Buying training is the answer to improving sales and service.
The average small repair shop is able to keep its techs actively working on cars only about half the time the techs are actually available for work.
This results in payrolls that are either too high for the shop owner or too low for the technician. The average technician only earns about $30,000 per year. But there are ways to turn the invisible option of training into visible rewards.
Given this financial overview, it's no wonder most shop owners don't have enough support staff to aid the techs who, as a result, are on the phone ordering parts, or worse yet, asked to go pick them up and are not compensated for these activities. When the shop has a slow week, it's not possible to make up the sales later in the month, which can result in an "off month" financially.
The industry standard to shoot for in parts and labor sales per day per technician is $1,000 to $1,100. If you have a three-tech shop, this means you should be able to average $60,000 to $66,000 per month in sales, or around $750,000 annually. If you have a lube tech or apprentice, he or she should be counted as half a tech from a production perspective. Assuming an eight-hour workday, this adds up to $2.08 in parts and labor sales per minute of a tech's time.
Inventory security
Every repair shop has some inventory. If a shop owner discovers that the inventory is missing $500 worth of parts, he or she is not going to be happy. They'll check every worker's garage to find the missing parts, breeding suspicion and doubt.Most shops keep track of parts inventory by using a computer. If the computer says there are 20 oil filters but the bin is empty, that is a sure tip-off something isn't right.
Shops basically sell two things — parts and labor. The parts inventory is closely watched, but the labor inventory frequently goes unobserved. The very fact that most shops keep their techs actively working on cars only half the time is a testament to this. The same $500 in lost parts that has the shop owner losing sleep is probably lost every single day in labor.
For example, if you divide the $500 by the per-minute value of a tech's time ($2.08), you get 240 minutes. If you divide 240 minutes by the 60 minutes in an hour, that equals four hours of lost labor per day. In many shops, this happens every day.
Who's causing the problem?
The inefficiency of a technician almost always can be traced to the front office. It's almost never the tech's fault — techs fix cars. They rarely set the rates, schedule the work, order the parts or decide what jobs to take on.
Since techs can't control much of anything except a fixed car, they shouldn't take blame. Yet the owner frequently tries to assign some blame to them. Let's forget for a moment who is guilty; it won't fix the problem.
The problem is, we aren't keeping track of our labor inventory. If we can track it, we can control it. If we don't track it, we'll never control it.
The fix
My fourth year in business found me in this exact situation. I became convinced that I needed to do something different, so I signed up for a class on shop efficiency and time management for technicians. I also decided to take everyone in the shop to the class so we all could be trained together rather than attending myself and then trying to teach everyone what I'd learned.
This involved closing the shop and still paying the help, which amounted to a lot of money. The class instructor said he'd never seen any shop owner do this and admired my courage.
The results were terrific. Within two months, we'd increased our techs' productivity from working on cars only half of the time to about 75 percent of the time. This meant we had the potential to increase sales by 50 percent. We could now make up for that slow day or slow week and still come out with decent revenue.
Ultimately, I was able to go from five techs to three and keep sales at the previous level. I was also able to reduce support staff, because I now had fewer techs. I was in a position to pay my techs great wages, which enabled me to get better techs over the long term. I also had a shop with much less expense and greater revenue. I was able to recover my training expenses in a few months, and it continues to pay off like a cash machine.
My point is simple: I could have invested in equipment, but I decided to invest in training. Equipment investment is easy. You can see the stuff, read the specs, feel it and touch it. It's a tangible thing.
Training is invisible. You can't see it, feel it or touch it. To invest in it seems to be a leap of faith.
However, at some point, your shop needs this more than any piece of equipment. The best part is the more training you get and implement in the shop, the easier shop ownership becomes. If you find your own situation stressful at times, training is the answer.
Buying training sometimes can be risky, as paying good money for what turns out to be an infomercial can be frustrating. The best advice I can give you is to be sure the Automotive Management Institute (AMI) approves the training you pick.
AMI is the leading provider of management education for the automotive industry and offers a lot of home study courses that have made management training more accessible and affordable. You can learn more about it by visiting its Web site at www.amionline.org.
The "acid test" of training is for the shop owner to be able to take a vacation and return to find the shop ran fine without him or her. Everyone needs a vacation, and it's a shame too many shop owners have to do a Google search to find out what that word means.
Selling service is selling the invisible. It only makes sense to invest in the invisible to learn how to better sell it.
George Witt is the owner of Lincoln, Neb.'s George Witt Service, Inc. He's an ASE Certified Master Technician and holds the C-1 Advisor Certification. Witt also is an AMI Approved Instructor and a member of AMI's board of trustees.
