Over the 17 years we have been providing management software to repair shops of all sizes we have spent many an hour hearing what helps their business, what hurts their business and what grinds their gears.
No one likes paying taxes, and most people don’t seem to like any kind of government body at all. The one common denominator that really seems to annoy auto shop owners is the walk and talk.
Whether you are a shop owner or a technician you know exactly what I mean. When the technician walks from the back of the shop to the front and chats with everyone on his way. The weather, sports, the ex wife and the kids are all subjects that are costing general repair shops thousands, probably tens of thousands of dollars in lost productivity every year.
One shop owner described it as seeing his annual profit being used up one word at a time. A auto technician may well say it’s no big deal as they are walking anyway, How big a problem is it really?
How much does a technician really cost?
Never mind the $20-$35 you are paying him each hour, what about the extras that it costs to have him at work. The fica, fuda, suda, the insurance, the benefits you give him because he has been with you years.
While every shop is different we have spent the last 15 years working with shop owners to find the Profit Index Factor they need to aim for. To put this in layman’s terms, how much Profit Per Hourdoes each tech need to make to cover not just his income but the overhead that comes with every business.
While we can’t tell you your exact number (well not without speaking to you and using our Shop Management Software), let’s for ease of this blog post say $120 an hour (Scary to think of but we have seen plenty of shops with higher numbers). That is the profit your shop needs to make on each tech’s working hour, whether it is from the work he does or the parts he sells, that is the amount you need to be making.
What is Walk and Talk costing me?
If we use the PPH number that we mentioned earlier $120/60= $2 a minute
Every minute that your tech is not working on something that produces income has a real world cost to you of $2.
That extra cigarette break, outside of the planned mid-morning break or lunch, is costing you a minimum of $10. What would happen if you told your techs that smoke, each extra cigarette break was going to cost you $10 (in addition to buying them at the supermarket)?
Cell Phone Usage = Throwing Money away
Do you allow staff to carry their cell phones and use them during work hours? I would hope not as this is a definite time waster. If you have not already banned cell phone usage from the shop floor, and the front counter, do it now and see an instant gain in productivity. If their spouse or kids school needs to get hold of them, they can phone the shop just as it was done before cell phones.
If people don’t want to leave their stuff in their car you can buy some small lockers and give each person one, they can leave their cell phones, their cigarettes and wallets in them. The $200 you spend on some 2nd hand lockers will pay itself back in a couple of weeks due to increased productivity.
Road Tests can be Time Wasters
Yes you should road test every car before and after you work on it, we include this in the pre delivery inspection form included in our workflow app. But have you ever checked to see where the car is being test driven to? We recently had a shop tell us how they had to fire a guy as he was doing errands while on test drives. His argument was that it was only an extra 10 a time, so each vehicle he did a road test on was costing the shop $20.
I think this is more common than any of us imagine, he just happened to get caught because he broke down in a Walmart parking lot – TWICE – a week apart.
We have a solution coming out for this problem!
How Do I Stop Losing Money in my Auto Repair Shop?
I am sure many of you are recognizing at least one of these issues, maybe your road tests sometimes go on too long, maybe you have someone who smokes outside of the normal breaks, maybe you see guys furtively sending txt messages. Whichever one it is, you are watching money go out the door, so how do you fix it.
The short answer is Repair Shop Management Software
- Remove the need for walking around:- By using our built in messaging system you no longer have to yell messages out to techs, they don’t have to walk to the front to check that parts have been ordered, and they can ask you questions without leaving the vehicle they are working on.
- Company Rule Book – If you don’t have one get one asap. It doesn’t have to be a war and peace length master piece. It just needs to cover things that are costing you time, cell phone usage, smoking. Have an attorney look it over before anyone signs it, yes it will cost you a couple of hundred dollars but that will save you thousands over the next few years
- Workflow App – By using the Profitboost Workflow app everyone can see where they are in the process of fixing the car. The techs can see that parts have been ordered, the service writer can see that inspections have been done. Less time wasted wondering who is doing what, or trying to find out and more time spent fixing cars.
Be Honest With Yourself
We all become friendly with people who work for us, whether it is service writers or technicians we seen them for 8-12 hours a day 5 days a week and we learn about their lives. This is natural and is good as we all need human interaction.
However, friends sometimes push the boundaries and if that push is two extra cigarette breaks a day it is costing you $20 a day, $100 a week, $5,000 a year.
Be honest with yourself, is it time to look at the amount of money your business is losing due to the Walk and Talk, Cell Phones or Cigarette breaks?