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Workshop Facts & how shop profits are made.

Profit in a shop only happens after a volume of work has been completed by someone, and that work has operated as expected by the customer for a time period of usefulness for the customer.

A customer is the only source of income for the shop and a priority of the shop manager or mechanic is to keep a customer coming back and having mechanical work completed. Repeat work from a customer is the first goal of the shop workers.

 

 

Communication to the customer is critical, real time communication works out well for those with intranet capabilities. The type of information that makes customers come back for more work is a daily correspondence to the customer as work is being performed for and on their behalf, and that the work performed has an accurate detail of the work that had been completed as it happens. Cost of repairs and the actual time the repair took to accomplish are two important factors to keep a customer.

 

 

Important to a customer is the time required to repair something or to get it running properly. Next is how much it will cost. Generally speaking when someone comes in for a two hour repair like a tune up or service and it is done the same day the customer pays and out the door. If that work ends up taking one week and the customer has to call every day and ask how much more time to repair it is likely a shop may have to reduce the hourly rate by reducing the total labor charge for the customer or that customer will not come back again.

 

 

In a general repair equipment shop there is work ongoing each day so likely is the need for the customer to first leave the work to be scheduled. Once the service manager looks at the work he or she estimates the time required to perform what is interpreted in the repairs. This is done in a step by step process and a very accurate estimate can be made in time to remove and replace bolts holding components together the more steps that are calculated. Use the example on the Estimates link to view a process that works very well. At no time should an estimate cost be over the estimated labor and parts value given to a customer. If that happens it directly reflects the experience in that particular shop. An experienced shop will give you a price and never exceed that price. A shop con is one that is consistent at charging small amounts over the estimate because unforeseen or said to be extra, bad business and more profits can be made after customers coming back know for sure when the service manager tells you 500 bucks it is never over that, consistency is what a shop owner looks for in a service manager. 

 

 

 

Quality of the work is imperative to have a good customer, good work is honest work that performs the repairs without any more problems for the customer.

 

 

A good customer is one that had work done before at your shop and that work had no complaints since those repairs were made. Heavy equipment shops have a difference compared to a regular auto or motorcycle shop. This difference is the customer expectations, how much money is anticipated for repairs and the need for what you are repairing in the workshop or field.


Usually a young mechanic will begin by working on small things like a push style lawn mower engine, something that doesn't run and is worth a couple hundred dollars and can be replaced for a few hundred with a new one. This category of customer is low budget and if you can't repair the engine on the mower for under the price of a new one then replacement is necessary. In simple when you spend $500 for a new push mower and use it for a few years and then it needs repaired an option would be to replace the entire push mower. That customer is not going to have your shop repair the engine if replacement is close to the repair total estimate. So the mower or beginner mechanic customer is worth possibly a few hundred dollars at best and most likely will complain about something else. Time is consumed that cannot be accounted for in that type of shop, unless the shop mechanic or owner becomes rude and pushes the inefficient work to the side. This type of mechanic shop business would include mopeds and things that are relatively inexpensive compared to the  heavy equipment shops.


So the new mechanic starting out at 10 dollars per hour in this type of shop would cost the owner or manager 14 to 15 dollars per hour 8 hours a day five days per week. Add the shop rental, lights, insurances and find that now the shop is costing 40 dollars per hour to operate.


In the small engine, moped, lawn mower shops the shop mechanic or owner has to deal with many customers willing to spend small money for repairs. Much time is spent doing nothing but talking to customers that want information with little work that takes time to decide what to do. Most mechanics get very upset because of people interrupting them when they are on a timeline for other repairs for other people that will again take time out of shop efficiency by wanting to talk.


The skills required in this shop start at a desire to work in a mechanical based trade and a trip to the inexpensive tool kit store. Tools are key to repairs but at this entry level knowledge is absent on the critical need to have good quality name brand tools like in the tool trucks that stop by to sell mechanics on a payment plan for good tools. At this level just having some off brand cheap tools fills the toolbox and is sufficient until more experience is gained by the mechanic.


 

The next level of shop experience is the automobile shop, next level truck shop, next level heavy equipment shop. At each level upward on the mechanical trade as a mechanic a larger knowledge and skill base needs to be achieved. From the lower parts changer to the experienced repair technician they are critical to the success of the repair shop. The thing about being a mechanic is the work performed needs to work properly, not leak any fluids, and continues to work to the customers satisfaction. If those three things can be accomplished then for sure you will have the potential to make profits in the shop. 

If you have taken your equipment into a workshop and paid for your services and the work broke shortly after or, if you feel you have been taken advantage of by a local workshop please go to our Contact Us page and let us know the details.

 


Hanaparts will assist you with expert assistance in resolving your mechanical disputes with other workshops. If you feel you have been overcharged for the work completed also contact us.