Joe Marconi

I want to clarify something.  I stated in the above post that many shops are getting $135 to $150 per hour.  I am not implying in any way that this is too high or unreasonable. In fact, as an industry we need to raise the average labor rate across the board in this nation.

What I am saying is that you need to sit down and do the math.  Find out what your labor rate should be by determining your overall cost of labor and your expenses; and then adding your desired net profit. Also, I recommend you have multi-tier rates.  So, a C-level tech performing oil changes and general service is billed at your standard labor rate and an A-level Master Tech performing complex driveability and other onboard diagnostics is billed at a much higher labor rate. 

If you are not sure how to do this, you need to get help from a professional, such as a coach. 

I am not accountant and I do not know the tax laws in every state, but it is important that you meet with your accountant way before the end of the year if you received and used an SBA or PPP Loan.  Loans used to pay bills may not be used as a deduction on your tax return, and may result in increased taxes. Again, DO NOT TAKE MY ADVISE as an accountant.

I plan on meeting my accountant in October to review all the tax implications for my 2020 Tax return. 

AND, the SBA may change rulings, so stay informed and seek professional guidance. 

With so many uncertainties these days, there is one strategy that we can all do that will help to smooth out our overall sales and customer visits throughout the year.   Make sure the experience is always amazing during the entire customer visit. And perform the car delivery that gives the customer a reason to return.

Here's the key part before any customer leaves your shop: Make sure you discuss their next service appointment and any other future recommendation.  Let them know that they will get a reminder by either post card, email or text.  BUT, there is one more thing you can do to boost your customer retention, get permission from your customer to call them a week prior to their next appointment.  Yes, give them a phone call.  Try it, and give it time to work.

Oh....won't work, you're thinking??? Well, here's list of businesses that do it: Dentists, doctors, nail salons, hair dressers, chimney cleaners, boiler service companies and Successful Auto Repair shops. 

From as far back as I can remember, labor has always been an issue. As and industry, we have struggled to get paid properly for the work we do.  And those shops that understand how critical labor is, are the shops that have done quite well.  

In today's auto repair shop world; Getting the right labor dollars is no longer a buzz topic or debate- Labor dollars will be the salvation of your business. Labor translates into profit, and will also allow you to build for the future and to attract the quality people we need in our industry. 

If you don't know what your labor should be, you need to find out.  Don't call ABC Auto, down the street to ask him. The odds are he did not do the math. Plus his expenses are not the same as yours.

Depending on what you pay your techs, your overhead, and knowing your numbers will determine your labor rate.  I can tell you that there are shops that are paying techs a very good wage and those shops are getting $135 to $150 per hour, and more.  That is not a typo.  And there are shops that have multi-tier rates. So, for Diag and labor jobs that have no parts associated with the repair, their labor is much higher than their standard labor.  It's fair, it's honest and it's time we all raise the bar. 

Please, do the math, get help and make sure your labor is right for your shop. 

Most of you probably already know what I am about to say:  The Service Advisor position is the most crucial position in the shop.  I know, I know, what about the mechanical work done by the techs?  Well, that's important too, of course. 

For the most part, customers spend their hard-earned money and most of time don't really know or see what was done to their car.  Let's face it, the customer can't see the water pump or T-belt. And most of the time, the customer does not feel any difference with the car as they drive out of your parking lot. 

What the customer does see (or experience) is how she was treated.  And that makes all the difference in the world.

Plus, great service advisors also motivate the technicians, because great advisors are also great leaders of people. 

Think about this...Six months from now, your customer will not remember the fuel injection relay or the mass air sensor that was replaced....but she WILL remember how she was treated. 

And trust me, that OE-quality fuel injection relay install by a certified A-level Master tech using Snap On tools and a Launch Scanner IS NOT the reason WHY your customers return to you....She returns because of the level of service your provide.

As we celebrate Labor Day, let us all remember that we, the automotive professionals, keep America moving! 

Be proud of the work you do each and every day!

HAPPY LABOR DAY! 

I can't speak about all businesses in my area, but the repair shops are doing ok. In fact, most had a normal or near normal summer.  A few weeks back we had a major storm that knocked out power for nearly the week. That killed the week. But aside from that, we had a very good June, July and August.   With a miserable March and April, this was a great morale lift and financial boost.

The only  down side is the affect COVID is having on other businesses, like restaurants, deli's, sport businesses and other businesses. Will this have a trickle down effect on our industry.  No one can tell for sure.

I will be shoring up my finances and preparing for the unknown. 

After a recent trip to California (Yes, in spite of COVID-19, I went to visit my family and grand-kids) I found that complacency has set in with many people. I thought that due to the current economic state for so many businesses, those that are working would be on high alert to go above the norm and provide an extra level of amazing customer experience. I found the opposite. 

The airport in NY, JFK, nearly empty, was filled with workers leaning up against the wall on their phones. The people in security bordered on rude, no, let me rephrase that...they were rude. The flight attendants must have been auditioning for the next zombie movie, because there was NO sign of life with them.

We went to a restaurant in L.A. Outside dining only. We were herded like cattle through roped walkways, to our table and everyone spoke in a monotone voice, as if to say to us, "Why are you here? Can't you see we don't want to be here." 

I know we have been through a lot, but I was surprised at the level of complacency. Or was it something else?

Shop Owners, it's been a strange and tough year. But we are still standing. Maybe a little battered. So, let's be thankful for each and every day. Let's smile. People may not see that smile through the mask, but it will show in your voice and attitude!   

Those with the right positive mindset will come out the other side of this stronger than ever. Trust me on that! 

Don't become a victim of complacency. 

I read about the Goodyear incident in the paper, and not happy with it. I also want to state that I am not making any political statement here.  We as a society need to come together and work through our differences. We all have our own perspective and as civil people, we need to see each other's perspective. 

The other day I saw people on the news stomping on the American Flag and cursing this country.  I will not debate their right to do that.  However, there are those among us that have fought, and many have died, to give those people the right to express their feelings.  

No politics, please.  Let's all come together, share our opinions, learn from each other and work to keep this country the great nation that it is. 

What are the 4 words I'm tired of?  "It's a leased car"

I don't know about you, we don't fold when someone says to us that they are driving a leased car.  No matter if you own your car or lease it, the car has to be safe for the road and for the occupants. 

They other day, a customer told my service advisor, "I don't believe in ever changing the Cabin Air filter, it's a lease car and leave it alone." My service advisor replied, "Sir, can I at least remove the dead mouse from the filter?"  (See photo below)

Lesson: You got to point out the WHY!  

And yes, he not only authorized the cabin filter, but also paid us to remove the blower motor to clean it out and completely sanitize the car. 

How do you handle customers that tell you, "It's a leased car"

49 minutes ago, benzfxr said:

Nevada has a list of exemptions - we posted those on the front door - so we ask you to wear it unless you fall under one of the exemptions- them its end of discussion 

Exemptions?  Can you give us a few examples, Frank. 

I know it's not going to be Back to School as usual this year, but there will be increased traffic on the road as more people perform school-related errands.  It's your obligation to your customers and the community to make sure the roads are safe.

Many people have neglected their cars the past few months, making a lot of opportunity for your shop.  

Get your Fall/Back to School marketing plan in place today!

Want to share ideas?  Even Better! 

If you received an SBA PPP loan, you need to contact your bank/lender to find out specific information regarding loan forgiveness. Because banks and lending institutions handled the PPP loan, a specific bank may require different information. 

I just viewed an hour and half video from my bank about the PPP Loan forgiveness applications, and it was a little overwhelming.  For me, I will seek outside help with this. 

Just perform your due diligence. 

Any feedback from anyone would be appreciated.  

Matthew, I like you feedback and agree.  All great points.  And I do believe we need to prepare ourselves for any downturn and have a solid plan in place, and of course as you mentioned, it is crucial to stay top of mind with your customers through follow up, reminders, thank you's, etc. 

We, automotive shop owners of America,  must take the opportunity of a lifetime and turn it into a bunch of success stories. What opportunity?  Look around you. The world is in turmoil. COVID-19, social unrest, uncertainty about the presidential election, the economy, how are we going to get out kids back to school, on and on and on.

While the world is spiraling out of control, we have the power to make big changes to our auto repair shops.  And it can all be positive! 

The Opportunity...

First, the average age of a car in the U.S. is about 12 years old, attaining well over 200k on the clock. 

Second, Uber, taxis and limo companies are suffering.  Guess why?  

Third, the motoring public in the foreseeable future will be traveling by car, taking road trips like they have never did before.

Fourth, the roads are packed with motor vehicles, as more and more people prefer their own car as their primary means of transportation. 

Fifth, as the cars get older and older, more of them will be out of factory warranty.

Sixth, independent auto repair shops have a vast amount of training, resources and replacement parts.

Seventh,  the overwhelming majority of cars being build and sold today are still internal combustion engine powered cars. If you factor in the expected average age of car these days, we can safely bet that those gas engine cars being sold today will still be on the road in 2033 and beyond! 

Eight, You need more?  That's not enough! 

Get your plan in place.  Get your prices in line with making a profit. Don't give anything away anymore (I am mostly referring to checking, testing, diags of any sort!) Offer world class customer service. Be a leader of your employees.  Show the world what you are made of! 

Great points Matthew!  I a key component in any business is to know your numbers. And it is all about Measuring.  We have managed to maintain and grow the business through the years by knowing our numbers, but it's a more than that. It's about leadership, making tough decisions, getting rid of the dead wood and hiring the right people. Also, it's recognizing the value we give to our customers, and not be afraid to charge and make a profit. Yes, I said it...making a profit. Not just a living or paying the bills. 

Like I said, it's not 1995 anymore, we all must change. It may not be as drastic as the blacksmith times, but those blacksmiths that stop counting "horse and buggy's" and started to count "horseless carriages" made the transition. We too must realize that in order to thrive will mean a different type of thinking. 

In my 40 years as a shop owner, I have battled the age old dilemma: Is it my car count, my customer count or some other reason why some weeks I find it hard to hit my sales goal.  

It always comes down to production.  Now that's really simplifying it, I know.   But, when you look at the numbers, with the right jobs and a balanced schedule, the ARO goes way up and car counts become not as important as we thought. 

Another thing to consider, this is not 1995. Cars do not come in 5 to 6 times a year for an Oil Change Service.   You are lucky to see some customers every 10,000 miles as they wait for that Oil Change Percentage light on their dashboard to tell them...NOW IT"S OK TO GO TO YOUR REPAIR SHOP. Isn't it funny how so many people will listen to the dash board light, and not you!

Anyway, what are your thoughts.  How do you reach your weekly sales goals and what KPI's are important to you? 

We too are not seeing many techs or service advisors looking for employment.  Which is strange since the vast majority of techs that lost their jobs during the COVID-19 crisis were dealer techs and service advisors. 

As of the end of July, we are busy, and hitting the numbers we did last year. In fact, we ended June and July better than last year. I don't think we can make up for the losses we had in Feb, Mar and April for 2020, but all that really matters is realigning our goals and moving forward. 

From what I hear from on the streets, most repair shops are doing fine, collision shops are doing better and it's mixed with new car dealers.  

Traffic also seems to be almost back to normal.  

If we can ahead of this virus, we will be ok. As I stated before, my only fear is that many main street businesses such as restaurants, are still struggling along with some major industries, such as hotels and airlines.  

I would continue to be cautious, keep building up your reserve cash and be very careful how you spend your money in the near future.

NEWS BREAK: Workers at a Mavis Discount Tire shop falsified records to make it look as if they completed brake work on a limousine before it crashed and killed 20 in Schoharie, New York, last year, when in actuality the work was never performed, according to the shop's former manager.

Below is a link to the article:

https://www.usatoday.com/story/news/2019/10/09/new-york-limo-crash-mavis-discount-tire-shop-falsified-brake-records/3920945002/

Technicians have been working very hard during tough times the past few months.  And I am not just referring to maintaining production levels. The emotional strain is also a factor. They have been true heroes and have not let up with their commitment to their jobs, the companies they work for and the people they help each day.

We need to recognize what they do and say thank you to our techs and let them know how much we appreciate what they do each and every day. 

I am not one to get political, and there are people that really need help in these times.  Let me be clear about that.  

With that said, the added $600 in most cases has caused more of an incentive NOT to work.  I don't know the answer on how to distinguish who clarifies for extra help, but what I do know is that when people can make more money for sitting at home, it takes away the human spirit to go out and make a difference every day through hard work and community involvement. 

It also does not sit well with so many of the essential workers that have worked through the virus crisis, and put themselves in harms way to keep American moving. 

How do feel about this?  I know it's controversial. Let's be open, honest and civil.

Due to COVID-19, many repair shops experienced a severe economic downturn, some with a drop in sales over 50%.  Without a strong cash reserve and/or SBA funding help, many shops would have gone under. 

My 40 years as a shop owner has taught me to always have a cash reserve.  However, never would I have ever imagined a downturn like the one with COVID-19.

So, how do we plan for the next financial crisis.  And, it will happen. Perhaps not as bad as the the virus crisis, but it will happen.

Here are a few things to consider: Have a separate, and hard to access, cash reserve bank account that has least two months of expenses. Also, secure a line of credit for at least one to two months of expenses.  Also, know your numbers, keep payroll in line, and make sure your prices are fair to you too, not just your customers.  Keep in good standing with all your vendors and keep your credit score high! 

The bottom line here, is truly the bottom line.  To weather the next financial downturn, you need a strong balance sheet and net profit to the bottom line.

What other strategies are you considering or implementing? 

7 hours ago, JimO said:

When anyone disrespects an employee it is time to step in and stop the abuse. You did the right thing and I am sure your employee and other staff members appreciate your response. 

Thank you. Sometimes we second guess ourselves. 

In New York, face masks are required.  And most people are wearing them.  It is not an issue for us, since 99% of customer come in with a mask.