Quantcast
Jump to content









Build Your Labor Rate From the Ground Up: Part 2 [THA 346]

carmcapriotto
 Share

Recommended Posts

carmcapriotto Grand Master

carmcapriotto

Posted
Posted

Part 2 of our labor rate discussion in the automotive aftermarket industry. Our panel emphasizes the importance of setting labor rates based on the shop's own expenses and profitability, rather than comparing them to competitors. They also stress the need for regular labor rate increases and educating staff about the financial aspects of running a shop. They address fear and mindset issues that can affect labor rates and overall success. The episode provides valuable insights and advice for shop owners in effectively setting and managing their labor rates.

Chris Cotton, AutoFix Auto Shop Coaching, Chris Cotton Weekly Blitz Podcast. Listen to Chris’ previous episodes HERE

Rick White, President and Lead Coach for 180BIZ, Listen to Rick’s previous episodes HERE. Dave Schedin, CompuTrek Automotive Management Systems. Dave’s previous episodes HERE

Show Notes:

  • Build Your Labor Rate From The Ground Up Part 1 [THA 276]: https://remarkableresults.biz/remarkable-results-radio-podcast/a276/
  • Where the Money Goes – The $100 Lesson [THA 210]: https://remarkableresults.biz/remarkable-results-radio-podcast/a210/
  • Labor rates should not be set based on competitors (00:02:10) The importance of setting labor rates based on the shop's own expenses and profitability, rather than comparing them to competitors.
  • Educating staff about where the money goes in the business (00:03:18) The need to teach employees about the various expenses and costs involved in running a shop, to help them understand the labor rates and the owner's income.
  • Fear and mindset issues affecting labor rates and success (00:05:02) The fear and mindset issues that can affect labor rates and the overall success of a shop, and the importance of addressing these issues before setting labor rates.
  • The importance of financials and owner thinking (00:07:46) Discussion on the prevalence of shop owners not having up-to-date financial statements and the need for owners to transition from technician thinking to owner thinking.
  • Raising the Labor Rate (00:15:40) Discussion on the importance of raising labor rates and providing value to clients.
  • Labor Rate and Value (00:17:19) Exploration of flipping the conversation from price to value and the curse of knowledge.
  • Labor as Time vs Value (00:18:05) Insights on how labor is often tied to time, but should be based on value and the skills of technicians.
  • Setting a Higher Standard (00:23:11) Discussion about the importance of qualifying customers and setting a higher standard for the shop's services.
  • Firing Customers for Excellence (00:24:03) Exploration of the concept of firing customers who compromise the shop's level of excellence and professionalism.
  • Running the Business Like a Business (00:25:58) Importance of charging correctly, controlling the schedule, and making every car count to improve the shop's profitability and efficiency.
  • The impact of increasing labor rates on gross profit (00:31:37) The relationship between increasing labor rates and gross profit. It explains that when a technician's pay is increased, the labor rate must also be raised to maintain the same gross profit percentage. It highlights the importance of understanding the math behind labor rates and setting them proactively.
  • The need to compete with other industries for skilled technicians (00:33:42) The challenges of attracting and retaining skilled technicians in the automotive industry. It compares the benefits and compensation offered by other industries, such as Target and emphasizes the need for competitive labor rates to attract and retain talent. It also highlights the importance of providing tools and benefits to technicians to create a profitable and sustainable industry.
  • Building a profitable business (00:42:42) The significance of being profitable and setting labor rates that allow for a 20-25% net profit, as well as the importance of love and grace in running a successful shop.
  • The importance of making changes now (00:44:27) The need to make changes in labor rates immediately instead of waiting and encourages shop owners to trust the advice of coaches.

Thanks to our Partners Shop-Ware and Delphi Technologies

Shop-Ware: More Time. More Profit. Shop-Ware Shop Management https://getshopware.com/

Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. http://DelphiAftermarket.com

Connect with the Podcast

-Join our Insider List: https://remarkableresults.biz/insider

-All books mentioned on our podcasts: https://remarkableresults.biz/books

-Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom

-Buy Me a Coffee: https://www.buymeacoffee.com/carm

-The Aftermarket Radio Network: https://aftermarketradionetwork.com

-Special episode collections: https://remarkableresults.biz/collections

Delphi-Call-to-action.png      

ARN-Website-Banner-July-2022-1200x400-1.

Screenshot_340-1.png

Click to go to the Podcast on Remarkable Results Radio

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share
Go to topic listing

  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      Want to End Your Technician Shortage? Focus on Retention!
      By Joe Marconi in Joe's Blog
         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”

  • Similar Topics

    • carmcapriotto
      Interest Rates and Market Update [E116] - Business By The Numbers
      By carmcapriotto
      On this Episode of Business by the Numbers, Hunt reflects on his time at the STX conference in Nashville, sharing stories about the connections made and lessons learned from industry experts.
      • Economic News Breakdown: We get into the latest economic updates that dropped last Wednesday. Hunt breaks down what these changes in numbers might mean for your wallet and business this year, especially when it comes to interest rates.
      • Tax Talk and Government Spending: Hunt explains the proposed wealth tax and what the latest federal budget might mean for us. There’s a lot of talk about balancing the budget without raising taxes too much, and we'll explore what that could look like.
      • Capital Gains and Your Money: We take a closer look at potential hikes in capital gains taxes and how these could affect your investments and long-term financial planning.
      • Understanding the Numbers: Inflation, GDP... these terms get thrown around a lot. We’ll unpack what they really mean for the economy and for us as workers and business owners.
      Thanks to our partners, NAPA TRACS and Promotive
      Did you know that NAPA TRACS has onsite training plus six days a week support?
      It all starts when a local representative meets with you to learn about your business and how you run it.  After all, it's your shop, so it's your choice.
      Let us prove to you that Tracs is the single best shop management system in the business.  Find NAPA TRACS on the Web at NAPATRACS.com
      It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
       
      Paar Melis and Associates – Accountants Specializing in Automotive Repair
      Visit us Online: www.paarmelis.com
      Email Hunt: [email protected]
      Get a copy of my Book: Download Here
      Aftermarket Radio Network
      Click to go to the Podcast on Remarkable Results Radio
    • carmcapriotto
      How To: Talk to Kids About Careers in Automotive [E132] - Diagnosing the Aftermarket A to Z
      By carmcapriotto
      Matt Fanslow covers strategies for engaging high school students, debunking industry myths, and the importance of talent over passion in choosing a career. The episode aims to inspire a new generation to explore the diverse and rewarding paths within auto repair.
      Show Notes
      Ideas for Engaging Students (00:01:19) Addressing Misconceptions (00:07:59)  Value of Skill and Talent (00:13:41)  Changing the value system (00:19:04)  Impact of artificial intelligence (00:21:21)  Future of Auto Repair Careers (00:22:40)   
      Thanks to our Partner, NAPA Autotech napaautotech.com
       
      Email Matt: [email protected]
      Diagnosing the Aftermarket A - Z YouTube Channel HERE
      Aftermarket Radio Network: https://aftermarketradionetwork.com/
       
      Click to go to the Podcast on Remarkable Results Radio
    • Changing The Industry
      Defending Flat Rate #podcast #autorepairshop #autorepairbusiness #carrepair #automotiverepair
      By Changing The Industry
      Defending Flat Rate #podcast #autorepairshop #autorepairbusiness #carrepair #automotiverepair
    • carmcapriotto
      Attract, Develop, and Retain Top Automotive Talent [CC 113]
      By carmcapriotto
      Thanks to our Partner, Technician Find Building the dream team in the automotive industry goes beyond hiring technicians—it's about creating a culture that fosters growth, respect, and development. Join our panel of shop owners as they share their experiences and strategies in building an outstanding team. Topics include the significance of culture, passive and active recruiting, development through apprenticeship and training programs, and retention strategies like understanding employees' goals, compensation, and creating an enjoyable work environment. Want to learn more? Join Chris Lawson's 'Repair Shop Growth Systems Live 2024' May 31st - June 2nd in Mt. Arlington, NJ. https://www.repairshopgrowthsystems.com/ Chris Lawson, TechnicianFind.Com. Chris’ previous episodes HERE Shawn Gilfillan, Automotive Magic, Kenvil and Lake Hopatcong, NJ. Shawn’s previous episodes HERE Russell Crosby, Russ’s Wrench Auto Repair, Clinton, NJ. Russ’s previous episodes HERE Rob Morrison, Morrison's Auto Rite, Jamaica Plain, MA Roy Niemi, A & D Auto & Body Repair, Haslett, MI Show Notes
      Repair Shop Growth Systems Live 2024, May 31st - June 2nd, Mt Arlington, NJ: https://www.repairshopgrowthsystems.com Attracting Employees (00:00:01) Discussion on strategies and stories for attracting skilled technicians and employees to automotive repair shops. Upcoming Summit (00:01:11) Introduction of a summit focused on attracting, growing, and retaining employees in the automotive repair industry. https://www.repairshopgrowthsystems.com/ Personal Stories of Attraction (00:02:26) Shop owners share personal stories and strategies for attracting and hiring employees, including promoting unique employee benefits and culture. Writing Attractive Job Ads (00:10:03) Discussion on the importance of highlighting ongoing training and development opportunities in job ads to attract skilled technicians. Employee-Centric Job Ads (00:14:31) Highlighting the core elements that technicians look for in job opportunities, including compensation, growth opportunities, and respect for work-life balance. Creating an Apprentice Program (00:16:21) Establishing in-house mechanic apprentice program with local institutions and colleges to attract and develop young technicians. Focusing on Personal Growth (00:17:09) Prioritizing individual growth and ambitions, not just automotive knowledge, to attract and retain young staff. Hiring and Fostering Culture (00:18:09) Emphasizing the importance of hiring and fostering culture through team involvement in the hiring process and internal recommendations. Attracting and Retaining Talent (00:19:43) Introducing TechnicianFind.com as a solution for finding skilled automotive technicians and retaining a strong team. Recruitment Strategies (00:21:05) Recruiting individuals with strong work ethic and potential, focusing on personal and professional development, and utilizing mentorship programs. Building a Candidate Bench (00:24:17) Emphasizing the importance of keeping and organizing job applications to build a candidate bench for future hiring needs. Engaging Families and Open Communication (00:29:00) Involving employees' families in company activities, promoting honesty and open communication, and addressing personal well-being through a life coach. Listening and Individual Management (00:31:14) Highlighting the importance of active listening, intuition, and individualized management to improve employee retention. Attracting and Retaining Employees (00:31:57) Strategies for supporting employees' financial well-being and making work enjoyable. Creating a Fun Work Environment (00:32:37) Implementing games, profit-sharing, and unique incentives to make work enjoyable. Recruiting and Developing Future Technicians (00:35:40) Strategies for attracting potential superstars from marginal shops and nurturing talent. Employee Compensation and Long-Term Care (00:40:33) Ensuring fair compensation and care for long-term employees to retain talent. Profit Sharing and Business Understanding (00:45:33) Educating employees about profit sharing and the mechanical perspective of business operations.
      Thanks to our Partner, Technician Find If you are tired of struggling to find skilled automotive technicians for your independent auto repair shop, say goodbye to the endless search and let Technician Find be your solution. We are a 'Single Stop To Staff Your Shop.' http://www.technicianfind.com Connect with the Podcast: -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on (X) Twitter: https://twitter.com/RResultsBiz -Visit the Website: https://remarkableresults.biz/ -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections  
      Click to go to the Podcast on Remarkable Results Radio
    • Joe Marconi
      Are Your Using Multi Tier Labor Rates?
      By Joe Marconi

      Premium Member Content 

      This content is hidden to guests, one of the benefits of a paid membership. Please login or register to view this content.



  • Similar Tagged Content

  •
    nptrb

    Tax Season Preparation: A Comprehensive Guide

    By nptrb, in Automotive Industry,

    1 comment 649 views
    nptrb

    Spring Clean Your Finances: 5 Steps Every Business Should Take

    By nptrb, in Automotive Industry,

    1 comment 553 views
    nptrb

    Understanding S-Corp Distributions and Draws | Are They Taxable?

    By nptrb, in Automotive Industry,

    0 comments 770 views

  • Our Sponsors










Main Sections

More Sections

Discussion Forums

×
×
  • Create New...