[jbrenn77]

No need to babysit when you train people to be good leaders! Easier said than done but there are many good ways to do it. You have to learn how to be a good leader yourself 1st. Let people make decisions themselves. Encourage it. Read “inspiring accountability in the workplace”. It will answer many of your questions and show you how to address these concerns. Many other good books on the subject as well.

[jbrenn77]

I’d start by figuring out what your target GP$/hr is.  A good baseline might be whatever you are averaging now(assuming you’re profitable).  Personally I’d go higher than that due to the high liability, equipment, and labor cost involved.  Figure out how long the programming is going to take on average then charge the $/r rate times that amount of time for that make.  Nissans may need to be more than GM’s.  For example, if you paid a diagnostic tech $40/hr and your labor rate was 130/hr you’d be making 90/hr GP$ on that tech assuming he was at 100% efficiency.  Now let’s say he’s installing a 1hr water pump that you bought for 50 and sold for 100.  Your GP$/billable hr in this case would be 90+50 = 140.  In the case of programming, you would not be selling parts, and in my opinion you should be able to make a higher profit than water pumps on programming for the reasons mentioned above.  If it took an hr to do the programming and you wanted to make the same $ as water pumps you’d need to charge $180 for that service.  As for the software fees, in our shop if it’s a per instance fee we get charged, we simply pass that along to the customer.  If it’s something we need to buy (NERS, new hardware,etc) then we consider that a shop overhead, just like we would with a special timing tool set needed to do a complex water pump.  It’s not a direct cost for that job alone.  That being said, you may need to have a higher labor rate for programming if you don’t have a lot of volume to recover that expense, since these tools and equipment are typically higher as a percentage of your labor sales.

This is my opinion on this so far.  If you are in a major city it’s very probable that you have mobile programming guys grossly under charging for their service, and it might not make sense to buy all this equipment, rather, subletting may be the most profitable option.  If this isn’t the case for you then it’s a different story.  It is the case for us in any car line we’re not doing a minimum of 4 programming instances per month.  We do Ford/Chrysler/GM, some Nissans in house.  Others we sublet to mobile guys ’cause it costs me less than buying the tools and we mark it up 100% just like any other sublet.

 

Hope this helps.

[jbrenn77]

I like the YES system by Pace software.  Been using it since 2006.  As others said, make a list.  Then research.  Then demo.  It will take time.  The yes system doesn’t look as flashy as some of the others but it’s capabilities are huge and I’ve never lost data.  Support is good.  Scalable from one shop to as many shops as you want.  800-336-1615.  Ask for Dave.

[jbrenn77]

I like the YES management system by PACE software.  We’ve used it for about 13 yrs now.  For CRM we are with Kukui.

[jbrenn77]

I agree with other that posting individual hrs for techs may cause some animosity.  Posting whole shop prod hrs would be good in my opinion, however, I’m not speaking from experience, just been thinking about it a lot lately and ready to pull the trigger on doing it this wk so this thread was timely for me.

[jbrenn77]

I agree with Eric above, however, if you are going to consider it, you should definitely consult with your insurance broker about it to make sure you can get covered properly.

[jbrenn77]

We pay for training but not the time to attend.  We do pay our techs very well to come to work educated and capable.  That’s the skill set we expect, and they are the types of people who strive to be the best.  We do have a training bonus that is part of their pay plan.  They get this training bonus as long as they attend 4 hrs per quarter.  They are able to choose online or in person seminars.  It’s a significant bonus so they seem to not mind going to training.

[jbrenn77]

I agree with the above comments about getting some automotive specific management training/consulting.  I use RLO training.  They’ve done well for me in the past.   

[jbrenn77]

I think you should use the ROI speadsheet above and factor that into the equation.  For what it’s worth I’d go Hunter based on prev. experiences with not being able to get my old John Bean machine fixed properly, and then having nothing but good experiences with Hunter service.   We have a used Hunter DSP600 with rack I bought 4 yrs ago on a relatively low interest payment plan, I paid 17K for everything installed.  Has needed about 2K worth of repairs since then.  Glad I bought used because the amount of alignments we do keeps getting lower and lower based on our markets “race to the bottom” alignment pricing structure.  Frankly the only reason I still have it is so we can control the quality of our own alignments.  Currently we are only doing about 3-5/week.

[jbrenn77]

I agree with Dieseldan and ericdavis.

[jbrenn77]

So if you are not itemizing the parts how are state sales taxes paid on the parts sold. South Carolina has an 8% sales tax. So parts do need to be itemized as I don’t pay sales tax when I purchase at X amount But when I sell it at Y amount.

We still charge and pay sales tax on the parts.  The parts just aren’t itemized, or broken down separately.  The parts total, however, is listed on the bottom of the invoice, along with tax, labor, and shop supplies, in the totals section.

[jbrenn77]

I understand that certain states or provinces are mandated to break everything down. I have two questions for those who menu price to hide parts. 1. How do you handle a warranty if they ask for a customer invoice? 2. What do you do in an audit situation when the invoice is not broken down?

1.  -I am assuming you are referring to a vendor asking for a customer invoice?  We have a good enough relationship with our vendors that they never do, however, if we were asked to provide this we would print it for them, in that format, from history in our POS system.

2. – In an audit situation, I assume you are referring to IRS, we would refer them to Quickbooks, where we store all financials.  If they needed more detail we would print them whatever they wanted from our POS system, in whatever format they would like.

We don’t store any paper copies of RO’s any more anyway, so it wouldn’t matter what format they were in if/when they were printed since they all get scanned to the cloud, and then shredded.

[jbrenn77]

I have been menu pricing for 10 years with Service Shop. each job is subtotaled, parts have the item number, not the part number, no labor hours I don’t charge shop supplies cuz I got tired of having to explain it to customers that get bent out of shape about it so I just bumped my labor by 8% now nobody asks me what shop supplies are and it more than covers the supplies. The invoice just shows a subtotal, tax and the total. Each job shows the total without tax. Some customers want to see the itemized bill so I turn those features on then off again for them but I still do not show part numbers just item numbers (by item number I mean the sequential number of the part when it was entered into the database), but the people that want to see it are very very few between like maybe one or two a year! When I give an estimate it’s for the total job I never say parts, labor, tax to the customer. If they ask for my labor rate, I tell them we do it by job so there is no labor rate. Hope this helps!!

..So I’m assuming your experience has been the same as mine, don’t create reasons for objections and you’ll have many less objections!  I’m no sales genius, but I’d bet this would be part of sales 101 in some kind of sales training.  As far as the breakdown, we do provide if requested, including part #’s upon request.l   Heck, we’ll even tell them where we bought the parts, the name of the person we placed the order through, and how much we paid for the parts if they want.  I don’t have a problem explaining why we have to make money on parts and labor, what shop supplies are used for, or any other reason why we do things the way we do, because we have good reasons for what we do.

 

I think the main point is do whatever makes your customer happy.  That’s what we are here for, to provide a service to our customers that they think is fair and they can easily understand.  In my experience adding more complexity to the invoice makes customers confused, and therefore unhappy.  Good for you for thinking outside the box and graduating from the 50’s!

[jbrenn77]

WOW “jbrenn77” what management system that cost so damn much? Hell, I’m still using quickbooks 2011 Pro… its simple additions and subtractions, add “items” etc…

We use the YES system.  I believe it might cost less to buy now as there are scaled down versions, but when I bought it it was $5500 I believe for the system and $99.00 per month for support, which is optional but I do use it so we choose to pay that, it’s always been worth it.  Bought it in ’06 so that adds up!

[jbrenn77]

I guess we’ll have to add another invoice printout if this catches on. I think we probably have about 50 invoice printouts now. So far, no shops have requested this kind of an invoice… we’ll see.

I chose the management system we currently have now based on the fact that it could do this.  I called and researched a lot of companies and many said the same thing, no one had asked for it.  I ended up buying the one that said they would do if for me.  To date between support and the purchase I’ve spent about $19,800 with them, so I’d say it was probably worth their time.  Food for thought.

[jbrenn77]

One question I have… if you were to NOT give the customer a breakdown of parts and labor, wouldn’t you want to do it for yourself? That way you have much more information if the vehicle comes back.

Yes, we would want all of that tracking information of course, we simply have different formats we can choose from for how it prints.

[jbrenn77]

When you go to a restaurant do they give you a breakdown of how much they are charging you for the steak, and how much the labor was to cook it, and how much you are paying for the gas to fire the oven, etc etc… ? Nope, ’cause nobody cares. The same holds true for our business as well. We create these problems ourselves.

Totally agree on this one. Never thought about this issue from the restaurant perspective. The difference about the restaurant and repair shop is the trust level. In most cases customers are not thinking that restaurants will put some crappy ingredients into their food or will skip couple of eggs in “omelet du fromage”. On the other hand it’s easy to feel when something is wrong with the food your ordered. As for the repair shops we have this “magical” reputation of doing things wrong because everyone in their lives had this story about bad repair or stolen parts or something similar. So these invoice breakdowns are compensating this lack of trust. Anyway I won’t use breakdowns for at least a month and see what will be the reactions of my customers.

I agree with trying it out.  Can’t hurt I don’t think.  These invoice breakdowns may compensate for a lack of trust, but here’s the question:  Who said they don’t trust us?  That’s our perception, which may become true the more we dwell on it, compensate for it, etc.  I go in to every transaction with my customer with the assumption that they trust me or they wouldn’t bring their car here.  I believe we also all know that if somebody wanted to they could still cheat the customer even while giving this breakdown, and I think customers know that too, so I question even the validity of whether providing that really serves any purose at all in the trust department.

[jbrenn77]

I like Rick’s response from above.  We focus mainly on a % of GP $ they sell.  Since they can influence production it doesn’t count toward their pay until the work is completed and RO closed.  Also they have bonuses that change depending on what we are focusing on at the time.

[jbrenn77]

If you are worried about customers checking you prices after they leave…finding it cheaper on fleabay, does give them a sour taste in their mouth. You can explain to them that YOU warranty your part AND labor to replace the part if/when it fails within the warranty time period. How much is THEIR time worth, waiting for warrantied parts to get shipped to them…In the meantime, they have to, Uber, Lyft, rent a car, etc… (How much is their time worth) is usually my best selling closer. You can also inhibit their ability to look up your parts numbers by reversing a few numbers, OR entering the part number backwards…example, 06J-115-403 (oil filter), enter it as 06J-115-304, OR 06J-511-304, they will NEVER find it. Or you can put half of the part number… 06J-115, which would only send them in the general direction

Yes, We could and have had to do that…  or we could just avoid all that and stop creating objections ourselves and quite breaking it out separately.   I choose the latter.  It takes a LOT less time and customers leave with a smile on their face, amazed at how simple and easy it was.

[jbrenn77]

Well, if there’s a law preventing you prom not itemizing parts and labor separately then you’d better abide by that.  I’m not sure what Il law says, I’ll have to look into that.  I can tell you I’ve been doing it this way for over 15 yrs and I can count on one hand the amount of times I’ve gotten asked how much the parts were.  Before that I had much more criticism regarding parts prices due to the fact that I had to mark them up more than the customer could buy them down the street.  When asked, I will always gladly give a breakdown, but I don’t see the need to create unnecessary objections by adding complexity to the invoice.  When you go to a restaurant do they give you a breakdown of how much they are charging you for the steak, and how much the labor was to cook it, and how much you are paying for the gas to fire the oven, etc etc…  ?  Nope, ’cause nobody cares.  The same holds true for our business as well.  We create these problems ourselves.

[jbrenn77]

We’re not talking about not listing the parts, just not separating out the parts and labor prices individually.

[jbrenn77]

Yes.  It is time we stop treating our service as a commodity.  Pricing out labor and parts separately causes unnecessary objections during the presentation regarding parts prices.  This is because the customer can get parts for our cost, which didn’t used to be the case.  It used to be that we could mark up our parts, make a profit on them, show the sell price of these parts to the customer, and they would still be less than what the customer would pay at a parts store.  That was a long time ago.

The amount of gross profit needed from each job can be more easily earned on labor than parts.  I am eagerly awaiting the time when we stop marking up our parts and figure out how to make the profit needed on labor.  After all, we don’t make parts.  We do sell our labor though, and that is unique to our particular shop.  You can’t buy it online (usually, yet) and it’s not the same as the labor down the street.

I’m not sure how to implement this change but I’d be willing to do it if I could get together with a group of owners who wanted to collaborate on this.

[jbrenn77]

Michael,

Sounds like there are a few things going on here…  First, you need a job description.  Also it sounds like you have a service manager who’s above you and would need to have input?  My suggestion would be to talk to your manager and ask her to come up with a list of added responsibilities for you to take on and hold yourself accountable to.  If she really does have no idea, than I’d say ask if it’s OK to write your own and present that to her for review.  Every shop has it’s own unique way of doing things and so I don’t think there’s a generic one size fits all approach to a shop foreman job description but I would start with a basic list of things you know you can do to help the company, who you report to, who reports to you, and the results you are going to be responsible for (what management can hold you accountable to).  If you need help email me and I can provide some ideas.  

[jbrenn77]

Uniforms are required or go home. T shirts are a good idea. Tucking in shirts and wearing a belt is also required. I’ve had this problem before. I just had to do verbal and written warnings and they complied. Just tell him it’s nothing personal, but you have to do your job. Holding people accountable to policies and not sanctioning improper behavior is your job. As far as cell phones go my techs do use them for work so I cut them slack but officially the policy is no cell phones. I just tell them not to give me a reason to enforce that policy and there won’t be a problem. They don’t abuse it.

[jbrenn77]

We use a coats tire machine, can’t remember the exact model but it’s the same kind they’ve been making for eons. Picked this one up used last year for $1200.00. The nice thing is my coats guy will sell us the parts, so I can have my GS fix it when he has a little down time. They are very easy to repair.

[jbrenn77]

I agree with all that Frank has said.  The type of person who is usually a good technician will absolutely hate change.  Unfortunately, it’s necessary.  Better that the owner hired you to implement the necessary changes than to go out of business and have everyone looking for a job.  Don’t forget to remind the techs that it’s not up to you or them to decide that the automotive world can just stop changing, it’s just happening. 

  Getting the employees to “buy in” on your/the new owners plan for the business will be a test of your leadership capability.  You need not to just tell them, but get them to believe that these changes are god for them.  This needs to be done tactfully and the right way.  It may take some time as well, and you need to be prepared to lose people in the process.  It sounds like it will be a big change and you may or may not have the luxury of slowly changing things a little at a time.  In my shop recently I needed to implement a few big changes that I should have done a long time ago.  I wasn’t sure how the employees would react and I was afraid that implementing changes slowly over time would cause my employees to lose faith in my plan as it would take too long to see the end result, so I decided the best thing to do was to just “rip the band-aid off” so to speak and see what happened.  I lost  a tech, fired an advisor, and implemented the changes.  I’m still implementing the smaller and finer detailed ones but the major ones were done right away.  We are seeing the benefits in the bottom line and are making progress in the right direction, and I’ve replace the tech I lost with a better one. 

Just be prepared for the place to turn upside down if you decide to handle it this way.  It will be like living in a tornado for a while, but it will be worth it when all the garbage blows away and the good things are left standing. 

Always recruiting is also very good advice.  You never know when you may need people.  You may also be surprised at the effect it has on your current staffs’ attitude. 

[jbrenn77]

I’ve had several go-rounds with a couple of the different review sites, including Google.  They change their algorithm very fast and it seems like all of them are leaning toward making SEM a much easier way for us to get business as opposed to reviews.  I won’t say I’ve given up on Google reviews, customers pay attention to internet reviews and we need good ones, but I don’t have the time to devote to correcting all the errors and dealing with all of the problems.  I’m now having someone manage my social media campaign as a standalone service, this is all she does for me, maybe she could get involved in managing this fiasco?  I don’t know, I’ll have to ask her. 

[jbrenn77]

I think I agree with all the replies except the one about hiring a tech to be an SA. I think personality is one of the biggest things. Hire a people person. Hire a customer service oriented person. They can be trained to do business your way, they can even be trained about cars and how to sell car service, and tehy can even be trained on sales in general. The more of these things they already know, the better, but the one thing I think you would have the hardest time teaching is customer service skills. These things need to come naturally to them or your customers will think they don’t care as much as you.

[jbrenn77]

That’s a good question. I ahve a pre-interview questionnaire but it doesn’t address anger issues or personality issues. It mainly identifies specific characteristics that would tell me whether I think the person would be a good employee or not. Personality is usually figured out after the 3rd or 4th week, anybody can put on a show for awhile.

[jbrenn77]

I’d lay down the rules. Show up on time, Stay late if you want, or not if you don’t want him to. If not production based pay then at least a min. acceptable amount of work. It’s your business, are you paying him good wages? If so, then you can’t afford not to have the best employee. If you’re not getting a good value after a little work, why wait? Give the guy a chance(sounds like you already have), and then if nothing improves get another guy. It may be painful short term but be better in the long term. I made the mistake of waiting too long and it wasn’t worth it.