Dave Redinger
davidredinger@rogers.com

March 25, 2010

Garage Business

The Big Ticket

 
If you’re not making the money you think you should, perhaps it’s time to take a second look at the way you price your work.
 

Let me ask you a personal question: What are your services worth? That may sound like an odd thing to ask, and you might want to answer it by quoting your posted hourly rate. But let me assure you that there’s more to the question than meets the eye.

Allow me to share with you a personal experience. For years I had been my own worst enemy when it came to dealing with customers. The problem had to do with my belief (or “principle”) that if I actually asked what the job was worth, I’d lose the job. In fact, I believed fi rmly that I would lose the job to someone who would be able to do it for less than I could. Moreover, not only would I lose the job, but I would lose the customer, too.

Turning point

After a few years of living off the cash flow and hustling to pay the bills, I attended a seminar given by a local jobber. After the instructor fi nished his song and dance about whatever he was fl ogging, the group broke out into a discussion about some of the real issues that were plaguing us. One of the issues that stood out in my mind is the fact that we were never getting the total revenue we were due when quoting work.

It seems we always had to discount the repair or the parts or something else in order to get the job. The customer was always looking for a deal... or at least I thought that’s what was going on.

The speaker nailed it when he said, “Don’t be afraid to write the big ticket.” He was absolutely right. We were afraid to write the big ticket, and that, in the proverbial nutshell, was the problem.

That day changed my life because that’s the day we changed the way we approach repairs. Now we wrap our heads around the job rather the cost of the repair. In short, the question we ask ourselves is what is it going to cost to do the job right the first time?

Objections

To overcome any cost objections, we offer delayed billing and financing. We don’t discount. And since we implemented this policy (granted, it didn’t happen over night) we have become a better and more profitable shop. We are currently running at 3.2 hrs per work order with the average work order weighing in at about $642.

There are several reasons for this:

• We have weeded out all the customers that were not profitable, price shoppers, hangers-on, etc.

• Being able to conduct a proper repair leads to almost no comebacks.

• Good parts come with good warrantees, if things go sideways.

• We aren’t doing repairs for free so we can afford to sell more hours.

• The guys (myself included) are making more money.

• Not having to scramble to make the rent has allowed us to manage the company rather than spending our valuable time putting out fires.

So remember these words because they might just change your life:

DON’T BE AFRAID TO WRITE THE BIG TICKET!
 

Dave Redinger is a mechanic with over 40 years experience. He owns and operates his own shop in the Toronto area. Dave hosts the Neighbourhood Mechanic show, heard on Chum 1050. The Neighbourhood Mechanic can be seen on Dave’s national Television show on E Channel. Both shows deal with automotive issues.