Wheelingauto

Basics like gross profit, difference between mark up and margin. Tech efficiency productivity. Then how to measure, monitor and adjust. Sent from my iPhone using Tapatalk

I originally learned from Mitch S seminars, then local get togethers and then 20 groups. As I have said in multiple threads, Jay, u need to learn and be a business owner quick. All these ideas are great but if u don't grasp structure and understand business matrices you will most likely run out of steam before you make real money Sent from my iPhone using Tapatalk

When you take in all fees, discounts etc what is your all in discount rate on a monthly basis? What type of volume do you do? We have a company who charges all in 1.44%.....everything...

To set a margin is one thing, to actually achieve it is another. I belonged to 20 groups for many years and I can tell you there are many who mean well but never get there.

UGh.....typing too fast and not re reading....ELR. Effective Labor Rate. You say you charge $80 per hour. Lets say you have 4 techs each working 8 hours a day and they were 100% efficient. 8x4=32 32x80=$2560 = 100% elr Lets say you collected $2200 in same scenario. 2200 divided by 32 = 68.75 divided by 80 = .85% elr. This is the basic scenario, it can be more complicated with a lot of other factors but this is a start.

This is provided he has 100% EFL which I highly doubt.

If you did your job and fixed the car right, treated them well then they should return. But they don’t sometimes. RETENTION; This is the cheapest form of marketing there is so get this right and do it consistently. For me, I want to be everything automotive for my customers. I invite them in for any reason, tires low on air, stop by. Questions about warranties, recalls etc., stop by and ask. We will find the answers. The more I can get them to subconsciously think about me as the solution to car issues the more of their car dollar expenditures I can expect them to spend with me. But it takes a while and a lot of effort to get there. First off, with every customer who comes in for an oil change you must ask them what interval they follow. If it does not align with your values figure out why/who/what’s acceptable. Get away from 3mos/3k, its long gone and you’re working against the tide if you continue to insist it. Once you find out what interval they follow set up the reminder sticker to account for it. Some management programs measure average daily miles driven. There is software you can buy/rent that will use this data and calculate the next service date and sticker. Once you (and they) know service expectations figure out how to communicate with them when their next service is due. Call when service is due, text, e mail. Once this is done consistently and accurately you will see a large increase in repeat customers. A lot of shops say I don’t want to be bothered with an oil change only bring me the repair work. Well most every service visit begins or includes an oil change. Another big thing in retention marketing starts with, inspect every vehicle, estimate and present the findings. Over the years I have seen customer roll in with a new set of tires and when asked I hear “We had no idea you sell tires”, Ouch! Guess I didn’t tell them huh? Even if you don’t sell the entire ticket you’ve told them what they need and hopefully let them know you can do it. If they don’t buy it note it on the invoice and them send them a reminder after 6 weeks. We also have a program where we mail a postcard every 6 months when someone has not been in. We mail a different postcard at 6 mos, 12 mos, 18 mos, 24 mos and 30 mos. They say if someone bought a new car they are usually ready to get back in the independent shop after 30 months. This system will keep your name in their head even if they are not ready to return. For us, after 36 months we delete them from the database. Sorry if this sounds preachy, not intended. These programs have done very well for us and are just a few ideas that might work for you.

So a lot of industry Guru's will tell you to instantly fix car count issues put out a cheap oil change or discounted package. This will fill your bays quickly. They then tell you inspect every car, estimate everything and present it (you should be doing this part all the time BTW). Problem is the type of customers who respond to these already know you will be doing this and just aren't interested in anything else or if they are, you need to be the cheapest they can find. They will leave you for the next coupon as well. Proper marketing is like planting seeds. You must prepare the ground, plant, water and wait. There are no silver bullets and it all takes time. There are sever things to consider as you market. First, image. Every impression you make both in printed, digital and live must tell the same story. If you print up a bunch of post cards and use stock photography of tall Scandinavian people all with blond hair and blue eyes and the people show up to the shop and there are a bunch of brown haired, brown eyed short Italians there well....you have probably not met expectations you created. Take a minute and think about the concept and not about the Italians and Scandinavians. Now, if you want to sell Chinese tires to the bottom of the market don't put out a flyer with high end Euro cars. PROSPECTING; Getting new customers who are not part of your current database. The first thing to do with the best immediate results are get out of the shop and meet people. Go to Chamber of commerce events, networking events, get out to the local diner if thats where people congregate but get out there and meet people. Brush up your elevator speech and tell anyone who will listen what you do and why you're so passionate about it. The more you love what you do the more it will show and draw people who want their cars fixed right to you. Web presence, you MUST have a website if you want to be relevant. Once people hear about you they will do their homework. They will look you up on the web. The better your image thru your website, google, yahoo, and all the other sites the better. Claim you business and put in the right info. Hours, address, phone etc. Make sure it's all the same so the spiders (electronic web crawlers) don't get confused. I would suggest not spending any money with review sites (yelp, angies list)until you get a chance to see what if any draws to your business. Get some reviews out there. Ask people to legitimately review you on Google and anywhere else they can/will. There are programs where you can send out emails after service to gain reviews and get feedback on how you did. Google campaigns both pay per click and SEO are valuable but you need to get your image and website in order first. I would invest most if not all of my prospecting dollars above. Electronic and networking. Anything left over would be spent in community involvement and the smaller the community the more I would spend there. I would not incentivize people to refer you. Your best customers refer you because the like/love you. They do it for the reward of knowing they are putting two good people together. When you incentivize them they are doing it for a reward. Next post: Internal marketing, getting your customers back. (got to do some work first)

duplicated post, sorry

They say when you go from owning one shop to multiple the plan needs to be getting to three pretty quickly. I can tell you that the dynamics and/or skillset of running one location to multiple is completely different. I dont know you but my some of the questions, comments and the part about just beginning to take paychecks I would think your one location is way to risky at this point. I would perfect the one operation before ever considering a second. You should be hitting a solid and consistent 20% net (after paying yourself if you work there) before ever thinking you are ready for more.

April fools is not until.....well.....april But good one though..

So your now in business having both employees and a physical location. I would suggest strongly on getting some business training (quick!) and spending some time every day with your business owner hat on. You need to do two things IMO rather quickly. You need to add up all over head expenses, cost of employees, desired profit and establish pricing based on that info. Not on what you once charged or what the shop next door charges. Remember the shop next door might charge less per hour than you but maybe they charge more hours to perform a repair or find other way to produce profit. Either way, it should not affect what you do unless you wish to compete with them. Which leads to item #2. You need to figure out who you are (as a business) and who you cater to and compete with. If you wish to compete with chains they will most likely win since they are designed to compete on price, they have corporate pockets and the one truly accountable is usually not on site. If you're going to feel guilty about anything feel guilty your shortchanging your business, employees and family by subsidizing the cost of auto repair for your customers, that is truly something to feel guilty about.

If you're looking into a 20 group Bob is not the right guy to talk to. IMO you need to speak with Jim. Good luck!

What is mastermind and which 20 groups are you looking at? Have you spoken to Jim Murphy?

I see above you've stated a connection with Elite.....to what capacity? Are you in a 20 group, part of a one on one coaching? Or looking to be a coach?

Since being in 20 group? First year we in group we did 875k. Last year 2.4 mil. Was 5 bays and 2200 sq ft, now 12,500 and 15 bays Sent from my iPhone using Tapatalk

I think the reasons I dropped out (or graduated, depends on how you look at it) would be the same even in a new group. I do enjoy talking shop though so I would always be open to the idea.

I was in 20 groups for many years. I started in a RLO 20 group some 18 or so years ago. After our Coach left and joined with Elite I stayed with them for many years. I think I dropped out 3-4 years ago. I miss some aspects of it but there were many things in the process that became stagnant. That was the sign to me to drop out.

The statements made above sort of explain themselves. I have always been taught..... When discussing parts discuss margin not markup, if you dont know the difference it is rather large. To mark up a part that costs you $100 50% you would charge $150. To have a 50% margin on a part that costs you $100 you would charge $200. This has nothing to do with the comeback ratio. The best shops still need a minimum 50% margin on parts to maintain profitability. Has you known this when you were in business you may have had the opportunity to fund a retirement program not only for yourself, but also the employees and have more than a tool box of old tools. It is unfortunate that so many techs hang their own shingle and never learn the business skills to be successful. The only thing you are doing by working cheaper is subsidizing customers vehicle expenses at the cost of your own families financial health.

So would I, what does that have to do with this post?

Be a businessman first. Sit down with a retired (or active) accountant and understand financial statements. Understand Gross sales, gross profit, expenses and net profit. Understand the industry benchmarks you want to follow so you can measure, adjust and baseline against. It's easy to say I want to make a profit. There is a huge difference in 3% and 20%. Figure out how to measure the businesses performance. Next, sit and dream about what your business is. Who you cater to and who you do not. Figure out who you compete with and who you do not. Because your in business does not mean you must compete with every shop./offer/special. Before taking the leap be financially stable. If you cant go a month without a paycheck and are going to always work from a position of fear it wont work. Know the 80/20 rule. 80% of you headaches come from 20% of your customers. 80% of your profit comes from 20% of you customers. MOST IMPORTANT THING I can tell you...figure out who you wish to cater to, the top 20% or the bottom? Understand what value is and how to deliver it to the top 20%. ( I gave away my answer to the last question) Building a business takes a long time. The more you know who you are (as a business) who you cater to and keep score of how you do it the more profitable you will be and the more fun it will be. Dont bend your beliefs to gain a job. Trying to manage cash flow on 3% net profit is not fun and takes many years off your life.

This discussion came up on another larger discussion board and it's bull. I called my insurance agent and specifically asked them about this scenario and although it sounds really really good it's bull If this were the case your insurance would not trust you to secure proof of liability insurance they would require you to provide it prior to issuing policy. This would be way to cumbersome to collect and provide even if true. What if someone walked in with all genuine Honda timing belt components having tried to do the job themselves and decided it was too hard. What then? I am sure Honda has liability insurance, cant complain about the quality.... Brutal honesty, we don't make money if we don't supply and mark up the parts. If the above scenario occurs I will install at a higher labor rate to make up for the lost GP, customer always has the choice of what to do.

I've always hated being questioned about price after an agreement was made. You gave them a price, they agreed, Should be all done but....we have to address questions like this at some point I prefer to be completely up front as others have said. I run a business that uses both parts and labor to accomplish what I am selling, a properly repaired automobile. This requires me having vendors who I trust will provide me with quality components I can use to repair your vehicle. Sourcing things from an unknown and the cheapest vendors come with risks I am unwilling to take even if you are. We also must make a resonable profit on parts in order to remain in business. There was another good example in another thread about sourcing internet based parts here : Buying online can be risky. Each year billions of $ worth of counterfeit parts are sold. Remember Amazon, Ebay etc. allow any business to sell on their website. There is no way to know if the Moog, Denso, or even Dorman parts you order are real. Companies overseas are copying parts, boxes etc to match the original and then they end up on the internet. Buying from the cheapest supplier or using a website that allows anonymous suppliers is just asking for trouble. Either way you need to establish a policy which accounts for the few times you may be asked this.

My argument Is I dont think Joe should be focused on stirring up the masses to get a response that will not do any of us good. Whining about what AAP is doing is like whining about what the national auto chains are doing with all the low priced based offers (or free) which do not align with out viewpoints. You might want to write about AAA too!!! look at what they are doing! In selecting a vendor I am looking for an entity who can supply me with quality parts, give me great delivery and who will stand behind it when needed. Since WP and other vendors can do that I purchase from them. I do not purchase from the AAP AZ and the like because they sell crap. The more they do stuff for free the less I have to deal with those that believe it is/should be free. I can then focus on my customers and their needs.

@WheelingAuto, I think Joe refuted your point in your holier-than-thou condescending rant. First of all, Joe is 100% correct, the entire motoring public hears the marketing message, either on the radio or on TV that all these services are free so why should they have to pay us? We can market that our battery testing isn't just hooking up the tester and "Yup/Nope" but we check the integrity of the cables, we test the alternator in real world conditions, etc.etc. But all the customer knows for sure, what they come to the counter thinking is "the other guy does this exact same thing for free." It's not the exact same thing, but that's what they think and when we try to explain otherwise, all too often we have lost before we even get to talk. Or how about the check engine light and code scans? I can't tell you how many people think all we do is, "Plug that thing into my car and it tells you what's wrong." You know that's true, that the customer thinks that. But we all know it's not true. That code is only a starting point. Every single code has a minimum of 3 possible causes, 1)the component identified ie the oxygen sensor, 2) the wiring connecting the component to the control module identifying the problem or 3) the control module identifying the problem. But the cheapo DIY stores won't tell the customer that. The official line from these places is that the counter people are NOT supposed to indicate a diagnosis, they are supposed to equip the customer with the knowledge of what the code is and then be referred to a shop. Even in the ideal world where this is the case, that is implying that shops are crooked and dishonest and you need to go to AZ/AAP/O'Reilly's etc. and get the low down so you don't get ripped off when you go to the shop. But we all know what really happens, the customer goes there, gets their code scan and little printout and then comes to you telling you what is wrong. The guys told me this is what I need. But it isn't. Real world examples, from my own customer database: 2002 Ford Mustang, Memory Code P0402, KOER code: P1408 AZ told him AND sold him that he needed an EGR valve. We all know he didn't, that he needed the DPFE sensor. 1998 Pontiac Grand Am 3.4L DTC: P0172 Exhaust is BLACK, engine starts hard, Oxygen sensor registers full rich and does not fluctuate. The parts store told him he needed an oxygen sensor. You can probably guess what he needed instead, a fuel pressure regulator. But they told him so I must be wrong. Same car, 2 years later. The engine was hunting for idle, DTCs P0171 and P0121 and you hear a hissing noise when the hood is opened. The parts store guys told him he needed a TPS because of the DTC. They are just minimum rage guys who can punch buttons on a computer but because they work at a parts store they think they are auto repair professionals. Turns out he had a gross vacuum leak at the emissions hose connection right behind the throttle body. But they told him it needed a TPS so it had to need one. These people ARE our customers, there is no escaping that. There aren't enough "A" grade customers for us to ignore these "B" and "C" grade people. Even our "A" customers hear the marketing and wonder causing us to have to reestablish ourselves as the experts and rebuild their trust in us. Even if they don't lose trust completely it does diminish. Think about it, the typical customer visits the repair shop on average 3-4 times a year. But they hear the marketing message probably at least once a week. No, Joe has it right, these parts stores actively and aggressively market to countermand our worth and then expect us to buy from them to support the assault on our integrity, honesty, knowledge, skill, expertise and worth. There is no comparison to the shops that advertise those discount oil changes. They aren't trying to convince OUR customers that we are overcharging the customer AND trying to get us to buy from them. I wrote on a different thread that buying from these stores is like holding the knife that is cutting your own throat. I still stand by that statement. After reading both of your posts I think you may feel as if I am protecting or aligned with Advanced or any other parts vendor. I am not. I choose not to buy from advanced for the same reasons above but more importantly they sell junk. My point about where do you buy your parts from is NAPA Auto Value all do the same thing and advertise the same way. I am happy to hear you think they dont by you but up here in the big city they do. And weather they admit to you or not they will there also. Their bosses are looking for growth. As far as comparison of auto parts stores and cheap oil changes. They both are trying to do the same thing. Take the car out of your bay and put it in their bay or parking lot. There are many auto repair shops who advertise free code scans just as there are many who do free brake inspections...maybe you do that? It;'s all in an effort to get the magical $$$$. I can say if you (meaning anyone) do free brake inspections or cheap oil changes your devaluing our industry.....but what good would it do me? I see Joe Marconi who writes for a National publication who by fault becomes an industry leader standing on a soap box creating headlines that lather up the common folk to get a reaction. What I think he should be doing is educating us about what we should focus on as small businessmen. How about you forget about the few that make life difficult and focus on the ones who don't. When the one idiot darkens your door step who installed Chinese ball joints and now wants you to fix it right get paid, every step of the way. Charge for what you know, and what you fix without concern of what someone else would do. Ooh! Do I detect a note or desperation to defend one's business decisions? I mean what difference does it make where I buy my parts from? But I'll play your game because I think I know where you're trying to go. I buy most of my parts from NAPA. Most but not all. I have a very low failure rate and I know for a fact that the local store will scan codes but every single counter person has told me they will NOT sell parts and will not give a diagnosis. They will only scan the code and refer the owner of a broken car to a shop, my shop. And many of those who are referred confirm that they were told what the code was but that it required further professional attention to properly address the concern. My second call is to a local independent part store with 3 local stores where no other parts supplier has two. They also have at least 10 stores in outer lying towns and villages. They do NOT scan codes. They are affiliated with AutoValue and a Motorcraft supplier downstate. My third call is to another local independent part store who is the local AC Delco distributor and also is affiliated with AutoValue and a Motorcraft supplier downstate. I am told by the salesman, who I know and trust, that they do NOT scan codes either. All 3 will test your alternator and starter for you IF you remove it and bring it in. I think they all test batteries too. I know the ones that do ask why the customer has a concern about the battery and if it's anything but a bad battery they will advise the customer to seek professional assistance with a shop. My last call is to the manufacturers' dealers. But I stand by my statement, I will close my doors if Advance becomes the only part store in town. It's not just because of the issues raised here. I dealt with them when I first opened because I knew the manager. But after two abysmal warranty issue within a month I was done. Then the following year I had an issue with a brake pad that delaminated and was told it had to be a problem with a different part of the brakes and therefore there was no warranty. All other brake pads (I did four wheel pads, rotors and calipers) had worn 1 mm from new. So there was no other problem. But they refused to stand behind their products too many times so I will NEVER spend another penny with AAP. Oh, and just in case you were gonna try playing "Gotcha" if I said I bought from CarQuest, we don't have a CarQuest in town anymore. And when we did, they were literally my last call and then only if no one else had it in stock and I absolutely had to have it that day. Thanks for playing, but you didn't win. No, you're right. I did not win the internet message board fight. I have never spent a penny with AAP. But I do spend more than 10k a month with World Pac (Guess who owns them). MY thoughts are as small business owners we should figure out our Unique selling points. If ours are weak or non existent we need to create or strengthen them. Figure out what you need to do to be successful. Whining about what they are does nothing for you.