Gross Margin Archives - Remarkable Results Radio

Support our partners:

Paying Attention to Inflation [THA 269]

Carm Capriotto, AAP — Thu, 31 Mar 2022 05:15:00 +0000

We’ve all heard inflation is up 8%, as of this broadcast, but when you walk through the grocery stores and sit at a restaurant, it sure seems like it’s a lot higher … don’t you agree? As prices continue to jump, what are we doing as an industry to adjust? And why are so many shop owners worried to raise their labor rates? My panel includes 2 shop owners and an auto shop bookkeeper with a wide-open discussion about labor rates, parts pricing, and even employee retention in the age of rampant inflation.

Watch the Episode on YouTube

Natalie Paris, Three Rivers Bookkeeping, Profit Strategist. Listen to Natalie’s previous episodes HERE

Dave Kusa, owner of AutoTrend Diagnostics in Campbell, CA. Listen to Dave’s other episodes HERE.

Dustin Brown, Brown Auto Experts, 3 Locations in New Mexico, Albuquerque, Village of Los Ranchos and Rio Rancho. Listen to Dustin’s other episodes HERE

Key Talking Points

Parts – While parts costs are rising, our parts GP should take care of itself if we are using an effective parts matrix. 55-60%
Unfounded fear for charging correct amount for parts
Expenses – Expenses, in general, will jump up. We need to monitor our expenses and possibly shop them to get the best value.
Labor Rate Increases: Shop your competitors and monitor how the labor rates in your town are adjusting for inflation.
The dealership suggested retail isn’t always what they’re selling to their customers
“Don’t trip over dollars to make dimes.” when it comes to expenses
Employee Retention- This year all office staff received a raise and some of our technicians. We did not give raises to techs that have been with us for less than 6 months. With raising the labor rate, shops should be able to afford to increase technician pay. A recent Gallup study shows that 50% of all employees are thinking about changing jobs. Do not think your shop will be different. “The great reset” instead of “The great recession” Staying on top of retention to prevent turnover is very important in our current labor market. Wages are not the #1 cause of employees changing jobs, but it is a factor to keep in mind with the rising cost of everything.
The workforce has 5 generations of people working- how you manage each generation is different
Other ways that can make employees feel appreciated and help with retention would include fringe benefits or low monetary benefits. Things like more paid time off, tool purchases match, Friday (or once a month) shop paid for lunch or training opportunities to help them advance their careers can be huge. Another great way is to ask the employees if they have ideas on non-monetary or lower monetary benefits that they would appreciate around the shop.
Be careful of ‘profit leakage’ and be transparent with your employees when you do raise your labor rates
Pay bills with gross profit dollars, not a percentage

Connect with the Podcast

Check out today’s partners:

More Time. More Profit. Shop-Ware Shop Management getshopware.com

See how Broadly can help YOU grow your auto shop. getbroadly.com/chat

How Much Does It Cost You To Open Your Doors? [RR 722]

Carm Capriotto, AAP — Fri, 25 Feb 2022 05:15:00 +0000

We know transparency with our people is important, but what does ‘sharing your numbers’ really mean? Are you explaining the backstory behind those numbers and how it affects the business, and most importantly, your employees? My guest Tim Shaffer simplifies the numbers side of the business and areas in your point of sale system that you might be overlooking.

Tim Shaffer, Dale’s Service Center, Davenport, IA https://www.dalesqc.com/

Key Talking Points

Plan with numbers
Getting the ‘whole story’ from shops- investigate the financials
Business coach- there is no ‘magic pill’ for change. It comes from within.
Most POS don’t account for calculating gross profit for labor. Parts costs must match POS and P&L
How much does it cost you to open your door? P&L and fixed expenses and how many hours open per week = cost per hour (without wages/parts etc).
Sharing numbers with your team- how numbers effects the business and themselves
Bonus- the team works together for 1 goal monthly/quarterly

Connect with the show:

Check out today’s partners:

Set your sights on Las Vegas in 2022. Mark your calendar now … November 1-3, 2022, AAPEX – Now more than ever.

More Time. More Profit. Transform your shop at getshopware.com/carm

Start Monday Positive and Celebrate Friday [RR 711]

Carm Capriotto, AAP — Tue, 18 Jan 2022 05:15:00 +0000

Key Talking Points

The top technician in the shop had a motorcycle accident- probably won’t be able to turn a wrench again due to injuries but his career won’t end in the industry.
UPDATE: Gofundme campaign has ended and raised $4,415 for Jimmy Gerontzos- he has returned to a full-time position with Andy’s business
Foreman position- increased productivity
Pricing correctly- if you’re not increasing your pricing you are in danger to stay in business.
Labor rate- set on what you need to charge to pay employees accordingly.
Margin- set margin target and hold it
Building your ultimate team- mission statement “price our services so we can make a profit and our people can work at a sustainable business”
Tesla needs the aftermarket to service vehicles- cars are aging out and need repairs and parts
Changing environment- you must have an enjoyable and compelling place to work for, start Monday positive, and celebrate Friday
Gravity- younger people raised in a zero gravity environment due to parents. Everyone received trophies. You must introduce gravity a little at a time.

Connect with the show:

Check out today’s partner:

NAPA Autotech Training helps your technicians keep their skills sharp and their NAPA Know How up to date. It’s the highest quality technical training that covers almost every vehicle system and every make and model. NAPA Autotech is presented by experienced instructors who are ASE master certified technicians. Even after a class is over, techs can access course information online with ClassPass. So when questions come up later they can get the answers. AutoCare Center owners who have taken advantage of Autotech Training say that well-trained technicians are helping to increase their shop’s repair capability and raise bay productivity. That results in fewer comebacks, more satisfied shop customers, and reduced technician turnover. Learn more about NAPA AutoCare and the benefits of being part of the NAPA family by visiting www.NAPAAutoCare.com

Andy Bizub, Midwest Performance Cars in Chicago is also a native of Chicago. His first career was 25 years as a commodity trader. He entered the professional auto industry in 2014 by acquiring a failing shop in downtown Chicago that he was a customer of and started a turnaround. Andy now has two locations. He bought his first car at age 19, a 1972 Triumph Spitfire, which was the start of his gas, oil, and automobile obsession. Listen to Andy’s previous episodes HERE.

Why Can’t Every Shop Owner Be Profitable? [RR 682]

Carm Capriotto, AAP — Fri, 08 Oct 2021 05:15:00 +0000

Scott Wheeler, President of Automotive Consultants Group, Inc. (ACGI) is a shop management expert in the transportation industry, with over forty years’ experience in the automotive, trucking, heavy-equipment, marine, motor sports, and defense aerospace industries. He holds numerous ASE credentials, including two Master’s Certifications, and has experience working in every position from Tech, Fixed Operations Director, and Mechanical Engineer. Scott has authored five books for the automotive industry and continues to write, consult, and speak professionally at major industry events throughout the U.S. and Canada. He has been a regular featured consultant/contributor to Ratchet+Wrench Magazine, Auto Inc., and Canadian Tire magazine with articles relating to topics such as technician compensation programs, understanding production capacity, and how to maintain passion for your automotive repair business, among others. ACGI continues to consult and mentor clients throughout North America.

Listen to Scott’s previous episodes HERE

Key Talking Points

“How to Make Money (& Stay Sane) in the Automotive Service Industry”- Chronicles “Bob” a fictitious character. Effective labor rate, marketing and advertising in 21st century. Charts and graphs included. Policies, procedures, job descriptions.
What are your goals? Why are you in the industry? “What’s in it for me?”
Are you willing to listen? Try new things? Change?
Change triangle- the center is change, outside points are commitment, plan and action.
“Why when how to” with financials
“All business is, is a math problem”- understanding the numbers, understanding benchmark (labor gross profit margin, parts margin etc)
Ego factor- what is your break-even point is? Do you rate how well your month went by how much money is in your checking account?
Holding someone accountable- clear set goals and expectations
CPA using Quickbooks- Quickbooks isn’t geared towards automotive
Make sure you set your shop management software to your set gross profit matrix for parts and labor
Production incentive for technicians and service advisors- it should be easy to calculate. Is it based on working 40 hours or meeting/beating time guide? Consider individual compensation plans. Find one that motivates your employees.
Raising effective labor rate
Automotiveconsultantsgroup.com

Connect with the show:

Check out today’s partners:

This episode is brought to you by AAPEX, the Automotive Aftermarket Products Expo. AAPEX represents the $740 billion global automotive aftermarket industry and has everything you need to stay ahead of the curve. The Virtual AAPEX Experience 2020 is in the record books. Virtual AAPEX lived up to presenting leading-technical and business management training from some of the industry’s best and brightest. Now set your sights on the homecoming in Las Vegas in 2021. Mark your calendar now … November 2-4, 2021, AAPEX // Now more than ever.

This episode is brought to you by Shop-Ware Shop Management. It’s time to run your business at its fullest potential with the industry’s leading technology. Shop-Ware Shop Management will increase your efficiency with lightning-fast workflows, help your staff capture more sales every day, and create very happy customers who promote your business. Shops running Shop-Ware have More Time and generate More Profit—join them! Schedule a free live demonstration and find out how 30 minutes can transform your shop at getshopware.com/carm