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Auto Repair Shop Owners: Clarity Helps You To Charge What You're Worth


Clarity Helps You to Charge What Your Worth

by Rick White, President 180BIZ                                                                  (Estimated Read Time 4 minutes)

Your Effective Labor Rate is one of your silent profit killers.

Many shop owners think their labor rate is what they post, but it's not. It's what you collect that matters. But how do you get on top of this?

You need CLARITY.

You must know what it is and what it should be so that you can begin to get better. While running some profit numbers with a client last week, his Effective Labor Rate in the proper zone was a $12,000 difference in one month.

Be aware of where you're at now.

Don't go into ask butt-kicking mode. That's a mistake. Instead, step back and just be aware. Accept where you are now. Don't get upset about it. It comes down to billing properly. This is simply charging for what you do. A lack of awareness is the first issue.

Your second issue is your emotional bank account. It's when you are looking at an individual invoice and you're afraid, or your advisor is afraid of billing this out properly. And in the process of doing that, you start to whittle away at your profit. And it's only a little bit here and a little bit there, but guess what? Before you know it, it's $12,000 in one month. That's a lot.

So one of the things I want you to be aware of is that emotional bank account. Where is yours coming from? Why are you afraid to charge what you are worth?

Stop thinking you're selling time and start thinking that you are selling experience.

It doesn't take you an hour to do a job. It took you 15 years or your techs 15 years to figure that out. Ask yourself, “Where's this emotional bank account coming from?” Is it afraid of being too expensive? Is it afraid of not being able to communicate your value? Is it a fear of being rejected? Is it a fear of failure? Is it a fear of not paying your bills? What is it that's causing you and or your team to whittle away at your profit?

Step back and ask the tough questions.

And when you get to the, “I don't know” answer, remember that “I don’t know” stops growth. “I don't know” kills growth. Until you can get past that, “I don't know” stage and dig in, of course, you don't know. That's why we're asking the question. You must ask that question and then push through it. Push through that resistance and ask yourself five to seven “why's.” Why am I doing this? Why am I doing that? Why is that like that? You will get to the bottom of it. How do you know when it's real? When you get down to some kind of fear of concern or issue that is causing you to pull back.

You may be pulling back but no one else knows you are. You think you're doing a nice thing. But that’s the story you're telling yourself. You think you're doing a nice thing for your client by giving them a break and that'll make you feel better to help them out. They don't know. You're not telling them. So it's like winking at a pretty girl in a dark room. You're the only one that knows you're doing it and you're the only one that feels better because of it. Instead, find out where is this coming from. Why aren't I charging what I should be charging?

I was having this conversation the other day with a client. There are a lot of advisors out there that when they realize if they have technical experience, where they see a six-hour job and they think I can do it in three, I'll charge four. That's killing you. Here's the issue. What about all the ones you go upside down on? What about all the jobs that eat your lunch? That's what you must be aware of.

It all comes down to clarity.

It's being clear about what is happening right now in your shop. But then the second part of it is to understand that it's coming from you. Not billing from your team, not billing for the labor, and then asking why. And digging down to the point where you can get comfortable charging a fair price, loving your clients, and doing what you need to do.

If this resonated with you, share it with someone. There is someone out there that needs to hear this.

God bless. Go have some fun. Go make some money.

Take care. Thank you so much.


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