automotive epic

automotive

Home - 2019 - May (Page 2)

Month: May 2019

The “Family” Business – The Godfather’s Business or the Automotive Repair Shop?

Posted on May 27, 2019 in Uncategorized

When somebody mentions “the Family Business” I think of a well dressed, old and skinny Italian man with a scratchy voice and has a name like Tony or Sammy. My Grandfather, who I’ve mentioned in some of my other articles, definitely fits the bill. With just one glass of a good Chianti wine, you might find him in our garden patio, rocking back and forth, singing Italian love songs for hours. He was indeed a short, skinny guy, who talked in a voice very similar to the Godfather and at the age of 80 he still had a full head of gray hair. Give him a mandolin and it was almost like being in an old Italian movie.

Well let me get back to what “Family” means to me in a Family Business (beyond that old Italian theme). It doesn’t matter whether it’s an automotive service business, like Sandy and I operate, or a cleaning business, a landscaping business, or even a street sweeping business. You see, when Grandpa owned businesses in his younger days, it was his name, his word, and his values that he was offering. He wasn’t fixing transmissions, brakes, or air conditioning like we do. Grandpa was painting murals on grocery store windows. But like us, he knew if he didn’t deliver good quality work for his customers, his name would be ruined and he might have a hard time finding work – especially in a tight nit New England town. That’s why I like working with businesses here in Austin that are family owned. Businesses that are family owned are much more likely to stand behind what they do because they’re offering far more than a product, their offering the meaning of their word and their reputation.

In the automotive business, a family owned business is more than just an automotive repair facility. A family owner, and his hand picked team, can be “trusted” advisors of what you “don’t” need to do as well as what you might want to do now to avoid bigger problems down the road. They’ll get to know you and your car so they remember what was worked on last time and how the problems you may have experienced before fit with what’s happening now (or not). It doesn’t matter whether you’re fixing transmissions, brakes, or air conditioning, or your fixing a dishwasher. Family owners tend to care and so many are so very trustworthy.

Family owned automotive repair is much like a family doctor and his trusted nurse practitioner and small administrative staff. In a big hospital conglomerate where Dr’s might be overworked and see you once or twice in an emergency room, they aren’t going to care about you as much as Dr. Mulligan who will be with you for years as your family doctor and knows you and your family’s names and watched your kids grow. In addition, although the hospital doctor might ask you a few questions about what happened to you in the past, he’s really not going to put it together the same as Dr. Mulligan who was there treating your family’s health issues with you.

I guess that kind of sums it up for how I feel about family businesses. Many small businesses are indeed family businesses, so when you hear somebody say they are a small business, you may very well be hearing somebody offering the luxury of a family business. More than likely, it will be a business from which you’ll enjoy years of great service.

Co-Branding in Automotive Service Businesses

Posted on May 26, 2019 in Uncategorized

In a world of co-branding, point of destination strategies and co-op marketing; all industries are evolving and diversifying to capture greater profits within a single brick and mortar location. The same strategies are used on the Internet only you can see it happen faster in real time on Internet web sites. In general much of the new thinking has been customer driven due to lifestyle changes, low unemployment, time factors and quality of life issues of the consumer.

If you look at amazon.com which now sells tapes, records and toys when previously it was strictly a books sales site. It can quickly add new revenue streams by offering it’s customer base more reasons to buy more things. Do you to see the revolutionizing effect of this trend? We have on-line search engines being paid million dollars from car companies and furniture companies for their industries exclusive rights to e-commerce directly on those sites. As Starbucks begins to sell house wares on their web site, and Home Depots add McDonalds inside their stores and Bank of Wal-Mart opening it’s own brand of bank within its 5 superstores; you have to think that ‘express detailing’ at car washes is simply a natural. progression.

Many professional detailers would disagree saying these types of services are different animals. Some complain that fixed site car washes have ruined the true definition of the term detailing. Yet if you look closely this is nothing more than true capitalism in a free market system generating additional revenues with existing resources.

Think about it for a minute. Professional Detailing Centers often do glass repair, window tinting, pin-striping and graphics, gold plating, ozone treatment, dent repair, color sanding, upholstery repair, wood grain paneling, and even after market auto accessories. These are all industries in their own right and these industry leaders with their own definitions and trade publications and accepted operational procedures complain about other competitors in other market sectors offering similar services as professional detailers. They say we are stealing their customers and not providing the same quality workmanship as the craftsmen do in those industries, which may or may not be true.

For example a person specializing in upholstery repair for twenty years can obviously do a better quality job than a detailer on fabrics of almost any type. You are affecting his bottom line with an inferior service since you don’t have 20 years experience in upholstery repair understanding the dynamics of thirty different types of fabric, dyes, and manufacturers suggestions for preservation. Should he be mad at you for offering a greater array of service to you customers? No, the upholstery craftsman will need to have his own set of value added services and products he can offer to his customers such as removing and replacing seats and headliners and using the highest grade fabrics and stainless steel screws. You must have a specialty or an area of expertise, but you must also understand and then cater to the needs and more importantly the wants and desires of your customer. If you don’t know their wants and needs, ask your customers directly in an informal survey or indirectly during conversations. If you fail to honor this advice, that’s okay your customer will be serviced by your competition instead. Think about it.

Automotive Service Bays – Staffing By the Numbers

Posted on May 25, 2019 in Uncategorized

It seems to be a universally asked question, whether you run the service department at a large dealership, or the local 4 bay repair shop. How do you know when you have just the right amount of technicians employed? Regardless of how you pay them, if you have too many, you have idle hands, otherwise known as the “devil’s playground”. If there are too few, your technicians are overworked, causing incomplete check outs and possible quality issues.

For the sake of simplicity, let’s assume all of your technicians are flat rate employees, which is basically a fancy way of saying they are paid for the work they do and not the hours they are present. Whatever labor guide you use gives you the billable hours for the repair you are going to perform. For example, your customer’s check engine light came on. Most shops charge a diagnostic fee, assuming, of course, that more than a simple computer scan is required. The labor guide calls for 1 hour. The diagnostic routine shows that the engine is not reaching operating temperature, so it is determined that the thermostat is at fault. To replace the thermostat on this particular car calls for 1.0 hour of billable time, so the entire job pays 2.0 hours. Your more experienced technicians will typically beat this time, which is how they can turn more hours than they work. A rookie technician may take longer than two hours, though, which is how a customer is protected by the flat rate system. Otherwise, it would cost someone more to use inexperienced technicians than it would a professional!

Back to the subject at hand. In order to determine how many technicians you should employ, you will need to do some math. In most of my teaching, I always say to start with the end in mind, and then reverse engineer your way to the answer. In this particular case, let’s start by setting up the foundation of where you are currently.

1. Step one is to determine your productivity per billable hour. Basically, you take your total sales, including BOTH labor and parts, less tax, and divide that by the total number of billed hours. In the case of the thermostat above, let’s say the total repair cost is $300. Your billed hours were 2.0, so $300 divided by 2.0 is equal to your productivity of billable hours on this job, or $150. If you apply that logic to your whole operation for a full week, you will come up with a pretty reliable number to base the rest of your calculations on.

2. The next step is to determine where you are currently at. If you have been regularly turning $16,500 a week in sales, while billing a total of 110 hours, then your productivity of billable hours is $150. This is your starting point.

3. Now you need to determine where you want to go. You would really like to generate $1,000,000 in annual sales, and you know that in your case you have 50 working weeks a year, so that means you need to generate $20,000 a week ($1,000,000 / 50 = 20,000). This is your goal.

4. If you take your goal of $20,000 and subtract your starting point of $16,500, you are left with $3500 between where you are at and where you want to go. You can now divide that by your productivity of billable hours of $150, and what you get will be the number of hours you need to generate to get there! In this case, you need a technician who can turn 23 hours per week (3500 / 150 = 23.3). The way you move from where you are at to where you want to go is called your map, or your plan.

My suggestion at this point would be to look at the technicians you currently have. If you tweak your systems and make other improvements, could they turn the additional 23 hours? If the answer is yes, then make those changes so that your current crew can enjoy the benefits of your solid management skills. If the answer is no, then you need to find a technician that can, and in our business, finding a technician that can turn 23 hours is not that difficult.

One other train of thought, and one that has worked very well for me over the years, is that in a scenario like the one above, you hire a technician that can generate 35 or more hours. This now puts the pressure squarely on your shoulders to generate the business needed to keep all of your techs happy. But now let’s take a look at what happens. Your current staff was generating 110 billable hours at $150, or $16,500. You add a technician that turns 35 hours a week, and then you market your company to generate the additional business to cover the additional hours. You are now billing 145 hours at $150, or a total of $21,750 per week. Do this for 50 weeks and you now have a shop producing annual revenues of $1,087,500. You have exceeded your goal, or worse case scenario, you have given yourself a little breathing room. It is very important, though, for the sake of your technicians, that if you do this, you MUST do the marketing to generate new business within the next 30 days.

Your technicians trust you to help them provide for their families. If you are not going to get the additional business, either stick with a 20 hour tech, or plan on staying where you are.

Top