Recently, our own Brian Gillis appeared on the Remarkable Results Radio podcast Town Hall Academy. This show features a roundtable discussion amongst automotive industry experts on a single topic. Carm Capriotto and Bob Greenwood discussed all of the ins and outs of labor rates with Brian on this special episode.
Labor Rates podcast discussion
Brian elaborates that shop owners want to look at the end goal result first. Shop owners must first know the true cost of doing business in order to arrive at their labor rate formula. In fact, as Bob states, it is important for you to employ not one, but at least three labor rate formulas. Today’s automotive industry is more diverse than ever. Thus, you need employ different rate formulas for maintenance, diagnostic, and reflash.
Bob then presents the cost per billed hour (CPBH) formula. Every dollar must have a name, and every expense needs to be accounted for in order to know rates that are right for your shop. Finally, you should net 20% of gross sales after paying yourself (first!) and your employees a professional wage.
Brian and Cam reiterated that you are in the labor business! Therefore, you must give special attention to your team’s rates. Bob then gave examples of the three door rates he mentioned earlier. He presented formulas for setting those door rates, which are based on competency rate and/or efficiency of business operation.
After discussing these key stats, Brian discusses the concept of labor matrixes, specifically accurately charging for the time that’s spent. Then, the hosts welcome shop owner Bill Nalu to discuss the emotional aspects that go along with the numbers. Courage, as well as knowing your worth as a technician, are essential.
You have heard us speak about silent thieves before. You Net Results’ game plan starts with helping your auto repair shop identify which thief or thieves lurk in your midst. In this clip from our Daily Operations webinar, Brian quizzes members on their own experiences. Is your auto shop losing money, but you don’t know why? Then watch this video and find out!
Auto shop losing money – silent thieves on the prowl
Brian opens up by explaining the concept of a silent thief, which is money leaking out of your shop undetected. He asks members what those thieves look like in their shops, starting with inventory.
Once Andy’s business started growing, he noticed he started to lose track of inventory. His shop’s process of transporting waste oil for reuse, for instance, needed improvement. Therefore, he bit the bullet and invested in new equipment.
Joe’s parts were not properly being charged out, so he implemented a new process to keep track of this expense.
Then, Jim Ryckman talks about the priorities of owners and managers. Whenever the boss doesn’t manage time well, silent thieves can creep in.
Next up, Leon mentions labor inventory. In his case, this is a huge chance to lose money. Because it can be hard to keep track of, labor rates may be a shop’s #1 money loser.
Finally, Brian discusses one thief we may not have thought of previously. Let’s say our advertising is on point, and customers are jamming your phone lines. If your service writers don’t know what to say to them to close the sale, then you may as well be throwing money out the window. This is why proper phone skills and scripts are crucial.
A few tidbits discussed afterward revealed the importance of taking notes on procedures, as well as being open to change. Surprisingly, many shop owners still use pen and paper instead of computers to keep up with shop supplies and tickets. Doubtless, these shops must update procedures and conquer their fear of change in order to survive.
Stop your silent thieves!
Do these problems sound familiar to you? By now, you might be wondering how you can solve these problems. We have your answer! Sign up for one of our coaching groups. Each week, you can join fellow shop owners to identify your problems. Then, apply our systems to start turning record profits!
The auto repair industry employs a variety of different positions. Check out this this clip from our members only People Process workshop. Brian and callers explain automotive jobs. The You Net Results group outline both the jobs’ tasks, and their relationships to each other. Each shop owner shares their knowledge from decades of adapting to an ever changing industry. Think you know everything about each job description in the automotive field? These pros bring up some great points you may have never considered. Don’t miss out!
Explain automotive jobs: Owner and General Manager
First, Brian quizzes members on what it means to be an automotive repair shop owner. Andy recalls his experience working his way up to the position of Owner of his family’s repair business. He describes “replacing himself”, delegating tasks to other staff. Sometimes it does not work out, and he needs to resume said chores temporarily. The bottom line is that owners have to wear many hats within the business, thus they need to stay on their toes to adapt to change.
Our own Jim Ryckman chimes in to describe a General Manager is responsibilities. He or she also must delegate jobs amongst the team. However, the GM is often on the floor, right in the action. Thinking on your feet is key! Managers assist with tickets, tracking parts inventory, and weekly organizational tasks for both front and back of house staff. Sometimes, perhaps most importantly, they are the face of the shop to customers. Your GM may need to engage clients in “show and tell” about the repair process, or grab them a cup of coffee – anything to make your customers feel welcome! This important position is very challenging, but the more dedicated and flexible you are, the more rewarding it can be!
Explain automotive jobs: Your Front Counter Staff, or Service Advisors, are crucial!
Whether you call it Front Counter Staff, Service Advisor, or Service Writer, this job is a crucial spoke in the automotive shop wheel. Cory explains what this job means to him, since he has experience with training front counter workers.
Service Advisors are the conduit between both your customers and your mechanics. They are responsible for explaining the car’s repair needs. They also must estimate how long repairs will take and how much they will cost. “Job stacking” is a critical task for a Service Writer. Managing multiple jobs can be tough, so Front Counter Staff need to have excellent time management and organizational skills. Not to mention, they must work with vendors to ensure all necessary parts are in stock. The COVID-19 pandemic has presented new challenges to these workers, such as online communication with customers, due to social distancing requirements.
Cory believes that no other position is as integral to an auto repair shop’s income than the Service Advisor. You could say that no other auto repair position requires people skills more than a Service Advisor.
What are the responsibilities of General Service Technicians?
When we explain automotive jobs, we must not leave out the General Service Technician – the heartbeat of your shop!
A General Service Technician is sometimes called a Mechanic by a lay person. It is undoubtedly the heartbeat of any auto repair shop. Techs often perform a thankless job. That is despite their required regular ASE certification training. While many facets of the auto repair process don’t change, technology advances dictate continuing education. Who knows, your shop may have to service a self driving car in the near future! Mechanics need to know everything from transmission repair to how to fix the computerized engines of 21st century cars and trucks.
Joe is a veteran shop owner hailing from Alabama. He’s seen it all! First, Joe runs down the ever evolving responsibilities of technicians. He recalls his own experiences as a mechanic, which began over 50 years ago. Before their continued learning, each tech must have a strong foundation of know how. Speed of service is also crucial.
Mechanics are typically the lowest paid team members, but they have plenty of opportunities to advance their careers. General Service Technicians learn many skills on the job. Whether at their existing shop, or in another industry, they are valuable hires. Their communication with others in house, plus their adaptability, are important traits. Those skills can help a General Service Tech eventually move up to an A Tech, Service Writer, or even Owner in time.
Ready to learn more? Grow your shop’s bottom line with our weekly webinars!
Are staff relationships and training confusing you? Do you struggle to put all of the pieces together? Then why not join one of our monthly coaching groups! You will have access to join our live weekly Zoom webinars. They cover topics such as budgeting for profit, hiring, leadership, and much more. Members also have 24/7 access to hours of previous training calls. A library of valuable documents will help to guide you. Sign up today!
In the excerpt above from our Front Counter Workshop series, Brian discusses the concept of professional obligation in the automotive industry. We owe it to our coworkers and clients to be both honest and consistent. The members of your community, as well as your profession, talk. Word of rudeness, dishonesty, and overall unprofessionalism travels quickly.
YNR Members on the call talk about the similarities between auto repair shop staff and medical doctors. It is up to us to not only correctly diagnose a vehicle’s problems, but to also remain up front about them with their owners. Think of how you would feel as a customer if a service advisor withheld information about problems with your car because he or she was afraid of charging you more. Imagine if these problems caused your car to break down, and cost you even more later. You probably would not visit that shop again. You may even leave the shop a poor review online afterward. What if that review included the service advisor’s name? Surely, that would cause harm to the shop’s reputation, as well as the front counter staff.
Our professional obligation as Auto Repair Shop owners and staff
You owe it to your team to model both honesty and integrity. As Warren Buffett famously said, “It takes twenty years to build a reputation, and five minutes to ruin it.” If your staff sees you practicing what you preach, then they will get buy in from you.
When mechanic technicians, general managers, and service writers work together to perform their professional obligations, customers respond. They will reward your honesty and consistency with the one thing every automotive shop needs: return business and referrals!
Learn more about professionalism in your own auto repair shop!
Could your front counter staff use a deep dive on the concept of professional obligation? Learn the systems that run a successful automotive repair business, as well as how to teach them to your people. You Net Results offers LIVE online webinar groups every week. They are also archived on our site for you to view at your convenience. Sign up for our monthly services today!
In this clip from the May 20th Front Counter Workshop webinar, Brian discusses a few scenarios that service writers might encounter. When your customers bring their vehicles in for recommended checkups at 30/60/90k, advisors must print out a checklist. During this scheduled maintenance, it is important that front counter personnel and technicians are thorough. Making the right recommendations when sharing the printout should always be part of this car service system.
30/60/90 Car Service System Discussion
The YNR members on the call then propose specific services to recommend. What if the customer objects after that? Perhaps your customers who have read their manuals will reject recommendations when your service writers make them. “The manual does not recommend checking that part at this mileage, so I will opt out.”
Brian guides us how to respond when such instances occur. These are core tenets in systems that both build customers’ confidence and maximize your profits.
Put the most effective systems to work in your auto repair shop!
Do you and your front counter team need hands on, real time training? If your profit margins are not what you wish they were, then the answer is always yes! Learn the systems that run a successful automotive repair business, as well as how to teach them to your people. We offer LIVE online webinar groups every week. They are also archived on our site for you to view at your convenience. Sign up for our monthly services today!
General Manager Clip - Coaching Groups Build Confident Leaders
Check out this clip from our members-only live General Manager Process webinar, originally aired May 12, 2020. Firstly, Brian sparks a roundtable discussion. Veteran shop owners then reveal what it means to be a confident auto repair shop leader. Each member agrees that when you regularly participate in an auto repair coaching group, it is key to building confidence.
Both automotive owners and general managers chime in to stress modeling systems to their employees. Thus, automotive staff respond best to confident, consistent leaders.
Afterward, the group reads bullet points in the You Net Results brand script, which outlines our mission as a company. It also ties into this clip’s theme of repair shop owners and managers training together and supporting each other.
Finally, Brian discusses the concept of silent thieves. When you don’t put the right processes in place, chaos sneaks in and then money sneaks out. If you don’t activate the right systems and processes, then you will be powerless to prevent these thieves from robbing you blind!
Auto repair coaching group for general managers
Are you a directionless general manager? Silent thieves might be bleeding your business dry, but there is still hope for you! Learn how to master finances, daily operations, phone skills, service advisor training, as well as intangibles only experienced pros know. Sign up for one of our coaching groups today!