Charging customers properly — not exorbitantly — helps you invest more resources into your shop and better service your customers, argued a shop coach.
Maylan Newton, chief executive officer of Educational Seminars Institute, was the latest shop coach to urge shop owners to up their labour rates.
“Most of us go, ‘I can’t afford that. I can’t afford a wheel lift. I can’t afford this.’ But that’s because that’s our shortcomings as owners,” he said during the recent Automotive Aftermarket Retailers of Ontario Symposium. “How do we afford that? Charge the right amount of money. Bill right to the customer, set standards, hold people to expectations.”
And shops need to ensure they’re being productive. Naturally, most people think of technicians when the term “productivity” is used but this also applies to service advisors or office staff, even general workflow. Shop owners need to ensure their business is productive from top to bottom to realize the full gains of increasing their labour rate.
There’s also another main issue: “We have to find a way to stop thinking about this — and I’m not saying this to offend anybody — we got to stop thinking about this [profession] as a hobby,” Newton said.
Most people become automotive repair technicians because they like cars. Then they decide they want to own their own business; they want a piece of the action. They see the owner charging $100 an hour for labour; the tech gets $20 and so they think the owner pockets $80. They think they’re going to be rich and have all this free time.
“Didn’t work so good, did it?” Newton chuckled. “Because there’s a lot more to business. We need to stop being a hobby — I’m going to use that word — and we need to become a business that understands the numbers … that understands what we need to do. If we need a wheel lift, who’s supposed to pay for that? Customers. It’s changing the structure.”