Just ONE Thing
Stop Chasing Sales: Profit‑First Strategies for Your Auto Repair Shop
Episode 201
with Rick White, 180BIZ
Good morning, good afternoon or good evening. My name is Rick White from 180BIZ. We are a coaching and training company for the independent auto repair and truck repair shop owners. Okay, so here's my Just ONE Thing.
What do I want to talk to you about today? I want to talk to you about SALES. Let's talk about this for a sec. I really want you to understand that this is a super, super important discussion. And it was funny because I had this conversation last week with another client, and we were talking about things, and he says, I just gotta make more sales. And I got more sales. I gotta make more sales. Just gotta make more sales.
And I finally said something to him that kind of rocked his world, and I hope it will yours. There's a difference between making a sale and making a profit, right? Think about what constitutes a sale. A sale is activity. It's volume. And we have this misconception that if we have more volume, we have more success. So let me step back though, and have you think about this for a sec. Is it really your sales that keep the doors open? I want you to think this through. It's not the sales that make a difference. It's the profit. I'm seeing so many shops pushing for sales, pushing for sales, pushing for sales, and at the end of the day, they're not making the money that they could and should be making for the end of the month. Man, come on.
How much does it suck when you run out of money before you're out of month? This is a big deal, and it happens because when you're focused on sales, you don't know where your gross profit is, where your margins are, and what ends up happening is you're working really hard for less money, right? For less profit.
So I want you to just understand that number one, sales does not equal profit. There are some jobs that you are doing, I promise you should not be doing. Do you hear me say that you should not be doing some sales? There are some vehicles that you should not be working on. There are some systems that you should not be working on. I have a shop right now that's absolutely burying themselves in diagnostic work when they don't have a good diagnostic tech. So they're killing themselves getting cars fixed, because we're focusing right? Because what is the technician mindset? Technician mindset equals success, right? Success equals when I close the number of hoods on fixed cars as I opened on broken cars. So, if they really take a lot of pride in what they do, and trust me, I don't — I'm not beseeching this in any way. But when you have a tech that has a lot of pride in what they can do, you will have a tech that will go upside down on a car, because figuring it out is more important than making a profit. Please, someone type that in the comments. Figuring it out is more important than making a profit, and that's super, super scary. This is why running a shop with a technician's mindset does not work. It can't work, right? You gotta slow down and make more profit. That's what it's all about. You've gotta be able to do that.
So I want you to understand what has to happen in order for you to make a profit.
There are three things that gotta happen.
Number one, you gotta make sure that a customer values quality over price. Okay. Now, a lot of us are under the misconception that everybody's a Price Shopper, and that's not true. Only about 20-30% of your market is truly driven by price. The other people that you're working with, they're driven by value but they're not going to sit there and figure out what that value is. You have to be able to clearly communicate the value that you bring to the table when they decide to work with you. That's the first thing.
Second thing, we've got to work on, okay? The second thing is, you got to understand what a difficult customer costs. Right? I was just talking. We were just talking the other day. At our orientation meeting with one of our new members, they were a little bit slow, and they took in a car they knew they shouldn't have done, and it just went sideways the entire way down. And they said at the end of the day, it would have been better just to hand the guy 50 bucks and tell him to go somewhere else. You've got to be able to identify people who appreciate what you do. That's the first part of the trifecta. Okay, you gotta slow down, stop working on a car and start making money, absolutely right? So the first thing you gotta do, number one, is find people that appreciate what you do. The second thing you've gotta be able to do is you've got to stay in your wheelhouse. What does that mean? It means being able to know your shops’ core competencies. Maybe it is diagnostic work. And if that's the case, we got to make sure we're pricing it. But we're going to do that differently. Talk about that in a sec. But what I'm talking about is, what are your competencies? Are you very, very good on certain kinds of cars? Are you very, very good on certain kinds of systems? Like I have some shops that I work with that are transmission shops. That's all they do, and it works. I have others that are just diesel shops, and that's what they do, and it's awesome, right? As long as they're doing it better, right? Doing it properly. Then there's also some that are system, you know, some vehicles, European shops, or you are nowhere. We're just a GM shop. Whatever the case is, you gotta know what your wheelhouse is. Okay? Because that wheelhouse allows you to be quicker, it allows you to be more efficient. In effect, when you can be faster, it means better margins. Does that make sense? More gross profit. And let's face it, net profit comes from gross profit. So we've got to understand so you've got to know when to refer work that's not in your wheelhouse. Stop thinking like a technician who says to themselves, who judges themselves by what they can fix by being able to figure out everything. It doesn't work. Okay? It doesn't work. That's why there are so many shops in trouble today, because the shops are being run with a technician's mindset. Next third thing. So the first trifecta. First trifecta is they gotta appreciate what we do. Second trifecta is, it's gotta be in my strengths. It's gotta be something we're really, really good at.
Third trifecta, the third trifecta is, you gotta make money, right? You gotta be able to really work on jobs that are going to allow you to make money. Okay, if you're not making money on a job, don't do it. Man, I can remember, probably about 20 years ago, I stopped by a shop. He was struggling. We sat down, we started talking, and you know what he said to me? He says, ‘Oh, man, you’re doing all services. You're losing $5 a service.” He goes, “Yeah, but I'm doing a lot of them.” That is not the right mindset. Walmart does not work here.
Share this video. Three things, number one, sales and profit are two different things. Okay, please share this video. Remember our Shop Owners Round Table, this Thursday night, 7pm Eastern.
First thing, they got to appreciate you, right? They got to value what you do. Second thing, it's got to be in your wheelhouse. Third thing, it's got to be profitable. Okay? So gotta ask yourself, “Is this something we should work on? Is this someone we should work with?” Start asking yourself that more question, those questions more often, and you're gonna find a lot of really valuable things.
Everybody, God bless. There's the timer. I'm out. Have a great week. Go make some money this week and have fun doing it. I'll see you all next week. Take care. Bye, bye.
