Cost of Labor

Technicians should cost no more than 40% of labor sales, fully loaded. “Labor time is like inventory. If your tech is on the floor for 45 hours, you have 45 hours of labor inventory. If you can’t sell it, don’t inventory it. A good tech should crank out a minimum of $25 000 in sales or 90% of the time he is on the floor” “If he does not do courtesy checks, it is his fault. If there are no cars it’s my fault. If the service advisor can not sell it is his fault”

Gross loaded labor

Gross loaded labor sales with a 60% gross profit should cover _____________________________. Finish the statement.

BIB

Just found out that my Secondary Servicing Distributors weren’t checked off and verified. Cost me $1000 in RCB. I don’t care because we really don’t deserve to be in compliance and didn’t do much to help Bib in 2008. Too bad, I remember when Bibnet was an infant… on a single floppy disk. We had a phone line to connect, it was revolutionary in 1996. Now it’s a monster ATM. Business is brisk. So far this year: -Sold $103 000 of Generals and made $27 000. -Sold $58 000 of Conti and made $15 100. -Sold $45 000 in Michelin and made $8 000.

3 things I like about the tire business

#1 The People – That’s you!

#2 The Customers – If you like retail, you like living on the edge because you never really know who’s coming in the door next, and that’s exitement to you. The retail tire store is a unique environment, and unless you’ve ever looked at someone with a 2005 F150 and told them with a straight face it going to cost them $1025 to replace their tires - then they hand you the keys, ask for an alignment and synthetic oil - you don’t know the feeling.

#3 The Undesirables – Have you ever really fired a customer? I did once. And I’m not stereotyping any one profession, but everything we did for this guy, even on his fleet of lawnmowers, we did at least twice. Nothing was ever good enough. The defining moment came when we stayed late to fix the inside dually because he had a bush to prune the next morning: He blamed the tires and me, it wasn’t our fault and it had been a long day already, he owed me $1500 from 3 months ago:

He said: “I don’t have my wallet”. I said “you’re fired”.

Just like that. Just like Donald. My employees thought I would never do it and I was a hero for a few seconds. It was cool.

150mph flat repair

Geo, our canteen truck dude, has a 2002 supercharged Escalade. We put Z-Rated tires on because he said does do 150 mph on his way to buy the beef & broccoli at BJ’s. So when he had a nail in a tire, we fixed it properly. Last month the same tire we fixed blew out “suddenly” on the highway, with wife and child in the car. His ego damaged because he had to call AAA to change his spare, Geo claimed defective tire and Yokohama promptly sent a plastic bag and took the tire back for inspection; he got letters from lawyers in California and estimates for damage to his truck.

Now I know Geo. I eat his beef and broccoli and this was clearly a case of something for nothing. And it was no surprise to me that the claim was denied because he hit something. And I was more than pleased to see that the repair we made was deemed not to be a contributing factor to the tire’s demise. (Although Yokohama did not blame the repair, they did point out that the speed rating of the tire is void once it has been repaired, but is ok for normal highway speeds and since Geo wouldn’t admit to going any faster than 65mph in his 700 horsepower SUV, we were off the hook).

If you are doing sub-standard tire repairs, do you think a tire company would hesitate to throw you under the bus because you made an improper repair on one of their products that a customer thinks is defective? I think not. So given the choice of losing money on doing a proper repair, or making money on an improper repair, which do you choose?

Parts Buying

Sourcing parts and getting a good deal for you and the customer is more important than ever. Plus, parts guys have got to be the most miserable SOB’s on the planet. The less I have to do with them the better. Robots can pick parts. Summoning pricing, even pictures, from your favorite parts stores, while you’re in your work-order, on-line and not on the telephone, is priceless. Most parts distributors have a way to do this and some will give you a discount for not bothering the guy at the counter!

Shop Supplies

5-8% of your labor sales across the board, including tire service. This is not pie-in-the-sky stuff and we do it every day. Customers appreciate that you’re not going to nickel and dime them to death by charging 50c for bead sealer, or $2.50 to clean their wheel flanges. Or “Would you like the good, better or best patch with your tire repair?” They appreciate that you’re not going to skimp on their vehicle after the price is quoted? I love shop supplies. Customers get great service and we get to buy new stuff.

#9

Try it without looking at the Answer.! Pick your Favourite No. from 1-9 Then Use that no.Multiply by 3. Then Add 3, then Again Multiply with 3 You'll get a 2 digit no. or a Three digit. Add the digits and it's a 9 every time.

Time

Entering this new era of business, it's important to look at some positives.

Employees appreciate their jobs. Now it's OK to ask them to go above and beyond, without the whining. Think of all those times when it wasn't a good time to ask a tech to leave, and you held your tongue. Guess what? Now it's your turn to demand impecable service or purple valve caps.
Whether they're 25 year veterans or new recruits, there's no room for sloppy work It's the meeting every owner needs with their employees right now.