Tips

A better question might be: “Can you afford not to have them?” As with anything that you buy there are many levels of quality; however even the basic inexpensive systems can provide an excellent improvement in your shop’s security; often for well under $1,000. Most will record and can be viewed remotely from anywhere that you have internet access. And, it’s not just crime that is being addressed. Was that wheel cover or body damage there when the car arrived? What actually did happen in the shop, at the front counter, or in the parking lot? Put cameras near the top of your equipment to buy list before you wish you had done so sooner.

That is, the “furniture” in the shop area. In many shops the equipment was put in place years ago. New items were placed where they would fit. But how efficient are the locations now? Is the brake lathe located where most of the brake service is done? Is the supply cabinet at one end of the shop? Take a look at everything and rearrange it to achieve minimal steps for all staff. Then the next time you add or replace a piece of equipment spend some time at your staff meeting discussing the most efficient place to put it.

How about the speed of your advisors and techs? How many two finger typists do you have? Poor typing skills are killing the efficiency in many shops. This is one area of training which needs to be at or near the top of your list. Buy some typing programs. Create a contest with prizes for the most improved employee. This area will only become more critical as time goes on. Excellent keyboarding skills improve efficiency and profits, and can be achieved at a very low cost to the shop.

The typical shop has too little inventory and much of what it does have is incorrect causing significant inefficiency. Waiting for parts, even for a few minutes, is time and money which is never recovered. Let your management system decide what to stock. It does not matter what type of part it is or whether anyone else stocks it or if you only stock one of them. If the part sells every 120 days or less, stock it. If not, return it. Use your management system to reorder weekly or even daily. It’s really that simple.

That must be the correct way since so many shop owners seem to follow that policy. However, a fellow shop owner frequently reminds me that we should do just the opposite. Of course, he is right. Just think of how much grief you could have saved over the years if you took more time to find the right people and spent much less time getting rid of the bad apples. Make a sign and post it in your office today: “Hire slow, fire fast!”

Sometimes we get mixed up in our sales approach. We really want that job we are being asked about, but we don’t want to sound like we are desperate or that we are begging for it. On one hand I am not suggesting that you become a beggar. But, there is nothing wrong with making it clear to the customer that you really want to do that job. Be confident. Be politely aggressive. Go get that job!

Some of us have a very bad habit. We figure out what we need to do to hit our GP (gross profit) targets. So, we adjust the numbers accordingly in our management system. Then, when we are working up an estimate or preparing the final bill, we override the system we put in place and destroy our GP! Of course we then complain that we just can’t seem to hit those GP targets. Either learn to break the habit or have someone else do the estimating and billing. Your profit and loss statement will appreciate it.

If you are the typical shop owner the answer is: “Budget? What budget?” What would you call someone who will spend a quarter million, a half million, one million or more dollars in the next twelve months without a written plan of where that money will go? While it will take some time and effort the result will likely allow you to add 5%, 10% or even more to your bottom line at the end of the year simply by creating a written plan and making a reasonable attempt to follow it. Written budgets typically identify areas of waste and give you good reasons to say “no” when you should. So, start something new today. Create a plan, stop the leaks, and keep more of the money which you have worked so hard to earn.

Right under the hood, that is. Way back in the good old days it was common for shops to place stickers in the engine area, usually on the air cleaner or the radiator shroud. Today you may have to be a bit more creative, but you can be just as effective. Create a weatherproof sticker about the size of a business card which includes your shop name, web site, phone number and a towing number. Select a bright color that catches the eye. Place one under the hood of every car that goes through your shop. Even though many customers are unlikely to be able to do much about a leak or noise or other issue, many will still open the hood to take a look. Save them the trip to the phone book and give them the number they can punch in their cell phone right now.

There are telemarketers and there are businesses who call their customers. You should be the latter and should be doing it often. Is their oil change due next week? Call them. Are there recommendations from a visit a month ago? Call them. Haven’t seen them in a long time? Call them. Car serviced last week? Call them. The trick here, as with most everything, is to create a system, assign someone (a nice someone!) to do it, and then go for it. It is inexpensive, personal, and very effective when you communicate your concern caring for them and their car as opposed to just another guy trying to sell them something.

Maybe it is. But that is not enough today. You must also appear competitive and that is a totally different issue. Does it matter what the shop up the street charges? You bet it matters. You need to know what other shops are offering, especially for common services. This is often how customers judge you. Make sure that your prices are adjusted in such a way that customers see you as being reasonable. Survey your competition annually to make sure that you are in the ball park on price sensitive services while also making sure that your total gross profit targets are being achieved.

You used them on the job, so it would seem reasonable that you charge for them. But adding a generic line to the bottom of the bill is no different than many of the charges which phone companies and others tack on as far as the customer is concerned. Who likes that? Take some time to enter small items into your inventory and create kits listing these items which are specific for the job being performed. List them on the bill as you would any other part. Include them in canned jobs so they come up automatically when that job is performed. This way you charge for the items you used and the customer does not receive a bill with vague added fees at the bottom.

While it may seem to be an obvious thing to do many shops still do not consistently check for which factory maintenance items are currently due on every car in the shop. Most shops today have quick and accurate access to what is due. You can either created canned jobs for everything listed or offer items individually. Almost every car will be due for something. Create a solid system where techs and advisors check it every time on every car and watch your average RO increase.

There is certainly no rule that says you must send all recommendation follow up letters at the same time interval for every customer and vehicle.
If they just spent a small amount of money, a few weeks would seem reasonable. If they just dropped four figures you may want to give them 60 to 90 days for their budget to recover. If you find an air conditioning issue in the fall in the frozen north, set the follow up date for April of the next year. Look at the each situation individually and adjust follow up dates accordingly in order increase your odds of a good response to your reminders.

Do you even have one? Maybe you should. It could be a type of service, or one or two vehicle makes. Look around your town. Very few businesses operate today without some type of focus. An auto service shop without some type of specialty is likely to have a more difficult time in the coming years. While conventional wisdom says that narrowing the focus of a business will be a cause for decreasing sales, just the opposite is more likely to occur if the shop uses the proper approach. Then you can enjoy less hassle and lower costs in the areas of training, equipment, inventory, software, marketing and a number of others.

While most management software systems have provided for multiple rates for years many shops still use one or two rates. Here is a simple way to get ten rates. Designate all labor procedures at one of four difficulty levels (some labor guides do this for you). Assign both a repair rate and a diagnostic rate to each level. Then create a tire rate and an oil change rate. This will give you far more flexibility in achieving your gross profit goals.

Maybe you should. Is your day a bit short of full? Is there a tech available for a few minutes? A free quick look can be a powerful marketing tool when done properly. Develop a system to perform free quick checks and begin a relationship with a new customer. You may just end up with some four figure RO’s that you never would have gotten otherwise.

Five estimates to write, seven calls to make, a dozen parts to order and three techs screaming because they are stuck. Who will you handle next? Probably the most demanding customer who may not be the best for your bottom line. Try recording the previous average RO dollars for each customer on your schedule. Now the decision becomes simple. Highest average RO (and most likely to buy) goes to the front of the line. This approach will get your techs busy faster, achieve the best total for your day and take care of your best customers.

Mailing to your data base can be very expensive, especially if you do it often. How carefully do you look at who you are mailing to? In the typical shop well under half (maybe as few as a quarter) of your customers really carry the load. The rest will rarely or never respond regardless of what you send to them. Take some time to thoroughly examine each customer. Set some minimum standards on who should receive your mailings. This will often have a large impact on your costs without a significant change in response to your direct mail marketing.

Does every tech and service advisor at your shop know exactly what their daily goals are? Hours for each tech? Sales for each advisor? It is difficult to hit a target when one does know what it is. Sure, you may mention it from time to time, but is it a number that is in front of them all day every day and engraved in their minds? There are many ways you can do this including software which is available today that tracks these numbers live. Give them something to shoot for, reward them when they succeed, and watch your sales move upward.-

If you are not thrilled with many of the new customers wandering through your front door, ask yourself what you are doing to attract them. Is it your marketing? Your building? Your staff? Something drives them to your shop. What might you do to attract a better crowd? Many shops do a great job of drawing in excellent new customers. What are they doing differently than you, and how could you do the same?

While waste oil furnaces have been around for years, many shops which spend a lot on heating still do not have one. For the typical shop it is far easier to add to the bottom line through expense savings compared to sales increases, and heating is often a huge expense. This is one where you really should take the time to do the math and explore the options. Waste oil furnaces have improved dramatically over the years. Several thousand dollars in savings is not uncommon for many shops.

Or, do we? Calculate your cost of uniforms for the next five years. Probably a lot of money! How much would it cost you to purchase uniforms, a good washer and drier, and supplies for the next five years? Chances are it would be a whole lot less. Some shops assign a staff member to wash them. Others have each employee wash their own. If they get too nasty, buy replacements. This simple system is currently saving sharp shop owners many thousands of dollars.

Often the answer is because they are treated as an afterthought. Separate them from the other services the car is receiving. Perform courtesy inspections on every car first thing in the morning so the service advisor can review them and prepare estimates. Then proceed to the requested services for the day. This will prevent the advisor from being overloaded with a lot of information all at one time and likely result in a higher average RO.

The typical shop owner spends way too much time putting out fires. Many of these are very preventable. When the next fire occurs make a few notes and create a system to prevent it from occurring again. Keep it simple, preferably one page or less. Do it immediately while the situation is still fresh in your mind. Review it with the staff the next day. Then watch as the fires subside.