Ratchet+Wrench - January 2024

01.24

STRATEGIES & INSPIRATION FOR AUTO CARE SUCCESS

DETAILS INSIDE PAGE 08

Next In Line A STEP-BY-STEP PLAN FOR SUCCESSION PAGE 20

SETTING THE RIGHT PAY PLAN PAGE 17

FIGURING OUT YOUR LABOR RATE PAGE 19

DIFFUSING SHOP CONFLICT PAGE 28

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JANUARY

01.24

VO LU M E 12 N U M B E R 01

06 EDITOR’S LETTER

Planning all the way to the end

08 BREAKDOWN

PHOTO BY JAKE HOLSCHUH PHOTOGRAPHY

How Automotive Aftermarket Charitable Foundation helps those in the industry and why

17

THE SOP

19

MEASURE, MANAGE & MASTER

What’s the Best and Most Effective Pay Plan for Technicians?

Calculating your labor rate K AT H L E E N C A L L A H A N

28 HUMAN RESOURCES

Navigating workplace conflict

30 CASE STUDY

Hiring a manager from outside the industry

F E AT U R E

P R O F I L E

20 HANDING OVER THE REINS

24 STAYING THE COURSE

What are the steps to a successful succession plan? Joe Marconi of Elite Worldwide and Al Oramas of Pro Auto Care in Denver, Colorado, lay the framework and show how shop owners can develop this important part of the business plan.

An auto technician and his family endure poverty, homelessness in pursuit of shop ownership.

BY CHRIS JONES

32 TOOLS & TECHNOLOGY

How shops can use online scheduling tools

34 THE 35,000-FOOT VIEW Do’s and don’ts of labor rates D U T C H S I LV E R S T E I N

BY ROB DE ARMOND

ON THE COVER: Al Oramas of Pro Auto Care developed a succession plan that turns his operation over to his children. Photographed by Jake Holschuh Photography.

Ratchet+Wrench (USPS 9957), (ISSN 2167-0056) is published monthly 12 times per year by Endeavor Business Media, LLC. 201 N Main St 5th Floor, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI, and additional mailing offices. POSTMASTER: Send address changes to Ratchet+Wrench, PO Box 3257, Northbrook, IL 60065-3257. SUBSCRIPTIONS: Publisher reserves the right to reject non-qualified subscriptions. Subscription prices: $90.00 per year (U.S.A. only). All subscriptions payable in U.S. funds. Send subscription inquiries to Ratchet+Wrench, PO Box 3257, Northbrook, IL 60065-3257. Customer service can be reached toll-free at 877-382-9187 or at ratchetwrench@omeda.com for magazine subscription assistance or questions.

Printed in the USA. Copyright 2024 Endeavor Business Media, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopies, recordings, or any information storage or retrieval system without permission from the publisher. Endeavor Business Media, LLC does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of whether such errors result from negligence, accident, or any other cause whatsoever. The views and opinions in the articles herein are not to be taken as official expressions of the publishers, unless so stated. The publishers do not warrant either expressly or by implication, the factual accuracy of the articles herein, nor do they so warrant any views or opinions by the authors of said articles.

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EDITOR'S LETTER

EXIT STRATEGY

When writing a business plan, don’t just plan how you’ll start, but consider how you’ll leave the business, too at the 2023 Ratchet+Wrench Management Conference in Aurora, Colorado. I was huddled in a semi-circle with some other shop owners at the opening networking social when Al introduced himself. As the conversation progressed, I mentioned having a story idea on succession planning in the pipeline. Al lit up, and he pulled his son into the conversation and told me he was in the midst of succession from his business—Pro Auto Care—and that his son would be one of his successors. After telling me more about his exit strategy, I asked him—and later Joe Marconi—to be a part of the feature story you’ll read this month, “How to Create and Execute a Succession Plan.”

Succession planning is right up there with developing a business plan and, according to the 2023 Ratchet+Wrench Industry Survey Report, approximately 81% of shop owners have one. Their one-two punch on this topic will give you the steps to take and the practicals to apply to help you be successful in planning this important aspect of your business and life.

This month also marks the launch of two new print columnists: Kathleen Callahan, owner of Xpertech Auto Repair, and R. “Dutch” Silverstein, owner of A&M Auto Service. Each brings decades of industry experience and both are straight shooters with an objective to elevate the profile of the auto care industry.

This month, each shares a perspective on labor rates—how to calculate them, variables to consider, and caveats to taking the wrong approach.

In inaugurating these new columnists, we say goodbye to our former columnists, Joe Marconi and Aaron Stokes. These two I

met

Al

Oramas

6 / R + W / 01. 24

have graciously poured their hearts and passion onto these pages each month for upwards of the last decade. I’ve enjoyed the candor and the thoughtfulness behind the messages they shared with you each month in their columns.

As we enter 2024, the overarching goal of this year is to get back to basics.

There are and will be a lot of new shops opening up and we want to be that first reliable resource they can count on for expert information to get them moving in a strong direction. So, if you’re a shop owner with something to share, let’s talk!

EDITORIAL EDITORIAL DIRECTOR Matt Hudson EDITOR Chris Jones ASSISTANT EDITOR Kacey Frederick CONTRIBUTING WRITERS Susan Smigelski Acker, Tess Owings, Rob DeArmond, Neil Pope EDITORIAL ADVISORY BOARD Tara Topel, Topel’s Towing and Repair Andrew Marcotte, American Pride Automotive J.J. Mont, J.J.’s Auto Service Rachel Spencer, Spencer’s Auto Repair Bruce Howes, Atlantic Motorcar Lucas Underwood, L&N Performance Auto Repair SALES ASSOCIATE PUBLISHER Andrew Johnson / ajohnson@endeavorb2b.com ASSOCIATE SALES DIRECTOR Mattie Gorman-Greuel / mgorman@endeavorb2b.com DIRECTOR OF BUSINESS DEVELOPMENT Cortni Jones / cjones@endeavorb2b.com ACCOUNT EXECUTIVES (NATIONAL ACCOUNTS) Diane Braden / dbraden@endeavorb2b.com Darrell Bruggink / dbruggink@endeavorb2b.com Marianne Dyal / mdyal@endeavorb2b.com Chad Hjellming / chjellming@endeavorb2b.com Lisa Mend / lmend@endeavorb2b.com Martha Severson / mseverson@endeavorb2b.com Kyle Shaw / kshaw@endeavorb2b.com Sean Thornton / sthornton@endeavorb2b.com ADMINISTRATIVE ASSISTANT Ryan McCanna ART AND PRODUCTION ART DIRECTOR Emme Osmonson PRODUCTION MANAGER Mariah Straub AD SERVICES MANAGER Jen George ENDEAVOR BUSINESS MEDIA, LLC CEO Chris Ferrell PRESIDENT June Griffin COO Patrick Rains CRO Reggie Lawrence CHIEF DIGITAL OFFICER Jacquie Niemiec CHIEF ADMINISTRATIVE AND LEGAL OFFICER Tracy Kane EVP ENDEAVOR BUSINESS INTELLIGENCE Paul Mattioli EVP TRANSPORTATION Kylie Hirko VICE PRESIDENT - VEHICLE REPAIR GROUP Chris Messer

CHRIS JONES, EDITOR CHRISTOPHERJ@ENDEAVORB2B.COM

HOW TO REACH US ENDEAVOR BUSINESS MEDIA 571 Snelling Avenue North, St. Paul, MN 55104 tel 651.224.6207 fax 651.224.6212 web endeavorbusinessmedia.com LETTERS TO THE EDITOR editor@ratchetandwrench.com Opinions expressed in Ratchet+Wrench are not necessarily those of Endeavor Business Media, and Endeavor Business Media does not accept responsibility for advertising content.

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01. 24 / R + W / 7

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JUMP START

N E WS I D E AS PEO PLE TRENDS

AACF: LENDING A HAND TO THE AUTO CARE INDUSTRY

The Automotive Aftermarket Charitable Foundation helps those in the auto care industry who are struggling

BY KACEY FREDERICK

For many in the auto care industry, their

careers have grown from passion and dedication into lasting success, but life events– such as illnesses and natural disasters–can destroy years’ worth of work in only a fraction of the time it took to build.

Many in the industry have found themselves in this situation, and it can affect not only them but families and local communities as well.

In a time when talent is needed in the aftermarket field more than ever, Automotive Aftermarket Charitable Foundation (AACF) Executive Director Joel Ayres wants to reach as many people as possible to help those in need recover from tragedy and to empower the industry.

8 / R + W / 01. 24

Helping Families and Communities

From an individual technician struggling with illness to a family-owned shop ravaged by a natural disaster, AACF handles a broad range of situations and issues, each with its own solution.

The main requirement to qualify for help from AACF is that an individual must be employed with an aftermarket business for at least a year or have worked three continuous years for various aftermarket businesses.

In the case of natural disasters, AACF can provide those in the industry with food, shelter, and other necessities needed until they can get back on their feet.

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J U M P S TA R T / B R E A K D O W N

“After the hurricanes and the floods in Texas, Louisiana, and Florida, we had people that were sleeping in their car, their business was wiped out, their homes were wiped out, and they lost everything,” Ayres recounts. “So, we were able to–in that case– able to get some of those people into hotels.”

Oftentimes, it is not the individual themselves receiving the help, but their family members.

Having a background working with children’s charities, the cases involving kids have been especially memorable for Ayres. In the past, the organization has given support to children of those in the industry, such as providing a service dog for an autistic child who kept escaping from home or supplying funds for parents to enjoy the time they have left with their severely ill child.

AACF has always had a focus on helping families in the industry, such as covering bills or funeral expenses for those suffering a recent loss. It’s how the organization first began 63 years ago when the spouse of someone in the industry was struggling with a severe illness.

The couple had spent all their resources and were struggling. Friends and colleagues came together to support the couple by raising money, and before long, the group expanded its support to others in need and established itself as AACF.

The Industry’s Best-Kept Secret

Since then, not much about AACF’s goals has changed: the organization is here to help anyone in the industry dealing with circumstances beyond their control.

What has changed is its capability to help even more, which is why outreach has been one of its biggest priorities.

AACF’s biggest fundraiser is its golf tournament, held every year the day before SEMA and AAPEX kick-off, and it recently celebrated its 30th anniversary.

In its first year, it raised around $5,000.

Three decades later, the event sells out each year, hosting over 200 golfers and raising 10 times the amount it did its first year.

The golf fundraiser is only a glimpse of AACF’s growth. In the past ten years, the organization has donated over $5 mil-

lion in support to those in the industry and their families and is eager to help more. The problem is that many people are unaware that help is there for them and are unable to find it on their own.

“It was kind of a cruel joke that we were the best-kept secret in the industry. We didn’t plan on it being that way,” Ayres says.

Many people who require assistance don’t want to have their struggles made public, which is why AACF has committed to maintaining anonymity unless given explicit permission to share someone’s story. The organization has other ways of promoting the work it does.

Though AACF has grown tremendously since its inception, it still doesn’t have the resources of bigger groups such as the United Way or Red Cross. It relies on mostly volunteers for outreach, with Ayres himself speaking at the recent Ratchet+Wrench Management Conference to make more in the industry aware of the available help.

There are things shops can do to help promote AACF’s work and help any of its staff who may need help. The organization

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3,500+ ATTENDEES

43+ STATES

PHOTO COURTESY OF AACF

has a program that supplies shops with promotional materials such as posters and boilerplate messages to be displayed throughout work areas.

Businesses looking to support AACF financially can make donations or can even host fundraising efforts within the company such as matching donation funds made by employees.

When it feels as though everything is lost, it can be difficult to recover from.

AACF’s work in lifting those who have been hit by tragedy not only helps them and their families but also makes the industry as a whole stronger when people know that no matter what happens to them, they aren’t alone.

“If I could see anything under my term here, (it) would be that we can increase the number of people we’re helping– because that’s what we want, that’s what we’re here for,” Ayres says. “I spent my whole career in sales and marketing. Instead of taking people’s money, now I get to give it away.

It’s a great way to wake up every morning and know that’s what you’re doing for your job.”

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J U M P S TA R T / S P E E D R E A D

Aftermarket Auto Parts Alliance Appoints New President The Aftermarket Auto Parts Alliance, Inc.’s Board of Directors has announced JC Washbish as president, according to a press release.

As of January 1, 2024, Washbish will oversee the Alliance Headquarters office, its executive staff, and Alliance shareholder membership. He will work alongside the Alliance Board of Directors on matters regarding organizational directives, business development, and industry relations.

Company departments–including information technology, sales and marketing, category management, and finance–and their executive leadership will report to Washbish, who in turn will be reporting to CEO John R. Washbish as well as the company’s board of directors.

Before becoming president, Washbish started with the company in 2016 as a sales, marketing, and brand manager. He was promoted to director of marketing in 2017, followed by a promotion to vice president of sales and marketing in 2019.

Before joining Alliance, Washbish worked as an account executive for Niterra North America, Inc. He holds an AAP designation from the University of the Aftermarket and graduated from its Leadership 2.0 program.

“The Alliance Board of Directors has always been very strategic about the long-term future of the Alliance and the continued success of its shareholders,” said Corey Bartlett, treasurer of the Alliance Board of Directors and CEO of Automotive Parts Headquarters, Inc. “This strategic focus on the future of the Alliance led us to JC eight years ago.”

Advance Auto Parts Names Shane O’Kelly New President, CEO; Tony Iskander, Interim CFO The board of directors at Advance Auto Parts has named Shane O’Kelly as president and CEO, effective on Sept. 11, according to a press release. O’Kelly will also join the board of directors on that date.

O’Kelly, 54, has more than 40 years of professional experience. Most recently, he was CEO of HD Supply, a subsidiary of Home Depot. Prior to that, he was the 12 / R + W / 01. 24

CEO of PetroChoice, the country’s largest distributor of lubricants, the press release says. Before that, he was CEO of AH Harris, a construction supply distributor.

O’Kelly also served as a U.S. Army captain and has an MBA from Harvard Business School, as well as a bachelor’s degree from the U.S. Military Academy at West Point.

“I am honored to be joining Advance at such an important inflection point for the company,” O’Kelly said in the release. “I have great respect for the talented team members at Advance and all that has been accomplished, including the team’s relentless focus on delivering for customers while navigating the challenging competitive and macroeconomic environment.

As we undertake an operational and strategic review of the business, I look forward to working alongside the entire Advance team and our board of directors to drive growth, operational excellence and value for all stakeholders.”

O’Kelly succeeds Tom Greco, who was CEO at Advance since 2016. Greco will retire but stay on as an advisor during the transition.

Additionally, Advance announced Tony Iskander as interim chief financial officer, succeeding Jeff Shepherd. A search is under way for the next permanent CFO.

White House Backs Standardization of Tesla Chargers The Biden Administration is supporting a move to standardize the Tesla fast charger for electric vehicles nationwide.

A statement from the U.S. Joint Office of Energy and Transportation said that a move toward standardization “ensures that any vehicle or charging equipment supplier or manufacturer will be able to use, manufacture, or deploy the connector and expands charging access for current and future EV drivers across the country,” according to The Associated Press.

SAE International has already confirmed the Tesla North American Charging Standard connector, or NACS. This is a move toward using the connector style for all EVs. Ford and General Motors have committed to providing adapters for EVs that use a different connector standard, The AP reports. Automakers will likely begin

equipping new vehicles with the NACS standard by 2025.

The Lift Garage Secures $4,000 Grant The Lift Garage, a Minneapolis-based nonprofit auto repair shop, has been recently recognized for its work within the community through a $4,000 grant from the TEGNA Foundation. The shop, also celebrating its 10th year in operation, aims to provide low-income Minnesotans who cannot afford reliable transportation or auto repair with feasible options to get or keep them on the road. .

“Our whole perspective, our whole approach is to try to think about our work as building community with our customers, creating a safe community outside of this place,” Cathy Heying, founder and executive director of The Lift Garage explained to KARE 11-Minneapolis. “We are not just fixing these cars for our customers; we are all driving on those roads with unsafe cars that nobody can afford to fix.”

According to its website, The TENGA Foundation “is a corporate foundation sponsored by TEGNA Inc. ... (and) serves the greater good of our communities by supporting nonprofit activities where TEGNA does business.”

AutoVitals Releases Improvements to Shop Management Products AutoVitals has announced updates to the home page of the Repair Order Tiles and Today Vehicle Page within its inspection and workflow management products, according to a news release.

The Repair Order Tile is now customizable, allowing shops to prioritize the home screen to display the most relevant information for business operations. The Repair Order Tile also displays the promised time assigned to each vehicle, with the ability to display flashing red warnings if the promised time has passed.

A progress bar showing the current progress made on an inspection is now available, as well as information on when customers have opened an inspection and the amount of time they have spent looking over recommendations from the shop.

Front-of-house staff now can see how

many of the total labor lines have been completed on each open repair order, as well as how many billed hours remain.

Vehicles that are currently being worked on will be represented by highlighted Repair Order Tiles, allowing staff to check which vehicles are in bays and which ones are still waiting on inspection, parts, or service.

“I am excited to launch this new design for AutoVitals’ home page, the TVP, and RO Tile because it brings a more modern design and simplifies the user experience while maintaining the valuable functionality that our clients, small business owners across the country, use every day to drive their business,” said Robert Allen, AutoVitals’ director of product.

Leads Near Me Named to the Inc. 2023 Best in Business List in Advertising and Marketing Atlanta-based automotive marketing agency Leads Near Me has been named to the Inc. 2023 Best in Business list in the advertising and Marketing category, according to a press release. Inc.’s Best in Business Awards honor companies that have made an extraordinary impact in their fields and on society.

“This recognition represents a team effort where my staff goes above and beyond for auto repair shop owners and their employees every day,” said Ryan Burton, CEO of Leads Near Me. “And I appreciate those shop owners continuing to place their trust in us to help us grow their businesses and become effective lead-generating, relationship-building businesses that keep customers coming back.”

The issue, available on Dec. 12, features a complete list of companies across the nation of all sizes and industries in 70 categories demonstrating an outstanding influence on their communities, their industries, the environment or society as a whole “Being named to the Best in Business list is a rare and special honor. These honorees demonstrate the foresight, caring and dedication to prioritize positive impact—impact on their community, on their industry and the environment, and even on society as a whole,” said Eric Hagerman, special projects editor at Inc.

Honorees for general excellence across various industries and categories are featured online at inc.com/ best-in-business.

Repairify Receives ASE Accreditation in Training Automotive Technicians Repairify has received ASE accreditation for online and in-person training, according to a press release.

After reviewing and testing Repairify’s curriculum design, processes, and methods for training over several months, ASE has designated the organization as a provider of “Continuing Automotive Service Education,” of which fewer than 50 institutions have been granted.

Now having ASE accreditation, students who complete Repairify courses can receive credit towards I-CAR certifications in the same manner they would as if they completed an I-CAR course at the technical center in Chicago.

Repairify will hold its first I-CAR alliance course at the new Repairify Institute Center of Excellence in Dallas-Fort Worth, consisting of a four-day hands-on ADAS Calibration training series.

“It’s no secret that the technician shortage is heavily affecting our industry,” said Repairify VP of Training Chris Chesney.

“This accreditation, along with the opening of the Repairify Institute, will mean substantially more opportunities for technicians to receive best-in-class training to help bolster the auto repair industry.”

Family Receives Help From Automotive Aftermarket Charitable Foundation After Losing Home Automotive Aftermarket Charitable Foundation (AACF) has stepped in to help an individual in the industry recover after losing his home to a fire, according to a news release.

Just a few days after Thanksgiving, Interstate Batteries employee Stefan Gonzalez woke up to his home in Sacramento, California, engulfed in flames.

Though he, his mother, and his grandmother were all safe, their house was destroyed after the incident.

Following the loss of his home, Gonzalez turned to AACF, an

organization providing help to those in the aftermarket industry facing emergencies, family needs, natural disasters, illness, and hardships.

Three days later, AACF Executive Director Joel Ayres delivered a check to Gonzalez to provide him with the help his family needed.

Gonzalez’s employer is a member of AACF’s free Employee Assistance Partner Program, which provides companies with informative materials on the help offered

by AACF to give to its employees.

This is Gonzalez he was introduced to AACF, which connected him to the support he needed during this time and serves as a reminder for employers to let their staff know what resources are there for them.

Major Automakers Urge U.S. Government to Reconsider Proposed Electric Vehicle Rules The Alliance for Automotive Innovation is pressuring the Biden administration to reconsider its proposed emissions rules in fear that halting gas-powered vehicle production too soon could have negative repercussions, Reuters reports.

The proposed rules in question would require 67% of new vehicles to be electric by 2032, though finalized rules will not be released until early next year.

The Alliance–which represents General Motors, Toyota Motor, Volkswagen, Ford Motor, Stellantis, and other major automakers–sent a letter to three cabinet agencies and the White House about the rules.

The document asserted that the proposed regulations would force automakers to abandon internal combustion vehicles too early, resulting in a loss of revenue, and consequently, the funds needed for an EV transition.

Alliance for Automotive Innovation CEO John Bozzella, who signed the letter, cited “overlapping, duplicative and sometimes conflicting objectives” within the proposed rules, and argued that it would ultimately hinder the White House’s goal of 50% EV sales by 2030.

Automakers have been voicing concern over the proposed regulations since they were first unveiled, such as a potential $14 billion in Corporate Average Fuel Economy (CAFE) fines that could occur as a result.

01. 24 / R + W / 13

J U M P S TA R T / S P E E D R E A D

In addition to the letter, the Alliance held a meeting with EPA Administrator Michael Regan on Nov. 29, and last week, GM CEO Mary Barra met with White House Chief of Staff Jeff Zients and environmental adviser Ali Zaidi to discuss vehicle regulations and other issues.

Subaru, and Mazda. These figures are for U.S. auto sales.

Cox expects sales success to continue in 2024, though its press release says that it may look more like a buyer’s market than a seller’s market in the coming year.

New Car Sales End Year on a High

2023 Saw High Number of Recalls from Ford

The best-selling vehicle in the United States continues to be the Ford F-150.

According to Cox Automotive research, new car sales in 2023 will top 15.5 million units, up 11 percent from 2022 but down from a peak in 2019.

According to a press release, most OEMs expect improvements in their sales for 2023 by year’s end. The only exception might be Stellantis. General Motors, Toyota, and Ford are the top-selling brands this year. Tesla is the notable EV company, coming in with fewer sales than the likes of Hyundai, Stellantis, and Nissan but beating out companies like VW,

Ford has recalled a large number of vehicles this year; though some claim that it may a good sign, Autoblog reports.

This year, Ford issued 54 recalls affecting 5,692,135 vehicles. Prior to a recent Honda recall for 2.5 million Hondas and Acuras this past week–putting them at a total of 6.3 million recalled vehicles this year–Ford had the highest total of recalled vehicles, coming out to more than double the total of Stellantis, who followed behind Ford.

Though General Motors did recall more vehicles, it was spread throughout

different companies within GM’s portfolio.

Honda’s recent recall this week was the single largest recall issued this year, while Tesla notably issued a massive recall for over 2 million of its vehicles due to issues with its Autopilot feature.

While most automakers issued recalls for issues related to electrical systems, Ford’s recalls predominantly involved powertrain issues.

Though the number of recalls for Ford is large–and is an increase from 2021, which saw 53 recalls covering 5.4 million vehicles–it is an improvement from this time last year. In 2022, Ford issued 68 recalls that affected over 8.7 million vehicles.

An industry expert who recently spoke with Automotive News remarked that the high number of recalls is not necessarily negative, in that it displays an effort to address every issue, no matter how minor.

Regardless, Ford is making an effort to reduce the number of recalls, such as improving its manufacturing procedures and implementing additional quality control practices.

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By An dy Bald ass arre, D irecto r of M arket i ng and Trai ni ng As an Independent Shop Owner or Service Manager, it’s your responsibility to make sure your shop succeeds in customer retention and shop profitability. If your shop is surviving instead of thriving, it’s time to ask yourself:

“Do my staff members have the tools they need to be successful? Or am I missing the opportunity to provide the training they need and deserve?”

If you want to boost the knowledge and confidence of your service advisors and technicians, you must provide regular training for each member of your team. This training can take many forms, from classroom instruction to on-the-job training to digital online courses. Whatever the format, the goal is the same; give your team the skills and knowledge they need to excel in their roles.

Here are some of the key benefits of role-specific training for technicians and service advisors.

Improved Efficiency and Productivity

Investing in training is a crucial step for any independent shop looking to improve its efficiency and productivity. Provide service advisors with the knowledge and confidence to engage customers and make the sale, and train technicians on the latest diagnostic tools and repair techniques.

Together, increased efficiency and productivity means: • Improved workflow: Training can help streamline your shop’s workflow, from initial customer contact to final repair and payment.

• Faster turnaround times: Well-trained technicians can complete repairs quickly, allowing you to serve more customers.

• Reduced comebacks: Proper training can ensure that repairs are done correctly the first time, reducing the likelihood of customers returning for the same issue.

• Increased profitability: Well-trained employees not only complete tasks efficiently, they can also complete more tasks throughout each work day, which will ultimately lead to increased profitability for your business.

Increased Customer Satisfaction

When your service advisors and technicians are well-trained, they can provide exceptional service to your customers, resulting in higher satisfaction ratings and increased loyalty.

Role-specific training leads to: • Improved communication: With proper training, your service advisors and technicians can communicate more effectively with customers, explaining repairs and recommendations with confidence and clarity.

• Enhanced trust: By providing excellent service and demonstrating expertise, your team can build trust with your customers, leading to increased loyalty and repeat business.

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•

Higher satisfaction ratings: When your customers receive exceptional service, they are more likely to rate their experience highly, resulting in higher satisfaction ratings and positive reviews that can help attract new customers.

Ensured Safety and Compliance

In many industries, it is essential to provide role-specific training for your team to ensure compliance and safety. For instance, in the automotive industry, safety and environmental regulations must be followed when diagnosing and repairing vehicles.

Improved compliance in your shop will: • Avoid costly fines and legal issues: Role-specific training ensures that they are up to date on the latest regulations and standards, helping you avoid costly fines and legal issues.

• Build a positive reputation: Compliance with regulations and safety standards builds a positive reputation for your business, leading to increased customer trust and loyalty.

• Create a safer workplace: Proper training can reduce accidents and injuries, creating a safer workplace for your team and customers.

Reduced Employee Turnover

Investing in training shows your team that you value their contributions and are committed to their professional development. It not only benefits your team members by providing them with valuable skills and knowledge, but also contributes to your business success.

Role-specific training means: • Happier employees: When your team feels valued and that you are committed to their success, they will have increased job satisfaction and loyalty. This reduces employee turnover and saves you time and money on recruiting and training new hires.

• Empowered workforce: By providing your team with ongoing training, your staff can acquire the necessary skills, knowledge, and confidence to dramatically improve their job performance. Ultimately, this leads to personal and professional growth, increased self-esteem, and a sense of ownership and responsibility.

Role-specific training for service advisors and technicians is an invaluable investment for any independent shop owner or service manager. By improving customer satisfaction, increasing efficiency and productivity, reducing employee turnover, ensuring compliance with regulations and standards, and improving profitability, role-specific training can help your business thrive in a competitive industry. So take the time to invest in your team and watch your business grow.

Andy Baldassarre leads the marketing and training departments for BG Products, Inc. He has more than 23 years of experience in the automotive industry with an emphasis on adult learning in the automotive workplace.

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FG TRADE / E+ / GETTY IMAGES

J U M P S TA R T / N U M B E R S

WHAT ARE YOU WORKING ON? Insight into the types of vehicles repaired by the average mechanical repair shop

BY CHRIS JONES

16% EV REPAIR

Auto repair shops come in all shapes, sizes, and specialties. Independent shop

16%

owners taking the 2023 Ratchet+Wrench Industry Survey reported an annual revenue between $1 million and $2.5 million.

Below are the types of shops these operators run.

27% TRANSMISSION REPAIR 27% 30% HYBRID REPAIR

Note: Respondents were asked to choose ‘all that apply.’

30% 32% DIESEL REPAIR 32% 76% IMPORT REPAIR 76% 80% DOMESTIC REPAIR 80%

80

70

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60

50

40

30

20

10

0

J U M P S TA R T / S O P

The SOP: What’s the Best and Most Effective Pay Plan for Technicians?

Without a good pay plan, auto repair shop owners may find it difficult to hire and retain technicians

BY CHRIS JONES AND CECIL BULLARD

Cecil Bullard is the founder and CEO of The Institute for Automotive Business Excellence in Ogden, Utah. A veteran in the auto care industry, Bullard has run many successful shops and now lends his expertise to helping other shops succeed.

Ratchet+Wrench spoke to Bullard to find out how fledgling auto repair shop owners—those in operation for less than two years—should approach creating and implementing pay plans for their automotive technicians.

As told to Chris Jones

In Bullard’s experience, the best pay plan for shops is a performance-enhanced plan with a base and bonus structure. Before you start, it’s important to understand what you can afford to pay and what the employee needs to do to earn that pay.

Once you understand that, you take 60% of the available pay and give it to your technician as a base, hourly/salary. You should then build 40% of the available pay for the position into a bonus structure for achieving the specific goals and for doing the job you want them to do. It also helps to have a good job description so everyone understands what they’re supposed to do.

You’ll need to determine what you want from a tech. I want a certain number of hours, a high quality of work, and I want my tech to be educated and have whatever certifications they can to prove that they know what they’re doing. If that’s what I need from a tech, then the bonus is going to be structured around those three things.

And the more hours they produce the more money I can pay them. You should then meet with them about the goals for the position and get their agreement.

It used to be we had hourly and flat rate. Flat rate puts the burden on the employee and hourly puts the burden on the shop. Hourly rarely motivates. Hourly says, “It doesn’t matter what I do, I still get paid.” Flat rate can be a motivator for some people, but it’s also can be a demotivator; it demoralizes some. Some coaches talk about lowering the tech’s pay or putting them on a flat rate so that when they’re not performing, it doesn’t cost the shop, but now you have underpaid people who are underperforming and unhappy. It’s just not a good pay system and in some States, it won’t meet their minimum standards.

THE NUMBERS For the shop to be profitable, if I’m paying a base pay, there’s a minimum number of hours produced. If you look at paying 40% of your effective labor rate, let’s say your effective labor rate is $120, which will leave $48 an hour to pay your technician.

I would take the benefit costs out, around $8 an hour, and have $40 an hour to work with. I would give the tech $28 or $30 an hour as a base hourly pay, and then build a $12 to $14 an hour bonus structure, based on the performance I want.

THE CAVEAT FOR NEWER SHOPS Paying techs gets easier when you have a consistent enough business where a technician can do at least 40 hours a week. Brand-new shops should be careful. You’ve got to build car count, average repair order, and may have a tech you’re paying a base salary of X ($1,000 a week) for three, four, or even six months before you get to the point where you can really afford the bonus. If you haven’t built the clientele to stay consistent, you’re most likely to pay a guarantee and lose money on that technician to start. You also need to pay a competitive rate because you need a good tech. If you can’t pay a competitive rate, you’re unlikely to get a good tech and you’re likely to struggle with quality of work issues and comebacks.

Now, let’s say the average shop in the United States is $130 an hour. I can afford to pay 40% of that out to a technician, but I’m a new shop starting out.

You may not be hiring a super-tech or you might be that tech, so you may not be paying $40 an hour. You might start a b-tech out at $30 an hour and guarantee them 40 hours ($1,200 bucks a week) no matter what they produce. Hopefully, at

some point, they will be doing 40 hours or more. You can then look back and say, ‘I’m not going to raise your base rate from $30 an hour, I’m going to take the guarantee away and the $30 an hour is going to come to you because you were here for 40 hours. So, you’re still making $1,200 but now there is a bonus structure on top of that that has to do with your productivity, your education, and your lack of comebacks where I will pay you another $12 an hour because when you’re producing 40 hours. I’m making enough money, and I can do that.

There are some important rules around pay plans to keep in mind. First, never pay something to somebody that they have no control over. (You don’t want to pay a tech based on margin because they don’t control margin). Second, if you’re going to put a bonus structure in place, make sure they can earn it. If you have only 30 hours a week in your shop and you put a bonus structure starting at 40 hours, your techs will say, “Wait a minute. There are only 30 available hours, and you’re telling me I get a bonus if I get 40? I can never earn it.” If you put a carrot in front of them that they can’t get, it’s frustrating. Third, make sure the bonus is enough to motivate behavior. You can’t have a $1 an hour bonus because if I’m a good tech and I’m putting out 50 hours and you say I’m going to give you an extra dollar an hour at 50 hours, it’s not enough to motivate me.

But if you say you’ll get another $10 an hour at 50 hours, that will motivate me.

Next, you must have a good reporting system that documents and displays what they’re doing. If my technician’s bonus is based on hours produced, on Wednesday they need to know how many hours they’ve produced so that by Friday they can earn their bonus.

Don’t overcomplicate your pay plan, keep it simple. Make sure you have a system of documenting what’s going on that you and the employee can see. You don’t want it to be a surprise for them on Friday when they don’t get their bonus.

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MEASURE, MANAGE & MASTER

THE MATH BEHIND YOUR LABOR RATE A common-sense approach to evaluating and raising your rate

BY K AT H L E E N CA L L A H A N

We often hear, “Raise your labor rate,”

yet owners resist this and respond with excuses about our “unique” market being unable to support the higher charge. Says who? Do you have proof, or is that your mind’s itty bitty snitty committee talking because you don’t value your and your staff ’s talent? That self-doubt stops today!

REVIEWING YOUR LABOR RATE First, schedule 30 minutes a week to work on your business (that’s six minutes a day for a 5-day work week). No distractions or interruptions. Set a timer to lessen the anxiety you’ll feel when you think about locking yourself away for that long. Fire, flood, or blood are the only reasons to interrupt this scheduled time. Your business will survive. Seriously. If you’re a solo shop, you may schedule time outside your regular business hours. You can find time.

What will you do with this time? I’m glad you asked! Let’s take a close look at your labor rate!

Many repair shops calculate their posted labor rate by guessing. What?

Let’s fix that. Restaurants often price their menu by ensuring food costs hover at 30%. Let’s try that for your labor rate.

(If you’re hourly, find your billed hour rate by dividing what you paid by the number of hours produced in that period.)

At Wilson’s Auto, technician Nancy makes $35 per hour. The loaded cost is $49 (Using a 1.4 factor to cover taxes, insurance, etc.).

Service advisor Ann, who serves three technicians, makes $30 per hour, or $42 loaded.

Nancy’s $49 + 1/3 of Ann’s pay of $14, rounded up for simplicity = $63.

One billed hour costs $63 without utilities, rent, technology fees, fixed expenses, and your pay. Using the restaurant method (Cost/GP% = Rate), your effective labor rate (ELR) needs to be $210 ($63/0.3 = $210). Assuming you’re a rockstar operator and collect 90% of your door rate, your posted labor rate must be $233.33.

I can hear you shouting, “What?

There’s no way!” I was not too fond of it either. But the math doesn’t lie.

Other nerdy math facts. If labor rates were $25 per hour in 1968, and we increased them an average of 4.5% per year, our labor rate would be $281.41! On a 1968 vehicle, not a 2023 that requires more training, tooling, and software.

INCREASE YOUR LABOR RATE GRADUALLY You cannot walk in tomorrow and add $75 to your labor rate. That’s a giant shock. You can add $5 to $10 per hour every quarter until you’re at the right price. Likely, nobody notices the change.

Consumers don’t ask what your labor rate is unless they don’t feel the value of your service. In the absence of value, there is only price.

Charging what you’re worth takes more than raising the price. It requires working on the customer’s perception of the service they will receive. If the exterior of your shop looks like an episode of “Sanford & Son” or your waiting room makes people worry about touching anything, you were correct; you cannot charge that. Your client needs to feel the value of your expertise because you are an expert. Raising perceived value will often require tidying up, perhaps new uniforms.

You are blind to your mess. Look at what high-end dealerships offer for their customer experience. Ask your brutally honest friend or coach. Send pictures to your peer group. Heck, ask me. I want you to be successful. I want to see all of you at conferences and training classes because you and your staff are worth it. Once you raise your prices, the shops around you will too! Thanks for raising the industry!

P.S. You will lose customers when you charge what you’re worth. It’s OK. The ones who stay will tell their friends how much they appreciate your expertise and top-notch service. Giving cookies helps with that.

Kathleen Callahan has owned Florida’s Xpertech Auto Repair for 20 years.

In 2020, she joined Repair Shop of Tomorrow as a coach to pursue her passion for developing people and creating thriving shop cultures. Callahan is the 2018 Women in Auto Care Shop Owner of the Year, nationally recognized by AAA for three consecutive years, testified for Right to Repair on Capitol Hill, and is Vice Chair of Women in Auto Care. kathleencallahanfl@gmail.com

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F E AT U R E

How to Create and Execute a Succession Plan What auto repair shop owners need to know about mapping out the life of their business

BY CHRIS JONES

Benjamin Franklin famously said, “If you

fail to plan, you are planning to fail.” For auto repair shop owners, it’s not enough to have a business plan focused on operations, growth, and income goals. One major component often missing is the exit strategy—how will you get out of the business when the time comes? Yes, shop owner, there will come a day when you’re not a 20or 30-something-year-old operator and you want to be prepared when that day comes.

While succession planning sounds as morbid to many as writing a will or signing an advance directive, the importance is the same—knowing who will take the reigns of your shop when you decide to walk away.

Al Oramus of Pro Auto Care, with locations in Denver and Littleton, Colorado, opened his first shop in 1992. For many years, he wore all the hats before developing his team, which encompasses 24 employees, including his adult children. Similar to other shop owners, his focus was on growth and sustainability until one day when he asked himself at what point he wanted to transition out of the business.

Oramas took a hard look at his business.

He observed the people in his charge from his managers to those who showed interest in his business. That’s when he realized the answer was closer than he thought—his

2 0 / R + W / 01. 24

children. Oramas has four kids—two boys, two girls—and all four were in the business.

“The four of them took on different roles within the company and grew those particular roles. So, that to me was probably as interesting a piece as anything because I cannot tell you how many owners of businesses, whether automotive or otherwise, (whose) kids want absolutely nothing to do with their business,” Oramas says.

He used the opportunity to allow his kids to test the waters with various roles within the shop to find their place of interest. For one daughter, he tried her hand at an administrative role but discovered she excelled at marketing where she’s now the director of marketing and customer service.

Both sons worked in the shop, but one of his sons wanted a more formal role, so he completed automotive school, earned his ASE accreditations, worked as a technician for a while before becoming a service advisor.

“That’s been a big piece for me, to always be able to be flexible enough to allow people to step in, grow, and try different things and guide them through the process,” Oramas says. “These are my kids, obviously, but I’ve done that with my employees as well.”

Though Oramas began his succession plan in 2018, he says the thought preceded the plan. In other words, the roadmap to succession was marinating for him mentally and when the opportunity to execute it became apparent, he seized it.

There are five steps to creating a successful succession plan, says Joe Marconi, executive council member and coach with Elite Worldwide. They are 1) Create a LongTerm Plan, 2) Assemble a Team of Advisors, 3) Create a Plan for the Growth of Your Business, 4) Decide Who You Want to Sell To, and 5) Prepare for Life’s Curveballs.

Step 1: Create a Long-Term Plan

Marconi says creating a long-term plan comes down to getting your thoughts onto paper—“kind of a wish list,” as he describes it—of what you want your life to look like over the next 40 years. While your goals may change down the road, knowing what you want and expressing it is paramount to creating your plan.

“It’s very difficult for a young person at 25 or 30 years old, to think in terms of where am I going to be at age 65,” Marconi says. “Early on in my career, I had no desire to grow, (but) then all of a sudden, I wanted to move my business from a four-bay origi-

nal to an 11-bay and then multiple locations.

So, put a plan in place mapping out your five-year vision, your 10-year vision, and your long-term 25-to-35-year vision, knowing that it will change.”

Before Oramas began his succession plan, he first wanted to get some of the stumbling blocks out of the way. He paid off his debt, cleaned up his books, and remodeled his shop. Then he took account of his successors and what their potential fit in the business may look like.

“My successors are essentially my four kids, and each wants a different capacity in the business. There are those who are going to work on a day-to-day, and there are those who are looking to just have an interest in the business, mind you that may change.

They may want to stake in a daily basis in the business, I understand that,” says Aramas. “So, I set for myself a 1,3,5 (year) plan.

It’s how my succession plan works. I’m essentially in year No. 2 right now.”

Step 2: Assemble a Team of Advisors

With a plan in place, shop owners should seek wise counsel in the form of financial

and legal professionals. According to Marconi, a certified public accountant (CPA) will help the shop stay within the good graces of the IRS while serving as a topnotch tax strategist to ensure that shop owners aren’t overpaying in taxes.

“Many shop owners, believe it or not, don’t understand how the numbers work and sometimes they end up paying too much in taxes because they don’t understand how to work the business in a way where they’re maximizing profits and minimizing their tax liabilities,” Marconi says.

“A good accountant or CPA … (will) show that you’re paying only your fair share of taxes. No more, no less.”

Oramas’s CPA met with him to review the financials and go over tax impact, stock, business structure options, and transfer of ownership protocol.

Having an attorney on speed dial helps shop owners when legal questions and hurdles present. Marconi says a knowledgeable attorney is essential for discussing shop growth and expansions (if that’s within your long-range plan) how to purchase property, navigate zoning laws as well as local and state regulations.

01. 24 / R + W / 21

F E AT U R E

“An attorney who has proficiency in these areas is critical when you’re talking about future growth, how to expand, and the end game, plus your attorney can also help you with the will, with the estate planning, they work in conjunction with (your) financial advisor,” Marconi says.

As Oramas executed his succession plan, his attorney was instrumental in helping him and his family legally put the legs under their strategy. Oramas has worked with his attorney for many years and says because of that history, his counsel is better able to look after his best interest in this critical phase of ownership.

“Last year when we said, ‘Hey, it’s time to roll and make this thing happen’ there was a meeting where we sat down with all the kids, and my wife, and myself, and him just talking about what the steps were going to look like—the language, the docu-

2 2 / R + W / 01. 24

ments, the agreements, the stock, the voting shares, the non-voting shares, all of these things,” says Oramas.

The financial advisor ensures that the future you desire is fully funded while ensuring that the decisions you make today don’t jeopardize the lifestyle you want tomorrow. You may marry, have children, and eventually retire. The financial advisor ensures your money is properly allocated to meet the needs of those seasons of life.

“The financial advisor has been somebody we’ve been working with for north of 18 years and has worked on what matters to Al and Jessica (Oramas's wife) … and he’s been able to give us some strategies, been involved in looking at the bank deals, the refi, the purchase of land,” Oramas says.

“He’s allowed us to put away (money) and have buckets saved.”

Having these and other key advisors in

place—such as a business broker and real estate broker for growth and expansion-related deals and transactions—ensures that shop owners have the right people in their ears when key decisions need to be made.

Step 3: Create a Plan for the Growth of Your Business

Accurate numbers are at the crux of any successful succession plan. Marconi says shop owners must have a firm understanding of the data that drive their businesses.

Clean financials, a strong balance sheet, and the ability to show consistent an increase in profit and sales over time—a five-year period, 10-year period, or 20-year period. Understanding your shop’s break-even point and net profit is also part of this equation.

“They need to establish those goals early on, and then map out (a) plan. What does

it look like in the long term—three years, five years, 10 years, 20 years, 30 years? Can I achieve these goals? Do I need to readjust these goals in five years? And then take it from there. But you have to start with a plan right now?” Marconi says.

In 2018, the first year of his succession plan, Oramas focused on cleaning the books and eliminating debt as a means to create a financially independent shop to hand off to his kids. By 2019, he achieved his goal and made his shop financially healthy for the next phase of his succession.

“To me, (eliminating debt) was such a big piece. Full disclosure: we were staring down the barrel of almost half a million dollars worth of notes and debts. We paid it all off. Not only had everything been paid off, we had refinanced the properties that we own, we paid off one of the properties, and we have only one note now.

We’ve hammered at that debt to just pay that thing down and get that balance under control. To me, financial health is all part of the making of good books and cleaning up books,” Oramas says.

Step 4: Decide Who You Want to Sell To

Planning your succession in the infancy of your business is as fun as writing a will in your 20s, but both should be done. The goal is to lay out your plan and get it as automatic as possible and then begin to seek out and raise up your successors or research potential buyers. Marconi says shop owners need to give themselves a 10-year window between training a successor or identifying a buyer and transferring ownership.

“Let’s say you determine that you're going to be 55 years old when you want to get out and you’re 25 right now, that means at 45 you start the process of making a determination of who you’re going to sell to.

Is it going to be a family member? Is it going to be an important key employee? Build a plan. If that’s too long in your mind, I would say no shorter than five years before that date you want to sell, build a plan around that,” Marconi says.

Oramas is preparing his four kids—oldest son, Alex; twin girls Leah and LeNea; and youngest son, Carlos—to take over his business in the next few years. Each is entrenched in the business and the teams at his shop—starting with his managers—are fully aware of and supportive of the incoming change of leadership.

“I start with the managers first. The managers have to know the plan. They have to know what I’m doing ... and they’re seeing my family—my kids if you would, my successors—assuming roles of responsibility and administration and becoming comfortable with it, versus me walking up on a Monday morning and saying, ‘Hey, everybody, I’m not going to be here and so and so’s taking over.’ No, I’ve made it deliberate when they are taking an active role,” says Oramas, adding that he also meets with his kids to bridge the gaps for them, as well.

“On a weekly basis, I have carved out time for meetings with them to talk to them about what we’re doing and how we’re doing. Give a safe place to ask questions of unknowns and try to help them. I try not to overwhelm … That to me is the essence of a good transfer. If you transfer in title alone, you won’t succeed.”

Step 5: Prepare for Life's Curveballs

In the Allstate “Mayhem” commercials, Dean Winters personifies unforeseen circumstances to remind viewers that anything outside of their control can happen at any time. The same is true of shop owners.

Life can change in pleasant ways—marriage, children, a first home— or in unpleasant ways—an accident, long-term illness, or death. Shop owners need to consider each in their succession plan.

Marconi says shop owners should have enough insurance to cover the needs of their family and take care of the mortgage should they meet an untimely death and have a written will outlining what happens to the assets. “You don’t want to leave it to the government or to probate to make those decisions for you,” Marconi says.

A continuity plan for the shop is also a must-have document. This spells out who will do what in the business should a shop owner need to be out of the business for an undisclosed period of time for any reason.

“Let’s say you get sick, but you’re not willing to give up the business and you don’t have to, but you’re going to be out for a considerable amount of time, what takes place in the interim? Who runs the business? Is there a second in command?

Does everybody know how to conduct the business in your absence,” Marconi says.

Though succession planning takes time and foresight to create and implement, shop owners should see this as a part of their business plan. Understanding your overall goals for your business, assembling allies to help along the way, projecting your growth, choosing your next in line, and planning for outside variables that can affect you and your business is mission critical to the successful launch, growth, and continuity of your auto repair shop.

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PROFILE

FROM ROCK TO ROCK SO Kipp and Candice Van Zile:

The peaks and valleys of a couple’s pursuit of shop ownership

BY ROB DEARMOND

24 P H O/T R O +: W S T /Y F01.

2 224 / ISTOCK / GETTY IMAGES PLUS

K BOTTOM OLID

Kipp Van Zile dreamed of owning an auto repair shop, but his journey to ownership felt like a nightmare.

“While I wouldn’t take a million bucks to lose the experience, I wouldn’t take a million bucks to go through it again either,” Van Zile, owner of QIS, LLC (dba as Quality Import Service) in Elkhart, Indiana, says. “But hey, (it’s about) growing, maturing, being able to be OK with an outcome.”

Pursuing the Dream

Van Zile met his wife Candice, who serves as the shop’s office manager, 30 years ago while working in a factory making headliners for Buicks. The two started dating when Van Zile offered to fix the brakes on Candice’s car.

While Van Zile held jobs in Indiana and later Michigan, Candice learned she was pregnant. When their daughter Michele was a year old, the family, which included Candice’s 7-year-old son, Matthew, from her first marriage and her 6-year-old daughter Mariah (Candice’s adopted niece), moved to Phoenix, Arizona, so he could attend United Technical Institute Automotive School. Van Zile went to UTI during the day and worked at AutoZone at night before graduating in the top 10 in his class.

That led to Van Zile being accepted into the Mercedes program, where he trained in Rancho Cucamonga, California, while Candice stayed in Phoenix with the children. On weekends, they would make a four-hour drive to California, living in a hotel room for four months.

“The ring that I got for being master certified, Candice says that’s her ring,” 01.

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PHOTO CONTRIBUTED BY QUALITY IMPORT SERVICE

PROFILE

Kipp Van Zile says. “She earned it … All I did was take the test and study a little bit.

She did a lot of heavy lifting when we were separated—separated for me to learn.”

A Temporary Derailment

Van Zile later worked for a Mercedes dealership in Petaluma, California, for a couple of years before the family’s situation changed drastically.

“We were young and irresponsible and stupid and didn’t know a whole lot and did everything backward. (We) had three kids first and then tried to build a career, so we got ourselves into some financial difficulties and ended up homeless,” Candice says, noting those financial difficulties eventually led to the family being evicted from a rental home.

The family lived in a tent at a KOA campground and stayed in a motel before moving to a homeless shelter. Candice says while saving up money, they fit five people into one room with a full-sized bed and a couple of bunk beds at the shelter.

“Every couple of weeks, we’d go stay in a hotel, and then we’d go back to the campground again,” Candice says. “The kids never realized we were homeless. We made sure of that. They thought we were just spending the summer camping, and they thought it was cool.

“I’ve not been able to get Kipp to go camping ever since. He says he did a lifetime’s worth of camping in one summer, and he’s never going again.”

Van Zile says he and Candice relied 2 6 / R + W / 01. 24

on their faith to help get them through the situation.

“There wasn’t ever a day that we didn’t eat,” he says. “There wasn’t ever a day that we couldn’t do the daily things to keep our family safe, and I credit that to God. He took care of us. Sometimes He has to put you in places for you to appreciate the places He’s going to take you to. It was a very humbling and embarrassing experience for me, but I learned a lot from it. I learned things that I never want to do again. I’m not saying I won’t be in that spot again, but I’m saying that I’m going to avoid everything that I can that got me there—the bad decisions, things of that nature.

“I knew that things were going to be OK, but I also knew this wasn’t going to be over overnight. We didn’t get here overnight, and I was pretty sure we weren’t going to get out of it overnight.”

Seizing Opportunities

Van Zile eventually landed a job in Santa Barbara, California. The family stayed in the area for a few years before his grandmother passed away, and the family returned to Michigan to help care for his grandfather, who had dementia.

He landed a job at the shop in Elkhart, but during the interview process, the owner said he planned on retiring and was looking for someone to take over the business. He eventually did and offered Van Zile the option to buy him out.

The couple eventually sold Van Zile’s

grandparents’ house, helping them put a down payment to buy the shop, which they took over in 2019 to make a dream come true.

“When we bought this shop, we almost didn’t get it,” Van Zile says. “The analogy I always use … the figurative poker chips; we just pushed those all to the center of the table and said, ‘Hey God, it’s on you.

We’ll be right here. You let us know which way we’re going.’ There’s something about knowing that because of my faith, God will take care of me. It didn’t matter if I got the shop. That was a huge burden off my back. I didn’t have to do it anymore.”

Candice says it’s also bittersweet because in quick succession, Van Zile lost his grandfather, mother, and father. Candice’s mother died, too.

“It just felt like every time we thought we didn’t know what we were going to do next, something happened that showed us what direction we were going in and what we needed to do,” she says. “Kipp always says that he wishes so much that his parents could be here to see that he succeeded and has the business, but at the same time, he knows that because they passed away, we have the business.”

Van Zile says he’s gotten some perspective on the journey to becoming a shop owner.

“Now that I have the shop, I look back and I say, ‘Well, this is just a bad day. Look at everything you’ve been through,’” he says. “It’s nothing compared to that. Just take a deep breath. You’ll be all right.”

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HOW TO MEDIATE CONFLICT BETWEEN TEAM MEMBERS When personalities clash, how should shop owners handle it?

BY SUSAN SMIGELSKI ACKER

Navigating conflict in a shop is challenging. Handling it properly is important because how a leader helps to resolve conflicts reverberates through the entire shop.

This means fostering communication and addressing conflicts constructively. Doing so can lead to better relationships, enhanced collaboration, and an adaptable team.

Ratchet+Wrench talked with Chris Cloutier, owner of Golden Rule Auto Care in Dallas, Texas, and Shari Pheasant with Horse Power Strategies, about how to best handle workplace conflict.

Don’t Ignore, Chose to Resolve By ignoring conflict, a leader may think they the problem will resolve itself. However, ignoring often makes it worse. “As 2 8 / R + W / 01. 24

the leader goes so does the company,” says Pheasant. Leaders end up regretting this approach because by avoiding the tension, conflict grows as people take sides over who’s to blame. Not handling the conflict promptly can cause long-term company disruption.

“As a leader, you have to handle the situation properly under pressure. The problem will work itself out faster if handled with proper timing. But it needs to be resolved because resentment will build and that leads to passive-aggressive behavior,” Cloutier says.

Determine if the dispute needs disciplinary action and if harassment is a factor.

Before stepping in to resolve it, first understand the dispute is coming from several

perspectives. Both parties, and if possible, an outside party, need to be given time to describe their versions of what is happening. As a mediator, your goal is to help both parties understand each other’s perspective.

This needs to happen before the resolution, advises Pheasant.

“Letting go of ego in this part of the process is important. It isn’t about right or wrong, it is about what is equitable,” she adds.

Have a Safe Place to Talk Do not resolve the conflict in front of customers or team members not involved in the situation. Cloutier gives his team members a choice on how to peacefully discuss the conflict.

“I ask them if they want me to mediate or they can have the conversation themselves. Many times, after talking, they say the conversation went well and not what they expected,” he says.

If a team member does not want to participate, it could be because they are uncomfortable. Find out what makes them uneasy. According to Pheasant, this could involve having a conversation with that team member to fully understand their concerns and address issues that might be affecting their willingness to participate.

Determine who holds what responsibility in the future to prevent future problems.

Then again, sometimes a situation needs to be handled away from the shop.

“Ask them to go for a walk. It’s hard stuff, but it’s good to pay attention to the human side,” she says.

Get Both Sides of the Story Conflict in a shop can be due to miscommunication between team members.

When the job is making sure customers have reliable transportation, communication between the service advisor and technician is key.

A customer complaint can cause tension, especially when the leader is on the receiving end. Do not approach the situation with anger. Listen to both sides calmly. It’s important to realize customers will complain much more than they will compliment, Cloutier says.

“Like with a youth soccer referee, if parents have a problem about a call the ref made or didn’t make, they will complain.

But no one tells the referee he did a good job,” he said.

It’s important to understand those issues without asking the team member to divulge more than they are comfortable discussing.

Being empathetic to such problems creates an understanding workplace, she adds.

Do Preventative Maintenance Pheasant recommends not blaming the entire team for one or two team members’ mistakes.

“Making a blanket statement about a problem that is not caused by the entire team may have people wondering if they are part of the problem and many times they know who it is, but don’t like getting blamed,” she says.

Cloutier tries to prevent conflict with a “no water cooler talk rule.” His experience has been when a person complains to another co-worker about a fellow team member, it spreads resentment.

“If Jeff complains to Mark that Luke is not cleaning the coffee pot, but if no one talks to Luke about it, resentment builds,” Cloutier says.

Cloutier makes a point of praising team members for a job well done. Harvard Business School research shows that leaders who actively engage in

coaching and give positive reinforcements to team members find themselves dealing with much less conf lict. Coaching and positive reinforcement can foster a sense of teamwork and collaboration.

When team members feel connected and supported, they are more likely to work together harmoniously.

“People respond better to criticism if they are giving praise often,” Cloutier adds.

See an Opportunity When dealing with conflict resolution through a lens of opportunity, it can be healthy for business growth as well as team members’ professional growth. It can catalyze innovation, growth, and improved team dynamics. The procedure established could be nimbler and more productive.

“By having conversations based around conflicts in the shop and listening to different perspectives in order to determine the solution brings innovation and best practices into play more often for a shop. Building trust through a better, clearer understanding of each other allows vulnerability and transparency to become a part of your culture and your team’s ability to thrive together,” concludes Pheasant.

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Find Out the Root Cause Pheasant recommends asking a lot of questions to understand the situation.

“If the service (advisor) didn’t properly write up the ticket or the technician didn’t do the complete job, ask if this person is doing too much. Does the service (advisor) have other responsibilities such as posting business news on social media? Is the (technician) being pressured to get the job done quickly?” Pheasant says.

Recognize that external factors beyond the workplace may influence team members’ behavior. For instance, a team member might be dealing with personal stressors like financial difficulties, family issues, or health concerns. This could affect their overall well-being and performance at work.

01. 24 / R + W / 2 9

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OUTSIDE MANAGER When looking for an office manager, outside experience could bring a fresh perspective your shop needs

BY TESS OWINGS

3 0 / R + W / 01. 24

“Why does it have to be someone from this industry?”

The thought jumped into Jim Willison Sr.’s mind as he was in the midst of trying to fill an office manager position at his shop, Tri-City Auto Repair. After COVID, Willison Sr. had been struggling to find the right person for the position formerly held by his daughter. After interviewing and trying out a few people with industry backgrounds, Willison Sr. found the perfect fit in someone with no auto industry experience.

Backstory: Willison Sr. has been a technician since 1989 and has owned his shop for roughly 20 years. He hasn’t always had an office manager, but when his shop grew to the point that he needed one, he hired someone he knew he could trust—his daughter. She was great, but when COVID hit, she decided to go down a different career path, which left a very important position vacant.

Problem: When Willison Sr. started to look, he saw many people who came from dealerships and it just didn’t fit right.

Many of those people were used to working the long hours that they did in a dealership and wanted to be compensated in the same way, which wasn’t possible for an independent shop with Monday-Friday, 8 a.m.-5 p.m. hours. He tried out a person who had been a parts manager at a dealership, but Willison Sr. found he didn’t have the people skills he wanted and didn’t work with his staff in the close-knit way in which they were accustomed.

“There’s eight of us in total. When you’re dealing with eight people, it’s a lot more personal and you approach things on a different level,” Willison Sr. says.

Willison Sr. says the former parts manager wasn’t able to connect with the other staff members, which drove a wedge and, because of that, it did not work.

something different. That’s when he had the eureka moment that he could look at someone from outside of the industry. It turns out, Willison Sr. would find success very close to home.

After finding success with his daughter, Willison Sr. asked his other daughter, who turned down the position but led him to his current office manager. At the time, Carl Reynolds was his daughter’s fiance (they’re now happily married) and was looking for a new career path after COVID. Reynolds had managerial experience at Mancino’s Pizza & Grinders, Papa Murphy’s, Sweetwater’s Donut Mill, and at a nightclub. He had excelled at each of these positions but decided after COVID hit to find something that would take care of him in times of crisis and wouldn’t be disposable. The auto industry fits the bill. Willison Sr. hired Reynolds and hasn’t looked back since.

Aftermath: When Willison Sr. first told his daughter about his plan to hire Reynolds, she expressed concern that he didn’t know anything about the auto industry. Turns out, it hasn’t mattered in the slightest.

Since taking the position, Reynolds has studied the industry and is taking steps to learn more, but his success comes from his attitude.

“One person can’t accomplish anything on his own,” Reynolds says.

Reynolds gives credit to the staff for helping him along and writing things in a way that anyone, not just someone with a mechanical background, could understand. Willison Sr. says Reynolds’ people skills and his desire to be successful have allowed him to excel at the position.

Takeaway: Willison Sr. says the beauty of hiring someone from outside of the industry is it’s like starting with a blank piece of paper.

“You don’t have to train the bad habits out of them; you’re just training good habits,” Willison Sr. says.

Now, this obviously isn’t the case for a position like a technician, where you need industry knowledge. Still, for an office position, it can be extremely beneficial to break it down by skill set rather than experience. Do you need 5-plus years working at an auto repair shop, or do you need someone who can relate to customers and help your team bond?

Sometimes, it’s more about the person than the background.

8 Essential Skills Curious about what makes a great manager? Read on.

If you’re looking to fill a leadership role in your shop and are willing to look outside of the industry but aren’t quite sure what to look for, an article

by Gallup may interest you. The article took a look at some of its finalists for Gallup’s 2019 Manager of the Year and put together a list of the top eight behaviors for success.

• Connect company purpose to action • Value the opinions of others • Foster a safe and honest work environment • Connect meaningfully with your team • Find out what motivates each member of your staff • Be sure to reward excellence • Truly care about your employees • Be on a mission to develop your team

Solution: Willison Sr. realized he wasn’t yielding any results and he needed to try 01. 24 / R + W / 31

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HOW ONLINE BOOKING CAN HELP SHOPS Why giving customers the option to schedule auto repair service online may be a winning play for shop owners

BY NEIL POPE

In auto repair, time is viewed through the lens of billable hours. The adoption of online booking in auto repair shops emerges as a strategic decision driven by time and convenience. Online booking not only provides your customers with a more streamlined experience but also reclaims precious time for your staff. It’s a practice other industries, such as restau3 2 / R + W / 01. 24

rants, salons, and medical practices, have used with success, and auto repair shops, particularly service advisors, can find advantageous for saving time and effort.

Jason Smith, owner of M&M Car Care Center with locations in Merrillville, Schererville, Dyer, and Hammond, Indiana, says online booking is reducing the number of incoming calls his service advisors take. Smith sees between 5% to 6% percent of total bookings made online each month, with most customers who book online coming in for simple services such as scheduled maintenance and oil changes.

“With taking that call count down, it allows us to spend more time with the customers that are standing in front of us, and the customers that we speak to on the phone, we can better inform them about their current situation,” Smith says.

Convenience, the second protagonist in this narrative, plays an equally signifi-

cant role. It’s the assurance of a hassle-free experience for customers from the comfort of their own devices. No more waiting on hold, no more back-and-forth calls, or miscommunication. Online booking simplifies the processess for you.

Exercising Your Options Booking appointments online may be relatively new to the auto repair industry, but the different ways that repair shops are implementing it is already becoming apparent. Smith’s shop uses a QR code that is generated by AutoOps, which seamlessly integrates online booking with M&M Car Care Centers website and point-of-sale system. The QR code that sends people to his shop’s website or online booking system is printed and sent out on a direct mailer or service reminder, giving people the instant ability to book an appointment upon receipt.

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“When we signed up with AutoOps they sent us a QR code that we can use for everything and it’s a link to our site so basically what happens is that we have the QR code on our direct mailers, in our website, on Google—we have these things all over the place so because everyone’s going to want to set up an appointment in whatever (system) they feel the most comfortable with. So, if people get their direct mail piece in the in the mail then they can use that and say, ‘I’m going to make my appointment right now because I just got my mailer,’ we’re giving them that opportunity,” explains Smith.

Bill Nalu, owner of Interstate Auto Care in Madison Heights, Michigan, uses a system within Shopgenie, integrated with Tekmetric, to make a specific number of appointments available for customers to book online. Additional conditions can be specified, such as opening a set number of spaces for certain jobs within a set window of time. This reduces the number of last-minute rush jobs that always seem to show up just before closing time and prevents complications like unavailability of specific parts or unforeseen delays.

“That’s really the biggest surprise in all this because inside Shopgenie, inside

the portal, you can specify how many slots are open for customers to just book an appointment,” Nalu says. “So, they include things like no more than four oil changes in a day, and they all need to be before noon because we don’t want (the) change appointment setup at 4 p.m. It just eliminates those kinds of headaches.”

How Online Booking Unlocked Unexpected Garage Gains Both Nalu and Smith attribute the focused and straightforward nature of online booking as providing a number of unforeseen benefits. Smith notices that the quality of repairs booked online are of a higher level due to “a reduction of wasted energy in appointments.” This refers to those vague communications or redundant discussions that don’t contribute to resolving your customers’ needs efficiently and can be a major cause of frustration for both your customers and shop staff.

Smith says his online scheduling system allows customers to attach photos or videos to their appointment request, giving a clearer understanding of any potential problems before the vehicle arrives at the shop. Having more than a vague description of a problem also streamlines the troubleshooting process and aids in a more precise assessment of a vehicle’s condition.

Online Bookings Impact on Overworked Service Advisors The integration of online booking systems is already causing a shift in time management strategies by minimizing the need for service advisors to spend significant portions of their workday on the phone. This enables them to focus on pivotal tasks that directly impact customer service and ensure a smoother in-store experience.

Smith finds that online booking enables his staff to plan their day better and has seen task completion rates jump from 60% to 70% to 100% consistently. This ability for an employee to hit their workrelated goals fosters a positive work environment and morale, reducing the risk of employee burnout.

“As the owner, it literally takes some stress off (my staff ), and I want to do that because when you have an environment where everyone’s going 110%, people are going to eventually crack and that’s going to create a demotivating work culture,” Smith says.

Insider Insights and a Dash of Caution About Online Booking Both Nalu and Smith offer valuable advice to shop owners thinking about integrating an online booking tool into their CRM. Smith emphasizes the professional and streamlined layout of the system as an industry-leading feature that demands serious consideration and something that will define future industry standards.

Nalu’s advice shops owners on the transformative impact of online scheduling on customer interaction by using it as a tool to assist in building stronger customer relationships. Nalu underscores the necessity of never allowing the human touch in customer relations to be overshadowed by online booking and artificial intelligence (AI).

“AI helps in efficiency. Don’t think that AI is going to take over a service writer’s job by building human relationships or getting new customers faster than anybody ever imagined. The whole point of what I do for a living and the whole point of what I’ve been doing for a living is the people business. My frontof-shop staff are the best people to talk to my customer about their given problem today and the day that I stopped believing that is the day that I will retire,” Nalu says.

01. 24 / R + W / 3 3

C O L U M N / S I LV E R S T E I N

THE 35,000-FOOT VIEW

T.L.A.R DIRECT: KEEPING YOUR LABOR RATE ON COURSE

Establishing the right labor rate for your shop should be rooted in fact and not feeling

BY DUTCH SILVERSTEIN

A lifetime ago, I was piloting an aircraft

cross country on the “red eye” from California to Charlotte, North Carolina. On clear moonlit nights with visibility for hundreds of miles in each direction, we’d ask Air Traffic Control if we could proceed “TLAR (pronounced tee-larr) Direct.”

We’d turn the illumination down on the instruments until they were just barely lit, and we’d navigate by reference to the proximity of the cities whose lights were visible from many miles away. Although not precise, it got us close because we could cross reference our position visually and with our navigation equipment if we wanted to.

TLAR is an acronym for That Looks About Right (not an official FAA-approved term), and my experience mentoring young shop owners seems to reflect this same methodology regarding labor pricing. They come up with a figure “that looks about right,” but unlike flying, which had defined points of reference to ensure we were heading in the right direction and remained on the right track, their figures are arbitrary and are frequently based on what neighboring shops are charging. The great automotive writer Mitch Schneider used to call this the “Oreo effect.”

One shop lower in price, one shop higher and they would be in the middle to “remain competitive.” This pricing strategy is fraught with problems and is usually spawned from (a) lack of sufficient operating capital, (b) fear of failure caused by being perceived as “charging too much,” (c) a lack of knowledge of what methods to use to determine how much to charge, and (d) a reluctance to use math. There are several methods to use to determine your posted shop labor rate. Some methods directly contradict one another and that’s OK; you need to find out what works for you. The key, however, is knowing that your labor rate must be based on your expenses, not the shop up the street and most certainly not what everyone else is charging.

One method often used by shops famil3 4 / R + W / 01. 24

iar with their key performance indicators (KPI) depends on knowing your shop’s total fixed monthly expenses divided by its gross profit margin expressed as a percentage. This will yield your break-even number. Based on your break-even number, desired profit and hours available for work, some calculations are made, and the result is the shop’s labor rate based on its record of labor hours sold over a specific time.

Obviously, this works well for established shop owners who have a record available to them, but a new shop owner will need a place to begin. For the benefit of new shop owners who may be unfamiliar with key performance indicators, these are internal tracking or reference points that provide information to keep your business on course. Just as I referenced the instruments and the lights of the cities in the distance while piloting the “red eye,” every successful business relies on knowing where it is at any given point in time.

Another more basic method to establish a labor rate target entails knowing all your technicians’ expenses (total of wage and benefits) and establishing the shop labor rate on a 70% gross profit margin. So, if a technician costs you $30 per hour, your beginning target rate would be $100 per hour. This is a good starting point for the new shop owner. A 70% gross profit margin on labor combined with a minimum of 50% gross profit margin on parts (excluding tires) yields a 60% gross profit margin for the business. Here’s where the new shop owner must pay careful attention to billed labor hours produced by the technician, as well as shop overhead.

By tracking the hours consistently billed by a technician per day, per week, per month the labor rate can be modified to ensure that it pays for all the overhead as well as the desired profit. The important thing to remember is that just as an aircraft requires frequent control inputs to keep it on course, the labor rate also requires attention and fine tuning as well.

R. “Dutch” Silverstein, who earned his Accredited Automotive Manager Certificate from AMI, owns and operates A&M Auto Service, a seven bay, eight lift shop in Pineville, North Carolina.

Dutch was a captain for a major airline earning type ratings in a variety of aircraft including the Boeing 767/757, 737, 200, 300 and 400 series, Airbus 319/320/321, McDonnell Douglas MD80/DC9 and Fokker FK-28 mk 4000 and 1000. After medically retiring, he transitioned his parttime auto repair business into a full-time occupation. dutch@dutchsgarage.com

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