Automotive shop management questions

[bams50]

I have no idea if this fits here, or anywhere on this forum, but I am doing research anywhere I can think to look.

I am in the planning stages of opening a brand new automotive repair shop. I have been in the industry over 40 years, so I know the cars and the business. What I’m trying to find out is information on things like ideal pay situations for employees, and Shop layout. The shop I am currently at is for sale for way more than I’m willing to pay, and it’s not a great set up anyway. So I have a very good location, and have decided to build brand new, starting with a clean sheet of paper. And if I’m going to do it, I want to try to plan for the best possible situation; it’s once-in-a-lifetime that you can plan everything from the ground up.

I would love to hear from anyone in the automotive repair industry, especially in Shop management. Also, if anyone has any tips on where else I could go to discuss this with other people in the industry, that would be greatly appreciated. Thanks in advance.

 

[GTA Matt]

Join IATN, lots of useful information and discussion for owners there. There are also a few shop owner specific pages on facebook. As for employee pay, try to utilize a system that would motivate you from a tech perspective. That discussion could go many different ways.

 

[Streetbu]

Tech pay can vary. Obviously the dollar amount, but I also mean flat rate vs hourly. Sometimes you find an "older" tech and its one of two scenarios. They were just screwed at there last job and they need to make money, so they want flat rate and can really pound out the hours. Other times, they will be on the downhill side, very reliable, lots of knowledge, but move a little slower and just want a known, steady income from hourly. It never fails, which ever you advertise they always want the other. Leave that conversation for the interview....

As far as layout, that can vary for multiple reasons. Land and street view are the first two that come to mind. You want it appealing from the street, sometimes local law or the actuall land makes that hard though. BTW, I'm just south of you in Marcellus. Let me know when your running. Id love to take a look!

 

[d300]

Let me get this straight...you have 40 years in the industy and I'll guess that you started at age 20.....so at age 60 you want to take on that much debt? Doesn't sound like a great plan in my book but I'll give you bonus points for thinking that you'll live long enough to make it all work out and enjoy the time spent doing it.

 

[The_Auto_Tech]

What you're asking is EXTREMELY open-ended. I could go on for hours and hours about the industry as a whole, just check my user name.

 

[James-W]

Let me get this straight...you have 40 years in the industy and I'll guess that you started at age 20.....so at age 60 you want to take on that much debt? Doesn't sound like a great plan in my book but I'll give you bonus points for thinking that you'll live long enough to make it all work out and enjoy the time spent doing it.

I was thinking pretty much along the same lines, if it were me, instead of starting a business I would be considering retirement in a few short years.

 

[RWorth]

I was thinking pretty much along the same lines, if it were me, instead of starting a business I would be considering retirement in a few short years.

I'm 3rd in line on this train of thought. I had my shop til I was 50, then decided it was time for a nice easy job with no aggravation, so I started driving truck, easiest job I ever had. Good pay, can work as much or as little as I want, and it's all day trips, so home over night.

Did I mention I have NO CUSTOMERS, I'm just the guy that drives the truck and delivers the product, doesn't matter what goes wrong with the order , I'm always the good guy, no aggravation.

 

[Jsf721]

Is it your rig? What do you want you deliver. Sounds good t me.

I'm 3rd in line on this train of thought. I had my shop til I was 50, then decided it was time for a nice easy job with no aggravation, so I started driving truck, easiest job I ever had. Good pay, can work as much or as little as I want, and it's all day trips, so home over night.

Did I mention I have NO CUSTOMERS, I'm just the guy that drives the truck and delivers the product, doesn't matter what goes wrong with the order , I'm always the good guy, no aggravation.

 

[BillK]

x2 on iATN There is a discussion going on right now in the Shop Management Forum about pay plans.

 

[T_R]

I've got 25 years in the business and the first thing that comes to mind is why would you want to take all that on at what has to be close to retirement age?

I'm opening my own dealership, we should have the doors open next week. It's a small operation, used cars, 2 bay shop and state inspection. I also will do plowing in the winter for extra money. I'm going to do the shop work and buy the used cars. My girlfriend is going to answer the phone and run the office. I have zero overhead. I already had the garage, I built a new building for the office paid cash. I have the money to own, not floorplan all the cars.

I can't imagine taking on the debt load and frustrations of owning a large shop and having employees at my age and I'm only 45. To be honest I will probably make as much money as a guy who is in debt and runs a big shop. It's all profit for me.

 

[BillK]

first thing that comes to mind is why would you want to take all that on at what has to be close to retirement age?

TR,
Retirement age is just a number and can vary greatly from one person to another. I am 67 and have no plan to stop working any time soon. I can see another 13 or 14 years easy as long as my health cooperates.

Also, the original poster might have a family member to pass the business on to. He said he has been in the business for 40 years. If he started at 18 he is not all that old.

Just another perspective.

 

[bams50]

Thanks, guys.

To those that question my age, I am 56 years old. I started working in my dad Sinclair gas station at around nine or 10 pumping gas and cleaning up, so you could say I have over 40 years. I get that some people want to retire ASAP but I’m not like that. If my health permits, I want to work another 20 years. I have no idea where the mentality comes from to retire so young. And the excitement of expanding my business and taking it to the next level excites me. I know what you’re saying though. A lot of my friends my age or even a little younger are looking to get out, or have. They have a little camp and go fishing, or they putz around at their house and watch sitcoms. None of that is for me. I have my aches and pains, but I get a physical every year and the doctor says that other than being a little fat I’m doing great, and I want to take on this challenge. My hero and friend Gene Winfield is now 90 years old, still building street rods, still traveling 200 days per year doing seminars and everything else. At 56 I’m just a baby compared to him

My plan is to build this and get it as far as I can in 10 to 15 years, then transition it to my long time lead tech if he’s interested, or maybe have an auction and ditch the whole thing. But like I said, that’s a couple decades off if I have my way.

 

[04chase]

i to have just entered this endeavor with 15 years experience in hd truck and equipment repair and fabrication and a couple in fleet management with trade skills every where in between (commercial electrical a/c power , HVAC and many more)

I have had the most experience being a mobile mechanic and working from a truck for emergency situations and being able to perform any task needed when necessary. there are times i know what special tools i may need and times i get a call when im on less critical job. I carry enough emergency and standard tools and high use consumables to get almost any job done. I built this truck starting with a ram 5500 single cab and a good sized body for storage. For me being in multiple service trucks was space utuization and efficency. I built something that is great , organized and highly versatile. I have onboard air (30+ cfm @ 175 psi) , generator / welder with 12k watt and 250 amps of power. Oxy acetylene torch setup with reel, plasma torch , full a/c recovery setup (vacuum , scale, recovery pump and tank with everything in between ) . Two oil tanks for pm service and one waste oil tank (50 gallon waste and 40 gallons of one type of oil and 20 of the other. with gun dispensing reels) . I also do hydraulic hose repair or any hose for that matter on site and carry most hydraulic fittings and hose ends with a air over hydraulic crimper. I have most tools in my home shop for specialty jobs so i can grab them and go . i have been in business for two weeks and am already busy enough to keep the bills paid and my over head is my truck payment , fuel , and insurance with a few others here and there. I also have my resale license so i can sell parts and make money on them and setup accounts in many big parts stores locally so i can source parts when needed. i utilized much under bed space for the bulky items like air tanks and reels so the bed can be utilized for the other important things.

I do have a goal of getting a shop and employees in one year but that does add much overhead . i know its not apples to apples but imo keep overhead down to as much as possible and setup your shop with thorough thought and space maximization .

 

[T_R]

TR,
Retirement age is just a number and can vary greatly from one person to another. I am 67 and have no plan to stop working any time soon. I can see another 13 or 14 years easy as long as my health cooperates.

Also, the original poster might have a family member to pass the business on to. He said he has been in the business for 40 years. If he started at 18 he is not all that old.

Just another perspective.

In my experience guys like you are a rarity in the business. It's a young mans game, most guys who have been doing this since high school are getting worn out by their 40s and are done by their 50s. I've destroyed one knee and one shoulder myself.

I could see myself running my new little business at your age, just selling maybe a car a week and doing one job a day in the shop. But running a large shop full time in my 60's would probably kill me. I want no part of that.

 

[bams50]

I will add that from here on out it won’t be me bending over the fender of the car or hoisting up tires eight hours a day. But I do have a lot to offer by way of management and teaching. And I still love the business, problems and all. Even on days when it seems like I’m nothing more than a fireman. And a new venture energizes me. I can’t see reason why I wouldn’t do it!

 

[BillK]

In my experience guys like you are a rarity in the business. It's a young mans game, most guys who have been doing this since high school are getting worn out by their 40s and are done by their 50s. I've destroyed one knee and one shoulder myself.

I could see myself running my new little business at your age, just selling maybe a car a week and doing one job a day in the shop. But running a large shop full time in my 60's would probably kill me. I want no part of that.

And most of the guys I know that retire "early" seem to either get sick or something and are gone shortly thereafter What would I do if I retired ? Sit around and go crazy ?

I love working and cannot imagine not doing it

 

[bams50]

And most of the guys I know that retire "early" seem to either get sick or something and are gone shortly thereafter What would I do if I retired ? Sit around and go crazy ?

I love working and cannot imagine not doing it

Right there with you, brother man.

 

[Mike.ASC]

Same here with you and Bill , I love the satisfaction of being productive and busy. I will be relocating to a different state and restarting in a completely new environment. Much success & prosperity to you.

 

[GTA Matt]

Thanks, guys.

To those that question my age, I am 56 years old. I started working in my dad Sinclair gas station at around nine or 10 pumping gas and cleaning up, so you could say I have over 40 years. I get that some people want to retire ASAP but I’m not like that. If my health permits, I want to work another 20 years. I have no idea where the mentality comes from to retire so young. And the excitement of expanding my business and taking it to the next level excites me. I know what you’re saying though. A lot of my friends my age or even a little younger are looking to get out, or have. They have a little camp and go fishing, or they putz around at their house and watch sitcoms. None of that is for me. I have my aches and pains, but I get a physical every year and the doctor says that other than being a little fat I’m doing great, and I want to take on this challenge. My hero and friend Gene Winfield is now 90 years old, still building street rods, still traveling 200 days per year doing seminars and everything else. At 56 I’m just a baby compared to him

My plan is to build this and get it as far as I can in 10 to 15 years, then transition it to my long time lead tech if he’s interested, or maybe have an auction and ditch the whole thing. But like I said, that’s a couple decades off if I have my way.

You have more ambition then I do I've often thought about opening my own shop, I've been paying attention to what it takes to run the business end of a shop, enough numbers/profit/margin talk to make my head spin. I landed a pretty good lead tech gig, fantastic pay with far fewer hours then I would work as an owner, with little stress, and very little dealing with customers. As a bonus, I get paid health insurance, which is a big deal these days, and a 401k. I think one of your biggest obstacles will be finding good techs. Most of the good ones are being taken care of at their current shop and would need a pretty big carrot dangled in front of them to move. There is no shortage of bad techs bouncing around from shop to shop, and we all know how that works out. As a new business, I know you will have a delicate balancing act between being able to pay your techs well, while offering the benefits they desire, and still be able to reach the profits you need to be successful. Good luck to you

 

[kelpaso1]

Lot's of big windows and possibly skylights for lots of natural light.

I hated working in dark, dingy small or warehouse style shops with the doors down. Depressing when you can't see the outside world all day.

 

[Fender1325]

Offer your techs a specific percentage of the job. It will be fair to them regardless of hours, unless they lose their ***, but that's less common. That way they can do every job accordingly.

 

[kelpaso1]

One of the biggest things that motivated me, and my co-workers was our bonus system. We had 3 techs and a service manager. It went something like this (don't remember exact numbers). If we made $20,000 in labor that month (as a team), we got an extra $100 on the month end paycheck. Every $1000 more on top of that we got another $100. Some months we made 5-600 bonus every month. We all realized we were a "team" and the more we helped each other, the more we made. The lazy, non workers will get called out and forced out. Giving bonuses for individual performances created animosity, favoritism, and all sorts of other clashes.

 

[The_Auto_Tech]

Let's put it this way. If you want happy techs, don't put them on the flat rate systems.

 

[RWorth]

Is it your rig? What do you want you deliver. Sounds good t me.

Nope, I work for an agricultural supply company, he owns the trucks and trailers Most of the time I drive a 2017 Freightliner with twin lockers for off roading, March to September I mostly deliver fertilizer and farm supplies and equipment to Farms and Cranberry Bogs in Mass. and Rhode Island, occasionally to Conn. and once a week to Long Island. All Day trips.. Mostly Pallets using a flatbed and a piggy back forklift. Right now from Mid Sept. to mid Nov. we put 4' sides on the 45' flatbed and move Cranberries for harvest season, then we have 3 slow months we do pretty much nothing, mostly putting around the shop.

 

[GTA Matt]

Let's put it this way. If you want happy techs, don't put them on the flat rate systems.

I prefer flat rate. Unless an owner offered a huge salary, I wouldn't work anything but flat rate. Working 40 hours for a 40 hour check would be depressing. Turning 60 hours for a 40 hour check would drive me insane.

We do have a few bonuses in place at my shop. Can't say it affects my work because I'm always trying to get as much done as possible anyhow. $100-500 per person at the end of the month of we beat the prior years monthly gross. The amount we get depends on how much we beat it by. I get a $500 monthly bonus based on my personal efficiency over the month. Bonuses aren't something I count on,but I'm not going to complain about free money.

Sent from my SM-G930V using Tapatalk

 

[The_Auto_Tech]

I prefer flat rate. Unless an owner offered a huge salary, I wouldn't work anything but flat rate. Working 40 hours for a 40 hour check would be depressing. Turning 60 hours for a 40 hour check would drive me insane.

We do have a few bonuses in place at my shop. Can't say it affects my work because I'm always trying to get as much done as possible anyhow. $100-500 per person at the end of the month of we beat the prior years monthly gross. The amount we get depends on how much we beat it by. I get a $500 monthly bonus based on my personal efficiency over the month. Bonuses aren't something I count on,but I'm not going to complain about free money.

Sent from my SM-G930V using Tapatalk

Enjoy that when you're old. Flat rate works fine when your physical ability outweighs your mental capacity, but over time they change sides. I don't like to track hours. I'd rather show up, get paid for what I do, and go home. You can sit and say flat rate is a great system because you make more until you get fucked because the place you work for stops bringing in the work at a rate you're used to. I've worked at enough places to know that flat rate isn't the way to work. It's driven far too many good technicians out of the industry.

 

[reader2580]

A buddy of mine was a mechanic in the early 1990s. The dealer was flat rate. My buddy was really good at diagnosing difficult issues so he got screwed on his pay. It might take him three hours to fix a difficult problem, but he only got paid for an hour. He quit working as a mechanic around age 30 because he could see it was going to destroy his body.

 

[Richard Cranium]

Best of luck,
I am not as old as you, but I would not want to do, what you are going to do.
Do what makes you happy and don't look back.

 

[calif phil]

And most of the guys I know that retire "early" seem to either get sick or something and are gone shortly thereafter What would I do if I retired ? Sit around and go crazy ?

I love working and cannot imagine not doing i

This is me ^. I am starting my 20th year at my shop and love coming to work every day. Bams I am the same age as you. I say follow your dreams and build a nice shop. p.s. I had a nice chat with Gene Winfield this summer. He is a neat guy.

 

[T_R]

Let's put it this way. If you want happy techs, don't put them on the flat rate systems.

I left my last job because of it. I had average hours. Usually 50 on 40 hours clocked in. I'm 45 and have slowed down some. Dealer was Ford and Chrysler. Chrysler warranty times were **** from the day I started and Chrysler does not pay diagnosis time. Few months ago Ford announced their new "directed repairs" deal. Basically they give you a tool list and use that as an excuse to cut the labor times by 1/3 -1/2. I knew I wasn't going to make it anymore and left.

 

[The_Auto_Tech]

I left my last job because of it. I had average hours. Usually 50 on 40 hours clocked in. I'm 45 and have slowed down some. Dealer was Ford and Chrysler. Chrysler warranty times were **** from the day I started and Chrysler does not pay diagnosis time. Few months ago Ford announced their new "directed repairs" deal. Basically they give you a tool list and use that as an excuse to cut the labor times by 1/3 -1/2. I knew I wasn't going to make it anymore and left.

Yep, the directed repair thing is a freaking load of ****. Basically the flat rate system is driving people away from the industry. Everyone out there loves the idea of making more hours than the time they are there, but once business slows and you're making 50 hours and being there for 80 it doesn't matter during the months where you made 110 and were there for 80. You get tired of the rollercoaster and building your life around your shittiest paycheck. Right now I'm independent. If I ever go back to work for another place it'll be hourly or salary. Never again will I go back to fighting the clock.

 

[MikeF2316]

I'm impressed you want to start this at your age (my age too). In addition to having the building built too.

One thing that's worked out very well for my buddy it having a quick change oil place next door. The previous guy in his place matched their prices. He kept his prices, using the logic "they want my oil change they pay my price" So instead they're friends. When a car goes in for an oil change and the brakes are metal to metal, guess who gets the brake job. When the new guy tightens the oil drain plug 2 turns too many, guess who puts on a new pan. When an odd ball car comes in for service, he can borrow an oil filter right away, and replace it.

 

[bams50]

Thanks all, lots of good thoughts here.

 

[1930]

I was thinking pretty much along the same lines, if it were me, instead of starting a business I would be considering retirement in a few short years.

Make that 3 but good luck

 

[DirtyRat]

Oh my dismay! I've been kicking around the idea of starting my own repair garage also. I thought I'd search the forum and see what topics for 'Automotive repair' turned up. Found this thread and was excited that somebody will have asked the questions, kicked things around for a while, had a educational discussion and I'd reap all the benefit. I didn't realize this thread has just begun! Oh such a tease.

I was hoping this thread was 3 years old, bams50 had established a great road map for me to follow, and I'll learn from his mistakes. Shame.

Enough of my personal dialog, I'll +1 the flat rate is shite comments. There's no perfect answer, but I'm opposed to flat rate. It promotes greed, and frustration. Techs attempt to sell gravy jobs vs. what the customer needs, for the shear benefit of chasing easy hours. Works in the short term, until your customers get annoyed at the obvious money chasing, and your customers move along looking for more honest shops. The frustration comes from the guy doing a solid repair getting paid less than the guy hacking cars to bits, not taking any pride in the repair, just pushing it out the door as fast as possible. The hack gets rewarded. The hack job may last long enough for comeback issues to get blamed on some other anomaly vs. the fact that the job wasn't completely properly 8 months ago.

The idea of a respectable hourly wage with reasonably attainable bonus goals for the shop sounds like the best idea I've seen. The reality is that if you have several moderately efficient guys working in a shop, there's no reason at all you shouldn't be able to give them bonuses for above average months and still maintain a comfortable profit.

 

[The_Auto_Tech]

Oh my dismay! I've been kicking around the idea of starting my own repair garage also. I thought I'd search the forum and see what topics for 'Automotive repair' turned up. Found this thread and was excited that somebody will have asked the questions, kicked things around for a while, had a educational discussion and I'd reap all the benefit. I didn't realize this thread has just begun! Oh such a tease.

I was hoping this thread was 3 years old, bams50 had established a great road map for me to follow, and I'll learn from his mistakes. Shame.

Enough of my personal dialog, I'll +1 the flat rate is shite comments. There's no perfect answer, but I'm opposed to flat rate. It promotes greed, and frustration. Techs attempt to sell gravy jobs vs. what the customer needs, for the shear benefit of chasing easy hours. Works in the short term, until your customers get annoyed at the obvious money chasing, and your customers move along looking for more honest shops. The frustration comes from the guy doing a solid repair getting paid less than the guy hacking cars to bits, not taking any pride in the repair, just pushing it out the door as fast as possible. The hack gets rewarded. The hack job may last long enough for comeback issues to get blamed on some other anomaly vs. the fact that the job wasn't completely properly 8 months ago.

The idea of a respectable hourly wage with reasonably attainable bonus goals for the shop sounds like the best idea I've seen. The reality is that if you have several moderately efficient guys working in a shop, there's no reason at all you shouldn't be able to give them bonuses for above average months and still maintain a comfortable profit.

You're correct. The best way to do it is a decent base wage + bonus for efficiency and profitability. I've always thought you should be making more if the dealership is, but on flat rate you only get paid for hours turned for the most part. Most places have done away with bonuses.

 

[dynahoe]

I've been using Alldata pro for service info for at least 15 yrs.i started my own shop in 2013 and joined Alldata pro then and still use it. It is a personal preference thing I don't like identifix or mitchell..about a month ago I started paying for Alldata manage for repair orders and office management...so far I like it I have a lot to learn, it can import into quickbooks and send out notifications to customers all at once for my days off or vacations.Alldata pro is 147 a month and manage is 65. I also have iatn for 19 a month very handy tools. I am 51 now and looking to move my shop 12 miles away to my new land and build from scratch..currently working on quotes for building and small business loan stuff...I have never been happier,and I don't miss being robbed by dealers.....Good luck and keep us posted

 

[GTA Matt]

I didn't want to derail the original intent of the thread, but bad techs and hacks are bad techs and hacks regardless of pay plan. Most just use flat rate as the scapegoat for poor work, not doing training, not keeping up with modern technology and inadequate tooling. Far more greedy owners and service writers being pushed by greedy owners to make unneeded upsells then there are techs doing it. At least in my experience with a couple hundred techs. Most good techs don't care about maintenance work, fixing broken cars pays far better and is more rewarding from a mental standpoint. Honestly, most cars that land in my bay have far bigger problems then doing a flush. I've replaced way more timing chains in the past few years than I have timing belts.

 

[takotruckin]

I have some experience in that arena. I've been running a shop for 3 years now and we just built a new 16k sqft building, so I've dealt with layout of a new shop too.


What are your goals as far as #of techs, advisors, car count, type of work, specialty shop or all makes all models?

If all makes all models, what percentage of trucks do you plan to work on? Our area has lots of diesel pickups and we have multiple fleets of work trucks that we service, so we wound up with less bays for our square footage than most, but it pays off in being able to fit the big vehicles without any issue.

 

[sberry]

I have seen it done several ways so there is no perfect one. If I was going in might specialize, brakes and front end along with an exhaust side etc. If my heart was truly in auto I might build a common garage, about 3 bays and do what work I could do and hire a helper instead of the tech game.
I know a body guy, does real well when he works for himself and paints a few cars, its almost a compulsion that he wants to employ body guys and it doesn't take long to end up in the pooper.
One of my best friends at the end worked by himself, never owned a scan tool and didn't sell oil changes, didn't even try really. Had a few customers who he got used to and went from 12 hr days to 6 and made way more and way easier. Finished a job or 2 every day from people he knew, lots of them never even asked the pricing, called, dumped car off for brakes and paid when it was done.
None of the biz headaches, none tools or equipment, no hours posted, didn't care if he could fix every problem. On rare occasion he told good customers, take it to the dealer for a drivability, they came back for all the rest of it anyway.
If I was in that and was going to hire it would be specific and in hard line problems with a relatively predictable outcome with good parts markup and stuff easily stocked and bought competitively. Something I could mark up 3 times instead of 30%.