Joe Marconi

1 hour ago, Transmission Repair said:

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] 

You gave  lot of great advise. I am sure the readers will benefit from it.  Owning the real estate does put you in a better position and with more options, especially when retiring. If buying the property at the shop is not possible, then investing in other real estate properties should be considered.  Again, great story, great advise. 

1 minute ago, xrac said:

Lucky or l smart that is a tremendous achievement.  Congratulations!

Strongly agree!!!

Sometimes out of Crisis comes Clarity. I think that is what is happening now. The build up of the tech shortage, low wages, low shop owner profit, and rising expenses has come to a point of crisis for so many shop owners. But, for it's worth, lessons have been learned and it reflected in so many shop owners increasing their labor rates. 

I would urge all shop owners on this forum to spread the word and give other shop owners that you know, the confidence that they can have a labor rate that is in line with what they need to earn a living, pay competitive wages and turn a profit. 

13 hours ago, Transmission Repair said:

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

Only? I would say you did good!  And luck is when preparation meets opportunity.  So, you need to give yourself some of the credit too. 

3 minutes ago, newport5 said:

I agree we are mostly a trust business. Yet most of the articles for service advisors re calling to get approval for additional work is to be ready with a list of benefits, value and safety. I don’t. I tell them what their car needs and why. Sometimes an explanation of how that system works. Maybe a benefit or two. Then I pause. There’s an implied request to go ahead with the work. My mental outlook is: “of course they are going to say yes. The car needs it.” It’s a bit harder for them to say no since I haven’t asked them to do anything. So there’s nothing to say no to. And yes, they trust that I am looking out for their best interest, all while making a profit.

I’ve only worked at shops that specialized in German cars, especially Porsche. Only one offered a discount. And it was 10% off to new customers. Then I remember a regular customer asking: “Why are you giving discounts to new customers and not your good customers?”  Ouch!

My approach was similar. If I made a presentation to a customer, they needed it. And for my long time loyal customers, once you will build that trust it's really a matter of "telling" and not so much "selling"

And what a great argument about discounting to new customers! 

1 hour ago, Transmission Repair said:

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

Nice! Good you you!  This is a lesson for other shop owners, that's why this is such an important topic! Thank you for sharing, and what an amazing looking shop in a beautiful area! 

Agree Frank, and to add to that, for the most part too many people in our industry have been underpaid for too long, and that includes the shop owners too. 

I also agree that being the cheapest guy in town is a  sure way to go out of business. We are not mass-marketers, we are a specialized group of professionals with a lot of associated costs of doing business. We need to charge what we are worth. 

23 minutes ago, Mason Garza said:

We are a transmission shop in Texas. We are currently at $165.00 per hour

Nice Mason!  it is truly inspirational to see how so many shops are doing the math, looking at their operating expenses, and payroll, and increase their labor to what's needed to earn a profit! 

What do you do when one of your techs say, "Hey boss, the shop down the street just offered me $5.00 more an hour than what you are paying me."

This actually happened recently to a fellow shop owner friend of mine. And, it's happening a lot more these days due to the tech shortage. 

Do you match it?  Do you sit down and talk to the tech, persuade him or her to stay because money is not everything? Or do you tell the tech, make your own decision?  Or, do you put a plan together TODAY to avoid this from happening in the Future? 

Your thoughts? 

Bantar, I think that having a plan, like the one you have, is moving in the right direction. While you identify some of your weak areas, you do have a plan, and it's though through.

One thing I really like is when you say, "Auto Repair is not really discount driven. It's mostly a trust business."  To follow up with this, our best strategy is what we do each and every day, build trust through strong relationships.

Great discussion! 

1 hour ago, rpllib said:

"but the proceeds from the sale of your business may not be enough to financially support you into retirement"

If you are a shop owner in your 30's or 40's, I hope you listen well to Joe's words. My wife and I worked most of the first 30 years in our business with less then $100k in owner salaries, wages, perks, discretionary spending, ect. 

Much of that time I was not even sure we would survive as a viable entity till our retirement, so saving was not an option, we considered it crucial to having any chance at life after the business. 

Now that we are in our sixties, have no debt, own the real estate and still managed to have a 7 figure retirement account, with only minimal family wealth as part of that figure, we feel we are in the best position of all. 

For me, that position is the opportunity to chose good health and freedom of choice in what we do on a daily basis, over stressing about having to sell the business, to have a life.

The most liberating part of the whole thing, is the knowledge that even if we chose liquidation as our viable exit plan, we would be just fine. Even if the building had to lay empty for a few years, we will be just fine, even if we had to sell 350k of non real estate business assets for 50k, we will be just fine. Even if we got nothing out of the business/assets at all, and the real estate went back for delinquent property taxes, even then we would be just fine. 

I believe many can accomplish the same/similar to us, or better, if you have a plan and work the plan from the youngest age you can. 

Thank You Joe, wise words

 

Wow! Talk about words of wisdom!  Thank you for sharing. You gave a credible and critical argument for building wealth for your retirement.  Shop owners, please listen. 

44 minutes ago, xrac said:

Joe, I have been able to save approximately $25,000 per year for the last 15 years plus lesser amounts before that.  It was very hard to do that some of those years but I did it religiously.  We also own the property where our business is located which is prime real estate.,  I am now 69 years old and trying to exit the business.  If I I had not saved and invested and if we did not own the property I would be in deep trouble.  The proceeds from a sale of the business at asking price would not be something to live on.  I would basically be in a position of probably having to work till I can't work anymore.  Now I may continue to work at something different if I exit the business but it won't because I have to but because I want to.     

Frank, at 69 you need a plan.  But, thankfully you have investment money and the property.  I know shop owners that have not saved and rented their entire business career. They end up with nothing, and it is sad.  This is a hard business, and anyone in it should enjoy the fruits of their labor. 

WORK ON A PLAN- ENJOY LIFE. I will be 67 years old in a few weeks.  41 years in business was enough.  And I will still do my coaching, this site and other things to keep busy. 

20 minutes ago, xrac said:

I do not see that ASE certifications are very valuable.  I have employed 2-3 really bad ASE Masters.  It is kind of like when I worked in the environmental consulting cleanup industries.  I came into the business with no experience.  I did have a science degree from a major university and 2 years experience working for USDA where I receive rudimentry Civil Engineering training.  Two years later I was an REM (Registered Environmental Manager), a CHMM (Certified Hazardous Materials Manager), a licensed Florida Pollutant Storage Contractor, a licensed California Class A Contractor, and held other license for Kentucky, Indiana, Ohio, Arizona, Virginia, Tennessee, and Illinois.  I had all of those designations and license because I had enough experience on paper to set for the tests and was smart enough to pass the tests.  On paper I looked like a world class environmental consultant but what I was really good at was test taking.  ASE is gravitated to by technicians who are good at test taking.  

The other issue was that most people don't know what any of that stuff that I had meant.  ASE is the same way.  Unless you are in and around this industry ASE doesn't mean anything.  I think it has very poor recognition.

 

Wow, you have a lot of certifications under your belt.  You know, thinking about it, do we question our doctor? Or dentist for their certifications and education.  My dentist recently retired, and I was referred to a new dentist.  I checked the on line reviews, like everyone else. I don't have a clue if she was last in her class or what! 

I agree to that ASE may mean something to us, but public recognition. No. 

Well, you have a few good reasons not to!  Happy to see business is good! 

Every shop owners wants to continue to grow their business, and that means that one of the strategies is to attract new customers to replace the customers we lose. 

By the way, all businesses lose customers for a variety of reasons: They move away, buy a car model you don't work on, they may pass away, etc. 

The question is, how do you attract new customers?  Do you use discount coupon marketing or rely on brand awareness strategies, or a combination of both? 

Step 8- Don’t Rely on the Sale of your Business for your retirement

I know this sounds contradictory, but the proceeds from the sale of your business may not be enough to financially support you into retirement.  Your business must be profitable while you are in business and must financially support the things you want to do and need to do, while you are in business.  However, to expect a big payout from the sale of business to secure your financial future in your retirement years is not advisable.

Here’s what I suggest. Build wealth while you are in business. Whether that’s investing in real estate, through an investment portfolio or by establishing a retirement account.  In other words, you need to sit down with a qualified financial advisor and plan out what you will  need in retirement and build up the cash needed to support that.

The proceeds from the sale of your business should be a bonus for you. Something to feel proud and will allow you to enjoy the years of hard work and dedication you had to your customers, employees and your community.

One last thing, if you own your property, this opens up different opportunities. You can sell the property or lease it back to the buyer.  For this, you will need to sit down with your accountant, a real estate attorney and your financial advisor.

Stay tuned for Step 9!

17 minutes ago, NATURE said:

I think you just have to look at the other trades.  The apprenticeship to journeyman path is much more stringent, with class study and on the job training coinciding and taking years.  Compared to a master plumbers exam ASE is a joke and we're plumbers and electricians and HVAC specialists rolled into one.  If we want the legitimacy according to the common man and pay scale of other trades, shouldn't we have similar prerequisites?

You make a great point. Years back I hired a tech from Greece that moved to the USA. His trade was Undercar. He went through extensive training and certified in that one area.  Other trades are highly specialized, and perhaps as you say, we should take a look and learn from the other trades.  

7 minutes ago, thelmuth said:

Like EkmanAutomotive, I passed my first round of ASE testing in the late 1980's. I passed as a Master Tech and had never worked on a transmission, still haven't. I was and still am good at taking tests. I recertified as a Master Tech twice over the years, with my last certification expiring in 2019. 

I feel that as a certification, it does little to prove competancy of a tech. There was a prerequisite of 2 years experience to be able to sit for the test, which is something, I guess.

From a consumer perspective, very few have any idea what that blue seal is. It looks good hanging on the wall, but you could create your own logo and hang it on the wall and the consumer wouldn't know any diference. It really doesn't mean anything.

I have found many people who think Techs have to have a certification like hairdressers and other professions do. While I don't like Gov't control, I think working on a vehicle, with so many critical systems, and the potential for causing great bodily harm if not maintained correctly should have more oversight than a hairdresser. Look at the difernece in liability ("My hair is ugly, I'm embaressed" vs "My brakes failed and I killed somebody").

ASE has not achieved the goals of promoting Automotive Service Excellence nor in educating the consumer.

You bring up very valid points. I also agree that the auto repair/service industry needs some sort of qualifying criteria. And you are right, cutting hair and performing a brake repair are two completely different animals in terms of what can result if not done properly.

The question is, and has been for a long time: If ASE could not achieve the consumer awareness that's needed, then what will? 

Step 7 - Who Will You Sell Too? 

One of the decisions you will eventually need to make is who you will sell to.  If you intend to sell to a family member or an internal employee, then you need to establish a plan to  prepare this person for the role of shop owner.  A 20-year veteran technician, with no training or experience in how to run a business is a disaster waiting to happen. Create a plan to ease this person into the position of ownership. One thing to be very careful of; make sure that your desire to have this person take over your business is his or her desire too.  Get this person invloved with management training, financial training, leadership training, and all the other components on how to run a business. And you should consider getting a business coach. 

If you intend on selling to a qualified outside buyer or company, then you need perform your due diligence, speak to a  broker or a company that has experience in selling automotive repair shops. Please be careful with brokers, many business brokers require an exclusive contract for a period of time, and may make promises to you that seem too good to be true.  

Lastly, spend time and thing this through. There are many ways to structure any deal. The more you prepare, the better off you will be its time to sell. 

Stay tuned for future articles on your Exit Strategy! 

4 hours ago, juanpablo4219 said:

Good Day!

We are a Brake and Front End shop!

We do oil changes, state vehicle inspections, suspension work, alignments tune ups, cooling systems, what I call "basic maintenance".

I have learned to say "No" for the fact that we  have small location, the property itself won't allow us to do some of the big jobs.

we are an in & out shop 

We have 4 bays, 1 for alignments, one for state vehicle inspections and 2 for brakes and suspension and anything else within our capabilities. 

we are a 2 man show, but we work fast and efficiently to where we don't delay our customers more than we need to.

We have become a Suspension Specialist shop, most of our revenue comes from alignments and suspension work. 
The big jobs are for the big shops, where they have room for the cars and more techs, and the cars stay over night. 

 I hate to take a car and don't deliver within the time.. 

Some of our customers want us to do odd jobs out of scope of work, but time is a very valuable commodity, we take a big job and then I have to either turn down work or don't deliver the big job on time.

I just don't think is fair! the big jobs put a lot of stress on us because we want to finish them on time.. and some time we end up loosing time and money...

My next addition to our list of services will be the ADAS. The camera and sensors calibration goes a long with our scope of work...
I am still studying the process... not many places down here in Brownsville, TX doing that type of services yet..

It sounds like you have determined your true business model and your strengths. I believe this is key to be efficient, which leads to success. 

2 hours ago, NATURE said:

I must agree that I don't see the point.  When I was at the dealers I saw many master certified apprentices that were great at quoting books but couldn't fix a car.  There's just no substitute for experience and whether those apprentices made it or not had nothing to do with ASE testing in my opinion.  I recertified twice and gave up.  I thought recertification was supposed to be so we could be tested on current knowledge as technology changed, but I saw very little of that.  Instead it just seemed like a cash grab every 5 years to keep ASE in business and it was a huge pain in the butt for what seemed like very generic tests.  I myself have had very little transmission experience as nowadays I send that stuff to the tranny shop, and when I was at the dealers they had dedicated tranny guys, but I had no problem with the tests because they had nothing to do with how transmissions work but a lot to do with how electrical circuits work.  I do feel like I'm being too negative first thing on a Monday morning but I've been contemplating a this question a lot lately and I'm glad it was asked so I could get my rant out of the way.  I also have to admit that it's been some time since I've been to a test and things could have changed.

I don't think you are being negative. We need to hear all sides, that's how we learn and grow.

For me, I would like to see something that tells the world we are a profession.  However, in spite of the legacy of ASE, not many consumers know what it is. 

I would really like to hear how others feel about ASE certifications. Good, bad, needed, not needed? 

Sears had a legacy behind it.  When they put quota and profit ahead of integrity, it shook up the company to a point where it could not recover. 

Sears at one big thing that many auto companies did not have at that time....A vast customer database.  Sad, but a lesson for all.  

8 hours ago, JimO said:

I have owned a shop for fifty years and I think that knowing when to say no and pass on a job is vital to success. When I first started it was easier to try to be everything to everybody because I had youth on my side plus we were working on vehicles that were easier to repair. GM, Ford, Chrysler and AMC made up 90% of our customer base with Toyota and Datsun (now Nissan) just entering the scene. We rarely saw a European car in those days. As vehicles became more complex we began to realize that it would be very difficult for a small, three tech shop to become proficient with every vehicle that came in. We got burned a few times by getting involved in jobs that were too complex or too time consuming. We are also blessed with a busy location which allows us to be more selective. So fast forward to 2022 and we have people in our area with Bentley’s, Ferrari’s and Lamborghini’s that I will not touch. Convertible top problem on any car - No. Involved electrical problem on a Jaguar or Land Rover - No. Windshield replacement on any vehicle - No. Involved, 8 hour heater core on any vehicle - No. Intermittent problem that I feel will most likely not end well - No. Transmission work on any vehicle - No. Installation of aftermarket radio, remote start, theft alarms - No. Any kind of work on motor homes, large trucks and busses - No. I could probably keep going and add another 25 more items that I would say No to but I will stop at this point. Saying “No, I am sorry but I can’t help you with that particular problem, I suggest you bring it to the dealer” allows me to concentrate on the jobs that we are good at, jobs that don’t put a physical strain on my older techs that have been with me for over 40 years, jobs that allow us to be profitable. I fully understand that many of you possibly need to say Yes because if you say No there may not be any other job. As I noted, we have been blessed for 50 years with a busy location that provides us with more work than we can handle so this, more than anything else, allows me to be this selective. With that said I can’t help but think that as these vehicles continue to become more and more complex everyone, busy or slow, will be getting familiar with explaining to customers that they need to go to the dealer for various repairs. 

50 years! Wow! That fact alone means other shop owners should pay attention to your post.  

It all comes down to what fits your business profile, and no other shop owner can you what's right or what's wrong.  With that said, I do agree with you that being everything to everyone is a setup for disaster.

Great discussion everyone!

I think as a society, we need to distinguish between what's entitlement and what is earned.  When employees feel that they are entitled to something, the incentive to produce and grow within the company they work for is diminished.   And that puts too much pressure on the other workers to maintain production, especially on smaller businesses. 

I am all for family time, and personal time.  However, what we do on a daily basis, shop owners and employees, should enrich our lives. And the work we do must have purpose and be part of WHO we are. We need to be proud of the work we do and work hard, not seek ways to run from it.

Everyone needs to contribute to the success of the company they work for.