Randy Lucyk
Forum Replies Created
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A word of caution when it comes to payroll companies. Very Very few, if any, take responsibility for making sure the way you pay your people is consistent with federal, state and local labor laws. Don’t get me wrong, I use one of the biggest and have interviewed many more. They are the way to go in my opinion, but they are not labor law attorneys, nor do they claim to be, and in my case at least, you have to specifically hold them harmless in labor law disputes. It’s in the agreement
If you have a typical, novel or unusual productivity pay plan, bonus plan, spiff, ect. It is up to you to be sure the information you are entering into their portal, is consistent with the laws. There job is to calculate your employees pay using the data you provide. This statement includes pretty much any and every pay plan that is not hourly with overtime.
It’s all fine and dandy, until the DOL comes knocking
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did not take the image. Here is a link: https://1drv.ms/u/s!Ap7ibKYluQaehZdDtFxLS3_Dyec_fg?e=JZ63xz
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We tried this last fall as an alternate idea to a signing bonus(should be image of postcard attached). We saturation mailed a 20-30 mile “irregular radius” around the shop, about 24k households. It did not have the response we hoped for. Some contacts but no actual interviews. I was a little surprised as we have a lot of small 3-4 man shops with techs that work for less then they deserve. We intentionally left wage info off the postcard, but it was available at the website, along with a lot of other information, that I believed a qualified tech would of value, if they took the time to read. I suspect most did not.
Hopefully, we received some residual benefit from all the households that do not have a qualified auto technician in their circle of family and friends.
[attachment file=”tech postcard.jpg”]
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Most would not be aware that I have made a personal commitment to try and convince industry participants that we need to bring “time” into the discussion when offering these types of resources.
The advent of abbreviated video displaying “case studies”, with little to no discussion about the “billable time” that would be needed to perform the process indicated in the video, is not as helpful as it could be, if we included “time” as part of the discussion.
The make or model of vehicle was not indicated in this resource. Without that specific information, it is a little more difficult to establish “bob” time for this, but i am going to call this an average of 90 minutes @ “bob” time (see below for description if interested), for this specific process on an average vehicle. This includes consulting service information, accessing module and/or wiring, making 8 labscope connections, road test and interpreting the results. The initial analysis/testing with scan tool or other would not be included in this 90 minutes of specific testing.
In our store their would have been an initial charge of some amount, for developing a “diagnostic plan” for attacking the customer complaint. We are approaching $300 for diag and testing. We may not be able to talk about specific charges on open forums such as this, but we can certainly talk about time.
Concept of “bob” time, previously posted on a diagnostics forum:
I suspect most understand that many of the challenges we face in this industry have a root cause of low profitability in general, as we consider the service industry as a whole. I suspect most also understand that we don’t sell anything in the service industry until we sell time first, and that drives everything else.
It has occurred to me recently, as I am absorbing content from industry forums, case studies, resources, SOD calls, theory training, equipment training, articles, ect., that their is something missing. For the most part, in virtually every case(Imo), we leave out completely or drastically underestimate the time consumed to perform the services/process/procedures we are discussing.
I believe that this is caused by the fact that each individual approaches a problem differently, with different knowledge levels, skill sets, equipment capabilities, ect, So how could possibly have a time estimate that has any meaning?
I am going to suggest it starts here and now.
Whether you folks are willing to admit it or not, you are the best of the best. As such you have the opportunity to establish a new language for time, that could be invaluable towards moving this industry forward. In the title line, I called it “bob time”, described as follows:
“Imagine you are among the best equipped and trained/most efficient/most knowledgeable technicians in the industry, for the particular problem you just fixed/diagnosed/completed, how much time should have been allowed for the process?”
By including this baseline time estimation, I believe we could accomplish a great deal for so many that struggle in the industry, and as such, help our selves. Services advisors and other customer facing individuals are constantly looking for ways to justify the diag time we charge for, and i believe it is human nature to underestimate time, just like many technicians and technical advisors do. If we had a “best of the best”(bob? call it what you want) time estimate for them to consider, I believe it could go a long way into improving profitability for many shops.
Imagine if every resource, video, discussion, case study, ect had a bob time associated with it. Over time it would make a difference.
In my mind bob time is a starting point to adjust from. It should be the minimum time, that we should ever charge for a process/procedure/diag/service, regardless of what capabilities our techs have, because if it takes the best of the best this long to perform, how could it possibly be justified to charge less. I am convinced “we” do regularly charge less then bob time.
The following examples are what doesn’t help profitability. i am not singling these individuals out, they are just examples of what we are all guilty of:
My light bulb moment came a month ago as we were considering purchasing a new scope, and I reviewed a video by a respected industry trainer describing diagnosis of a vvt system, requiring connecting all eight channels to the vehicle. The video flashed from sitting inside the car talking about the problem, to hood up and scope connected to 8 different sensors, and looking at the outputs on the scope. My brain immediately said OMG, I would have to charge three to four hours of time for this procedure, where is that referred to in the video? I ended up reviewing more videos from the same organization and decided to hold off on the purchase, because my front counter is not ready for the tool, I need to provide them more resources to work from, so this can be a profitable purchase, not just a “you gotta have it” purchase.
Another example came yesterday on a different forum and then this morning I see this:
“No codes. Cranks good no start no spark.
So I had a few minutes to check this out before I left for work today.
I have good injector pulse, that I checked with the pico scope and current clamp.
Tailpipe has 30,000 ppm hc cranking showing good fuel, sounds high but no biggie.
I am assuming there is no spark on all coils because there is no signs of life.
For sure I have no spark from the 3 front coils that are easy to access.
I have battery voltage on both terminals of the coil connector while cranking with connector plugged in.
The coils have no primary signal from pcm.
Scanner shows 250 rpm cranking.”
This is a perfect example of what i am talking about. Did it really take a few minutes? I suspect we all know it did not. The author was not trying to be malicious, it is just the way the human mind works.
I believe each and everyone of us can do better.
Maybe it starts here
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+26.47 over our best november ever in 2020
+19.3% year to date over best year ever in 2020
I hope everyone is experiencing the same
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Sept- +6.4%
YTD- +19.6%
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This was my final message to this young man. I would have liked it to have it been a little more positive. It is the reality of the day, and maybe the currently reality of the industry. I suspect the reality of the future will be different.
“Shreyas
I have mostly struck out. It is as much of a question of finding service facilities with business models that support school age individuals, as it is anything to do with your age. The only lead I have for you is from a shop owner in Southfield that has a combination repair shop, quick oil change and car wash. He indicated that he may have a position on the weekends for you (during the school year), but only at the car wash to start. There may be some benefit to “paying your dues” by starting in the car wash and then getting to know the folks at the oil change and repair shop, while working towards your next “promotion”. ”
Thank You everyone for the ideas and replies
Randy
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Perhaps my Insurance agent of several years was incorrect, when my very first action relating to this opportunity, was to call him and inquire about any insurance concerns. He seems quite sharp and has been in HIS industry for 30 years or so, representing multiple automotive service facilities with multiple carriers, and he indicated that this 15 year old would be treated, and both he and his actions, would be covered “like any other employee”. The fact that most business models don’t support school age individuals, and we as owners like to play the insurance card a little frequently, when it is our own fear that gets in the way, does not make this all encompassing statement true: “Because all of our Garage Liability Insurance companies won’t let us touch them”. Hard for me to imagine that I could possibly make a blanket statement about any subject that would hold water. Especially when i am trying to portray an expert in a field other then my own.
The fact that were concerned about liability, does not make it impossible.
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Up 26%
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By simplify, I suspect you mean highly configured, so that labor charges are calculated is such a way as to be profitable, across a variety of services. I have begun the configuration process and it is described in the video at the link below. I believe there is more that can done to dial in gross profit dollars per hour of tech time, automatically, without any additional service advisor work. Some/many of us have low profit jobs that drag down our high profit job, and I am working to counter act this.
I am going plant the seed at Rowriter that I would like to be able to matrix additional “time”, as well as dollars, by service category.
https://1drv.ms/v/s!Ap7ibKYluQaehPVs1xX9G-3PP6xFUA?e=8tu4Au
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There is no value in the percentage increase as compared to April 2020, Imo.
That said April 2021 was our highest sales and profits ever
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Justin
Know the numbers is the best advice I can give you. Not just the current numbers, but the numbers that will be in place, once you have your debt load and personal needs included. Even veteran owners are surprised, at how a good month financially, quickly evaporates to very little “reusable cash”. You will need help with this. I suggest you review the hour long youtube video from Bob Ward: https://www.youtube.com/watch?v=y1eQOwDrmqU , and then contact him to see how he can help.
I have attached a snapshot of our shops performance from April 2021. I realize that your numbers will be much smaller, as our shop is much larger than yours, with multiple divisions. Maybe even better to make my point. The number at the bottom of the image is the one that will matter to you the most. It is generally very small. Much smaller than the number shown. Think $1000 or less per month, for many new shops/owners(and even veterans), Imo. This is just a glimpse at “where does all the money go”.
You will do well, to not let your evaluation stop at net profit. I would suggest that as a new owner, with likely marginal profits, what you will ultimately be concerned with is whether you have an excess or shortfall of cash in your bank account.
You won’t regret spending time with Bob.
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Down 20% straight up. 18% allowing for the two less days, against the strongest January we have aver had in 2020. We were down 3% in Jan 2021 against 2018, 2019, and ahead of 2017 by 3% in 2021.
We were remarkably strong right up to the end of Dec 2020
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-14.4 northern michigan
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Our “final checks” are embebed in a quicklube module that ROWriter developed back in the day. It was ahead of its time for primarily one reason,
“You cannot close out an invoice unless your “final Checks” checklist is completed”.
This single feature makes it a breeze to get compliance in filling out the inspections and final checks. There is no real learning curve or “remembering” to complete the checklist.
I continue to be highly disappointed in every other digital inspection platform out there(including Rotouch), for not having this feature embebed in their platform.
Unfortunately, Rowriter did not provide a easy way for me to share my inspections. In the past I did extract the data from the tables in the database for sharing elsewhere, and I have that attached.
I believe what you are asking for is a key to providing profitable quality service by minimizing comebacks. We will continue to enhance our “final checks” and continue to badger inspection platform developers to include the feature described.
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I believe Tom hit this on the head. If your tendency’s are such that fixing things is in your dna, and you chose to be good at it, then finding a shop that respects your talents, and has the courage to operate in a profitable manner, can create a rewarding environment.
I tell this to techs at all levels , and few listen. I believe it is the single most important step to a better future for yourself. Not a single tech in 40 years has brought me what i describe below. Imagine how that would make you stand out in an interview.
“Every single day you work, you will benefit greatly by tracking number of hours you work, the number of billable hours the shop billed for the work you completed that day, and the amount of labor sales associated with those hours”
Not just look at the numbers, write them down or better yet put them into a spreadsheet. At the end of the pay periods, calculate your percentage of pay vs labor dollars sold and your hours worked vs hours sold.
If you watch these numbers, and keep the records to present to a potential new employer, you will be light years ahead of most of the techs in the industry.
My folks do this every single day.
My 2 cents.
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Natalie
Great advice. Thank You
For those interested in doing planning/projecting during their 8 week expense period, this is the best tool I have seen to date:
https://www.cpabr.com/covid_19_news/ppp-loan-forgiveness-workbook/
These guys are the only ones I have found with the courage, and willing to dedicate the resources necessary, to produce a thorough forecasting tool, using the best guess’s to date. In my mind it is only a question of whether you fill something like this out now, or in a few more months, when we all hope to be a lot busier.
I fear that for MOST owners, that received PPP funds, there is a day of reckoning coming, and another round of frustration. I chose to plan for that day vs just let it happen.
It may be a good idea for everyone to understand what the actual meaning is of the June 30th date. Imo, it is what you do during the 8 weeks after the PPP funds hit your bank account, that matter most.
I wish you all well
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Joe
I seldom see a “best practice” incentive plan laid out on forums or anywhere else, and I also do not have one for you. That said, we have had incentive plans (productivity based pay) in place for most of our 40 years in business. We have had substantial incentive plans in place for a couple years now, as we make the transition from on site owners to remote owners.
I will start out by suggesting that anyone that believes an incentive plan can be laid out using the KISS methodology, either has no employees that work over 40 hours ever, or they calculate bonus dollars weekly and pay their employees weekly, or they just don’t understand the federal labor laws related to bonus’s, incentives, spiffs, ect.
I have to start with the legal disclaimer. I am NOT about to give legal advice. I am NOT suggesting that you do anything that I do, without consulting a labor law attorney for their professional advice.
One of the concepts it has taken me a long time to understand is the concept of “gross funds available”.
I used to think that if I developed a bonus program around a dollar amount or a percentage of something, then that was the “bonus” amount, to be added to an employees pay. That was certainly defective thinking on my part.
What I have come to realize, is that what I really have is a “gross amount of dollars” available, to begin the calculation, that will determine the actual bonus dollars to be added to an employees pay. I can find no indication that the DOL can regulate the amount of funds we have available for a bonus or be involved in the calculation that results in the final amount of actual bonus dollars to be added to employees pay. They (the DOL) only appear to get involved once you put a bonus, spiff, ect. dollar amount on top of the employees base or standard pay. Only then, once you add those non discretionary dollars and the employee works over 40 hours, do you have to consider the regular rate of pay and subsequent premium overtime.
In my case, we pay based on the DOL required “regular rate” basis on our bonus’s paid out, but it does not take me out of formula for the gross amount I have determined to be affordable and prudent, as the calculation for the actual bonus dollars to be added to an employees base pay, is up to me.
I make sure that the calculation allows for every factor that i believe is important to our business, before i can determine the actual amount of bonus I can afford to pay. In 2019, we have had 28k in gross funds available to begin the calculation. By the time we complete all bonus payouts for the year, we will have north of 40k in gross funds available to begin the calculation, that will determine the actual amount to be added to employees base or standard pay. This is shared among 10 employees.
For me, even though the calculation can reduce those gross amounts by 12-20%, it still drives the attitude, activity and sense of ownership I am looking for. That said, it is NOT a silver bullet, nor does it fix all employees and/or all problems
Whenever we revise the “conditions” of our bonus system, we make sure employees are kept up to date, and have them sign that they have received the latest version and all past versions are null/void. I make sure my folks know how much government regulation costs them. Once you understand the concept of the “regular rate” you will better understand that statement.
I also make sure they understand that all decisions regarding any and all “special compensation program” are completely and solely at the discretion of ownership. It is also made clear that minimizing the administration of any of these programs, is a primary mandate of the program.
Our primary basis for most of the bonus dollars paid, is based on “new gross profit dollars”. We assign a percentage to the gross profit dollars generated this year that are above last year for the same period. We have safeguards in the calculation to ensure that gross profit dollars are always tracking above last year, and net profit ytd, is tracking above a preset minimum. We pay this bonus monthly, when eligible. This year we have added north of 23k to employees pay on the monthly bonus system. It was a good year. Our best ever.
Hopefully someone will have an easier method for you, then ours. No matter what plan you are presented with or come up with on your own, please don’t underestimate the importance of the federally mandated “regular rate”.
I have attached a somewhat difficult to read image of our special compensation programs. It should help you better understand the concept of “gross funds available”.
I intentionally created the image under low light conditions and somewhat blurry. Pay plans are serious stuff. Doing them wrong, is sometimes called a “company killer”. I suggest that no one take my word for anything. Get your own legal advice.
Regarding the concept of “gross funds”, I just find it easier with staff, to get them to comprehend that we have a limited amount of funds available to pay bonus’s from and everything we do wrong, and anything we don’t do as well as we could, reduces the amount of gross funds available.
Randy
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Thanks Rick
Still some conflicting info out there
https://www.dol.gov/whd/regs/compliance/wh1312.pdf
page 7, shows exactly what you are saying, other then i could find no reference to the lower training rate.
https://canons.sog.unc.edu/is-training-time-work-that-must-be-paid/
also quotes federal law and the final paragraph states:
When Employees Enroll in Classes or Training at Their Own Initiative
The FLSA regulations also address both training that employees enroll in of their own accord and special employer-offered courses of which employees may voluntarily take advantage. When an employee enrolls in a course or college program after working hours at his or her own initiative, the time is not compensable even if the coursework is directly related to the employee’s job. Occasionally, an employer will offer a free class or training opportunity after working hours for the benefit of its employees. If attendance is not required and the employee’s participation is voluntary, the time spent in such classes would not be considered hour worked. For the regulations, see here and here.This last paragraph also references these two links:
https://www.law.cornell.edu/cfr/text/29/785.31
https://www.law.cornell.edu/cfr/text/29/785.30Little doubt that our industry has used a very broad brush on how they have applied these regulations. I was also left unclear as to the travel time question.
Randy
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Will
We provide courtesy shuttles and also have 4 loaner vehicles that we do not charge for. We run 30-40 cars a day thru the store. About 50-60% of those are LOF’s and light services, with customers waiting. We have a staff of 10-12 on any given day, so we use existing staff to shuttle customers. The loaners are invaluable, IMO, as they give us the ability to say Yes much more frequently, as well as get us out of jams, when things don’t go as planned. Our loaner fleet are older customer cars, in good condition that we purchased with some major defect. On average we have $2000-$3000 invested in them plus gas and maintenance.
Not much in the way of issues with customer shuttle, as we are in a small town with little traffic and most shuttles a couple blocks to a couple miles. Minimal trouble with loaners. Again, small town, folks seem to respect them and are highly appreciative of having them available. Little doubt in my mind, both shuttles and loaners are a key to our success, and our ability to charge correctly for our services.
I know a few 3-5 million dollar a year shops, and those owners feel the same way.
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Adam
You have received some great advice. All these suggestions can be helpful, and most coaches will make a positive difference in your business.
I might start out a little differently. The most important resources in my 40 years, have been other shop owners. I would suggest reaching out to others in your same specialty area. Sometimes you need to be bold and just call them and strike up a conversation.
Looking at your specialty and other markets in Alberta, my first thought might be Alpha Diesel in Calgary. They are also new and you both likely fight similar battles. If not them, keep looking. I have been shot down more than i have created relationships, but the relationships i have developed have made a real difference in my business.
In my store, we are the general generalists. Their is nothing specialty about us. What i have learned is that when the scope of repairs changes, and it was unpredictable by any reasonable assessment, then the scope to the customer changes. I would hope that buys you back some of those lost hours. Never had the heads off that diesel, but 20 hours seems light on first glance. Certainly the injector issues involve extra labor charges, as it was the customer that mislead you.
We have a reasonably new term in my store when it comes to diagnosis. “Thorough and complete customer interrogation”. Any thing less and we get our selves in trouble.
As far as your techs efficiency issue, my suggestion is, make sure he knows how much labor he generated and how much he cost, everyday, or at least at the end of every job, in the case of big jobs like you do. He can do it on a piece of paper. I make sure my techs do this recording, so it is not a question of accuracy.
I hope you find other owners to “partner” with. It can be one of the most rewarding parts of this business.
Best of Luck
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Bob
I am not seeing a diverter/dam. Looks wide open to me, other than maybe the oil comes in off angle, and maybe a little lower than where we had the majority of filter damage. Here is a link to the video I shot of the new housing:
https://1drv.ms/v/s!Ap7ibKYluQae8ml-yKdz5MXoSs69
Randy
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Lots and Lots of questions in my mind. Some already brought up. I suggest you spend some time on this website: https://art-blumenthal.com/
I would at least call Art and introduce yourself. I suspect he would give you a few minutes of his time, even though it is not his deal.
Learn a lot more about cash flow “normalization” and/or discretionary cash flow. Art could help you a lot with evaluating the financials. He likely has a consulting rate and it would be worth it.
I want to know more about the existing staff. Are they compensated appropriately? Do they have a benefit package that will keep them around? Are they “bought in” to the location?(close to home, convenient, spouse likes them working there, they like the hours of operation, ect).
I have not done what you are thinking about, but i have worked with three individuals doing exactly what you proposing. In each case, the best i could do is to help them get out of what they bought into. They were already in trouble when they came to me. They all returned to their corporate lives.
Yours is a very common scenario in the automotive franchise world. Sometimes it works out real well. Your IT background will serve you well. You will count on having an effective staff more then you can imagine. Your leadership skills will be crucial to your success.
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We recently instituted new drug policy and new smoking/vaping policies.
Neither have been reviewed by an attorney to determine if they are enforceable or legal.
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Great Tip!! I have used several methods to help me change my habits, including extensive use of my reminder feature on my smart phone. What I love about this tip, is that it focuses on the most important things in life instead of all the details my reminders focus on. THANK YOU
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first draft of new warranty policy attached
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We installed a system ourselves 3 years ago. Used this dvr
https://www.2mcctv.com/16-channel-dvrs?p=2 (Veilux VR-5B-16H 16 Channel Digital Video Recorder)
and the same brand cameras. It has been flawless. We have 16 cameras
I just recently maxed out the hard drive storage to 24tb.
Although we may call these security systems, we find them effective to prove we did what we said we do(torque wheels, drain plugs, replace what we said we did, ect). We also use them to prove we did not do something.
We were blamed recently for leaving a small ball cap bill style flashlight on top of the air filter of a 2012 ford turbo diesel, three oil changes ago. The flashlight got sucked into the turbo and the customer wanted us to buy him a new turbo(5K). when we checked our footage, we realized that we only had 2 months of storage with the 16 cameras and 8tb of storage we had installed. We added 16tb of additional storage as a result of that incident, which would have gotten us back to when we did that oil change and provided proof that it was not our flashlight(since we don’t use that style of light anywhere in the shop).
More is better when it comes to storage.
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For me at least, I have had blinders on when it comes to this crisis. Unfortunately, they were torn off 6 weeks ago when we lost a 23 year old family member to a heroin overdose. Shae was a intelligent, middle class, hard working young lady from a stable supportive family. She held two jobs and had a couple thousand dollars in her personal bank account when she died.
She was not what I would picture when I think of the word junkie. Come to find out, she IS the picture of the new generation Junkie.
Prior to 6 weeks ago, I knew nothing about this disease. Today, I know almost nothing. But what i have learned from the 4 meetings on the subject I have attended, the documentaries I have viewed and the resources I have consumed, scares the living sh** out me.
My 3 and 6 year old grand children are at risk. Maybe not today, but not more than a decade away.
Just to be clear, many of these Junkies, just fall asleep and never wake up. THEIR BODY FORGETS TO BREATHE.
Their is a solution to this crisis. It will involve money for messaging. We have to raise the “perception of risk” associated with “trying” this drug to a point that a much larger percentage of our young population NEVER consider trying this method of escape, NOT EVEN ONCE.
The answer will require the involvement of the business community and it will involve the commitment of Grand Parents.
Our industry can do something about this, if we choose to. You can do something about it in your community.
Not one of us can do everything, but all of us can do something.
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Found the attached today. we use this to drive the point home during the interview process.
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I am finding it necessary to truly spell out what the following means
“On time
Dependable
Rarely misses work”I would replace those with something like the following:
“Vividly understands the importance of being at work, every single day they are scheduled to work, 10 minutes before their start time, in uniform and ready to work.”
I would replace “loves cars” with “enjoys technical challenges”
and add “above average math skills”
