Joe Marconi

I am hearing this story over and over, and not just from our industry. I spoke to the local deli owner yesterday. Business for him is down 95%. He is working alone, and has one employee working 2 hours a day. He cannot pay his rent or his bills. The only thing that I can say is that this will pass. Right now is seems like the worst of times, and being in business for 40 years, and in New York, I can tell you that I am never seen anything like this. But, we will prevail. Talk to your banker, accountant, financial advisory. Get the help you need and make those hard decisions. You need to save the business first, then rebuild when things begin to get better. I know it may sound fruitless at this point, but maintain a positive and strong attitude. This will help your mind find ways to get through this. It will not be easy, but we will succeed.

You are not alone. I am in New York, ground zero and we are suffering too. We are all in this together. Speak to your accountant, your financial advsior and your banker. Get their help to create a plan. There will be assistance for us, this time. This is not our fault. Also apply online for the SBA Disaster Relief fund. Call all the vendors and other companies you owe money and negotiate a deal. Call all your customers to let them know you are thinking about them and offer to pick up and deliver, if that is something you want to do. Talk yo you employees. You may have to cut hours or lay off temporarily. This will pass, it will not be pretty, but we will get through this.

No one knows what will come next. Where we are in New York, it's the hardest hit state in the country. Things change by the hour and we are making adjustments as needed. We do not plan on shutting down, but we will adjust hours and staff as needed. Hang in there everyone, this is not our fault, we will get throught this.

I have been contacted by many shop owners about the decision to close or not. In most cases across the nation, Auto Repair Professionals are considered essential workers. Which means that we can stay open for business. However, even though we are essential, I personally will not demand my employees to come to work. If business fails because of this virus, it will fail in the short term. We will all eventually find a way to come back and rebuild our businesses. Things are changing by the hour, and that makes our decisions as leaders even more difficult. I don’t want to get sucked into panic, but I don’t want to turn a blind eye to the fact that we are in uncharted territories and that we are all learning from this crisis together. The decision to close your business is yours. There is no wrong or right decision here. The safety and well-being of our families are our number one concern. If it makes it any easier, make your next decisions from the heart, not from a business standpoint. Be strong, be a leader, and know that we will get though this. When the dust begins to settle, we will have learned a lot about business and even more about who we are are as a culture and a society. I cannot tell you what I am doing tomorrow. I plan on having a meeting with my staff, and a decision will be made to stay open, cut staff, cut hours or perhaps another scenario will surface. I will keep you updated and try to bring a little sanity to everyone during these crazy times. You are all leaders; you are automotive shop owners. You are the toughest of the toughest. I know you and I will prevail through these troubling times and I look forward to the future when we can all look back and say…”We may it through, and we’re better off for it.”

We are holding at a 50% decline in business the last 4 weeks. However, looking at the numbers, something was going on since mid January. Numbers were down about 20% in January and worse in February. I thought it was the lack of a tough winter in the North East, but now I know that it was more than that.

I respect your decision. There is no right or wrong decision here. Stay safe.

Frank, you are lucky. Please be prepared. Have a plan. If nothing affects your area, you will still benefit.

Alex, we have seen a 40% drop in business the last three weeks. The worst drop in business in my 40 years. I made a post, by the way, under Joe's Tip. Here's is our plan: We have daily meetings with emoloyees to maintain our aim to keep oursleves clean and our customer's car clean We wipe down customer's cars before we get into them. The areas we are in contact with. We launched more radio spots to let people know that we are taking precautions, we will santize your car before and after we work on it. We are also promoting that we will pick up and deliver your car if you wish not to come out of your house We are offering a Deep Cleaning of the HVAC system at cost, $39.95...Usingb BG Kits. We purchased cases of small hand sanitizer and are gvivng them out to our customers No overtime and we may need to cut hours. No non-essential spending I have advised my employees to also not to spend any money now, unless necessary I have some employees take vacations now, We need them when business returns Don't panic Stay postive PRAY! Let's share our ideas and beat this thing!!!

My Thoughts on the Coronavirus and Business In my 40 years in business, I have lived through many economic downturns. From the stock market crash of the late 1980’s, the housing bust of 1990’s, the tragic event of 911 and the great recession of 2008. This is different. The fears and the realities of the coronavirus has affected us all. And some areas of the country have been hit harder than others. In all other situations, I fought like hell to make a difference and beat the circumstances. Again, this is different. I am not an alarmist, not a defeatist and I do not get sucked into the sensationalism of the press. Just today, I heard a sports announcer on a talk radio show advise her listeners to stay at home, don’t go to work, don’t go to the movies, don’t go out of the house and isolate yourself from other people. Is this rational? I can’t do that. I am an automotive shop owner. What I do matters to my family and the community. I…WE….need to be there to ensure that the doctors, nurses, police, public officials and everyone else has their transportation ready to perform. Stay home? Us? Is that an option? But again…this is different. This afternoon, I was getting ready to go to Church; 4:00pm Mass, when my wife got an alert that Church as been canceled. Wait; let me say this again real slow…Church… has…. been…canceled. Fear has a way of eating at the fabric of our rational being. I fully understand the reality of what is happening. This virus will take people’s lives. But, do we run away in the face of a threat? Is this who we are? What do we do? Close our businesses for a few weeks? A month or two? How many of us can afford that? We all know the answer to that question. As automotive shop owners, technicians, service advisors and all the other valuable employees of this great profession, we need to take the proper precautions. Do all you can to protect yourself and your family. If you decide to continue to operate your shop during this challenging time, have a meeting with all your employees. Take the proper steps to protect yourself, your employees and your customers. Business may get ugly for some. My company has taken a 40% drop in business the past three weeks, directly contributed to the coronavirus outbreak. I write this to tell you how I feel; not to decide for anyone what to do. I will not force my employees to do anything they feel would put themselves or their families in harm’s way. For me, I intend to fight. I will take care of myself, take care of my family. But there are too many people depending on what I do, and way too may years behind me to hunker down and wait this out. Stay safe, stay healthy. Take this situation serious. But please don’t give up. We will prevail and we will get through this together. We are the hardest working, most resilient, toughest people on the planet. Let’s show the world and this virus who we are!

One thing to consider, more and more jobs these days are jobs that have no parts included. Take all the labor time your dad spends testing, with no labor dollars brought into the shop. The auto repair and service world has changed and we need to change with it. While I agree with you that we need to bring a higher level benchmark into this industy, the fact remains that we are behind when it comes to labor. The future is here and to remain in business will require a financial demand the likes we have never seen before. And the only way to invest in our future is to ensure we are getting paid the labor we deserve and work so hard for.

Your lead tech is not performing up to expectations. Shop production is slipping and you’re not sure why. You hear through the grapevine that some of your employees are wondering when they will get their next pay raise. After a few agonizing weeks of pouring through reports, you make the decision to give across-the-board pay raises. Almost immediately, you see a boost in production. The shop is more upbeat and all is well. Your decision appears to be correct. Three months later, your shop is once again struggling to meet its sales and production goals—and morale has slipped, too. I have seen this scenario all too often. And, while there are times that we need to give pay raises, if your shop is struggling to meet its sales and production goals, increasing pay to improve business is not the answer. The reality is you have deeper issues. Let’s address employee compensation first. You must pay people a competitive wage with the opportunity to earn more. There should be incentives in place to reward your employees for reaching their personal and team goals. And, there needs to be a process in place where your employees understand how and when they will get a pay raise. However, in terms of long-term company growth, a focus on pay alone will never be the formula for success. In other words, throwing money at a problem is a short-term fix. It’s putting a Ban-Aid on a more serious injury that requires much more care and attention. About 10 years ago, Mercedes-Benz was struggling with its customer experience at many of its dealerships. In response to this, Mercedes decided to increase pay incentives, implement new policies and training programs. No improvements were realized. Mercedes top executives could not understand why customer service was not up to company expectations. After all, this is Mercedes, a car company that represents quality and sophistication. Why were their dealer employees so indifferent? A senior leader at Mercedes recognized the problem and stated, “Pride in the brand was not quite as strong as we thought, the level of engagement with work was not as deep as we thought.” Mercedes finally realized that until the employees at Mercedes genuinely cared more, no amount of money, policies or training would make a difference. Understanding the need to get front-line people more engaged and take pride in their work, Mercedes began to invite its dealer employees to spend 48 hours with the model of their choice. To experience not only the amazing performance and mechanical attributes of the vehicle, but also that they can turn heads as they drive through their neighborhoods or when they drive into the little league parking lot. Mercedes also built its Brand Immersion Center in Tuscaloosa, Ala., in 2014, where hundreds of employees go each year to spend time getting to know how the cars are built, gain a deeper understanding of the brand, the history of Mercedes and experience the legacy of the company. According to Philippa Green, brand immersion trainer for Mercedes-Benz, “The ultimate goal is to engage their hearts and minds around the brand. We’re teaching them about our legacy.” As business owners, we track KPIs, set goals, work on marketing and refine our business plans. We also ensure that we provide our employees with adequate training and a well-equipped environment. These are the essentials of our business. However, we must never overlook the importance of your employees taking pride in their work. And, pride comes from employees knowing who you are, what you stand for, what you do for your community and for the industry. Giving people pay raises can motivate them. But the bounce you get from that is short-lived. Once people have gotten over the excitement of the raise and made the financial adjustments to their lifestyles, the raise is long forgotten. If there are no other intrinsic motivators, then shop morale, production and employee engagement will fall right back to where it was before the raise. Anyone who knows me and has read my articles, knows how much I preach about leadership. The theme of this article also has its roots in effective leadership. You, the leader of your company, have the power to transform the people around you. Focus on the person, not the position. Recognize when your employees do things that are from the heart. Promote your company’s brand, vision and legacy. These are the keys to a long-lasting company. This is what will improve morale, not a pay raise. This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2020 View full article

We hear all too often that the "other shop they went to, does not charge for diagnostic testing" or "waives the diag if the customer agrees to do the work" This may have happened years ago, but I really can't see this has common any more. Shop owners know the costs of complicated diagnostic testing. And shop owners know that 2 hours of testing has no part profit, so in order to maintain your hourly gross profit, you need to charge. And depending on your labor structure, many shops use a multi-tier labor rate to offset those jobs that have little to no parts for a particular job.

Joe, more and more shop owners feel the same as you do and are going through the same things. What we need is unity to find common ground on this.

It's not about the brake job. It goes beyond that in everything you do. The value I am referring to is exaclty what you state: Your morals and ethics and the relationships you have built. And I am not in agreement that what most customers care about is the bottom line, maybe some, not most. We have all sold top of the line tires not because of price, but because of value. I am not saying you can charge whatever you want, but when the customer is treated with respect and is shown that we do care, price is not the determining factor. This is not theory and it is not abstract. You build value with a focus on customer service. You build value by becoming known for going the extra mile, for being active in your community, for being part of fundraisers, kids sports, for treating people as family and by the quality of your work. Be known for more than just the local auto repair shop. As a fellow shop owner since 1980, I can tell you that there are some customers that only see price, but most want to be treated with respect. And I know that the majority of shop owners are just like me, they will go to the ends of the earth to win over a customer. Capitilze on the things that your customers recognize. Focus on why you do what you do and focus on the customers that show you the respect; those key profile customers. I hope this clears up what I am trying to conevy. It's a lot to communicate in a post.

The balance between being profitable, competitive and fair to the consumer is a tough battle. And this issue will not be solved overnight. Plus, there are a lot of variables. The fact remains that the future auto repair and service business will become more labor-oriented with less parts. There will always be parts and labor, but as the automobile evolves, things will change. Unless we realize that we need a certain gross profit per hour, it will be hard in the future to remain in business. I am sure no one is suggesting raising labor rates so high, the public revolts. I think for now, we all need to settle down and do the math. What do you need per hour in gross profit? What is your breakeven? And how much do you want to earn and pay your employees? These are questions that must be answered. Profit is not just for your wallet. It's needed to reinvest in your business, attract the best people, pay for continued training and prepare for your future. A lot to consider here. In the end, whatever choice you make is yours. It’s your business.

I just want to add on thing to this conversation: Don't give up on value. The reason why independent shop can charge a higher price for a brake job, for example, is becuase the the value they bring to thier customer. Trust me, I have done consulting wotrk for major companies (I cannot reveal the names) and they are baffled with the prices we get on brake jobs. The typical repair shop is the go to place and preferred by consumers over any other auto repair center, and there is a reason for this. We are committed to our customers and the community. I know there are so many other peices to this puzzle, but value does play a key role in our business.

Wow, I understand your frustration and right there with you. And I hear the same things you do. The reality is that things will not change until the vast amount of shop owners stop and truly understand what they need to earn a profiit. The Auto Repair Shop owner are the hardest working people on this planet, and I am one of them. I wish and pray that we can earn what we deserve. Parts are another issue. The world has changed and getting your gross profit on parts the way you once did is a thing of the past. Shop Owners, listen, the only way to remain in business and earn a profit is through labor. We will win this mindset when we all realize that labor drives our business. Plumbers, electricians and other trades learned this years ago. When willl we? And, by the way...this topic is far from dead.

What are you doing for Valentine's Day? Each year we purhcase small boxes of Chocolates and chocolate roses. We give them out to our customers and delivery drivers a few days before and the day of Valentine's Day. It's a big hit. Everyone loves a little gift. Other marketing ideas to bring a little fun to auto repair and service?

It disturbs me to hear that you were ganged up on Facebook. We are professionals and need to conduct ourselves to a higher standard. We can all share and learn from each other. If someone disagrees, that's fine. But we need to be civil. I have been around for over 46 years in the auto business, forty of them running my own company, and I can tell you, the auto repair world has changed and we will see even more dramatic changes in the next five years. Sadly, for the most part, most shop owners have not gotten the income they deserve and it points right back to labor dollars; which has always been an issue. But now, it's the difference between keeping your doors open or shutting them down for the last time. Achieving your labor dollars to attain profitability is the only way to remain in business. We do more diagnostic testing than ever before in our history. And think about the jobs you do that require little to no parts: Removing a bumper cover to replace a side market bulb, Removing the bumper cover and radiator support to gain acces to a leaking 50 cent o ring at the receiver dryer. There is no way any shop can charge thier standard labor and remain in business. Let's please have an open and honest discussion and move forward!

The year was 1980 - the year I founded my company. And, like many new business owners, I didn’t have a clear understanding of what was needed to grow a successful business. I thought that success would be determined by my technical skills and my willingness to wear the many hats of the typical shop owner. It wasn’t until I began to let go of trying to do everything that I realized that success is not just dependent on what I do, but by the collective work accomplished by the team. I eventually discovered that I was not the center of my universe. After a few years in business, I began the transition from simply owning a job to becoming a businessman. And, while technology has reshaped our industry throughout the years—and will continue to do so—there is one constant that will never change: success in business rests largely on the people you have assembled around you. By the late '80s it was obvious that I was doing way too much. I looked at each role I had my hands on: shop foreman, service advisor, shuttle driver, bookkeeper to lot attendant. And, as long as I’m confessing all this to you, I need to disclose that I was also the shop’s maintenance person; making repairs to the bay doors, the slop sink and equipment. You name it, I did it. I was literally too busy to be successful. In order to lead my company, I had to first clearly define my responsibilities. These are working on the business, recruiting and hiring the best employees, becoming a leader of people and making sure that my business was successful. I also needed to fulfill the obligation I had to my employees. I realized that this required a deep understanding that putting people first is the best strategy for success. This was difficult at first because it requires working on things that have no immediate impact on the business. Unlike working in the trenches and having your hands on everything, working as a businessperson means that you need to spend time building for the future. The things that are most important to your success in business are the things that have a payoff down the road. I also clearly defined the duties I should not be doing and assigned those tasks to others. This is a critical step for any shop owner. Warren Buffett says that in order to be successful in whatever you do, it’s crucial to focus on the things that generates the greatest return and that you can’t do it all, and that means sometimes you have to say, “no.” By the late '90s it became clear that the most valuable role I played in my business was that of coach. All the best marketing plans and the best business strategies mean nothing without a team of great people around you all pushing in the right direction. And that takes a strong leader. Not just a boss, but a leader. Leaders inspire people. Leaders get others to reach down deep inside themselves and perform at their best because they are aligned with the leader’s vision. Leaders inspire others through praise and recognition for the work they do. When people feel their work matters, they have a purpose. People are motivated by the heart, not the wallet. That’s not to say earning a decent wage isn’t important. But a focus on money alone is not a strategy for success. Focus on people first and profit will follow. Spend time with your employees. Get to know them as people, not just the role they have in your company. Find out what their dreams and goals are. And then find a way for others to achieve what they want out of life. People cannot be motivated until they realize that what they do every day helps them to achieve what they want in their personal life. There are other people in our business world that we must never forget. And that’s our customers. If you were to ask me, who is more important, my employees or my customers? I would answer, “They are equally important.” You cannot have a successful business without the right employees and the right customers. One last bit of advice I can give you is to focus on your success, no one else’s. Be very clear about the pathways you take and never forget about the obligation you have to others. Build a company culture of teamwork, quality and integrity. Focus on what’s in the best interest of the customer and the people around you. Put people first, and everything else will fall into place. This story was originally published by Joe Marconi in Ratchet+Wrench on February 4th, 2020 View full article

Well said Joe! And my hat's off to you for being professional and recognizing that we need do what we can as an industry to attract and retain quality people. And also attracting and retaining customers. Thanks for sharing and best of luck to you!

With Mother Google literally tied to our hands, through our cell phones; are part margins becoming more difficult to achieve? Traditionally, shops use a 50% part margin, which they deserve. But, we live in a world today where part prices are so transparent that maybe we need to rethink this. Consider this: What if we concede on prices? Hold to a suggested list…BUT…raise our labor rate to offset the loss in overall profit. In other words, keep your parts prices at a margin the consumer will not question, but raise your labor to make up the part profit? This is being discussed around the country and there are shops that have implemented this strategy. We can’t give up our overall gross profit, so is this a viable option? Your thoughts?

Got your attention? Good! Take it from me, a shop owner for 40 years; before you invest a dime on advertising, get your internal marketing in order....in other words...get your house in order. No amount of advertising or marketing means more than what you do each and every day. And that is creating an amazing customer experience that gives your customers a compelling reason to return. Make sure that each customer contact point creates a positive experience. The phone call, the drive up to your shop, the parking lot, the customer write-up, the upsell, the car delivery and every other point of contact with the customer. These things I speak of means more than any money you spend on advertising. So, before you spend that dime, get your house in order. And remember, everyone in your shop is an important part of your marketing strategy!