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Profitability: Get ‘Em in, Get ‘Em Out!

Discussing the decades old problem of independent shops only billing 4.2 hours per technician out of an 8-hour day.

A common misconception many shops have is that the more cars we have booked in, the more money we will make. I call that being activity based. It doesn’t create billable hours, and it definitely doesn’t help a customer look after their vehicle very well. Let’s take a look at this from two different angles. Imagine that your technicians are working on 10 cars a day. That means you’re going to walk out to a vehicle in the parking lot, drive it up to the bay door, open the bay door, and then drive it into the shop. When you’re done performing that service or repair, you will then drive it out, maybe test drive it to make sure it feels right, and then park it. I estimate that could take at least 15 minutes per car. If you multiply that by 10 cars, you are using up 150 minutes, 2.5 hours per day, driving cars in and out of the shop. If your

Imagine that your technicians are working on 10 cars a day. That means you’re going to walk out to a vehicle in the parking lot, drive it up to the bay door, open the bay door, and then drive it into the shop. When you’re done performing that service or repair, you will then drive it out, maybe test drive it to make sure it feels right, and then park it. I estimate that could take at least 15 minutes per car. If you multiply that by 10 cars, you are using up 150 minutes, 2.5 hours per day, driving cars in and out of the shop. If your

I estimate that could take at least 15 minutes per car. If you multiply that by 10 cars, you are using up 150 minutes, 2.5 hours per day, driving cars in and out of the shop. If your labour rate was $100 an hour, that would be $250 that you lost that day.

Billing properly
So what causes this level of activity? One of the causes is what we call “one line invoices.” We spend all day performing the one service the customer requested. In many cases these are very basic services—oil changes and tire changeovers.

One of the best and simplest solutions to this challenge is to ask questions, especially if the appointment is for just an oil change or tire changeover

Even if the job is more complex—like a brake job—it will still take less than two hours, and we might not even bill that out properly either. I have a feeling that many automotive shop owners mistakenly believe that car owners know what they need to do to look after their cars.

I know that most drivers do not know what it takes to look after their car properly— they’re looking for a professional shop to help them with that. So, lacking that level of service, they wait ‘til their oil change is due or their car has a problem, then bring it into a shop.

At that point, unless it’s just an oil change, the financial expenditure is unexpected and they insist on only having that one problem fixed, because they’re not prepared to spend more.

Asking questions
One of the best and simplest solutions to this challenge is to ask questions, especially if the appointment is for just an oil change or tire changeover. Before the customer leaves after dropping off their car, take an additional minute or two to ask: “Do you have any other concerns with your vehicle?” And then bring up a few suggestions: “…Such as streaky wipers or noises? Leaks or burnt out bulbs?” Don’t make the list too long, and change it up a bit with each customer.

The point is not to dig, but to show interest and care about how their vehicle is running—the suggestions or hints help jog their memory. Many times they’ll add something to the work order because of this prompt, and the customer will thank you for helping them remember. Shops that practice this with each customer average a 0.4 increase in billed hours per invoice and higher customer satisfaction

Categories : Mechanical

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june, 2021

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