[stevebfl]

I suppose that I represent a Goliath.  We have twenty-five bays and 13 techs, one technical support expert, five service writers/support people and two cashiers/office workers and one Janitor.

Our size allows us to buy all the specialized tooling to be efficient and capable, pay for and send techs and writers to specialized training at long distance, and through experience and the above, we have long term experienced technicians for each car line we accept for service and repair. Each tech only works on one or two car lines.  Techs and writers work for the customers that request them and a large portion of our 40 year old shop work under that relationship.  We use quantity as an advantage for purchasing, and nearly every thing we do.  Our cost for tools is reduced as related to work accomplished, same with training and the little marketing we do.

[stevebfl]

I also agree with Eric.  If your guy does become a cop you have a good idea whether you have replaced him.  Experienced techs aren’t all they are cut out to be sometimes.  Various issues make it so the situation won’t work.  either he expects more from you or your shop policies don’t won’t with him.  I would rather create a great tech from raw materials than have a great one join and find they won’t work your way.

Hopefully you can absorb him till you are certain he will work out.  In the mean time allow one of your young guys to work as an apprentice to one of the senior guys.

[stevebfl]

I believe Greg has defined the issue. We have never had a problem getting techs and many of them have come from dealers. Our 25 bay shop with 13 techs works in teams of two to three guys. Each team works on at most two car lines. Totally specialized by manufacturer. This allows a Mercedes tech to work on what he knows. Our teams have the factory tooling for the car they work on, which in some cases means we have more than one factory tool. No need to share outside ones team.

I have seen other shops take in dealer techs and lose them in a month. The issues always seemed to be that the shop didn’t have the tooling to do what the tech knew and they didn’t have enough of what he knew to keep him busy on what he knows. Dealer techs know that is often the case, but many dealer techs also know that a independent that specializes will pay him what he is worth and utilize what he knows. I have never hired a tech that I didn’t guaranty at least 10% more for the first year than the best year he had ever made. It was never hard to do either. In all cases they did better. Pay based on a guaranteed hourly wage with various levels of bonusing. The pay would be designed to make sure the tech made the guaranty with the possibility to make more. That combined with better health care insurance than is ever offered at the dealers made it so that we didn’t need to look for techs except to grow. Current staffing includes a couple thirty year veterans and eight more with over ten years seniority (Ranging from 10 to 25 years).

I don’t see the issue with the future, except to keep up with changes. Fifty years is a different story, but something rolling on wheels will still be around for a long time be it electric propelled and driven by electronics. It will be possible over time that disposability will take over totally. In the mean time the next generation is here to keep up with whatever changes are necessary.

[stevebfl]

acoliajja,

We don’t sell any flushes that aren’t a part of manufacturer recommended service. We do them at the intervals that are recommended except for oil changes. We work only on euro cars and they have gone to extremely long oil change intervals. Our town has no freeways and as such most daily driving is stop and go. If one would look at what many manufacturers call extreme conditions, I believe we see a lot of it and as such cut those high intervals in half. As to other fluids they do not get affected the way engine oil does and as such we leave the intervals as the manufacturer recommends.

What does make a huge difference in what could be called upsells is that our 13 tech shop is divided into 5 teams. Each team only works on as many as two manufacturers cars. We have one team that only does MB, one that only does VW/Audi, two work on BMW and another car, and one works one Jag and Land Rover. This matters in that the team leader is an experienced specialist in two car lines. All oil change services are overseen by the team leader who road tests and conducts the visual inspections. The lesser team members do the actual labors. This allows for honest helpful suggestions on system needs. A highly experienced master tech can find deficiencies that others would pass right over.

We only allow waiters for oil changes and alignments and we have numerous loaners to allow that waiter to leave to finish that $1200 ticket.

[stevebfl]

I’m semi retired now after owning the shop for 38 years. The way we do things has probably changed to a certain point and since I’m only working as a technical consultant, I can’t speak to current actions.

But, for the 38 years it took to build a 25 bay 13 tech facility, our position with old or new customers was to approach their concerns first. We always road test and do a quick overview of the car and report findings. We never flush anything as a principle. We handle all fluid serving in the manner prescribed by the manufacturer, with some modification to oil change intervals, but we won’t push the subject to a new customer.

Our approach to service was always based on the concept that maintenance should be done to drive down the cost of ownership, not to improve average ticket size. With that said, our average ticket size currently is over $1200. That covers every ticket including over the counter parts sales. The ticket size has grown to that size through long term customer satisfaction and confidence, good inspections on services, salaried service people without sales bonus which promotes the confidence, and finally working on the upper 30% of the local market of luxury German cars.

I will say that we regularly get new customers from the local dealers whose writers get paid sales bonus and work under quotas for selling flushes. Turning a $120 oil service into a $600 ticket through flushes will lose one a lot of customers.

[stevebfl]

I like Tom’s concept, but it was never the way I did it. I actually did his calculation in reverse. My concept is different enough to be ridiculed by most. I have always felt that I would not have a business if I couldn’t produce a product at or below market price. Thus market price is my whole world. My market competition is the dealer for the couple cars I choose to specialize in. My product has to be as good or better and equivalent in price. I market against the local MB and BMW dealers. My labor price is ten percent less than what they charge, even if my cost state I could do it for much less.

I then paid my techs (when I still had techs) a yearly figure between thirty and forty percent of what they billed.

A few times over the 36 years I did this my labor rate was forced close to my “Market rate” as dealers were having bad times and they reduced their rates. Most of the time my rates were 25 -30 percent above all independents in my market area and I was thus out of competition with them. This was fine because long term I also was interested in only the top third of the market, thus I was very happy for the bottom two thirds to find another place to use price as their first reason to be there.

If on the other hand this method had produced a price below what my costs would have demanded as a price I would have then known that I was in the wrong business. If one can’t produce a product sellable for market price then one should find a different product.

[stevebfl]

Just as bad as flat rate, commissioned service writers are just not a part of great customer service. The writer really has two things he must do well, support the tech and make the customers visit as pleasant as possible. The absolute last thing I want at my service desk is a writer badgering my customers to flush their wallets. When a customer sees a writer as a help then sales follow automatically. Image, image, image….. the writer is the first step in the formation of image. If sales are foremost on his mind, the best of customers will sense it and the process is hurting from the beginning. The writer has to be thought of as the customers agent in maintaining his transportation. Pay the writers well to the point that they want to do that job as lifesaver, concierge, transportation master.

[stevebfl]

The system is changing for shops that specialize and develop efficiency as such. We have two techs in their late twenties or early thirties that are making a hundred k a year with paid insurance 401k and other incentives. One is single and lives like a king, multiple motorcycles and brand new car and a rally car. The other is a single father of three whose wife died a couple years ago from Cancer. His kids go to private schools and he lives a decent life with a home for all of them not rental.

The rest of our techs make above $60k except for one or two. They all are paid very well for a small southern town and over the years many have raised kids, sent them to college and a couple have retired. It is a result of running an efficient business that satisfies all three parameters: the customer, the employee and management.

The results are based on efficiency and capability. Factory tooling for each carline that has been committed to, training and experience based on only working on at most two carlines.

[stevebfl]

Long term I don’t see this as an issue at all.  The independent repair business is gradually moving towards specialization as I see it anyway.  Cars are just too complicated to be a master level of skill in more than a couple car brands.  Shops will wind up only working on one or two brands or will gravitate to a model similar to ours.  We have a twenty five bay shop with thirteen techs.  We basically work on 6-7 brands in teams of two or three.  Each team only works on one or maybe two brands.  Thus, when a car gets dispatched it goes to someone who is trained and experienced specifically in that brand.  The relative skill and efficiency moves up tremendously making quality repairs and profit a much more likely occurrence.

[stevebfl]

We have never paid flat rate and our pay system rewards capability not necessarily productivity.  Our labor rate is high in a small Southern town and we get away with it because of our capability and customer service.  A tech billing 50 hours a week in our 42.5 hour weeks will produce over $298,750 in labor during the year.  Thirty percent of that is $89,625.  Forty percent is $119,500.  So now that the mans pay is absolutely covered by his production we can create jobs that pay more for capability over productivity.  We have 13 techs and the capable ones, the ones that make us the place to bring a European car, make 6 figures but probably don’t average 50 hours.

The ones that produce 60-70 hours will make less money than those capable ones that bring us 25 full bays every day, all day.  The point is that a capable shop billing top hourly figures should have NO problem paying $75,000 for productivity at these levels and maybe even more if he carries the reputation of that shop to bring in these figures. That capable tech working diagnostics may produce only 40 hours a week and in 50 weeks only do $239,000 labor.  I am perfectly happy to give that tech 50% of billed labor.  While I may only give parts changing techs somewhere between 30 and 40 percent.

[stevebfl]

To keep your insurance cost at a minimum, be sure to have the borrower sign off on primary coverage.  We have 6 loaners, 4 of which are year old or less BMWs and a Passat.  As such they need more than just liability coverage.  But when the car is sent out paperwork is signed out similar to what one does when renting a vehicle.  They must prove insurance and show drivers license both of which are copied and a form is filled out where they accept primary coverage under their insurance. 

[stevebfl]

Hi Bernard,

We bill tires just as we do any part, and labor similar to other labor.  As was mentioned this skews the GP% on parts sales, but since it doesn’t change the money in the bank, that has never bothered me.  We work to move the GP% up continuously and whether tires are in it or not makes no difference to our internal goals.  If I am talking with other shop owners (which I am no longer) I am at a disadvantage for bragging rights.  That doesn’t bother me.  I do believe tire sales are tracked separately as I can do with any part in our Fastrack software.

Steve

[stevebfl]

BTW, if anyone wants to see the ISPI NEXT document email me at steveb@atlantic.net

[stevebfl]

I’ll second the motion for Ami at Euro Car.  Great service which is the most important thing about using BMW online ISTA.  Of course the newest tool is ISPI NEXT.  It is BMWs new stand alone server which is only about $10,000 complete.  It comes with AIR and all the programming and diagnostic software subscriptions at that price.  Not sure I can load document here but there is a pdf that covers the whole program through API.

For MB the cheaper system listed is no longer available.  If you want to play the tool is Xentry Connect with Xentry Tab.  Total price around $25,000.  When one considers that it includes all update subscriptions and Startekinfo for three years it really isn’t such a bad price.  When you consider that it gives one access to MB service and repair to OE standards it is priceless.  Everyone doing this has a clone or two but the late systems need programming and SCN coding for everything.  If you want to be a real MB specialist you must pay to play. 

[stevebfl]

We bought a Hunter Hawkeye camera system a couple years ago. It was the third new system we had bought. The first was a hunter in 1980. The second was a FMC in 1995. We bought the FMC because at the time Hunter swore that they were dedicated to the upgradability of their 111 series through the end of the century. We/I wanted a PC based tool that I could network so that I could have Alldata and my shop management system on the same computer to save steps. After we bought it, not two months later Hunter hit the trade magazines with their PC based tool that “could run your whole shop”. Anyway, the FMC was by far the most accurate and repeatable of all the tools.

I love the Hunter camera system since it reduces the work tremendously. It cut the time to do an alignment in half. But I have measured cars numerous times for various reasons and the repeatability just isn’t where the non camera system had it.

We have 5 other techs that are using the Hunter regularly.  Three of them were not here when we had the FMC, the rest love the Hunter for the ease of set up. 

The main reason we changed from the FMC (which was working just fine) was that two car manufacturers that we do a lot of work on  (BMW and Porsche) have stated that alignments to their cars can not be done after the car has been lifted until the car has driven at least a mile.  That meant that standard wheel run out calibration was not acceptable.  The camera systems just roll the car forward and backward which is acceptable.  

[stevebfl]

While I like the ingenuity and risk taking involved, I personally would never consider it.  Too much unknown risk based on dealing in a enterprise with no training or experience.  It might be worth learning, but since there are already very good mechanisms to offer financing as a customer service I can’t see investing the time or the money.  The original story where there was over a million in sales and $180,000 in interest never finished the story enough to know whether there wasn’t a huge long term loss.  As it was left there was a $63,000 guaranteed loss against that $180,000 profit with $171,000 outstanding.  Sounds like a lot of investment which at the point of the story showed no profit with a possibility of a huge loss.  That’s a lot of investment and risk to gain the extra sales.

The same increased sales can be encouraged using the Bosch card program with no risk.  My business has always been fixing complicated cars.  I cashed in my chips as a winner, but if I were still investing I would still invest in what I know.  I know  customer service sells, but I’ll use proven vendors and place my risk on things I know about.

[stevebfl]

Charging for loaners is a big NO NO at least in Florida. You won’t get insurance and you have huge regulations as a rental car agency.

[stevebfl]

We bought a TC 3500 years ago and it struggled for years.  As we got the experience to do the low profile the low profiles got lower.  About 3 years ago We bought a new  Hawkeye target system Hunter alignment machine and wanted a few more years out of the TC 3500.  One of the best investments we ever did was to add the articulating arm modification and the center post modification that made a secure grip on the wheel possible, instead of the tulip type grip.  With those mods we were able to go another three years.

A year ago we finally decided to get a real professional tool and bought a Hunter Auto 34.  Now we can actually take off 20 inch BMW runflats without busting our a$$es.  Corghi makes a model that is just as capable but we had the Hunter Hawkeye and Roadforce Balancer and a great relationship with our service tech so we stuck with Hunter and did the Auto 34.  They have since made an even more expensive model but the Auto 34 is still available and is a really good machine, fully capable of dealing with what is currently being installed on Corvettes, Porsches, BMWs and MBs.

[stevebfl]

Quick Survey – What is your standard warranty?

_____ Less than 1 year, 12,000 miles

_____ 1 year, 12,000 miles

_____ 1 year, unlimited miles

_X____ 2 year, 24,000 miles

_____ 2 year, unlimited miles

_____ 3 year, 36,000 miles

_____ 3 year, unlimited miles

_____ More than 3 year, 36,000 miles

Steve Brotherton

[stevebfl]

We can reflash a few car lines.  The ones we work on.  Programming is required to diagnose and fix modern autos. 

[stevebfl]

Thank you!

The problem is that the general shop has very little chance of being honest with the customer when they can not even be honest with themselves. It doesn’t matter what car one works on, capability means being able to execute all the testing, adaptations, and programming designed into the on board diagnostics of the systems involved. That is not posible without the OE tool. The majority of shops don’t even know what I’m talking about. Without the capability they wind up never seeing the cars with the problems and that portion of the market. That portion of the market; late model whatever, is the lucrative part.

One gets into that portion of the market through capability or massive marketing. Doing it through capability is the less expensive way, especially after gaining a reputation. At that point marketing costs are minimal.

[stevebfl]

I wouldn’t consider buying parts from a vendor that gave labor warranty. Warranty costs are always distributed over the product cost and since I am on the wrong end of the bell curve for needed coverage I am guaranteed to lose. I sure don’t want my parts costs to reflect the warranty costs of the average parts diagnostic repair shop.

[stevebfl]

The tool you need for programming and all other functions for BMW and MB would be the Autologic. The best tool would be to get the OE tool but in your locality that may not be possible.

[stevebfl]

If buying stolen property suits your business needs clone can do some but not all of the work. For MB you can not program with a clone as the programming has to be SCN coded to work properly. That requires an online hook-up to MB.

We use Vag Com considerably but it is not even close to the capabilities of our OE VAS 5052A. Programming some coding and guided diagnostics are required to get the job done in so many issues.

BMW can be done considerably with a clone but the current clone ISIS/ICOM run near $10k. A subscription 3GIO hook up through a ICOM is slower but less money and fully capable. Autologic is the efficient way to go with BMW/Mini but without testplan guidance one is left to pander the forums for guidance. BMW, MB, VW/Audi/Bentley, and Volvo all require OE tools to access diagnostic info that appears NO WHERE else. IDS for Jag and Land Rover also includes a huge amount of Diagnostic info available no where else.

The techs at dealers using aftermarket tools are doing that because they don’t want to wait, they have been there before many times, they want a faster tool, and they aren’t being paid for diagnostics.

Once one has the tool to get the job done there are many tools that can do pieces and parts faster with more mobility. Our current quick reach tool is the Autel Maxidas. Great tool for a code clear, a quick data read, a service reset, a activation such as emerg brake retracting for doing pads with electric emerg brake or deactivating the SBC brakes on MBs with SBC electric brakes when doing pads.

Lots of tools get the job done, but if you can’t do all the tasks designed into the system then you ought to leave it alone

[stevebfl]

I don’t know your business so apply what I say as you wish. I need no comparison with accomplishment. I own a 25 bay shop with 12 techs and work on ten car lines which we do professionally. We even do transmissions on a number of them.

If you advertise competence and take on systems you are not tooled for you are a fraud. It is a simple matter of definition. If you tell folks you will do your best within your limitations you may be the best place for much of the market. The top of the market wants competent professionals and having the proper tools is the cheapest part of meeting that market. Training and payroll are real costs, tools are cheap.

[stevebfl]

You are in a specialized business that does is not based on systems competence, except maybe transmissions. I have fixed atleast 5 transmission issues this year through programming, 1 VW, 1 Audi, 2 MBs and a BMW, maybe two BMWs.

You may live with a general business model though specialized, but a repair shop that does systems diagnostic work is a fraud if it doesn’t have the testing, diagnosting, and programming capabilities built into the systems they claim to be able to work on. The tooling to do that is cheaper now than it was 25 years ago and is the smallest cost of business in a modern professional shop.

The proper tools make money they don’t cost money. They enable a competent business, and they assure a productivity that works to make a profet.

[stevebfl]

If you are building for the future, decide which car line you work on most and get the OE scanner for it. Use it for a while and then decide what else you need. The future is with the shops with capability and the ones that can market enough flushes. If you wish to fix cars there is no long term alternative but OE. Since the Maxidas has some coverage for every car in the universe and is dirt cheap you might also get one to help out while you realize your future.