Do Less, Earn More
How can you make your shop run more effectively and make you more money? Industry expert Becky Witt, AAM, reveals her eight
secrets for success.
A case can be made that the business plan for the average auto service shop is obsolete. Many shop owners and service consultants seem to have all the concentration and focus of a squirrel crossing a busy street. Hyperactivity and putting out fires seem to be the normal order of business.
Do a quick overview of your operation. Is there an hour of billed labor for every hour the techs are present and able to work? This means 40 hours of billed labor per week, assuming a 40-hour workweek. I believe it’s reasonable to bill 200 hours per tech, per month, without selling wallet-flush jobs. Here are some ideas.
Some people say the front office can solve 90 percent of a repair shop’s problems. I disagree. I say that 90 percent of the problems are created by the front office. The staff is doing too much, too often. So here are my tips for building a more successful shop:
Start with less work in the office. Learn to say no to some makes of cars that are well outside your area of expertise. This doesn’t mean total specialization. Just because one of your customers bought an old Jag doesn’t mean that you need to repair it. The common request is, “Well, just do the oil changes and other easy stuff.” News flash: You lose money on oil changes. Stop doing them on cars you don’t service.
The office staff is charged with calculating labor operations and getting parts. Why spend all the extra time to determine repair estimates and get parts on jobs you’ll never see again? Answer: You shouldn’t. It makes no sense. Strange cars cost the office too much time.
Reduce your parts vendors. Use one primary vendor who can furnish most of your parts. Service consultants can spend too much time calling all over to find the best deal or the quickest delivery. Make one call, and you have more time to invest in better processes.
Increase your inventory and manage it. People go crazy when I talk about this in management classes, and it’s a misunderstanding. Do you stock oil filters? Drain-plug gaskets? Coolant? Motor oil? Fine, then you do have inventory.
That’s another reason you should never “specialize in domestic and foreign” cars. Using correct coolants, transmission fluids and motor oils is critical. If there are too many to stock, then you’re either working on too many cars or have too few parts in stock. Make up your mind.
Evaluate every work stoppage or crisis that needs to be solved. If you’re saying, “We’re out of differential drain-plug gaskets,” it’s a serious problem, and you can’t depend on techs to tell you when you’re getting low. Nor can you afford to rely on outside sales people to maintain your inventory.
But you can solve this problem by linking the proper drain-plug washer to each fluid. When a certain differential or transmission fluid gets billed out, so does the appropriate washer. Setting the desired stock and order levels makes it simple to run a weekly stock order for all of your vendors. Voilà! You’ll always have drain plug-gaskets and proper fluids.
Maintaining a good inventory doesn’t mean having a water pump when you need it. But it does mean having the hose clamps, O-rings or other tiny parts that delay the completion of a large, profitable job. Calling around to find these parts eats time – both technician’s time and office time.
Use your inventory system to prevent problems. If you do, the spare time that the office now has should be spent pulling the parts or getting them ordered for a job as soon as the appointment is made. This idea also brings cries of rage from many in my classes.
“How can you know which parts are needed for a check engine light?” they ask. You can’t, I tell them, but you can know which parts are needed for a timing belt job, spark plug replacement or many other scheduled maintenance or repair operations.
Create a labor operation that says “parts pulled,” or “PP,” and place it on every appointment that needs it done. This enables anyone to quickly scan scheduled work to ensure you have the parts before the car arrives. And put the parts in numbered baskets in every tech’s area.
Assign all work at the time of the appointment. Assign the work to the appropriate tech, and let the techs decide the order in which they’ll attack their pile. This eliminates dispatching during the day and reduces the games that techs are forced to play to get, or avoid, certain jobs.
How long does it take to replace front brake pads? It depends if the last job of the day is a “gravy” job or an intermittent electrical problem, doesn’t it? I’ve seen brake pads installed in 10 minutes to get a gravy job. And I’ve seen the same installation take four hours if no one wants the last job of the day. Assigning a day’s work makes all of this unnecessary.
It’s rude to interrupt. You can’t concentrate on doing your best work when someone keeps tapping you on the shoulder and interrupting your train of thought and the rhythm of your work. This is where comebacks and low production numbers originate.
For example, take the “wait” jobs. We used to schedule them throughout the day, which meant constant interruptions for the techs and the staff. Now, we only do them three times a day: at 7 a.m., 8:15 a.m. and 1:15 p.m. Once we get these out of the way, we’re on to the more productive work.
Stop doing cheap oil changes. Most cars are switching to premium motor oils designed for extended service. This means that in your shop, “only an oil change” should no longer be an option. Any car you take in should also need some sort of maintenance operation with that oil change. Turn a $30 ticket into more than $100 by educating your customers about the value of quality oil – and extended service intervals.
Forget checking a car every three months for needed repairs. There’s too often nothing to find and nothing to sell. See your customers’ cars twice a year – or less. This cuts traffic in half and raises your average invoice, which leaves more time for your office staff and gives your techs more time to concentrate on the jobs.
Set your own schedule. When you ask customers when they want their car back, you set up a production schedule based on insane expectations. Adopt the attitude that it gets done when it gets done. But call your customers the minute the job’s completed.
Use loaner cars. If you give rides to and from your shop, you have to hire a person to do that and have a vehicle for this purpose. You’re talking 35 to 50 grand a year for that. How many $3,000 cars will that buy? Find some nice looking older cars to loan out, preferably with 200,000 miles on them. This is a powerful marketing statement that indicates to your customers the value of maintaining their cars. But use loaner cars only for your best customers. This is not only a strong convenience feature. It’s likely to set you well apart from your competition.
Loaner cars also can eliminate the under-booking that can take place to be certain all jobs get done the same day. An hour a day in lost production is 250 hours a year or $25,000 a year in lost profit. If their car doesn’t get done, they still have a car to drive.
• Work on fewer makes of cars to reduce office work.
• Reduce parts ordering phone calls with better inventory and fewer parts vendors.
• Dispatch in advance.
• See regular customers’ cars less often.
• Take fewer incoming phone calls.
• Stop giving rides. Loan a car or pay for a cab.
• Reduce staff expense and increase profits at the same time.
• Do less, earn more.