My dad used to say “I may be broke when I die but, I ain’t going to be tired too.” In other words, “I ain’t working for nothing.” That has stuck with me my whole life. I think of him when I see shops that are busy all the time and losing money every month. They seem to always have problem repairs, problem customers and problem employees. Lawsuits, customer complaints and transient employees are common. These shops are working hard but not making any money. Most just need to step back and revisit their current sales and production structure and then make some adjustments to create a more effective financial foundation.

It’s called working smarter. How do you do that?

Let’s start by deciding what repairs you want to perform and what do you not want to perform. The structure of a transmission specialty shop is much different now than in the past. Many general-repair shops are adding on transmission repairs. Many transmission specialty shops are adding general repairs. It is six of one and half a dozen of another. Hard to tell them apart. I guess the shop that has a builder is more of a transmission shop that does general repairs. The shop without a builder is more of a general-repair shop that does transmission repairs. It is rare to find a transmission specialty shop nowadays that works on transmission repairs only. So, what is the structure at your shop?

If you are taking in everything that comes through the door now, you might want to rethink that. We have all been involved in those repairs we wish we had not taken in. Others, we spent a lot of time on and made very little profit. So you have to ask yourself, what is right for me? Your ideal structure will be to only sell repairs that your employees are qualified to perform and your shop has the right tools to perform. You refuse all other work because that work is what creates all the problems. For example, if you decide to work on air conditioning and transmissions, don’t take in an engine job.

It is not enough to decide what your new structure will be. You must also advertise properly to make sure you get the right amount of leads in order to make the sales for each category of repair. Advertising must attract the type of work you decide to do in the future and provide enough leads to be successful. If you decide that you are going to do 75% transmissions and 25% air conditioning, then your advertising should bring in enough leads to sell 75% transmissions and 25% air conditioning. If your current advertising is bringing in 50% air conditioning now then, you will need to adjust your advertising accordingly. 

Recruiting the right employees to do the work is also important for this plan to work. Qualified employees are more productive and produce higher profits. There are only so many hours in the day. Qualified employees produce more work. More work means more money. When you consider that what we are selling is high-dollar parts and labor, it seems like a no brainer. You have to sell enough billable hours to max out the shops labor capacity every week. If you do that and do not have qualified employees there to produce the work, you are shooting yourself in the foot.

Same thing goes for buying the right tools to do the work you decide to do. The right tools to perform the work you are doing produce more work. It is not fair to ask your employees to take on repairs without the proper tools. Some shop owners rely on the techs to supply the tools the shop does not have. That is a great plan until the tech quits. It seems pretty straightforward, but you would not believe how many shop owners do not supply the tools and test equipment their employees need to do their work. Then they wonder why they have employee turnover and lawsuits.

In order to make sure your new structure is working, you must purchase modern shop-management software that you like and understand. You cannot do it without it. Get one that allows you to monitor remotely in real time. This will enable you to monitor everything in your shop on your smartphone. Time management is crucial to succeeding. Employees must perform and be held accountable for their work in order for you to make a profit. There are shop management tools available now that will help you keep up with employee productivity. A shop that has an organized workflow system and has employees who are being held accountable will be a major key to your success. Today’s software can help you do that and much more.

Finally, correctly pricing the repairs is also essential to your financial success. Stop leaving money on the table. You need to charge what your local market will bear now and in the future. If you are pricing repairs the same way you did five years ago, you will want to do a little research and find out what those repairs should are selling in your local marketplace now and change your pricing structure accordingly. (This is the quickest way I know to give yourself an immediate raise!) Then review your pricing structure regularly in the future and make your modifications.

Just working hard does not guarantee success anymore. Being successful has a lot to do with dealing with change. We all would love to work on transmissions only. However, things have changed. We will always have to deal with change as our industry continues to evolve. You may have to restructure things again in six months and create a new formula for success. Do it! My advice is to not be afraid of change. Instead, be open minded to change so you can have the right mindset to make the smart decisions needed to stay competitive as time goes on.

My dad would have liked this plan. You did not see him working on customers’ vehicles if he did not have the training and tools to perform the repair properly. He did not tolerate employees that were not qualified or had a bad attitude. He knew what repairs he could do well and he knew how much to charge so he would not be broke or tired. He only worked on those repairs that made good money and turned down the repairs that did not. We call it working smart nowadays. Are you working smart or are you going home broke and tired?