Labor rates and parts mark up are a fine line . You don't want to be too high and drive business away,BUT ,you have to make enough to keep the doors open and make a profit,,it's not a dirty word . There are a few shops around here living in the past and charging minimal rates. One or two close every year, New one springs up gonna set the world on fire with cheap parts and labor . Oh yea,,they are busy alright . After a year of stuggling to pay bills They are gone. Usually those shops have no insurance , pay no taxes. Eventually everything catches up with them. My buddy closed his shop after 40 years in business. Pretty sad to see. Tried to help him out , get him up to speed on newer stuff, did some diagnois on problem cars. He would not invest in training or tooling. He claimed he could not afford to. Well when his labor rate remained 42.50 and only 10% parts , he was bound to go broke . Of course he was busy for years. Cheapskate customers flocked to him . As his quality of service declined over the years those customers that were so loyal because of his cheap rates bailed the sinking ship . I too have been there done that . Started out as a mechanic that wanted to" own my own place ". I had no business training to start with . After few boom years of dealing with the Vampires that feed off you and cheap rates I was ready to call it quits ,find a job . Talked with some long time shop owners , got some training in running the office. I was able to turn around the sinking ship. Not where I want to be by a long shot yet , but getting there . I am no longer afraid to raise my labor rates or parts margin . This is because I know what they need to be to pay my overhead, my help, and me . I am no longer afraid to turn work away . Fire some customers that you can simply not make happy no matter what you do for them , or the price shopping Vampires . I'm still cheaper than the dealers around here,,but not by much . My rant for the day ,,thank you !
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Today's Featured Article - Tuning-Up Your Tractor: Secondary Ignition Wires and Distributor - by Curtis Von Fange. In our last episode we spent the entire day checking out the spark plugs. Is that efficency? Actually, it took more time to explain than it really did to do the inspection. At any rate we decided that a compression test was in order so we could verify the internal engine status. That way we wouldn't buy any tune up parts until we were sure that the engine was in reasonable mechanical condition. Our tests showed a fictional compression reading of 85, 80, 82 and 86 psi. That is well within a
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