Maintaining Profits In The Auto Repair Business

CEO and Founder, Chris "Chubby" Frederick

I think that if you drive around any community, you might notice quite a few auto repair shop. Same here in the Baltimore area. All those shops have owners, many of whom may have dreamed the dream of owning their own shop one day.

But there is much more to running a business than seeing your name on the shop's sign, or even being the best auto repair person in the entire area. It does take some business acumen to run your own shop, something that AUTOMOTIVE TRAINING INSTITUTE (ATI), in Linthicum, MD, eagerly provides. They are there to train, coach, and advise, helping the shop owner with developing a state-of-the-art business model, which helps him/her distinguish the repair shop from that other one down the road.


I'm sure it has not gone unnoticed that auto sales have been down, and the repair shops are noticing a decreased volume of customers. Shops rely on volume and profits to provide income for their owners and workers. So, it pays to consider how to manage at least to maintain profits, while volume is decreased. It is ATI Coach Steve Privette's advice to audit your repair process on every order.

How Steve goes about it is to have all service writers leave their repair orders with him at the end of the work day. He then goes through all of them a 1/2 hour before the start of work for the next day, checking them against a checklist derived from key performance indicators. He highlights anything that wasn't done or wasn't done properly. Then he checks margins to make sure that they were within the set goal range. Then he returns them to the service writers. Then they have to justify why any item on the orders did not comply with standards and goals. Steve said that this help to hold them accountable for performance and it reminds them to remember the standards and goals every time they service a customer's vehicle.

Do you know what happens when you monitor performance in this way? It improves, as Mr. Privette noted, with his workers. Fewer highlighted items as time went by, and those fewer highlights aligned with increased sales and profits.

Attendees at this year's ATI Super Conference in Florida.

That actually was only the start of the audit process. There are other areas to review, including parts margins, labor margins, courtesy checks, and labor rates. By reviewing all these areas, auto repair shops can cut down costs and increase profits, providing rewards for all of those who do the work and keeping the shop in business.

What everyone who works for ATI keeps in mind.

Thanks for information from this article in Motor Age from by Chris "Chubby" Frederick, CEO and Founder of ATI: http://www.autotraining.net/articles/2016-09_Are_You_Profitable.pdf; and the above link.

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