Ratchet+Wrench – February 2024

02.24

STRATEGIES & INSPIRATION FOR AUTO CARE SUCCESS

DETAILS INSIDE PAGE 12

LEARNING TO DELEGATE Juke Ball went from trying to do everything himself to trusting his people to do the jobs for which they were hired.

EARTHLING AUTOMOTIVE’S EV TRAINING PAGE 09

7 TIPS FOR TAX TIME

PAGE 31

SILVERSTEIN:

EXAMINING THE 300% RULE PAGE 36

SHOP OWNERS TALK EARLY MISTAKES (AND WHAT YOU CAN LEARN FROM THEM!) PAGE 20

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FEBRUARY

02.24

VO LU M E 12 N U M B E R 02

06

EDITOR’S LETTER

09

BREAKDOWN

16

SHOP VIEW

18

MEASURE, MANAGE & MASTER

The peril of sunk cost fallacy

EV training the Earthling Automotive way

ABR Houston Houston, Texas

Feeling disenchanted with shop ownership?

K AT H L E E N C A L L A H A N

F E AT U R E

20

LEARNING ON THE FLY Juke Ball of Juke Auto and Erich Schmidt of Schmidt Auto Care talk about the mistakes they made early on in shop ownership and the lessons they learned (and want you to know).

BY ALISON JOHNSON

P R O F I L E

26

STAYING THE COURSE Professor Andrew McGee’s mission to promote a positive image of automotive careers.

BY K AC E Y FRED ERIC K

31

FINANCE

33

CASE STUDY

36

THE 35,000-FOOT VIEW

It’s tax time. Here’s what to do!

Dan Adam: Taking the initiative

Is the 300% Rule ethical?

D U T C H S I LV E R S T E I N

ON THE COVER AND TO THE LEFT:

Juke Ball from Juke Auto Photographed by Steven Rudd

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.

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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 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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EDITOR'S LETTER

CUTTING YOUR LOSSES Changing course isn’t easy, but it’s often the right choice

BY CHRIS JONES

Sunk cost fallacy is the tendency to

prolong an action you’ve invested time, money, or effort into, even though its cost outweighs its benefits. This is why casinos thrive, sportsbooks profit, and lotteries succeed. Our emotions or needs get in the way of clear, logical thinking.

You can see the sunk cost fallacy play out in auto repair shop owners, too, when a shop owner continues to give opportunities to a team member who is a poor fit for the business. The shop owner only sees the invested time and training and the need for that position to be filled, but his emotions tell him to hold on and maybe it will click for the employee if he provides more training or another one-on-one. Or perhaps your shop has grown and your team is unhappy with the limitations of a once-working product, but you’ve spent thousands of dollars on it over time and encourage your team to find workarounds, which leads to decreased efficiency—a different loss.

In this month’s feature, “What You Don’t Know You Don’t Know” (p. 20), shop owners Juke Ball of Juke Auto in

Austin, Texas, and Erich Schmidt of Schmidt Auto Care in Springboro, Ohio, talk about some of their sunk cost learning experiences, among others. For new shop owners, it’s an opportunity to observe and learn from the mistakes of successful operators. As Groucho Marx once said, “Learn from the mistakes of others. You can never live long enough to make them all yourself.” For the seasoned shop owner, it’s a chance to reflect on some of the challenges you faced and have surpassed.

And with Valentine’s Day in our midst, Kathleen Callahan’s latest column, “How to Fall (Back) In Love with Shop Ownership” (p. 18) talks to shop owners about how to overcome disenchantment with their businesses to get back that loving feeling.

Finally, as we enter tax season, financial experts Eric Joern, a partner with Kaizen CPAs & Advisors, and Hunt Demarest, a senior accountant with Paar, Melis & Associates, provide seven tax prep tips (p. 31) to help keep your shop in the good graces of the IRS.

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JUMP START

N E WS I D E AS PEO PLE TRENDS

PHOTOS COURTESY OF EARTHLING AUTO

BRANCHING OUT: THE LAUNCH OF EARTHLING AUTOMOTIVE’S EV TRAINING PROGRAM San Francisco’s Earthling Automotive is working to fill the looming need for EV-trained technicians.

BY KACEY FREDERICK

Across the entire automotive industry,

discussions surrounding electric and hybrid vehicles have only gained more momentum. Several states have decided to halt sales of new gasoline-powered vehicles by the 2030s. Oregon, New York, and California are just a few that have made the step–the latter of which being the home of Earthling Automotive and its EV training program.

Originally specializing in hybrid vehicles under the name Luscious Garage, the San Francisco shop reopened as Earthling Automotive in April 2023 and redirected its focus to include EVs. Not only does the shop aim to fulfill electric drivers’ needs, but it also has a mission to help the indus-

try with its EV training program that launched last October.

Planting the Seeds

The program is led by Jack Rosebro, who has 20 years of experience working with EVs and hybrids. Canada, Sweden, and Denmark are just a few of the places that Rosebro’s career has taken him as an automotive instructor with an interest in hybrids and EVs. Before joining Earthling, Rosebro helped schools across the world develop hybrid vehicle programs and taught for Toyota North America. It was while teaching a class in 2005 that he would meet none other than Earthling Automo-

tive CEO Carolyn Coquillette, who at the time was a student of his.

A couple of years later, Coquillette went on to open Luscious Garage. It marked the beginning of a symbiotic relationship between Coquillette and Rosebro.

“I used to go to her shop when she serviced taxis at two in the morning and collect a lot of data there,” Rosebro remembers. “And it was just a synergistic friendship on both a personal and professional level.”

When Coquillette began developing Earthling Automotive, she asked Rosebro to join her team. Still holding a career with Toyota North America that he was enjoying, he initially declined her offer– 0 2 . 24 / R + W / 9

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

but Rosebro couldn’t shake the feeling that it was a path to something exciting.

“I started looking at the EV world and was really struck by how all the different manufacturers all had their own solution to the electric vehicles,” Rosebro explains.

“This growth time for the industry was going to be very interesting technologically, and I didn’t want to miss that. And so I jumped over, and the rest is history.”

As part of the transition, Earthling Automotive moved to a bigger shop, and the old Luscious Garage is now used by Rosebro to teach several EV and hybrid courses as part of the training program.

Cultivating Knowledge

There are currently five different classes offered by the program.

Tesla 1 is an introductory course on Tesla vehicles. It addresses certain things that make them different from most other vehicles, such as knowing how to work with a vehicle that you know won’t turn on while working on it.

Then there’s Hybrid/EV 1, an introductory course to hybrid and electric vehicles,

and Hybrid/EV 2, for those who have prior experience working with hybrids and EVs. Take someone who hasn’t changed a battery on a hybrid vehicle before, Hybrid/ EV 1 would teach them how to. In the second level, students learn beyond simply replacing battery packs and delve into how the system itself works. It builds upon previously acquired knowledge to supply an in-depth understanding of how hybrids and EVs work.

Similar to the Hybrid/EV classes, there is also Electrical 1 and 2, which focus on understanding electric components in vehicles. The topic has been a point of weakness for many technicians throughout Rosebro’s career, and he believes that a firm understanding of electrical work is a crucial foundation for many technicians to potentially build upon.

“Good technicians are hard to find; bad technicians are hard to find, even.

But what I’m seeing a lot of people do is, they’re focusing more on a grow-yourown philosophy, as opposed to a philosophy where you go out and find people,” describes Rosebro. “So if you want to grow

your own, then you need some electrical basis for them to be able to grow further.”

Each course runs for three days, the only exception being the Tesla 1, which is two days.

These shorter classes are less likely to make students feel overloaded with information. In courses that run over three days, Rosebro has seen students lose the same momentum they had going into the class. They need time to digest all the information that they’ve learned.

For those starting at any course’s first level, it can provide them with time to solidify the knowledge they’ve gained before going to the next stage. Though there’s currently only one Tesla course, the program is prepared to offer a Tesla 2 course if it grows in demand.

The size of each class is limited to four people; something rarely seen in this field. It was a deliberate move to promote hands-on work that meets every student’s needs. Most classroom tasks involve students looking up information on a procedure and then performing it themselves on a variety of vehicles spanning different makes and models.

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Reaping What You Sow

Upon returning to the aftermarket industry from his time at Toyota, Rosebro was surprised to discover the lack of hybrid and EV training on the West Coast, which has posed itself to be the leader in the transition to EVs. The training program is partly motivated by inspiring others to find an interest in the subject and to help accelerate the adoption of EVs. When first developing Earthling’s EV training program, Coquillette knew that the increased adoption of EVs will bring with it an increased demand for EV technicians that the industry can’t meet unless more are trained.

As it stands now, pursuing EV training is valuable for any technician who’s located in an area with a high EV uptake or working with a lot of EV-driving clientele. But many shops are seeing the long learning curve and are working to be ahead of it to maintain their value, as the push for EVs grows.

“We’re not worried about anybody ‘stealing our secrets,’ as if we had any,” says Rosebro. “We want to see more and more shops being very proficient in EVs, even if they compete with us.”

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

Women in Auto Care Receive Sponsorship From Endeavor Business Media Vehicle Repair Group Endeavor Business Media’s Vehicle Repair Group, consisting of Ratchet+Wrench and several other automotive titles, announced the beginning of a partnership with Women in Auto Care (WiAC) in a recent press release.

Upon entering a bronze sponsorship with WiAC, Endeavor’s Vehicle Repair Group will continue its dedication to including more women in a field that is actively looking for a new generation of talented, innovative thinkers.

The industry has historically been male-dominated, with only 10% of the automotive industry being women.

The increase of women in the science, technology, engineering, and mathematics fields presents several transferable skills and a great opportunity for industry growth through a demographic that has been traditionally overlooked.

With Endeavor’s sponsorship of WiAC, the company’s Vehicle Repair

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Group proudly supports the organization’s mission of offering more talented women an entrance into the automotive sector through education, leadership, scholarships, and networking.

“We’re thrilled to support Women in Auto Care and their mission of engaging, educating, and empowering women within the auto care industry,” said Chris Messer, vice president and group publisher of the Vehicle Repair Group at Endeavor Business Media. “Women have played an integral role in the industry, utilizing their unique skill sets and dedication to drive positive change and innovation.”

Dave Smith, Former Hunter Engineering Sales VP, Has Died at 75 Dave Smith, former senior vice president of Hunter Engineering Co., has died, reported Modern Tire Dealer. He was 75 years old.

Smith joined Hunter in 1975 as a business representative in Virginia, West Virginia, and North Carolina. He was promoted to Cleveland region manager in 1980.

He was named vice president of sales and marketing in 1984 and was promoted to senior vice president of the company in 2008.

“Dave was instrumental in leading Hunter through a period of great growth, increasing the company’s sales and service organization from 200 representatives to more than 630,” said Hunter officials.

He is survived by his wife Karen; daughter, Kim; and grandsons, Lucas, Benjamin, and Blake.

Vehlo AMP: A Tech and Teamwork Tour De Force Vehlo, parent company to aftermarket brands such as Autoshop Solutions, Tire Guru, Shop Boss, Protractor, Omnique, AutoServe1, Fitment Group, and 360 Payments, held its annual company-wide meeting in Tulsa, Oklahoma, from January 15-16, 2024. Dubbed the Vehlo AMP Kickoff, the event was a gathering of the company’s leaders, employees, and industry partners to

12 / R + W / 0 2 . 24

showcase its achievements, discuss strategic initiatives, and call its team to continued unity and purpose.

Attendees were treated to informative general sessions outlining new developments happening within Vehlo, breakouts for focused learning, a games-based team-building night, and an awards ceremony to recognize the notable achievements of Vehlo employees.

Honda Urged to Issue Recall for HR-V’s Shattering Rear Window Honda is being urged to issue a recall on its 2023 model HR-V vehicles after receiving hundreds of complaints related to the rear windshield spontaneously shattering, CBS News reported.

Over 300 complaints of the problem have been filed with the National Highway Traffic Safety Administration (NHTSA). Michael Brooks, executive director at the advocacy group Center for Auto Safety, told Consumer Reports that it’s atypical for a newer model to receive so many complaints.

Consumer Reports has called on the automaker to issue a recall, with one of its auto testers having experienced the problem himself after using the vehicle’s remote start function to begin warming up on a cold morning.

One HR-V owner who filed a complaint experienced their window shattering on Jan. 20 in Flanders, New Jersey.

Though temps fell to a low of 18 degrees, the vehicle had been parked inside the garage when the window shattered.

“While our vehicle was parked inside our garage, the rear windshield completely shattered outward, without any impact or object hitting it ... It was like it exploded,” wrote the owner to the NHTSA. The problem seems to be linked to the use of the rear window defrost. Honda has cited the assembly process as the root cause, and that the rear window sealer being warmed up by the defroster is causing the glass to weaken with use.

In response, Honda will be launching a voluntary product update campaign, estimated to begin in April or May 2024.

In the meantime, they are instructing drivers who experience problems with their rear windows to contact a Honda dealer or their customer service.

However, some have presented a recall as the best path forward, such as William Wallace, associate director of safety policy at Consumer Reports.

“For the sake of its customers and everyone on the road, Honda should convert its service campaign to an official safety recall of all affected vehicles, which would help get the word out and maximize the number of owners who get their cars fixed,” Wallace told Consumer Reports.

Texas Won’t Require Vehicle Safety Inspections Starting Next Year Beginning in 2025, the state of Texas will no longer require annual vehicle safety inspections, News Channel 6 KAUZ reports.

House Bill 3297 received approval from Sen. Drew Springer, who said that the decision will remove a burden imposed on Texans and that it’s what residents of the state have been wanting to see happen.

In response, some have voiced concerns over how the change will impact road safety–but Springer isn’t worried.

“We think that is such a small number that gets caught on that one day once a year. Look, people drive with tires they should replace,” Springer stated. “Please, check your tires, check your windshield wipers check your horn and all those other things, but to catch it on the day of that it went bad, they probably had been driving six months with it already, you know, out of compliance.”

Some auto repair professionals in the area don’t have the same confidence, such as Cole Salsman, owner of Veteran Auto Repair in Wichita Falls. He asserted that safety inspections require drivers to have things inspected that wouldn’t be looked at otherwise, preventing potentially hazardous scenarios.

“States that don’t have it, I mean you can see a clear difference when you look at the condition of vehicles on the road,” Salsman added. “I mean there’s vehicles on the road that are far older and in worse shape that might have no business being on the road still.”

The change will not take effect until Jan. 2025, making 2024 the last year Texans will need to have their vehicles inspected.

U.S. Government Puts $148.8M Toward Repairing Electric Vehicle Chargers The U.S. government will allocate $148.8 million between 20 different states to fund the repair or replacement of faulty electric vehicle chargers, Reuters reported.

Around 4,500 existing charging ports will be worked on as a result of the funds, which come from the $5 billion National Electric Vehicle Infrastructure (NEVI) program, which in turn is funded by the $1 trillion infrastructure law passed in 2021.

As part of the NEVI program, states must operate federally-funded charging ports for a minimum of five years. Of those chargers, they must reliably operate 97% of the time.

There are currently over 170,000 charging ports in the U.S., and the White House plans to expand that number to 500,000 by 2030. According to Reuters, these ports are slated to have high-speed chargers, placed no more than 50 miles apart along some of the busiest highways and interstates in the country.

Maine’s Right-to-Repair Now Law, But Faces Long Road Ahead Though Maine’s right-to-repair law has gone into effect as of this year, it may still be a while before they see any fundamental changes, reported Portland Press Herald.

Some groundwork will need to be laid before the law can fully take effect– namely, with the creation of a database for the advanced diagnostic repair data being received from manufacturers, and an independent oversight board to supervise the process.

Currently, the only immediate change is a fine of at least $10,000 that will be dolled out to automakers for every failure they make to share their repair data.

Auto shop owners in Maine likely won’t begin to see a difference until 2025, when the Office of the Maine Attorney General estimates to have an oversight board in place.

The Attorney General’s staff has

been meeting with many different figures within the automotive industry to discuss the law’s implementation. Tommy Hickey, director of the Maine Right to Repair Coalition, has been one such figure, and said that it’s necessary to collaborate with cybersecurity experts to lay out the best practices for storing and distributing the data.

As Maine lays out a strategy for enforcing the new law, some wonder when they’ll even begin to see changes.

“I don’t think it’s going to change your life, though it might change some stuff,” said Ryan Lund, shop manager at Bernie’s Auto Repair in Westbrook.

“But so far, I haven’t seen or heard of any change.”

YANG Sponsorships Now Accepted Year-Round The Young Auto Care Network Group (YANG) will now be accepting corporate sponsorships year-round, according to a recent press release.

While the organization previously accepted sponsorships annually each fall, it will now be available throughout the year. Corporate sponsorships offer companies increased exposure, discounts, exclusive content, and opportunities to network with others in the industry.

Sponsorships go towards supporting professional development and industry education that is offered as part of Auto Care Connect, the YANG Mentorship Program, scholarships, and YANG Regional Meetups.

YANG offers five tiers of sponsorship: bronze, silver, gold, platinum, and diamond. Each tier offers different benefits, ranging from the company’s logo being displayed on YANG’s website to being named in YANG e-mail campaigns, and a presence at the annual AAPEX and Auto Care Connect events.

“We must ensure that the next generation of leadership has the tools and mentoring it needs to advance the independent auto care industry,” stated Auto Care Association President and CEO Bill Hanvey. “YANG offers the opportunity for those under the age of 40 to network, share best practices and develop a support system to ensure our future.”

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

WHAT SHOPS BUDGET FOR TOOLS

A look at the percentage of the budget shop owners use for tool purchases annually

BY CHRIS JONES

Though most shop owners in the 2023 Ratchet+Wrench Industry Survey Report said they didn’t designate a specific budget for equipment, results showed their sweet spot fell between 1% and 10%.

While this may not seem a hefty investment, nearly nine out of 10 shop owners said they foot the bill in providing tools for their technicians.

Percent of Budget Used for Tech, Tools and Equipment Less than 1%: No specific budget:

3%

33% 1-5%:

26%

21% or more:

3%

6-10%:

19%

16-20%:

6%

11-15%:

10%

0 2 . 24 / R + W / 15

J U M P S TA R T / S H O P V I E W

ABR HOUSTON Owner: Alex Noll Location: Houston, Texas Staff Size: 8 Shop Size: 9,500 square feet Number of Lifts/Bays: 9 Average Monthly Car Count: 145 Annual Revenue: $2.25 million

ABR HOUSTON A shop as luxurious as the vehicles it works on

BY KACEY FREDERICK PHOTOGRAPHY BY RACHEL KO

Alex Noll opened ABR Houston around 11 years ago, following 11 years working with a BMW dealership. A decade after opening, ABR Houston relocated to a new facility at the beginning of this year, where it continues to specialize in working on European cars.

CREATURE COMFORTS Customers enter ABR Houston through two double doors before being greeted with leather chairs placed around a coffee table constructed from an old engine.

A coffee bar is fully stocked with sodas, beers, and wine for customers to enjoy while seeing the shop through windows at the back of the waiting room.

A kiosk is in the center of the lobby.

16 / R + W / 0 2 . 24

The star of the waiting area is a dog named Bones: the shop’s client service representative. First found at ABR Houston’s original location around a decade ago, he became Noll’s pet, and now accompanies him to work every day.

“He just kind of harasses everybody to pet him,” Noll says. “He’s got business cards, he’s on the billboard, and to me, he’s advertising. So everything for the dog can get written off for advertisement.”

EFFICIENCY IS KEY

HAVE AN OUTSTANDING SHOP? Send a few photos and a brief description to submissions@ratchetandwrench.com and we might feature it here.

ABR Houston houses a fully air-conditioned shop, a lack of which was the main motivation for the business to move.

It boasts nine BendPak lifts, an in-

ground alignment machine, an 80-gallon ultrasonic machine, a Road Force Elite Balancer, and its most recent addition: a car pusher that has been customized to protect plastic-painted bumpers on European cars. It also supplies a 600-pound nugget ice machine and a large stereo.

All the lifts are equipped with 100-amp power supplies as well as air lines providing refrigerated air to prevent moisture in the air, along with dedicated landlines for programming.

“We really just tried to make it to where the technicians don’t have to ever leave their workstation. And if they do, it’s for a very short time,” Noll explains.

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COLUMN / CALL AHAN

MEASURE, MANAGE & MASTER

How to Fall (Back) In Love with Shop Ownership If you’re feeling disenchanted with your business, here’s how to fan the flame

BY KATHLEEN CALLAHAN

During February, we are inundated with

messages of love. You cannot go anywhere without seeing hearts, cupids, diamonds, and chocolates! But what if we took a moment to fall in love with our businesses? I know that sounds silly, but you likely became a shop owner because you had a passion for this industry or your customers, or maybe, like me, you entered this industry following someone else’s desire. Admittedly, I didn’t love owning my shop until a few critical things happened.

I GOT COACHED The first thing I did was hire a coach. If your first thought is, “I can’t afford that!” then you must hire one. A good coach will quickly teach you to earn whatever you pay for their services, provided you implement what you learn. If your average repair order (ARO) is $200, which is incredibly low compared to the industry average ($536), and a coach is $1,600 per month, they only have to help you bring in eight more cars per month or two per week to pay for their services. If they increase your ARO to $400, which is better but on the low side of average, and still bring in those eight additional cars, you just put $1,600 in your pocket. That’s an excellent start to bringing back that loving feeling.

I MANAGED WHAT I MEASURED Learning and managing my key performance indicators (KPIs) was critical to increasing my love of shop ownership. Flying the plane while you’re building it isn’t any fun. I recall attending events where successful owners talked about their KPIs and how important it was to know and manage my numbers.

Acronyms like ARO, ELR, and SOP were always flying around, and I felt like the only one with no idea what all that jargon meant, much less how to find it! I feared admitting my ignorance and kept quiet while furiously writing notes to Google later and pretending I understood. Hiring a coach changed all that. Your coach will want to see and track your KPIs while teaching you how to measure and manage them.

18 / R + W / 0 2 . 24

Here are the top three to start tracking today, if you aren’t already, and why they matter. I recommend making this a daily, weekly, and monthly habit and suggest writing them on paper. Writing things down helps you remember more by forcing you to slow down. Becoming aware of your performance will improve it! What we focus on happens!

ARO: Average Repair Order. Total sales dollars divided by the number of repair orders. (There is some division on including zero-dollar invoices in this calculation.

I choose to include them, but it’s your shop.

Be consistent.)

Why track ARO? Knowing how much you collect per vehicle helps you manage productivity and understand the stress level of your staff.

Hours per RO. Total billed hours divided by the number of repair orders.

Why? This profoundly affects your ARO and staff attitude. Your staff will likely be stressed working low hours on too many cars if it’s too low.

ELR: Effective Labor Rate. Total labor dollars collected divided by billed hours sold.

This is what you’re collecting for each hour of labor you sell. Hopefully, it’s within 90% of your posted rate. If not, talk to the coach you hired in the first paragraph.

Why? Your posted labor rate might be $175 per hour, but when you consider oil changes or menu-priced items that haven’t been updated in a decade, you may only be collecting $120. Now you’re giving away $55 per hour, every hour, all month long. If you billed 500 hours monthly, that’s $27,500 and $330,000 annually.

Understanding your KPIs will help you fall in love with your business. Once you know what is essential to track, you can understand how to change those numbers.

Once you can do that, shop ownership becomes fun, and who doesn’t love to have fun?

I FOUND MY PEOPLE Another big thing was finding a tribe of people to support and hold me accountable. I did

this through my coaching group peers, joining a local shop business development group, and joining Women in Auto Care and online groups like Auto Shop Owners Group (ASOG). Having the “iron sharpens iron” experience of sharing successes and weaknesses with owners of similar shop demographics while introducing me to peers who broadened my knowledge and understanding from all over the automotive aftermarket industry has been a game changer for me and the success of my shop.

Bottom line: Ask for and accept help. We are not alone. We really do raise the industry by helping each other be better operators.

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

YOU DON ' T K NOW WH AT YOU DON ’ T K NOW 2 0 / R + W / 0 2 . 24

BY ALISON JOHNSON PHOTOGR APHY BY STEVEN RUDD & LAUR ALEE SCHMIDT

Erich Schmidt & Juke Ball

reflect on the hard lessons they learned when starting their shops

0 2 . 24 / R + W / 21

F E AT U R E

THE DAY THAT ERICH SCHMIDT opened his own automotive repair business, he felt excited and confident.

The second day? Not so much.

Nearly 15 years later, Schmidt still remembers sitting alone at his desk in a 1,200-square foot, former 1950s-era service station, with no customers and nothing to do, wondering what the heck he’d gotten himself into.

“I started getting scared,” he says. “Definitely felt in over my head. I knew how to be a good technician, but there was so much I didn’t know about how to run a business.”

Juke Ball, owner of Juke Auto in Austin, Texas, had a similar experience after he rented two bays with no lifts at the side of a used car lot in 2004.

“We did well financially, but we weren’t organized,” Ball recalls. “It was inefficient and much more stressful than it needed to be. I was burning myself out.”

Schmidt and Ball have come a long way: Schmidt Auto Care now has a 12,000-square-foot shop in Springboro, Ohio. Six employees work alongside Schmidt and his wife, Lauralee, who joined the business full-time in 2016 and serves as Vice President of Operations.

Ball’s 11,000-square-foot location, which he co-owns with his wife and CFO, Jonna, has 23 employees.

On their respective journeys, however, they have learned plenty of lessons—some of them quite painful.

LEARNING BUSINESS BASICS Schmidt and Ball have the same No. 1 tip for rookie owners: hire a coaching company, even if only for a short-term period.

“You have to go in with the mindset that you’re not doing this as a technician, but as a business owner,” Schmidt says. “It’s hard; I’m still a technician in my brain. You need people who keep you accountable in moving your business forward.”

Until Schmidt connected with Elite Worldwide and later Automotive Training Institute (ATI), he wasn’t taking the necessary steps to create a company with longterm value. He documented little, tracked few business indicators, and didn’t write up full vehicle inspection reports; instead, he simply fixed what the customer was concerned about and moved on.

2 2 / R + W / 0 2 . 24

Without standard service definitions, employee handbooks, or consistency in collecting information for a customer database, Schmidt Auto “would have been essentially worthless to anyone looking to acquire it,” Schmidt admits. “Everything was just willy-nilly.”

A set of detailed operating procedures has changed that. Take brakes, for example. If technicians measure brake pads at less than 4 millimeters, they advise replacement; 4 to 9 millimeters gets a yellow check mark, and 10 millimeters and above gets a green check. “Every technician follows the exact same system,” Schmidt reports.

Technicians also live by the 300% rule: inspect 100% of a vehicle, write up 100% of a vehicle, and present 100% of an estimate to customers even if they ultimately decline services. That process includes documenting issues with pictures and

video to help people understand no one is trying to rip them off.

“It makes everything run smoother and builds better trust with the customer,” Schmidt notes. “It also guards against liability. If someone has metal-to-metal brakes and you have it well-documented that person was notified and knew it was unsafe, you’re protected.”

Ball’s initial mistake, meanwhile, was to try to do every job himself. He came into work early to pull vehicles out, ran and installed parts, answered customer calls, pitched in as a service advisor and even towed cars into the shop.

“I wanted to inspire people by busting my ass, but I was just making things harder for everyone,” he relates. “Leading by example through hard work is great, but an owner’s role is to create good structure. That’s what makes employees want to stay.”

TOUGH SLEDDING For Erich Schmidt, watching his business nearly collapse became the call to action he needed to reverse course on what appeared to be a shop on the brink of closing.

A DRIVE coach helped Ball delegate responsibilities to supervisors on the floor and turn his attention to developing company policies. One such rule: anyone who spots a customer entering the parking lot or building should say hello and direct him or her to the right place.

“It can be intimidating to come into an auto shop,” Ball says. “If you have no idea where to go and people just walk by, it feels unintentionally hostile. That’s not what you want to project. It’s not just writing a policy, but explaining the ‘why’ of it. It’s not about being more ‘corporate’; it’s about treating people right and winding up with more work and sales because of it.”

PUTTING TOGETHER A STRONG TEAM Finding enough quality technicians and other team members isn’t easy. But tolerating negative employees is never the answer, veteran owners advise.

People who spend their days complain-

ing—whether about their present job, past employers, or life in general—quickly drain energy and morale; those who are abusive to other team members are even worse. Ball has realized that as the owner, he is responsible for creating a healthy work environment where his staff can be happy and productive.

“If I could go back to that first year, I’d tell myself not to put up with it,” he says.

“Why have those people in my building?

They waste time and make everyone tense and just miserable. It’s bad for business. The quicker you can get rid of them, the better.”

Instead of fretting about not being able to locate a replacement, Ball suggests creating a shop where people want to work: one with fair pay and benefits, some flexibility on hours, supportive supervisors and teammates, good organization, clean and well-maintained facilities, quality tools and equipment, and reliable air conditioning and heat systems.

Juke Auto also throws in fun perks such as monthly barbecues, holiday

parties and potlucks, and games with rewards for hitting certain business benchmarks. Most gatherings are held during the workday to avoid adding more hours to employees’ schedules.

The company uses social media to highlight employee and customer appreciation events for anyone who might be investigating its culture. “I’ve been surprised that a good number of people put money further down the list of what they’re looking for,” Ball says. “You don’t have to have the richest shop to have the best shop.”

Implementing a thorough new-hire vetting process is also crucial, Schmidt adds. When he first opened his doors, he brought on employees after they filled out a generic application form and did a short interview that often revolved mostly around salary discussions.

After several bad experiences with employees, Schmidt no longer considers applicants who haven’t compiled a resume, answered a few written questions,

STEPPING BACK Juke Ball learned that it was best to get out of his own way and to delegate tasks and trust his team in order to turn the corner on shop ownership.

0 2 . 24 / R + W / 2 3

F E AT U R E

and done an initial phone interview with Lauralee, who digs into who they are as a person and their work habits. Only then do approved candidates talk to Erich about their technical skills.

“I need to know someone can administratively do simple tasks and be a positive teammate,” he explains. “Doing your best to feel out if someone would be a good fit in your work environment is still probably the hardest part of the business for me. It takes effort.”

KNOW YOUR VALUE As many industry coaches will report, first-year owners tend to undercharge for parts and labor. Many of them also spend too much time thinking and worrying about competing shops in their area.

“I do remember looking around and setting my prices cheaper than everybody else, even if it was just by $2 or something,” Schmidt says. “I wasn’t focusing

on myself and what my own shop needed to do its best. I may be the most expensive shop in town now, but good results are worth paying for.”

Higher net profits also will translate into better pay for skilled technicians and service advisors—which should reduce staff turnover—and allow for investments in upgraded facilities and tools that employees want.

“You can’t provide the latest equipment for modern cars if you’re not charging appropriately,” Schmidt says. “You’ve always got to be thinking about improving your business, not just landing individual jobs.”

Ball also warns against taking just any job, although new business owners are understandably concerned about building up a customer base as quickly as possible. His policy is to work only on vehicles made in 2000 or later, with some longer-term customers grandfathered in.

“Whatever you work on, that’s the sort of customer you will attract,” he notes. “If you take on old cars with owners without money to fix them, you’re generally going to get more of those. And no insult intended, but it’s tough to make a living on that.”

Ultimately, of course, time plus some inevitable trial-and-error moments are the best business mentors of all. Schmidt and Ball say they’re continuously learning in their roles, despite more than three decades of combined experience.

Yet as the two owners look ahead to the future, they also suggest that business leaders reflect regularly on what it was like to be a technician, service manager, or other automotive employee as they make decisions.

“Basically, I have tried to build the shop that I would have wanted myself as a technician,” Schmidt says. “I think that’s a way individual owners can be part of elevating our entire industry.”

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PROFILE

Technicians Run the World ADD EXCELLENCE IN COMMUNICATION PLUS INTELLIGENT TECHNICIAN AND YOU GET ANDREW MCGEE, SOLANO COMMUNITY COLLEGE INSTRUCTOR

BY KACEY FREDERICK

2 6 / R + W / 0 2 . 24

DATA S OU RC E: EN DE AV OR BUSI N ES S I N T EL L IG ENC E

Some of the most influential figures in the automotive industry right now are those who are working to educate the next generation of technicians and to show those considering their own paths that the automotive industry has valuable skills that are in demand and can supply a high-quality career. Growing up in Vallejo, California, automotive instructor Andrew McGee didn’t have easy access to programs and training. For the past decade, though, Solano Community College has offered Vallejo locals the pathway to start a career in the field, with McGee being one of the faculty’s leading instructors in the subject.

Ratchet+Wrench spoke with McGee about his entry into automotive education and what his experiences offered him that he now passes down to his students.

A New World

The automotive program at Solano Community College had been put on hold for over a decade, until 2013, when McGee and his colleagues helped revive it.

Not only did McGee feel compelled to provide the resources he didn’t have when he was a student, but he already had a background in education at the time, having taught K-12 for a while.

Though he never thought he would attend college, he not only earned an associate degree in automotive studies but also a bachelor’s in communications. He then went on to gain a master’s and is now pursuing a doctorate.

As he began to lay the groundwork for his career, McGee wasn’t sure where to set his sights. He was trained in automotive work but enjoyed the writing and editing work he did throughout college and the opportunity he had to meet people and learn.

One career path that attracted him early in his career was editing for automotive magazines, which helped him realize that there were other opportunities in the field besides only working as a technician. His horizons broadened.

“I wasn’t aware of all of the options available to me, not only as a student, but as an automotive technician,” remembers McGee. Part of what motivates McGee today stems from that prior lack of knowledge, culminating in a desire to share with his own students the variety of different paths available to them with the skills they learn through his teaching.

Not only is there a need for those han-

dling finances or customer service within the automotive industry, but many of the skills learned are transferable to other fields. McGee has had students use the training they received at Solano to pursue careers repairing medical equipment in the health care industry.

“Electricity has been around for a very long time, and it hasn’t really changed too much,” McGee says. “So when our students master the electrical skill set, they’re poised to go into various types of industries, not just automotive.”

A Place for Anyone

Students in the automotive program learn about an assortment of topics, including engine performance, automatic transmission repair, hybrid and electric vehicle repair, brakes, and more, but one of the most important lessons McGee passes onto his students is that there is a vast array of career opportunities just within the automotive industry alone.

“It’d be very shallow to say that being a technician is the only way to get into the automotive industry,” McGee says. “We train our students on a lot of the soft skills, so that even if they don’t plan to become a technician or mechanic in the industry, they can still be in the automotive industry doing other things from the other skills that they learned and that we have throughout our course material.”

Since starting as an instructor, making his students fully informed on all they need to know is something McGee has continued to improve at, especially as the automotive program’s student body has steadily grown since its relaunch a decade ago.

Many students are those who have been made aware of the different careers in the field and realized there’s a place for them, even if they aren’t technically inclined, highlighting the importance of spreading that message to more young people seeking careers.

McGee is a hands-on teacher who gets his students directly involved with the work–something he feels differentiates him from automotive programs in the past. Even during lecture portions when discussing theory, it isn’t only discussion, but can include touching, feeling, or smelling different problems and scenarios.

McGee has no shortage of pride in his students, though he can’t help but reflect on how many more resources there are for them now that he didn’t have early on

Filling the Bays How easy or difficult is it to find qualified technicians to work at your shop?

Small Shops (1-3 BAYS)

71% of small shops say it's very difficult

Medium Shops (4-7 BAYS)

60% of medium shops say it's somewhat difficult

Large Shops (8+ BAYS)

69% of large shops say it's very difficult

0 2 . 24 / R + W / 27

PROFILE

in his own training. This is part of what drives him, though: getting to be a part of something that fosters innovation and making the field he works in even better.

“Sometimes I’ll look outside and I’ll see the modifications they’ve done on their vehicles, and I kind of chuckle to myself because I barely had air conditioning–matter of fact, I didn’t have air conditioning when I was going to college,” McGee recalls. “So it’s definitely a new world, and I’m glad that the students are here to share with us.”

A Man of Many Talents

While nearly anyone in the automotive industry would know their way around a car, not everyone can teach those skills to others. Being someone with talents as both a technician and in the realm of teaching and communication, McGee is a vital part of recruiting more into the field.

As an instructor, McGee connects with his students and works to understand what areas they need extra help in and the best ways to address those gaps in knowledge.

“We not only do we cater to the kinesthetic learners–the hands-on learners–but we also kind of tend to the visual learners and the auditory learners as well,” McGee explains. “I think as an instructor, it’s our charge to have that unique perspective to kind of iterate our lessons accordingly.”

Though the number of students in the

program continues to expand, McGee believes that there must be more awareness of what a career in the industry encapsulates: that it requires working with software and cutting-edge technology; being able to work with a team and communicate to customers; having an understanding of chemistry with regards to things such as engine performance and emissions; and having skills that will likely always be in demand around the globe.

McGee wishes to see more positive representation for those working as technicians, as they’re responsible for keeping things running that most people rely on every day. Rather than being considered as a plan B option, he wants to see more people actively motivated to learn about automotive and how careers in the field are some of the most important jobs that need to be filled.

Promoting a more positive image of automotive careers is something McGee hopes to start more conversations on as he delves into the subject as part of his doctoral research. In the meantime, he does this every day through his work at Solano by showing his students how those who work in automotive help keep the world spinning.

“Funny thing is–I halfway joke about it, but I’m pretty sure it’s true–that mechanics run the world,” McGee remarks.

“No police car, no fire truck can get to its destination if it’s broken down.”

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2 8 / R + W / 0 2 . 24

Career Conversation

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T O O L B OX / F I N A N C E

7 TAX PREP TIPS FOR NEW SHOP OWNERS

If this is your first rodeo, these tax tips will keep you in Uncle Sam’s good graces

BY ALISON JOHNSON

For the vast majority of new automotive repair shop owners, fixing cars is the easy part of running a business. Preparing for tax season is not.

The name of the game, of course, is to take advantage of all available deductions and only pay the money you truly owe to the government. That requires plenty of planning and, ideally, a close partnership with a knowledgeable certified public accountant (CPA).

“Most people who start a shop understandably have little to no background in financial compliance,” says Eric Joern, a partner with Kaizen CPAs & Advisors, a five-office practice in Illinois and Wisconsin that specializes in working with auto repair shops. “If you’re not careful, you could end up losing a lot of money.”

“Every shop has very individual goals and needs that need to be taken into ac-

count when decisions are made,” adds Hunt Demarest, a senior accountant with Paar, Melis & Associates in Maryland with a similar focus. “You want to be proactive and avoid big surprises.”

Here are some of the top tips for owners:

once you pass an approximately $60,000 profit benchmark, you likely would benefit from tackling the paperwork to convert to S corporation tax status.

Note: you will remain an LLC for banking and operational systems.

Select the best tax structure.

Determining if your business should operate as an S corporation, Limited Liability Company (LLC), partnership, or sole proprietorship for tax purposes is a crucial but often-overlooked piece of planning.

In some cases, simply switching how the Internal Revenue Service views your business as a legal tax entity can result in significant savings.

And what works well for a small shop might not be the best answer for a larger one. If you begin as an LLC with a sole proprietor, for instance,

Avoid business decisions based solely on taxes.

“Ask yourself these questions: ‘Will this purchase or investment make me or my team more money, or make our lives easier and more efficient?’” Demarest advises. “If it makes business sense, don’t let taxes be what stops you.”

On the flip side, don’t make choices only because of taxes, either. If you need new equipment, purchase it. If you don’t, you shouldn’t buy anything just to score a write-off. Ditto for capital investments and physical expansions.

0 2 . 24 / R + W / 31

T O O L B OX / F I N A N C E

If you’re already planning on making an acquisition or doing an upgrade project soon, however, consider acting before the end of a tax year.

Plan ahead.

Many new shop owners make the mistake of waiting until year’s end to review their financial statements, which can lead to unexpected tax bills.

Instead, look at statements monthly and provide your accountant with six months of financials in the summer for a mid-year review. Use a separate bank account and credit card for all business transactions to capture everything that could qualify for a deduction.

By October or early November, submit the rest of your documents to date. “That will give you time to make decisions before the end of the tax year,” Joern says.

“If you’ve had a strong year of profits, for example, you might opt to spend some money to mitigate your tax bill.”

After Jan. 1, turn in all financial information for the year as soon as possible.

If your taxes are completed earlier and you owe more than expected, you won’t face a last-minute scramble. Finally, ask your accountant to help you develop a rough tax plan for the new year.

Always fund your retirement accounts.

While tax-saving strategies generally involve spending money, contributing to a Traditional IRA, Roth IRA or 401(k) amounts to getting a tax deduction for putting money in your own pocket.

Understand deduction rules for acquiring equipment.

Whether you pay cash-in-full for an item, sign a lease-to-own agreement, or obtain a bank loan with monthly payments, all count just like upfront cash for tax purposes, in whatever year you sign an agreement.

In other words, if you buy a Hunter Alignment Rack for $100,000 but don’t have enough cash on hand, you may decide to spread out the expense with $2,000 monthly payments. You can still write off the entire $100,000 in that year.

Purchasing shop vehicles.

New and used vehicles are no longer considered differently for tax purposes.

3 2 / R + W / 0 2 . 24

“If you’re not careful, you could end up losing a lot of money.”

- Eric Joern, Partner, Kaizen CPAs & Advisors

Instead, size matters: anything with a gross vehicle weight rating above 6,000 pounds qualifies for accelerated depreciation, meaning you can write off the entire purchase amount in the first year.

Unlike those bigger SUVs, pickup trucks, and vans, cars and small SUVs have a first-year write-off limit of $18,000, with the rest depreciated over five years.

Doing renovations.

Doing work that improves your buildings or grounds but doesn’t expand existing square footage or acreage is defined as a qualified leasehold improvement and again offers a one-time write-off opportunity.

That includes repaving parking lots, replacing flooring, roofing or siding, painting interior spaces, and renovating waiting rooms. Expansions, on the other hand, usually must be written off over a much longer period.

Follow state-specific sales tax and payroll deduction rules.

Charging the incorrect amount of sales tax or not remitting enough money back to the state can lead to large penalties.

So can errors involving payroll withholding, including late payments to the government, Joern notes: “The IRS takes that particularly seriously. It’s considered to be stealing.” Be sure to have a good payroll system in place before ever hiring your first employee.

Reward your team.

Salary bonuses, which are taxable, are not the only way to boost employee morale. You might reimburse technicians for tools that they buy, host staff parties, or send out gift cards, which are taxdeductible for you and not considered reportable income for recipients. Just be sure to do so before the last payroll of the year.

Structured for Success According to LegalZoom, there are benefits to each business structure. The key difference?

An LLC is a business entity and an S corp is a tax classification.

This means each has different levels of liability protection, taxation benefits, and management structures.

Read more about the differences by scanning the code.

PHOTOS COURTESY OF DAN ADAM

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THE STRANDED MOTORIST FUND: PAYING IT FORWARD How Dan Adam of Adam & Son Auto Repair found a way to change the lives of his customers in need

BY TESS OWINGS

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“This doesn’t happen. This is a miracle.”

This is a quote from one of the recipients of a car repaired through The Stranded Motorist Fund in a touching video testimonial.

“If you’re hungry, you can go to a food bank,” Dan Adam says. “You can’t do that for a car.”

Transportation, for many, is just as important as food. It’s how people get to and from work, school, and

loved ones. However, according to a survey by MarketWatch, over a third of Americans would not be able to afford a repair over $500 without going into debt.

Adam, owner of Adam & Son Auto Repair and Service in Colorado Springs, Colorado, made it his mission to help people unable to pay to repair their vehicle and funded the Stranded Motorist Fund, an organization that helps those most in need.

Backstory: Since Adam started his career, he’s wanted to make the auto industry a better place for those who work in it and for customers. This stems from his first job as a tech, where he worked in what he describes as a toxic culture with horrible customer service. When he opened his shop in 1999, he wanted to take all of the ideas that he’d been brainstorming for improvement and implement them in his shop.

Problem: Adam realized The Stranded Motorist Fund was needed when one of his service advisors asked what they do if someone needed help getting a car repair that they couldn’t afford. There was financing available, but for some, that wasn’t enough. Adam tasked the service advisor with finding resources and when he realized that there wasn’t anything out there, he decided to do something about it.

Solution: In 2020, The Stranded Motorist Fund was founded to help people in Colorado Springs who can’t afford a car repair. Since it began, it has helped with over $150,000 in car repairs and put many, such as Mary, back on the road.

Mary, a CNA, was coming out of a domestic violence situation where her ex-partner was following her and vandalizing her vehicle.

The car eventually broke down and because she was unable to pay to have it fixed, she was unable to get to work or go shopping for food. The Stranded Motorist Fund heard about Mary’s situation and decided to do something about it. Because of the Stranded Motorist Fund, she was able to repair her vehicle, get back to work, and visit her granddaughter for the first time in over a month. It’s easy to take a vehicle for granted, but when it breaks down and you’re unable to repair it, you see just how essential it is. The Stranded Motorist Fund has changed the lives of those who have benefited from it.

To be considered, customers fill out an application that is reviewed

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JODIJACOBSON / ISTOCK / GETTY IMAGES

by the Stranded Motorist Fund committee. The application vets customers out to see why they need the assistance and how they will pay it forward. Once a customer is approved, the repairs can begin. On average, Adam says they see about 10 applications per week. Anyone can donate to the fund.

Aftermath: Since 2020, The Stranded Motorist Fund has raised over $150,000 in community support, most of which has been funded by Adam. Beyond helping the community and having a huge impact on individuals’ lives,

Adam says that it’s been a huge boost in morale for the staff and helped him create a culture where people want to come to work.

“Helping our community helps us with our own people. People want to be a part of it when they hear what we’re doing. They come to work with a sense of purpose knowing that they get to impact people’s lives and work for a shop that has a bigger purpose,” Adam says. “It is so great to be a part of something bigger than just fixing cars.”

Being a part of something so positive also helps with attracting and retaining customers. It’s also

been a great marketing tool, and, even though it is not at all why Adam started it, it’s been a bonus!

Currently, the fund is only available for Adam’s shops, but he would like to take it to a national level. Right now, he’s in the process of testing it out at his two locations to make sure the proper processes are in order but he’s in talks with other shops that are interested in joining the mission.

Takeaway: “You can be profitable doing good,” Adam says.

“If you can find a way to do good in your community, it pays dividends.”

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THE 35,000-FOOT VIEW

Maximizing Yield: The 300% Rule

Does this popular industry-wide method of doing business need reconsideration?

There have been many impassioned discussions about the 300% rule on online

forums lately. For those who may be unfamiliar, the 300% rule in its simplest form is:

1) 100% of those vehicles presented for service/repair are to have a multi-point inspection performed with an emphasis on those items critical to safety, reliability, and efficient operation. Some shops also include cosmetic repairs as well that they sublet out.

This rule has its genesis in two ideas: a. We as automotive experts have a moral and professional obligation to perform a multi-point inspection because it’s generally accepted that most consumers do not have the expertise, experience, or ability to evaluate the condition of their vehicle in those areas. This is the public face of the multi-point inspection. b. There’s a private face that is seldom discussed with the public and for good reason; it reeks of conflict of interest. We operate a business and that multi-point inspection is a profit center. It’s no secret that one of the most frequently heard complaints from vehicle owners is that shops are “finding things to upsell.” If you’ve ever been to a family gathering, you’ve most certainly heard someone complain “I went to the shop for an oil change, and they came out with a list for thousands of dollars worth of work. All I wanted was a damn oil change.”

2) 100% of the results of the multi-point inspection, as well as the steps necessary to remedy the customer’s initial complaint(s), are used to create an estimate to be discussed with the customer.

3) 100% of the estimated items are to be presented to the customer with the remedy to the original complaint being presented first, followed by safety, reliability, efficiency, and in some cases, cosmetic issues.

The 300% rule is often paired with a DVI (digital vehicle inspection). The technician may take photos and videos which 3 6 / R + W / 0 2 . 24

are then annotated with explanatory notes to help the customer understand what they are seeing. It’s an effective sales strategy.

Research has shown that approximately 65% of the general population may accurately be classified as “visual learners.” This means seeing information helps them to understand and retain what is being presented. The estimate usually accompanies the DVI results as well and is usually sent via text. The concept isn’t new. Older shop owners have been doing this for years by attaching photos and videos to email. The difference now is instead of emailing, texting is frequently used.

In principle, I have no objections to performing a multi-point inspection and then presenting the results of that inspection to my clients. I think it important that they are apprised of the condition of what is typically their second or third most expensive expenditure following the purchase of their home and college education for their children.

What troubles me about the 300% rule is the execution and rigid adherence to a procedure without context. Exceptions to the rule must be made in the best interest of efficiency and productivity, but to speak of such things is considered to be heresy among some of its most devoted advocates. Such exceptions include but are not limited to:

4) Presenting an estimate on numerous occasions of non safety related items when that customer has repeatedly declined that work can be rightly perceived as pestering them and may damage the trust that owners work so diligently to earn.

Lastly, Performing a courtesy inspection or creating a DVI must happen only with the vehicle owner’s explicit approval.

Just because they brought the car to you does not automatically grant you the right to perform that inspection. It’s their property to do with or not do with as they see fit. Whether you want to perform their requested work, or even have them as your customer if they refuse, is a different discussion for another time.

1) Sublet work for a body shop on an insurance claim. Anything not related to the accident will generally not be covered.

2) If work is subcontracted to your shop from another shop for a different issue and you call the vehicle owner to make recommendations, and if you call the shop that sublet the work out to you and tell them, it’s almost a sure bet that they will want to perform the work themselves.

3) If the customer returns within days or a short period of time as defined by the shop since the last visit. Performing anything other than a visual inspection of the tires to ensure that they haven’t been punctured or damaged since the last visit can negatively affect productivity and shop efficiency.

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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