Stephen

I tried being open Saturdays 8:30 - 2:00 for 8 months with advertising through emails and Facebook and all we really got were DIY'ers wanting us to bail them out at 1:59, a few oil changes, and lots of State Inspections (which the State of Maine mandates cannot be over $ 12.5 [i added on a Saturday $12.50 Saturday convenience fee which people gladly paid]. The only tech willing to work Saturday was an apprentice. Occasionally we got a decent paying job. I thought with so many Boston area commuters, we would be busy but no. Once summer came, it died because people want to play and not be without their car (even though we have a fleet of loaners) and with summers being short and winters long, I figured I would rather play on the weekends like my customers. Having started in 1976, being open on Saturdays is not going to improve the remaining years I have left.

Thanks for the encouragement. I'll keep you apprised of our progress and successes.

Can you disclose publicly or privately those %s? ([email protected]) Is your benefits package generous? One seminar I attended by ATI recently (Jan 08) contended that loaded techs' GP should be 60% (Labor Income generated by the tech - [tech's wages + vacation pay + other pay + 11.5% of the tech's total wages for payroll taxes + company paid portion of Health Insurance premiums + Workers Comp premiums for that tech {which is based on the tech's wages}] = Gross Profit for this tech/ Labor Income generated by this tech = % Labor GP (Loaded) After doing this calculation I realized how short we are on the "loaded" Labor GP even though our "unloaded" Labor GP% was above the industry target I feel I am in a real pickle and definitely looking for some insight and solutions. To raise our Labor Rate without raising techs' wages would help for sure. We are already at the high end in our area so we stand the risk of losing new clients who balk at the high prices. I know that we retain a lot of clients with superior quality and service but we also lose a lot because our prices are too high - they come once and never return. To cut benefits can play out as losing or at least disturbing an excellent team and is in reality a pay cut A more bold move is to cut techs' wages - a great way to success... I certainly need more car count with an average RO of $ 395 but not sure about the most effective method to attain that, or cut one of my techs loose - problem is that summer will soon be here with tourists and money flowing more freely and more vehicles in the area

I know that there are management companies out there who tell their clients (shop owners) that they should only book for 50% of their available hours on a given day because they feel your techs should find all kinds of work when doing complimentary vehicle inspections. To me that is a very high risk and is based on the premise that your customers don't take good care of their cars What if you have a loyal and regular client base who comes in religiously for every scheduled oil change and maintenance service and your techs look the car over thoroughly ? - sorry but every RO for that type of client isn't going to make the target $ 500 ARO that these companies tell you is possible - and if you force that on your loyal A customers, you'll kill the geese laying the golden eggs in my opinion Also what if those people who need the work don't buy it all? Despite what the economists were saying, they have now conceded a recession is likely - oh sure I know - people will take take care of their cars and not buy new ones - how many have you experienced approval on only a portion of what you recommend? Our solution - book 'em Dano! I want to get as much work in as possible - techs are far more productive if they have several cars going at once - remember there's also a parts and customer authorization bottleneck unless you specialize on only 1 make. If I over book then I pull the best Ace in the deck -one of our 7 free loaner cars delivered to their home or office What do others do? Opinions on my approach?

It doesn't matter if you think about it - what matters is that your Gross Profit (the $ left after paying your Parts and subcontracted vendors AND your techs) is substantially greater than your Operating Expenses. Financially healthy shops across the country are reporting 15-25% net income before taxes but after their wages are taken out. I am not there yet but working on it. You need both in my opinion - we have a relatively health avg RO of $395 but we don't have enough cars to keep 4 ASE Master L1 techs busy through out the year. My Service Manager argues that I should lower my Parts markup so that our Parts Prices are more in line with the dealers and jobbers and perhaps he is correct. BUT if I lower my Parts GP then I either have to increase my volume, increase my Labor charges or cut my techs wages, cut a tech perhaps and replace with a "General Service Tech" but somehow increase or maintain my total GP and get my net profit after taxes from our present 5% up to 15% . In short, I told him and I'll tell everyone here - it doesn't matter what you charge for Labor or how you mark your parts up or whether or not you pay staff's health insurance premiums, turn the heat down and the lights off when you leave, etc - what matters is whether your clients accept your pricing and how your Bottom Line looks after all is said and done Any suggestions from anybody out there? That's what I am hoping to gain from this Forum

When you folks have instituted changes in pay plans, how have you gone about the process? Presumably you start by developing a formula based on stimulating yet proven ideas from some outside source Then you " run the numbers" based on how this new pay plan will affect the people who work for you and your business. Do you run the old plan and new plan simultaneously for a month let's say so that those stepping up to the plate with increased performance are rewarded and those not stepping up have the safety net of the old plan but are made aware of what the new one will be to their paycheck Finally dump to old plan and let the chips fall where they may (i.e. risk the loss of 1 or more staff)

Perhaps this really should be another thread as it's not about recharging your internal battery EXCEPT that RL O'Connor said "the most effective cure to burnout is profitability"! Agree with you 100% so long as the client is willing to pay otherwise no transaction takes place. I remember going to one of many Automotive Service business financial seminars where the consultant went through the calculation of how to determine break-even and labor rate. I had absolutely no problem with the computations. This was in the era when money was virtually flowing in the streets and the attitude has been "you shop owners are afraid to get what you are worth". I am not afraid to ask for it and charge it but the clients comments on many (not all) of our AAA report cards are essentially "too expensive" and they vote with their feet by not returning - and yes we have a beautiful shop, wash & vac cars, try to sell the sizzle with the steak, and our comeback rate is virtually non existent - less than 1/2 of 1% in annual sales of $980K on which we are realizing only 5% net after all wages including mine ($50K plus benefits). As I said, I have listened to many of the Lifeline Interviews in Gary Gunn's archives and there is 1 shop owner who never follows up with "lost customers" because he feels it's a sort of Darwinian Natural Selection process - ignore the people who don't want to step up to your plate. Other shop owners have different solutions. Much as I personally hate Walmart they have successful business model that has put a lot of people with our attitude out of business! And they pay their workers crap in terms of benefits and wages. A strict comparison is erroneous because they are selling packages not services except in their super stores. My bottom-line may simply be I either have (1) too many techs for the number of "A" clients, (2) too expensive of a tech mix for my work load - I don't need an ASE L1 Master Tech doing money losing State Inspections and Oil Changes to motorists unwilling to be up-sold, my average RO is $ 385 at a posted labor rate of $82 (higher for diag work) or (3) Increase the number of A clients through marketing and advertising. (4) Cut Operating Expenses - specifically benefits which is the same as a cut in pay #1's solution is emotionally uncomfortable - it means letting go of a good tech and that's tough for me #2 involves the step for # 1 and replacing the proven good tech with a "General Service Tech" and training that person to see and recommend legitimate up-sells to be performed by the remaining techs #3 involves EFFECTIVE advertising and marketing to increase the number of "A" clients - costly if you guess wrong and impact takes a while #4 sounds great and we have made some headway but high quality customer service takes high quality people at decent wages and benefits. And as one adviser from SCORE (SBA's Service Core of Retired Executives) told me "you can't save your way into profit" Why can't I find the "intestinal fortitude" to "pull the trigger"? Because I am not sure of which gun to fire.

I agree and when I make myself do this I am and the business is better for it however it is such a struggle because I know that unless I change what I am doing with my business then everything will stay the same. I went for a good XC ski last Saturday and while I was listening to SHowcase seminars while driving back and forth I forgot about work while keeping my heart rate at 160 for sure and I was more energized as a result. For those of you who are in TurnAroundTour, it sounds as though Gary's answer to every problem is always a HowToManual. While I applaud and endorse creating structure, if your shop has good staff and low turnover then is a HowTo Manual the most pressing priority when profitability and car count are low or stressfully seasonal due to geographic circumstances beyond your control? Plus if you are lean on the profit side, there's no one to delegate the tasks to because I have cut my support staff to the bone in an effort to cut overhead. When it is slow that's the time to document procedures that you would like to delegate to others I grant you, but isn't my time better spent focusing on marketing and business financial analysis? I know that my car count is too low for the number of techs I have. I am reluctant to fire a tech because when the snow-birds (retirees) and tourists return, 4 techs is barely enough. I know that my overhead is too high for the GP that I generate but I have had techs with me a long time and their generous benefits are part of overhead. Raising prices is not an option because we lose customers due to our already high prices and that is the most common complaint in the AAA report cards that some customers turn in. On the other hand we have a great core of customers who are completely delighted with our services and price is never an issue because the quality of our operation is so high I am starting to work with Zed Daniels of Ad-Card.com with the hopes that we can pull in more A clients to broaden our core base but that's a hope not a reality Just venting my frustration I guess. This is not a simple subject/dilemma to ask others to answer. Sorry for going off but not so sorry that I didn't post.