[J. Larry Bloodworth]

I believe it is very important for a shop owner to work the counter a little bit every week because that’s the best way an owner can keep a finger on the pulse of the business. If an owner doesn’t regularly work the front counter of the business, they tend to lose touch with not only their customers but their service writers as well. The business was created with the owner on the front counter and it’s a mistake for the business to lose that owner’s touch. Alternatively, the busier the shop gets, the less time the owner will be able to spend at the front counter; it’s a fine balance.

It’s very important for the owner to follow the same policies, procedures, and ethics that he requires of his service writers so as to set a good example. Make every job a learning example for the service writers. One of the more important facets of the owner working the front counter is for the owner to follow through with all the R.O.s he started because “handing off” R.O.s has a high probability of having a dropped ball.

[J. Larry Bloodworth]

Lots of glass is a great idea. Also plan to have an ADAS bay. It takes up a lot of room, and the floor needs to be flat and level. Pretty soon, all vehicles (EVs and ICE) will have ADAS as standard. Early on, a shop could be soliciting ADAS work from shops that haven’t invested in ADAS equipment.

[J. Larry Bloodworth]

I would “shadow” new employees for 2 to 5 days myself. Having an employee do the same instead of me is not helpful at all.

[J. Larry Bloodworth]

Speaking of high prices, my wife brought it to my attention today that 1 lb of butter sticks at Walmart is $4.91. Its stuff like that made me vote a straight Republican ticket. FJB

[J. Larry Bloodworth]

We are a transmission repair-only shop. While we don’t have the same issues as you, we still have problems with pricing some transmission fluid and filter jobs. For the simple, straightforward transmission service we charge $149. However, there are some vehicles the transmission pan and filter are one unit. Additionally, there are some Euro units where we have to drop a cross member, exhaust, and shift linkage just to get the transmission pan off. One Range Rover ran over $700 to service and we made no more profit than we do on the $149 service job.

Very few people decide to service their transmission out of the clear blue. 95% of the time, they suspect something is up with their transmission. We can usually duplicate the malfunction on the road test if there is one. Of all the transmissions we would service, 50% turn into major work so the price of the service is irrelevant on those.

The worst scenario is that we service a failing transmission. After the service job, at some point in time, the transmission either starts to seriously malfunction or fail altogether. Of course, we get the blame. This is why we thoroughly road-test all service jobs and verify proper operation. Often, the debris in the pan will either confirm a problem or not.

[J. Larry Bloodworth]

Our shop’s location is in a rather affluent area with nice vehicles and customers’ ability to pay for repairs. We are a transmission repair business. We don’t ask for a deposit because we have possession of the customer’s vehicle. A signed repair order acknowledging a mechanic’s lien is enough of a deposit for us.

[J. Larry Bloodworth]

Tom Peters’ book “In Search of Excellence” was the first ‘outside of the industry’ management book I ever purchased. It’s an excellent read. Here’s his YouTube channel: https://www.youtube.com/c/TomPetersExcellenceNow/videos

[J. Larry Bloodworth]

Chris, while what you say is true, most shop owners don’t/won’t have the energy, motivation, or drive to go down to the laundromat every week. However, shortly before I sold our shop, washing shop towels and uniforms ourselves is exactly what we did. I guess I could say that money being tight gave me enough energy, motivation, or drive to go down to the laundromat every week. 🙂

We only purchased enough linen supplies to last us only 3 days. That had us going down to the laundromat twice a week. Once we got the hang of it, it really wasn’t that bad. I learned cheap detergent is a non-starter. We bought Tide which was the highest-priced at the grocery store. Having 2 guys handle it at the laundromat made it go faster. If I had not found a buyer for our shop so quickly, I was toying with the idea of buying a washer and dryer for the shop, along with more linen supplies. But I sold the shop before we did.

Thanks for the tip!

[J. Larry Bloodworth]

I agree that finding the right person is important. Here’s a tale of finding the wrong CPA…

Taxes, taxes, and more taxes, right? I have to vent. I’ll make a very long story short. We had a once-in-lifetime event of selling our shop real estate last year. My wife is an accountant with about 60 clients. She did our taxes but because it was such a large sum in taxes, ($400K) she decided she would have our CPA look it over, just to make sure. He edited both returns.

We file both federal and state income tax returns. Never heard a peep from either agency. She goes out to check the mail and there are 2 checks in the mailbox; one from the IRS, and one from the state of Utah. Both these checks were collectively over $9K for overpayment of taxes. WTF???

I can’t complain about my wife because I’m married to her and I don’t feel like doing couch duty. However, the person I’m really unhappy with is our CPA. How can he make such a gross error? Needless to say, we won’t be using him anymore. The good news is we won’t have to worry about being audited because the IRS and the state edited our returns.

[J. Larry Bloodworth]

I agree a business should not do its own payroll. We used Intuit’s payroll service and it was great. We used QuickBooks Desktop Pro. We did, however, calculate our own payroll and print our own checks. Intuit would make our 941 deposits and do our quarterlies by logging into our system and running all the reports. My wife is an accountant and has a degree in economics, so this may not work for everyone, but it worked for us.

[J. Larry Bloodworth]

Some accounting software places the labor under expenses, including office payroll.  I need to make it clear the office payroll and technicians’ payroll are in two different categories.  Technician’s payroll us a Cost Of Goods Sold (COGS) account and any office payroll is under an expense account.

Another is the owner’s pay.  If he/she works predominantly in the shop repairing vehicles, their payroll is a COGS account.  If he/she works mostly in the office, then their payroll is an expense account.  In either scenario, the shop owner’s pay should be commensurate with what a normal employee would be paid for the same job.  The owner’s pay IS NOT the net shop profit. 

This was a hard concept for me to grasp early on.  In the beginning, I thought my pay was what (if any) money was left over in the checkbook.  Later, I began to think the net profit was my pay.  Much later in my career did I finally learn the concept of my pay should be commensurate with what a normal employee would be paid for the same job.  Throughout my career, I was always learning more and more about accounting and that was a good thing.

Cheers,

Larry

larrybloodworth@gmail.com

[J. Larry Bloodworth]

We had different profit levels on different parts, labors, and whole jobs.  What I learned to pay attention to was the overall gross profit of the business.  It was very easy for me due to learning accounting through an early SMS I invested in named Digitree out of Colorado.  They were eventually bought out by Mitchell and Mitchell quit supporting the repair shop version and only supported the body shop version.  Later, I eventually went to a transmission shop-only software program called TransShop 1-2-3 by Larry Kuperman. (now retired) He stole the idea from Lotus 1-2-3.

I learned a lot of easy management tricks through DigitTree.  At the end of the week report, I would also print (remember dot-matrix printers?) out checks for that week’s sales tax and 941 tax.  At the end of the month, I would pay my 941 with 4 checks.  We paid sales tax quarterly and I would pay that with 12-13 checks.  That kept our bank balance from looking overly inflated giving me a false sense of security.  Even worse, I wouldn’t spend the money on something non-essential.

It simply blows me away at the number of small business owners who don’t know accounting.  Reminds me of a young rebuilder I hired (early 30s) who had been building transmissions for about 10 years.  Depending on the year model of a certain transmission, the steel plates and friction plates were of different thicknesses.  I told him to measure the old ones to know which ones to use.  I then learned he couldn’t read a mic.  I asked him how he could go so long not being able to read a mic.  He said his old boss had a digital read-out mike, dial calipers, and a dial indicator.  He had never learned to read a mic the old fashion, but standard, way.  That young builder reminded me of small business owners who don’t know accounting nor do any in-house accounting.  Many have an accountant for all of that and the P&L and balance sheets they get from their accountant are basically an obituary as to their financial picture.  They are often a month, a quarter, or heaven forbid, a year old.

There are plenty of ways to learn accounting.  Online, books, and even YouTube can all teach standard accounting principles and practices.  It’s not that hard and definitely not rocket science.  Even the numbering of groups of accounts is standardized.  For our members who don’t, I would strongly suggest bringing all accounting in-house and only using an accountant, or CPA like we did, only annually.

[J. Larry Bloodworth]

Steve, I didn’t sell through a broker either.  I consider my broker who wrote those 10 rules to be a good friend.  He wanted to GIVE his business to me so he could fully retire since he just recently purchased a multi-million dollar home in the San Diego area.  Frankly, I don’t need any job, let alone a job requiring flying around the country.

Just curious, did you sell your real estate with the business?

Did you lease your real estate with the business?

I posted an earlier topic titled, “HOW TO GET BUYER FOR YOUR SHOP REAL ESTATE”.  I mentioned the business real estate website LoopNet.com.  I received a lot of leads through LoopNet.  However, what ultimately sold my real estate was the good old fashion 8″ X  30′ FOR SALE banner on the building itself.  That’s where I made my full retirement.

Five years earlier, I had sold only the business to my largest competitor.  The way that happened is through simple phone calls.  I called the 4 largest competitors and told them my business was up for sale.  From the time I made those calls to the time I had cash in hand was only 6 weeks.  The real estate sold in 2 weeks.

A word of advice, have a pre-payment penalty clause written into your mortgage agreement.  My original real estate sales terms were for $2.3M financed @5% for 30 years.  We would receive $9,600/mo. for the rest of our lives.  Five months later, the buyer sold his business to a national concern.  The same month, they paid the mortgage off in full.  The bad part about that was that we incurred a $400K tax bill all in one year. OUCH!  Don’t let that happen to you.

[J. Larry Bloodworth]

There is a nifty tool I discovered a number of years ago that rates websites by all the important criteria.  This is especially important for SEO.  Their website is https://gtmetrix.com/.  While they do offer a paid version that has more features and benefits, the free version still offers a lot.  Try it out!

[J. Larry Bloodworth]

That list of 10 rules was written by a former shop owner who retired and started selling other people’s shops in semi-retirement.  His name is Art Eastman and he lives in southern California.  No wonder he put that in.  I really don’t know if he’s even doing it anymore. There’s no shortage of business brokers, but to find someone automotive-specific may be hard to do.  You can contact Art at: art_mr0007@hotmail.com  If he doesn’t do it anymore, maybe he can point you in the right direction.  I followed everything in the list except the last part about hiring a broker.  I did it all myself.  Contact me if you need to talk. J. Larry Bloodworth / larrybloodworth@gmail.com / 801-885-2227

[J. Larry Bloodworth]

We’ve never had a 1-star review.  Even from the guy that took us to small claims court because his warranty had expired.  I never dreamed of offering to pay a review to change their review.  I’ve never known that some reviews can be a shakedown.  I guess I’ve lived a charmed life. 🙂

[J. Larry Bloodworth]

We had a simple policy for our transmission shop.  We would offer to take in anything; for a price.  The more we didn’t want to work on something, the higher the price.  I wouldn’t say an emphatic “No” on anything.

We once had a highly modified Dodge Ram 3500 diesel come into our shop.  The guy was on his 4th transmission and we would be #5.  He had a chip that could be modified from the driver’s seat on the fly.  It’s was lifted with big tires and an exhaust system bigger than the sewer pipe to my house.  Injectors, manifold, etc. and it was a “rolling coal” example.

High liability, so I told him I would have to Remove, Disassemble, and Inspect the damage to give an accurate price.  He kept pressing me for a “guesstimate”.  I finally said, no less than $9K, depending on what we found.

He said, “OK, go for it.”  After the job, we never saw the truck again.  Lucky us, huh?  Later I discovered I should have charged him for installation:…

ATS Uninstalled Transmission Prices

[J. Larry Bloodworth]

The link to the call tracking you provided doesn’t provide very many features.

Try https://www.convirza.com/solutions/by-industry/automotive/ I used Convirza before I retired.  Their staff is more than helpful.  If there’s anything you don’t understand, they will either help you with it or do it for you. Affordable Call Tracking Contact me if you need to talk. J. Larry Bloodworth / larrybloodworth@gmail.com / 801-885-2227

[J. Larry Bloodworth]

Call tracking is a marketing measurement and management tool.  In unto itself, it does no marketing of its own.  When I discovered call tracking, it opened up a whole new world to me.  I was able to see what marketing and advertising worked and more importantly, what didn’t.  By far, Google’s AdWords PPC worked the best for us.  We’re a transmission repair shop, I don’t know how it would work for a G/R shop.

The reason I say that is way back before the internet I learned a terrific advertising trick.  I would get an unlisted number from the phone company.  I would buy a full-page Yellow Page ad using the unlisted number.  Because it was full-page, the ad always appeared in the frontmost location under the “Transmission” section.  I had a separate telephone on my desk for the unlisted YP number.  When that phone rang, I instantly knew the source of the call.  If by chance, the ad didn’t work, I could cancel the phone number and not be responsible for the large YP ad bill.

I told another G/R shop owner who was a good friend about my strategy and he tried it.   It was a dismal failure.  The YP ad was costing him more than the business it created.  On his best month, he only broke even.  After only 5 months, he canceled the phone number.

So, the bottom line is that I don’t know if Google’s AdWords PPC will work for G/R as it works for transmission repair.  However, I do know call tracking will work for any business that gets its new sales leads over the phone.  I tracked it for a few years and it proved to me that my Google AdWords PPC worked for our shop.  Before Google PPC advertising, our shop sales plateaued at about $700K/yr.  After we started Google PPC advertising, our sales instantly increased by $500K to about $1.2M/yr.  Admittedly, we were paying about $50K/yr. to Google, but it was worth it to us.  Call tracking proved beyond a shadow of a doubt that for every $1 we paid Google, we received $10 in new business.  Overall, we were giving Google 10% of the amount in the new business we created.

In fact, we would get so busy and far behind, I would actually turn off or ‘pause’ the Adwords campaign to give us time to catch up.  Once we started seeing daylight, I would turn it back on.  In closing, I have a link below to a 3-year analysis of our Google PPC program as measured through our call tracking campaign.  Below is a link to 1 day of call tracking data and you can see the information you get via call tracking.

Certified Transmissions Pay-Per-Click Analysis

Call Tracking 2012-03-26-2012-03-26

J. Larry Bloodworth 801-885-2227 larrybloodworth@gmail.com

 

 

[J. Larry Bloodworth]

<p>We are a transmission-only repair shop; no G/R.  It only takes ONE LINE of JavaScript on your homepage to enable call tracking.  Additionally, you have a “hidden page” that the call tracking software can hit with all the call analytics.  We had not only call scoring with our plan but conversation analytics as well.  I would listen to the recording of low-scoring calls to find out what keywords attracted such calls.</p><p>I quickly learned that any keyword that had to do with leaks, noises, and vibrations were either just shoppers, people with little to no money, or time-wasters.   I dropped those kinds of keywords and phrases.  In the beginning, I had around 1,200 keywords.  Over time, I whittled it down to about 25-30 high-value keywords that attracted good customers with big tickets.  Our ARO was about $1,800 and our Major Average Repair Order (MARO) was $3,500.  A side benefit was we rarely ended up with “dead jobs” in our back parking lot.</p><p>BTW, our parking lot is double-fenced with 3/4 acre of paved parking.  Check it out:</p><p>Certified Transmissions Draper, Utah</p>

[J. Larry Bloodworth]

<p>I use call tracking to identify where my leads are coming from.  In addition, by using call tracking you can find which keywords attract the best customers/jobs.  Check it out for yourself at The Call Tracking I Used</p>

[J. Larry Bloodworth]

I don’t subscribe to shopping competitors because our prices are set off our costs, not the guy down the street.  We are a transmission specialty shop and next to 16 new and used dealers.  We were either the same price as the dealer or higher.

Customers would come into our shop after visiting the dealer and want us to do the work because they felt they were getting more bang for the buck due to our 5 Yr./100K mile warranty.  I felt if I was pricing our work off the competition, we would not be profitable at best, or out of business at worst.  We were much higher than other independent shops and had more work than we could handle.

Of course, GR is a different animal, but even if we did perform General Repairs, I would still be pricing off of our costs.

[J. Larry Bloodworth]

In my opinion, the $100K income espoused is contingent on a shop’s ability to provide the service writer with enough high-quality leads. Most aftermarket shops I’ve known don’t have enough high-quality leads. If a shop is paying say, 5% commission, there would have to be $2M/yr. in sales opportunities available. Few shops have that available due to either sub-standard marketing, advertising, or reputation.
Then there’s the issue of work production capacity…

[J. Larry Bloodworth]

My wife and I worked together to finish the shop floor with 2-part Floor Epoxy from Home Depot.  It ran us about $450 to do 3K sq. ft.  Here’s a link to what we used.  It took us 3 of these kits.

https://www.homedepot.com/p/Rust-Oleum-EpoxyShield-2-Gal-Gray-Garage-Floor-Epoxy-261845/202963950

In our experience, it lasts about 5 years then you have to touch up the areas that have chipped due to dropping stuff.  Before laying down the epoxy, we etched the floor with muriatic acid then neutralized and cleaned the floor with Tide laundry detergent.  We didn’t grind or sand the floor.  Hope this helps shop owners who have more time than money for a cool-looking shop floor.

Here’s a fuzzy picture of what it looked like when we were finished:

[J. Larry Bloodworth]

Tom,

Thank you a bunch!!!

I’m checking it out right now.

[J. Larry Bloodworth]

Tom,

I’ve looked off and on, for the same type of information on passenger vehicles and light trucks for more than 25 years and have yet to find it.  If you find it, post your source here.  Thanks for sharing.

[J. Larry Bloodworth]

ConcreteNetwork.com

[J. Larry Bloodworth]

We are a transmission repair specialty shop and do not do general auto repair so we handle things a bit differently.  It’s my opinion that whoever writes the quote should sell the job.  Customers like to talk to whom they perceive is involved in the job, be it the tech or the manager.  We track it by how many estimates get written that don’t turn into invoices/repair orders.  We run our entire shop on Quickbooks alone.  No cumbersome/expensive SMS.

As far as selling the job, since 2008 we’ve been using a “video Show-N-Tell” to sell the job and our close ratio literally doubled overnight.  Yes, it’s more work, but the fruits of our labor pay off in a big way.  Because the nature of our work is big-ticket (ARO=$3,500) we only had about a 50% close ratio before video.  It’s now 95%.

Our YouTube channel (https://www.youtube.com/user/larrybloodworth) has over 2,200 videos and most of them are 3-4 minute customer sales videos.  The customer feels more involved and they can see what’s going on.  Our front page video (https://youtu.be/SARNYpQS460) on our YouTube channel is a customer watching us rebuild his transmission.

I hope this gives you some ideas.

[J. Larry Bloodworth]

What Tom and Trevor say is correct.  However, I’d like to put my 2-cents in.

As long as I worked IN the business at my shop, I didn’t have much time for anything except putting out fires.  It was only after I hired a manager that was I able to work ON the business.  I learned this after reading 3 of Michael Gerber’s books.

When I finally realized my job role was marketing and making the phone ring off the hook did we really start being highly profitable.  Before I just had a job and the “profit” was my paycheck.  I couldn’t even sell the business if I wanted to because nobody wants to buy a job.

The bottom line is to hire someone to run the day-to-day operations while you work on all things marketing and making the phone ring off the hook.

Next soapbox, please…

[J. Larry Bloodworth]

Perhaps. This is the first carmaker to make cost-cutting moves to afford the transition to EVs. All the other carmakers are simply announcing how many billions of dollars they are investing in their transition into the EV world. I’ve often asked the question, “How are they going to afford that?”. Stellantis answered that question for me.