Automotive & HD Business Management Articles.
Bob Greenwood. May 22, 2014. ( over 6 years ago ) 1,367 views
Many shop owners tell me they cannot compete on technician wage levels other industries are prepared to pay.
I respectfully disagree.
Do the math. It is not what you pay hourly: it is how many hours per day the technician gets billed:
A $25 per hour technician who is billed out for an average of 5.3 hours per day at $100 per hour generates $82,500 per year (based on 50 weeks per year) gross profit contribution to the shop after he/she are paid.
Conversely, a technician who is paid $39 per hour, but is billed out 8 hours a day at $100 per hour will generate $122,000 per year (based on 50 weeks per year) gross profit contribution to the shop after he/she are paid.
That’s an additional $39,500 more contribution to the shop the higher paid tech contributes than the lower paid less productive technician.
You also must evaluate front counter staff as well. A competent professional service advisor who knows how to communicate clearly to educate the client and build a secure and trustworthy relationship is worth much more to the shop than a service advisor who simply “sells” the flavour of the day… the “seasonal special” as instructed by management.
Slow down and learn the math of your business because “perception” of what you can do and afford can be way off base as compared to the reality of the actual situation.