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Tire & Mechanical Centres Must Charge a Reasonable Price

Autosphere » Tires » Tire & Mechanical Centres Must Charge a Reasonable Price
The tire and mechanical centre must charge the right price to its customers to ensure its sustainability. Photo ShutterStock

Whether it is through discussions with colleagues, or through Facebook groups that bring together members of the industry, it is possible to see that tire and mechanical centre owners tend to underestimate the value of their work and are often very generous with their time, which translates into amounts billed to their customers that are not commensurate with the work done.

This trait is reflected throughout the team, from the technician to the service person to the consultant. We all seem to have this mentality that we don’t want to burden the customer with the large, but necessary, expense of maintaining their vehicle. We always look for solutions that ultimately delay the inevitable when the right answer is to have the optimal repair done with top quality parts by a qualified mechanic.

We avoid raising our rates for fear that our competitors may offer our customers cheaper options.

A diversified and professional equipment

Haven’t you had a garage door repair recently? Or any other comparable trade? Surely the bill included travel expenses, truck expenses, minimum time on site. Yet, it’s only a truck, some inventory and a door “mechanic”.

Tire and mechanical centres typically have thousands of dollars worth of equipment to work on a vehicle. Prices for these have increased exponentially since the pandemic. This equipment is used to meet the needs of the customer, to ensure safety and quality of work. All this equipment and its maintenance have a cost that must be amortized to promote the financial health of our company.

Continuous training and renewed expertise

Moreover, our industry is constantly evolving. Our mechanics must invest in courses to keep up with new technologies. As the owner, we release our mechanics to attend refresher courses. We look for all the information available on the web or on social networks to know the latest innovations related to our customers’ vehicles. We subscribe to diagnostic platforms to help us find sources of failure. So, why limit ourselves to charging by minimizing the value of our work, even our expertise?

Qualified personnel

A garage’s hourly rate always brings its own set of discomforts. The proof is that when you suggest to an owner to increase it, he will often look for reasons not to do so. In fact, the only logic he or she should rely on is the numbers.

The return on your initial investment should be 20-30%. So, let’s start with that number and work down the hourly rate you should be offering. If the result of this calculation is $150 and you offer a rate of $100, you are minimizing the value of your work and sacrificing profits that you deserve.

In conclusion, not charging the right price means not being able to pay for new equipment and not offering fair and competitive wages to our staff. It is also to deprive ourselves of the profits necessary to maintain our place in the market and to devalue our initial investment which will lead to a difficult retirement or succession.

So, considering all these factors, why not charge the right price to keep our beautiful industry alive and growing?

 

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