Maylan Newton is waving his BS flag for all to see. Speaking at AAPEX 2021 in early November, Newton said it breaks his heart when shop owners tell him “I haven’t had a paycheck in six months.” When he asks them why not, they say they can’t afford it. That’s when his BS flag comes out.
“That’s not true. Price is relative,” says Newton, who is the CEO of the Educational Seminars Institute. “The business has to be structured properly financially, productivity has to be where it needs to be — and you can’t blame the techs for that. It’s the whole shop’s issue.”
Shop owners need to be paying technicians for that they’re worth, Newton says, as well as paying for proper training and equipment. These costs need to be passed on to the customer.
“They’re paying 30, 40, 50, 100-thousand for a car, and we are still offering $19 oil changes. That just baffles me,” he says. “We need to get out of the idea that we are the bottom feeders of our industry and start charging what we’re worth.”
Pricing structure should be reviewed regularly, and shop owners shouldn’t be afraid to implement an increase.
“Gasoline goes up every 12 minutes but most of you haven’t changed your pricing in a year or more,” Newton says. "It's about getting your financial house in order."
Co-presenter Greg Bunch, CEO of the Transformers Institute, echoed this sentiment and said many shop owners are vulnerable to this behavior because they went into the business for their love of cars and wanting to help people — not for the money.
“That’s great but it can be their own worst enemy because they are the ones that emotionally discount, they are the ones that don’t think they can get the markup that they need to, they get one person who pushes back and they think everybody hates them and they have to lower their price on everything,” he says.
Bunch also added it’s extremely important for shop owners to understand the profit and loss statement, and the balance sheet.
Recruitment
Having the right pricing structure feeds into your ability to hire the technicians that you need. If you’re not paying them what they’re worth, someone else will — whether that’s the shop down the road or in outer space.
“The employees that you guys are looking for, do you know who else wants them? NASA. NASA is looking for the same people and so is Apple and Microsoft. They are all looking for the same people,” says Newton. “And what do they have that we don’t have? They charge.”
Aside from the right pay, technicians also want to be a part of a team with a good culture, and they want to join a company they can grow with. During the hiring process, Bunch recommends shop owners make clear the opportunities for advancement along with ongoing training, ASE certification support, any tool allowance you have etc.
Shops also need to have a strong benefits package for their employees.
“If people say, ‘I can’t afford that,’ then I tell them, ‘Well, you’re not charging your customer enough because they are the ones that have to pay for it,’” Bunch says. “It shouldn’t come out of your pocket. It’s a cost of doing business and that expense needs to be passed on to your customer.”
If you want to put your best foot forward to new potential employees, talk to your existing ones, Bunch says.
“Find out why your good employees stay with you and keep doing that,” Bunch says. “It’s not one thing; it’s the whole package.”
