The Low Road Myths Part II-The Pricing Myth Conception

Posted by & filed under Benchmarks, Blog, Repair Shop Management, Shop Solutions.

When we left off last time, we discussed the reality facing shops that ignore their average repair order. The dangerous myth we’re combating is that shops can take the Low Road and still stay profitable.  The truth is, whether it’s ignoring profitability or ignoring pricing, shops can’t survive — much less grow — when they try and take the low road. Let’s dig into part two of the Low Road Myth and find out what happens when shops ignore their labor gross profit percentage and their pricing!  Reality #2 – Don’t Disregard labor gross profit percentage Disregard for labor gross profit percentage will result in…   Out of balance labor costs to labor sales.  Decreasing or stagnant labor rates WILL result in lower labor gross profit percentage. This will lead over time to tech pay issues. Much lower total gross profit dollars.Since …… ( more )

What Keeps Us Stuck in the Rut of Mediocre Results? by Terry Keller

Posted by & filed under Blog, Consulting, RPM ToolKit, Shop Solutions.

Early in my career as a shop owner I made so many mistakes that led to poor results, I found myself on a mental and emotional rollercoaster which led to anger and decision-making paralysis. Have You Ever Felt Like This? I felt very inadequate in many ways but I could not let my employees or my family know it. I felt betrayed by so-called experts I hired, by vendors I thought I could trust and by my own poor judgment and inconsistency. This led to a startling discovery. In many ways I was in fear. The Causes of My Fear From my position now I can see that I did not know what to do or how to do it and I did not know why I should or should not do it. This destroyed my self-confidence. I lived in …… ( more )

The Money You Need For Great Marketing Is Already In Your Shop!

Posted by & filed under Blog, Investing, Marketing, RPM ToolKit, Shop Solutions.

Over the last month, the markets wiped out the gains they’d made this year.  From where I write this, European banks and governments are struggling to stay afloat (and Bank of America’s financial and legal problems show things aren’t much better here). Most people probably remember Lehmen Bros and what their collapse did to the market. In other words, we’re right back where we started in 2008.  What are the chances that it goes differently this time around? This isn’t a big “I told you so” (though if you were listening 3 years ago, you could have bought gold at $800/ounce).  This is your wakeup call. Three years ago the government tried to keep people happy and confident in the market by propping up banks with the $800 billion TARP. This time around, the government is just shy of its …… ( more )

Why it’s Important to Have an Exit Plan for Your Repair Shop

Posted by & filed under Blog, Consulting, Investing, Repair Shop Management, RPM ToolKit, Shop Solutions.

Flip over the news…open your browser…switch over to talk radio…there’s a lot going on in the world right now. Death of Osama bin Laden. Gas prices. Libya, Syria, Iran, Pakistan. Japan’s earthquake and nuclear emergency. NFL lockout. Obama’s birth certificate. I’m not trying to sound like an alarmist — my point is that there are a LOT of distractions out there right now taking your attention away from this… Graphic by John Lohman. Click on it to see it full size. If this graphic doesn’t make it clear enough, my point is this: we are headed for serious financial trouble as a country. Interest rates WILL explode upwards.  Inflation WILL continue to make your dollars worth less and less.  Small business loans WILL become incredibly hard to get. This isn’t a political thing.  It’s not a matter of left vs. …… ( more )

Successful repair shop owners usually need help — and there’s nothing wrong with that!

Posted by & filed under Blog, Consulting, RPM ToolKit, Shop Solutions.

Image used under the licensing agreement from Getty Images© Stop me if you’ve heard this one before: when you started your shop, you did it all. You worked at the front counter, did most of the work in the bays, chose the marketing, and lead a small team of people you hired yourself. The busier you got, the more directions you were pulled in.  Managing employees and holding them accountable…tracking productivity and making sure nobody is wasting time and money…spending hours digging through expenses to make sure you’re not losing money…doing more than ever and getting less done. And tell me this doesn’t sound familiar: “How many entrepreneurs have missed their son’s football games, or daughter’s soccer games? A dilemma emerges as the entrepreneur sells the vision, manages one or more functions and works the floor. Vacations become a fading …… ( more )

Busting the Gross Profit Myth!

Posted by & filed under Benchmarks, Blog, Shop Solutions.

Who should you listen to when it comes to setting a target for your gross profit percentage in your shop? There are a LOT of opinions out there, but you don’t have to look any farther than your categories of expenses over the last decade to know that something’s not right with your profits…those expenses not going down as a percentage of your sales, they’re going UP! Be sure to read Terry’s blog below-this blog is also posted on MotorAge. This is the TRUTH about where you should be setting your Gross Profit Percentage target.  It’s the key to surviving inflation, rising prices, and other problems in your shop!  Shop owners are surrounded by myths…misconceptions about how to grow profits, how to attract great customers, and how things should and shouldn’t be in their shop. These myths lead owners to …… ( more )

Part 2: What to Do When You’re Short on Cash But Need to do Marketing!

Posted by & filed under Blog, Investing, Marketing, Repair Shop Management, RPM ToolKit, Shop Solutions.

This is part 2 of an article Terry posted earlier. To read part one click here! Here’s the Problem Deep discount ads can bring a high response, no doubt. They can flood your bays with cars. But if you stop there, you confuse activity with results (a whole different discussion for another day). If there’s a downside to high quality advertising (and I’m stretching to find one), it’s that it takes repetition. It doesn’t usually reach its greatest potential response or get the best return on investment from one-off mailings done at random. Some shop owners see this as a dilemma and make a false choice. They assume that they have to do cheap marketing now to get enough money to do high-quality marketing later. This couldn’t be further from the truth! No matter what the excuse, if you keep …… ( more )

Will Hyper-inflation Kill Your Shop?

Posted by & filed under Blog, Marketing, Repair Shop Management, Shop Solutions.

A few weeks ago, the Federal Reserve announced that it would purchase $600 billion in U.S treasuries. What does this mean? What could it mean to your shop? Very high inflation will cause prices and the cost of living to go way up. That will hurt your customers and your business in several ways. Is it possible to fix it? What can we do right now to stay busy and profitable in the face of high inflation that may continue for years?   The Problem Begins   When the Federal Reserve purchases treasuries, it has one goal in mind: inflation.  The government is scared to death of deflation, so it actually encourages slight inflation at all times. Problem is, energy and food prices are already increasing.  And the injection of cash that the Federal Reserve is conducting will only push …… ( more )

Repair Shop Management: Comparing Your Shop’s Numbers To What?

Posted by & filed under Benchmarks, Blog, Repair Shop Management, RPM ToolKit, Shop Solutions.

Benchmarking Most of us shop owners understand the process of comparing our numbers to a set of benchmarks or standards. I remember way back over 35 years ago, I had monthly meetings with my accountant where he showed me my shop’s financials with the percentages and ratios, and then told me where they should be. It was always a frustrating experience – not just because my numbers were off, but because I didn’t know how to fix most of them and neither did he. A decade later, as my experimentation nudged some of my numbers to higher levels, I ended up believing it was impossible to improve them above a certain point. Looking back now, that level of performance was mediocre at best…and by today’s standards wouldn’t allow me to stay in business for more than a couple of months! …… ( more )

Repair Shop Management: Incentive Pay Plans

Posted by & filed under Blog, Hiring Employees, Repair Shop Management, Shop Solutions.

If you are finding yourself somewhat resistant to reading this article because of its title, you are exactly the shop owner who needs to read it! If your employee pay plans have little or no incentives in them, I’ll bet your team’s productivity and your profits are lower than you want or are on a serious roller-coaster. Even if you do have an incentive type structure set up for your employees, are you sure they’re truly incentives under all circumstances and don’t have accidental disincentives built into them that some of your people resent?

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