Inside the numbers

On page 18 of this month’s SSGM, you’ll find Bob Greenwood’s analysis of independent shop statistics for Central Canada, and they just might surprise you. They certainly opened my eyes, especially the accompanying chart. If you think that, as Mark Twain once said, “Lies, Damn Lies and Statistics”, consider this: In Southern Ontario, where owners spent 41% of their time in the bays, the average labour productivity per technician was 50.1%. In Central Ontario, where owners racked up only 28% of their hours in the bays, productivity per tech was 72.6%. Coincidence? I think not. There is a clear correlation between owners staying in the office and running their businesses and technician productivity. While this shouldn’t be surprising, the fact is that many shop owners that I contact regularly tell me that they either can’t find good people, or can’t afford them if they could. If you are your shop’s best tech, chances are you have a problem. Why? Because to run a going concern today, you need both volume and a quality clientele, who are, by definition, difficult to please. Add ridiculous amounts of government paperwork plus the regular stream of receivables, payables, payroll, cores, adjustments, warranty claims, etc. etc. and where do owners have time to repair anything? A lot of successful shop owners I’ve seen use tape to hold the casters on their office chairs because there isn’t time to drill a hole, let alone dive in to the trenches. Paradoxically, those same Southern Ontario shops whose owners spend so much time under the hood also have the most bays, with an average, of 4.6 per shop, and the most technicians, at 3.2 full time people per shop. Average monthly sales, however, are well below the average, and door rates are the lowest in the survey at an average of $63.55.

Maybe there’s a wash bay in there distorting the stats. Maybe a dedicated Drive Clean I/M dyno occupies a bay and doesn’t drive sales. Or maybe, just maybe, there is a saturated Southern Ontario market that has far too many shops to serve an admittedly growing population base. Are you wrenching predominantly beaters and junkers? Most of the winning shops I visit seem to do a disproportionate amount of maintenance and pure diagnostic work on cars less than seven or eight years old. An unusual number also seem to dish off the rust work to other shops. Why? Because someone has run the numbers and determined mathematically what every shop owner and technician already knows: People without money drive beaters and junkers. Used parts, white box parts and nightmare receivables are inevitable outcomes. Ever let one go when you knew there was little to no chance of seeing the money because the vehicle wasn’t worth the lien? Finding a quality clientele is a lot tougher than many owners think, maybe as tough as finding quality people to service their vehicles. Twenty-buck oil changes won’t do it, nor will a plywood sandwich board out front. To find out what will, however, means getting out from under the hood and in front of the computer, and customer. To survive, we’ll have to.