019, right before the craziness.  After down payment, the loan amount was right around $350,000 for a 20 year.  It's just a 3 bay shop but it used to be a used car lot, so plenty of parking and one of the best locations in the city.  Of course when going this route you have to take taxes and down payment($30,000) into consideration, so I have to add another $700.00 in property tax a month to that $3000 mortgage payment but still it was an easy decision.

Even with the taxes, you are investing in YOUR future. Great move!

It's no surprise to anyone that today's workforce is looking over the fence for greener grass.  The fact is we need to KEEP and ATTRACT employees. 

We need to also keep in mind that shops need to be more profitable today and in the future in order to compete with other companies and industries.  

Let's put our heads together and discuss ways we can create pay plans and benefits packages that will keep our employees and also attract quality people to our shops.