[keithminn]

Ollie thanks for your comments they were really helpful. I think that your model mirrors the approach I’m taking. How do I find out about Tom’s compensation program that “saved your life”. Thanks Keith

[keithminn]

I certainly would welcome a regular discussion and relationship. One possibility is to set up a regular conference call where we jump on by calling a 800 number the number of separate shops is basically limitless. You can email me directly to discuss this further if your interested in conference calling or other thoughts.

[keithminn]

One thought I have is to add two more lifts in a larger building we have on the property. The building has room for 4 lifts total. This is a separate building then our current shop which creates two separate spaces which is less then ideal I know.

I would then hire an additional tech and eventually two. I would elevate our master tech to shop manger and he would work with and train the junior techs while I work with customers and market the business.

Positives: The added capacity spreads the risk of slow jobs out. Faster techs would produce more work and the slower tech(s) would get help or reassigned.

Negatives: Possibility of more low production just more of it. Two buildings hare to manage. Increase overhead of a shop manager which is a role I’m filling now (although) I’m at max capacity some days.

Your comments would be appreciated.

[keithminn]

Rob thank you for your thoughtful questions.

We currently have three bays in a 30 by 40 foot build 1200 square feet my office is in a separate building we have storage in two other buildings and outside storage for 20-30 cars or more. Each by is 400 square feet the middle by does not have a lift.

Car count 6-8 (sometimes less and sometimes more) per week 70% Subaru 20% 10% other. Current have a 2000 forester in bay 1 for 2.5 days and an 2003 outback for 3 probably stretching to 4 with 16 bent valves. Will roll out the 2003 to work on others while the upper engine is being reassembled.

Average heavy line invoice (head gaskets etc usually engine work $2000-$2500

Average smaller ticket — Brakes, tranny 600-800

Pricing may be a factor but usually my customers get hooked on our passion and quality. They compare the parts list of the other guys (non Subaru shops) to ours and we are much more thorough. Its not that we’re geniuses but instead know the cars and know what to look for and have all the small parts that are time consuming and are easily skipped (examples timing cover seals or oil pump o-rings, brake hardware). If you roll a Ford or Chevy in the shop we have our heads in the manuals.

Regarding rust — we know what we’re up against and add to the estimate. Things that consume a great deal of time are a harmonic balance pulleys coming loose ruining the pulley and damaging the key way. Shop rules are to use a torque wrench at 130ft/lb but an impact was used and a crank was almost damaged beyond repair. I stock the keys (the dealers do not) but this fiasco cost us 5-6 hours getting things repaired and back together again.

[keithminn]

Thanks Frank. I do not formally use a time clock system but I can observe when an operation starts and when it is complete and i have assessed the patterns.

Here’s an example: 2000 Subaru Forester with 188,000 miles on the clock. The car needed everything so this week we focused on the rear.

Passenger rear wheel bearing

E-brake cables, shoes and hardware

Sub frame bushings ( also know as stoppers — lord knows why) 4 of them.

I allotted 5 hours for the bearing (2.8 book), 3 hours for the bushings, and 4 hours for the e-brake cables (2.0 book), shoes and hardware (1.8 book).

The tech started at 8:15 Thursday and at the end of the day Thursday says that we will get the bearing completed on Friday as well as the e-brake but will not have time for the bushings. So in two full days 15 hours — 9 of the 12 hours sold will be completed and he suggests to have the customer come back. There has been no waiting on parts all the parts are here. I’m not trying to be hard on him but I need to pay the guy and if the work doesn’t get out where does the money come from to pay him?

Regarding parts profit I’m adding a margin of 40% so I’m not quite at the 55-65 percent range. Regarding list for parts — the list price is confusing to me — the pricing is all over the place. I know that many of the local dealers charge 20-40 percent over list — then give us a 20% discount. There is one dealer in town that charges list and then a 20% discount our business is concentrated at that dealer and then I charge list for those dealer parts. Most of our parts come from out of town and are steeply discounted and then we charge list and we are at 55-65 for those parts.

[keithminn]

Thanks Tom your points are well taken.

Regarding efficiency. My strategy was to have the techs buzzing by specializing. Every week we see the same pattern failures. My thoughts were that the techs would not have their heads in the manuals and All Data if we got so familiar with the cars that we knew them better then the dealer. We still learn every day but now the information gathering is quite detailed and borders on the obscure ( such as will a 2000 outback head fit on 2003)– I spend my time on this type of research and the weird jobs so my techs are not tied up in research.

I take the same approach with parts so that we don’t have to wait for parts. We stock many of the parts that are hard to find and I stock a lot of them so we don’t run out — including special sized o-rings, bolts, seals etc. Also we have the special tools that make a job go much faster.

Regarding billing hours worked — this is a trick I use an escalator of 40% for age and rust. We bill based on a how long it really takes to complete a job within reason — book time is a starting place. In addition I’m more then willing to lose a job if book time is a joke and my customer is hunting for someone who doesn’t know the real effort in a highly corroded and or problematic operation. For instance we know how long a rusted Subaru ball joint takes to remove from a vehicle without breaking a retaining bolt. We use hot wax and other tricks but your right it takes extra time and I build these factors into my estimates.

Ultimately though I have to balance how long something takes with the market place if the dealer is 10.2 on head gaskets and we’re 15 hours I can make the case to my customers because we service the oil pump replace timing idlers and the rear main seal etc. If the hours were higher many of my customers would elect to junk their cars — so its a careful balance.