Carter Pembridge: [00:00:00] For joining us. Thank you for taking the time out of your day. Um, this is something that we’ve put together. You know, we’re thinking about going a few different ways and, uh, you know, Khrist and I, we talk to each other every day and we’re so tired of hearing the same stories and laughing at our own jokes that we’ve heard a million times before.

So we thought, Hey, we talked to guys every day. We have great conversations. We want to hear from the people within Shop Boss and what better way to start with Sal, who you guys are gonna really learn to love here. Real soon. Sal’s been in the business for decades, I think. Sal, you said you’ve been running your shop for, for nine years, is that right?

Sal Garcia: I’ve been running the shop for nine years. I’ve been a technician for over 35 years.

Carter Pembridge: That’s right, that’s right. Good. Pull off memory. I don’t remember anything. So nine year. Hey, there we go. I got points for something there. Um, and we really just wanted to sit down, have a conversation, a dialogue back and forth, and jump into like real stories.

’cause Khrist and I, we can talk here all day and make up fake examples. We want to know what it’s. Really like. Right. So, um, [00:01:00] Sal, thank you again for joining us and everybody else who’s here. Sal, let’s go ahead and jump into this bad boy. I really want to know your, your start. I think that’s so important, especially the people we talked to.

It really kind of sets up everything really. So talk to us a bit on how you started, got into the, uh, well, working with your hands, man.

Sal Garcia: Well that started back in high school. You know, I, I took a class, uh, not a typical auto shop class, but one that’s more of the, um, ROP programs where to get you in the trades.

But I had no intention of getting into the trade. I was like, okay, work on the small stuff myself and know enough to communicate for the big stuff. And I just took a liking to it. It took to it easily back then. It’s like you make a really good living. So I was like, ah, let’s jump into this. And I jumped in with both feet.

Carter Pembridge: Well, there you go. There you go.

Khrist Hussein: The water’s warm Once you’re in right Sal, it’s not an issue.

Sal Garcia: There you go. It’s always warm once you’re in.

Carter Pembridge: Yeah. Hey, I, from my understanding, we need more people out there in, in the, uh, [00:02:00] technician realm. Right, Sal? Always looking and bring on more folks. Man. It’s like a lesson need that far young guys.

Yeah.

Sal Garcia: Yeah. The thing is everyone’s going for, oh, keep your hands clean. Oh, you make better money. It’s like, yes, then, and these days you can spend, you know, 40, $50,000 on a college degree. And then when you come out, you know, the only job you can get is, will you like fries with that?

Carter Pembridge: Yeah, exactly. Well, when you, when you’re studying dance culture, right?

And, uh, instead of working with your hands and, and getting a real work, working for real, then uh, things can happen like that. Absolute.

Khrist Hussein: That was the only course I could get into Carter. All right. Yeah. And I’m really good at dancing now because of it. Thank you.

Carter Pembridge: Exactly. Khrist And I have no skills. That’s why we’re talking to you here.

Right? So talk to us. So after. After, after you’re, you’re in school, you know, what was your first job? What really kind of got you into it? What made you fall in love with it? Because obviously you stuck with it. Right?

Sal Garcia: Well, I fell in love with it while I was still in school. I mean, and, and I really took well to it.

Um. They, I had very good instructors that basically said, really get [00:03:00] hold, understand the basic theory of how cars work. If you understand that you can work on anything. And sure enough, I’ve worked on all different car lines. Um, I had to sit with Mercedes-Benz and when I first went to work for the dealer, I’d only worked on one Mercedes-Benz in my life.

Uh, within six months of being there, I was working on cars and issues. That guys with 15 years experience there didn’t know what to do. So, because when you understand the theory, it’s just, okay, how does each car edge manufacture control it differently?

Carter Pembridge: Right.

Sal Garcia: Right. Everyone gets stuck in the patterns and it’s like, okay, I’m never good at at picking up on patterns.

So I always look at everything with a fresh set of eyes every time.

Carter Pembridge: I love it. I love it. You know, Khrist, he’s got some dealership, uh, background and experience. I do, I do. I do with like the, the packing of the actual corporate side with, with Chrysler. I did a stent with them, but I am curious, Sal on that.

So you started with Mercedes, a dealership?

Sal Garcia: No, no. When I first came out of school, I actually went to a Volvo dealer for a few months. [00:04:00] Then I went to a Mitsubishi, Suzuki Hyundai dealer for about two and a half years. Then when I left there, I actually opened up my own, no, I, I worked at a couple independents for like a couple months here, a couple months there.

Got frustrated with the places and then opened up my own shop. So I opened up my own shop for the first time when I was about 23.

Carter Pembridge: Boom.

Sal Garcia: Two, three years.

Carter Pembridge: Hold.

Sal Garcia: I had that, yep. Had that for about four and a half years. And that shop ended up failing because of my ego. Basically it was running the show, you know, and um, you know, I was actually behind on my rent, so the landlord sold the property out from under me because I was behind.

I couldn’t enforce the lease, so I had to close and walk away, you know, lick my wounds on that one for many, many years.

Carter Pembridge: Okay, so

Sal Garcia: then went to go work, uh, other places.

Carter Pembridge: The lesson. So you’re yeah, you’re, you’re actually, there’s so much meat into what you just said. I want to unpack a little bit there and I want to start, ’cause there’s so, there’s so much goodness in there I think for people to hear.

So including ourselves, Khrist and I are learning from this too. ’cause we’re talking to guys too. We’d love to hear this. So [00:05:00] we’re learning as well. So you started, um, you know, a couple different places and you saw some things that you didn’t really like. I I, before we get into. You kind of starting off your own and kind of running into some hiccups, and you said ego, right?

Mm-hmm. I have, I, I struggle with that too. It’s a constant thing, you know, I pray on it. But before we jump into that, um, what were some of the things you saw originally that you weren’t a big fan of that kicked off that idea, Hey, I wanna do this on, on my own.

Sal Garcia: Well, some of the things were okay. You know, it, most dealerships, even today, work on the flat rate system, and too many guys were all about, you know, getting the hours, getting the dollars and so on.

It’s like, okay, so they’re selling work on cars. The cars don’t need

Carter Pembridge: Mm,

Sal Garcia: because it’s easy money.

Khrist Hussein: Mm-hmm.

Sal Garcia: You know, it’s like, no, that’s not right. Again, my instructors really instilled in me on doing it right. There’s enough legitimate work on the cars on the road to keep everyone busy. There’s no reason to sell work.

The cars don’t need. And I kept on seeing that. I kept on seeing, when they’re trying to figure something out, they’re [00:06:00] using, they’re basically, they’re firing the parts cannon, you know? Right. Even back then. And so I, again, I was instructed as I could learn the systems and you can diagnose anything. And when I, when I had my own shot, excuse me, it, um.

I, I had developed a reputation in the area that I had other shops referring cars to me for diagnosis. I didn’t know the other shop owner, so it’s not like they’re friends of mine that referred me. It’s just because of my reputation. I was known to say, okay, that’s the guy to go to to get your car actually fixed when it’s a weird issue.

Carter Pembridge: Right.

Sal Garcia: Which, of course, you know, kind of, uh, attributed to the ego. Yeah, when you’re 23, 24, 25 years old and, and you get that kind of rep, yeah, you got nothing to keep you in, play on, on, you know, foot on the ground. So yeah, that’s where the ego happened. Um,

Carter Pembridge: yep.

Sal Garcia: But I just got good with that. Right

Carter Pembridge: on.

Sal Garcia: And, and that’s where it kind of also started where, because of the ego is like, you know, oh, we’re busy.

We’re doing this. Like, oh, I’ve got technicians. Let them do the work. I won’t [00:07:00] get anyone. It’s a weird one. And so on. Uh, instead of getting in there and getting the work done and not paying attention to the numbers, hence why the shop failed. Because again, as we, you know, again, leaking profit everywhere, because I wasn’t paid attention to the numbers.

It was just about, Hey, you know, you know, cars are coming in because of me. You know, uh, we’re we, we feel like we’re busy and everything, you know, I was, you know. As they say, you know, my head was like, oh, I, I am the greatest. Yeah, yeah.

Carter Pembridge: Yep, yep. Like I always said. Right. No, I, I hear you on that line. It’s funny how that works too.

I think we’ve all been a part of that, right? You see some success

Sal Garcia: mm-hmm.

Carter Pembridge: And then all of a sudden you, you start skipping steps, right? You start, um. Everything, you kind of just forget kind of what got you there, if that makes sense. Mm-hmm. Um, so that’s a great point. Make

Khrist Hussein: sure, forget the basics, forget the basics.

Good. And even for you to be able to identify that that was, you know, where the issue was. Sal, a lot of guys will open their shop, go through that similar journey you went through, but just try to continue that path and, you know, beg, borrow and [00:08:00] steal and before you know it, you’ve got that shop, That’s one.

Got the negative reputation and two. They’re not doing right by customers, which is why we get that stigma in the business that the customer’s gonna come in and get, they’re gonna get told they gotta do all this. No, no. Your breaks are actually broken. I’m looking at them right now, Mr. Customer. And, uh, kudos to you for recognizing, you know, that that issue, that’s a.

Perfect segue into what we’re going on about Carter. Sorry, I was cutting you off.

Carter Pembridge: No, no, no, no, no. That’s what this is all about. Um, I, and I wanna touch on one other thing you, you keep referencing here, Sal. And that is the importance of, because I think this also talks into. Leaking profit, um, is technicians that really know what they’re doing.

You keep talking about how you were trained. Right. How you were trained. Trained to do it the right way. Exactly.

Khrist Hussein: Um,

Carter Pembridge: talk to me a bit on that, you know, how, how you, how that made an impact on you, obviously, but then also how you make sure your team are doing things the right way, um, so that if they do wanna start up a shop in the future, right?

Mm-hmm. [00:09:00] They, they know they’re, they have the right habits set in place.

Sal Garcia: Yeah. And that’s actually kind of leads to why I’m having a problem finding good technicians because too many that have been out there for, you know, already five, six years have developed all these bad habits. Now they come here and I’m trying to correct those habits and let’s do it the right way and so on.

And I’m getting so much pushback because again, now their ego is running the show. Mm. You know, it’s like everyone thinks they’re keeping bracketing, you know, leave me alone. I know what I’m doing. No, you don’t. You know how to do something, but you don’t know the proper way we do it here the proper way.

And then as I’m trying to correct them, they think that by doing it the way I tell ’em, it’s actually gonna take longer. So then, because even though we’re not flat rate, we do have a production based bonus system, so it’ll affect their bonus if it’s taking too long on jobs. But if you learn to do it my way and really take it on in the long run, it’s actually gonna be quicker.

Carter Pembridge: Right.

Sal Garcia: Right. But you have to be willing to take that step back, as they say, like in racing, [00:10:00] you know, uh, you know, slow is smooth, smooth is fast.

Carter Pembridge: Oh, yeah.

Sal Garcia: You know?

Carter Pembridge: No, no, absolutely. That’s, that’s a very great point. Um, and I actually wanna dive you even deeper into that, right. What are. And I’m putting you on the spot a little bit here, but what are some examples?

You know, and you can say X instead of, uh, you know, Joe, it was Joe, he did it. But what are some situations you’ve run into where you know, hey, a technician, you know, he, he’s skipping this step that I always make sure my guys do, or he’s doing this certain thing a wrong way and it’s maybe leading us in having a conversation that is taking time.

Um, or maybe he’s. He’s, I’m quoting two hours, but he’s doing it in four. You know, give us a little bit of an idea on what that looks like, because I’m, I’m curious on that end.

Sal Garcia: Well, I, I mean, I have one, I mean, some simple ones. I mean, you know, when we are doing a service, we’re changing the oil. We, you know, do a rotation, do an inspection.

It’s like, okay, you know, a very simple one. The drain plug gasket, it gets replaced every single time. Right. Well, we just had a car in here that came in that we did the last service. It [00:11:00] was a tech that’s no longer here, did it. I look at the gasket, the gas has probably been reused four times. It was completely beat up.

Oh, but guess what? Now? It, it was signs of an oil leak. Now, luckily, that’s all it was. That took care of that. But if it wasn’t anywhere else, maybe they would’ve tagged it for an oil leak. And now the customer’s having to pay for, to repair an oil leak, that’s not legitimate. Mm. You know, it’s, it’s the details that make all difference.

You know, when we’re doing brakes, okay? There’s certain places where you have to put a little bit of grease. And things like that. We rarely, and when I say rarely, I’m talking about maybe 0.1%. Do we have cars come back because of kind of brake noise? And, and if they do pageant rotors, brake noise is covered by our warranty, we will warranty a brake noise issue.

If they do patent rotors, they do pads only. No, and yet, so I’m telling ’em how to do this and everything and it’s like, okay, I see. Afterwards it’s like, okay, where’s the grease that I told ’em where to put? They don’t put it in because you know, it, it’s, it takes a minute to do. Avoid so much issue and they, they just don’t do it.

Well, you know, it’s not needed. Or they give me every [00:12:00] excuse. It’s like, I understand you believe it’s not needed, but you know, this is not your shop, this is mine. You do things the way I say. Mm-hmm. You know, and I hate to, to word it that way or say that, but at the end of the day, you know, that’s how it is.

Because at the end of the day, they may lead, and I’m still here to stand behind the work.

Khrist Hussein: Thump that chest al you pay for the bill at the end of the day. So you’re more than allowed to. I actually have a curiosity question, invoice. Um, I, and this is the discussion I have a lot back and forth with a lot of my shops.

Um, on, on on what you were talking about, shop supplies and charging a shop supply fee. Um, curious your take on it and how it’s changed over time. ’cause it, it has been a very different discussion over the last couple decades, I promise.

Sal Garcia: Well, first of all, I’m in California, meaning that we cannot charge just generic shop supplies.

We cannot surcharge a percentage of of the bill for shop supplies. That cannot happen here. Everything has to be itemized, [00:13:00] so, oh yeah. The way I do it is, let’s say when we’re doing breaks, there’s a, a parts kit. Or a a, a ser, uh, what I call a break service kit. And that kit has one can of break clean itemized, some break clean, uh, some break grease itemized, some brake stop, uh, squeak, itemized.

Mm-hmm. And, and, uh, so it’s all there. So when we do breaks, okay. We gotta make sure we put that in there also.

Carter Pembridge: Mm-hmm.

Sal Garcia: Now, one thing I like about it is, um, that’s not saved as a, as a part because sometimes some of these kits may include a little bit of labor. Let’s say we have one that’s for cleaning after an oil leak.

Okay? We have a can of, uh, of engine cleaner, you know, external, uh, of a, a good cleaning, foaming. And we have like a half hour time to do a cleaning. So if we’re doing a, uh, oil leak. After the oil leak, we also put this into the, into that job as a kit so that way we can clean after the leak and the technician’s getting paid for the cleaning.

And the cleaner we use is getting paid for separately, [00:14:00] but it’s in that job. Now, what I like about, uh, with Shop Boss is you can actually, when you have a regular job, you can put a can job into a job you’ve already built. A can job doesn’t create a job by itself separately, like other systems that like, okay, the only way we can use a can job is it creates a new job.

You can’t put it inside of a, of a job you already have with Shop Boss, you can, I can put three can jobs inside one job I already have.

Carter Pembridge: Mm-hmm.

Sal Garcia: And so I have these jobs as can jobs. So the brakes, uh, service kit is actually saved as a can job. The oily cleaning is saved as a can job, so that way they get put in there.

So that way, or you know, we’re gonna be cleaning anyway. But you always forget about billing for that cleaner. That can of, cleaner, that cleaner is not, is not cheap. It’s like to the customer, we bill it at $25 a can. My cost is about $11 a can.

Carter Pembridge: Mm-hmm.

Sal Garcia: It’s a good foam cleaner that that’ll work. You know, brake clean, you know.

That’s one that everyone is always forgetting to bill. So you know that’s, you know, as an expense. Like, no, that customer pays for it. Customer pays for everything. I [00:15:00] mean, if you go to the doctor, you have a surgery, they’re billing you for every syringe, every, every time they use scalpel, every anything. I mean, they charge you $15 for time.

Khrist Hussein: Uh, pencils if they had to resharpen, uh,

Sal Garcia: exactly. You know, you go an attorney and it’s like, okay, they bill you for every 30 seconds that they’re even thinking about your case, you know, and everything else. It’s like, but yet we forget to. But at the same time, shop supply is how a lot of people do it. And, and that’s all fine, but.

Actually, it’s good that by doing it this way, we get real clarification, okay, how many cans of brake clean did we buy? How many did we sell? If you just bill brake clean as part of a shop supply, then how do you know? Are you really building it properly and enough and so on? So this actually forces us to really define what is it that we’re, you know, how we’re selling things.

Khrist Hussein: I think that’s probably part of the reason why we’re here talking today, is just identifying these things that are typical costs that we normally just don’t even accrue for. Mm-hmm. Um, there are a lot of shops that will just, at the end of the month realize I spent an [00:16:00] extra $500 an extra profit that could have been mine that I didn’t charge.

And, um, you know, certain regulations like you just listed in California can cause that grief to happen. Um, and, and that that’s what this whole. This webinar is about is just finding the, the spots where there’s current leaks or where you’ve noticed. Now I’m gonna probably lean on you a little bit more, Sal, because you’ve had a lot of time in it.

You’ve worked at, you know, a few different places and you know, a lot of people in the industry. So the curiosity question I have is, I’m certain a lot of people listening right now is. If you had to kind of figure out where your profit leaks actually come from, where did you identify where, ah, you know what I should have, where at the end of the month you said, why didn’t I make X amount?

And you identified those. What’s kind of a couple that pop in your skull going? This was a no-brainer that I switched.

Sal Garcia: The biggest one, that was a big one for me ’cause I wasn’t really tracking it. ’cause again, if you don’t track it, you won’t know. [00:17:00] Was technician productivity. Okay. Um, when I, and I’ve known about product two, but it’s not someone I really tracked.

And then when I started tracking it, I’m like, oh, shoot. Um, and that was because I started working with a coach. I’ve worked with coaches in the past when I had my shop the first time I worked with a, a coach back then. But it’s one of those things where I, I, I learned these things, but I didn’t implement ’em.

Now I’m implementing everything. So when I work with a coach now, he brought things up that was like, okay, I knew that, but now I need to actually start doing it. I had a technician that I was paying him quite well, just straight hourly, uh, but I never real truck productivity. He said, Hey, we’re staying busy and all that.

Well, he, you know, he’s, he looks like he’s knocking out work and, and so on. When I actually sat down and, and started looking at the hours produced, the productivity, he was only a 50. He was only 50% productive.

Carter Pembridge: Right, so,

Khrist Hussein: so which is brilliant, like this metric I try to impose on every shop I speak to.

Sal Garcia: Mm-hmm.

Khrist Hussein: Yeah. And it involves them actually making sure the guys punch in [00:18:00] and out. And I gr there’s multiple ways.

Sal Garcia: Not true ohs, not true.

Khrist Hussein: Baby.

Sal Garcia: Okay,

Khrist Hussein: Take the mike,

Sal Garcia: now, because there’s two numbers, there’s productivity and there’s efficiency. Mm-hmm. People get these mixed up back and forth and, and they, so usually interchangeably, those are two different things.

Clocking in and out of every job is how you track efficiency.

Carter Pembridge: Mm-hmm.

Sal Garcia: Product, but, but efficiency and productivity is kind of like when they talk about an engine with horsepower and torque, you know, uh, horsepower is bragging numbers, torque, do the work.

Carter Pembridge: Mm-hmm.

Sal Garcia: Efficiency, bragging numbers, productivity pays the bills.

And a very easy way to track productivity is whenever a technician does a job, make sure his name is assigned to that job. That’s it. He doesn’t have to clock in and out, but when you close the RO, the technician that did that job is assigned to it. Now, at the end of the week or however you wanna do it, you go into your report and see how many booked hours for that technician.

Carter Pembridge: Mm-hmm.

Sal Garcia: And then now you take how many hours he was on the clock. So an example, if he was there 40 hours and he produced 30 [00:19:00] hours of work. That’s 75% productive.

Carter Pembridge: Mm-hmm.

Sal Garcia: Okay. If he produces 44 hours of work and 40 hours, that’s 110% productive, and he does not have to clock in and out of the, the, the jobs, the lines to track that number.

Khrist Hussein: Efficiency’s been doing, he’s been doing these numbers for a while. Those just spur that, those are actual numbers I bet you that are happening right now. Yeah,

Carter Pembridge: definitely don’t want us counting, that’s for sure. And, and this is something that I’ve, this is definitely something that I always like to touch on and sometimes it’s funny, I’ll have like, uh, I’ll have like technicians in a shop manager.

On the same thing when I’m showing this thing off and the shop manager kind of looks at the text when he sees the efficiency room. Yeah. And, and, and you know, tha thankfully for Khrist, you know, we don’t really check, you know, his clocked on versus how much he actually works or else he’d be in some real trouble.

But let’s go ahead and I do wanna, I’ll

Khrist Hussein: get in trouble.

Carter Pembridge: He would get in trouble. Yeah, absolutely. I do wanna touch on that. Yeah,

Sal Garcia: go,

Carter Pembridge: go further.

Sal Garcia: Kind of cover that a little more is like, keep in mind that efficiency [00:20:00] numbers can be manipulated by a technician. Activity numbers cannot. All they have to do is, let’s say it’s a, it’s a three hour job.

They can be two and a half hours into it. Right. Clock off for the job. Right. Continue to finish that job. It’s their efficiency’s gonna look great.

Carter Pembridge: Yeah.

Sal Garcia: But at the, at the end of a week, if they’re there 40 hours, doesn’t matter how much they, they can be clocked on the job and it may show ’em at 200% efficient.

Meaning that, you know, in 40 hours produced, they did it in 20 hours. Right. But if they were busy the other 20 hours because they were clocked off, their productivity still won’t gonna be a hundred percent. You really can’t manipulate productivity times, but you can of efficiency times.

Carter Pembridge: Right.

Khrist Hussein: You know, I’m trying to think of ways I can trick my boss right now with the things you’re saying.

I’ve been writing ’em down. I’ll figure it out after, but

Sal Garcia: so Well, I can help you with that, but I’m not going to know.

Carter Pembridge: Yeah,

Khrist Hussein: I’ll pay you. I’ll pay you after. I’ll pay you. Well, Sal, how long have you been tracking this metric? Is that something you’ve started when you open the shop? When did you start actually paying attention

Sal Garcia: to it?

I started tracking that metric, probably it was in [00:21:00] 2020 or 21 right around there. Um, and I, I took over the shop in January of 17. So at the beginning, for the first two years of this shop, it was just me by myself. I had no service rider, no technician. I was it, you know, and then I took on my, uh, first, my first, uh, decent tech.

He came on board, uh, November of 18. And, and he’s the one that, you know, I, I did pay him well and everything, but then when it, he was about two years in and when I started really tracking things and it just wasn’t there, what I wanted to do is I wanted to actually change his pay plan. I was gonna lower the base and then put in a bonus, which is what I have now for a pay.

It’s, it’s hourly. And then based on their productivity, every 10% they get additional, uh, their actual hourly goes up based on productivity, and it starts at 80%.

Carter Pembridge: Hmm,

Sal Garcia: so 80%, 90% every 10%, and I was going to put him at a lower base. If he was at 90%, I mean, it was gonna be very generous. [00:22:00] At 90%. He would’ve made the same money he was making, uh, already, and a hundred percent he was actually gonna make more money.

Well, he wasn’t too happy with this one to where he actually said that I was stealing his money when he’s only at 50% productive. He’s actually stealing my money. So the day before, um, that went into effect, he basically did, uh, something that it was unexcusable. So I ended up letting him go,

Khrist Hussein: you know, if he needs out, we’ll go find him.

We’ll take care of business with the name Child Garcia. I figure you got your own guys to do that stuff. Now, when, when you did, when you did do this. I, I mean, I wanna ask you this. How has it changed your shop production? Um. Well, has it directly, can you put a number saying it’s, it, it’s helped me out X amount, or

Sal Garcia: It has, because now I, I actually have a set standards, I have standards here that are actually very clear, that is expected technicians and they, they also know that they can make better money with.

If they do this, and it’s very transparent. Now, [00:23:00] I every pay period, I print out a report that actually shows their clock hours or book hours and their percentage of productivity and I get posted on the board. All of ’em are on there. So they can, if they wanna compare each other and so on, every technician has access to their report within Shop Boss, where they can see, okay, what hours do they already have booked?

Carter Pembridge: Mm-hmm.

Sal Garcia: Or they have access to those reports so they can, the transparency is there. Mm-hmm. So it’s, nothing’s ever based on fetal. See, ’cause that’s what happens is if you go on, uh, how it feels, the, the shop may feel like it’s busy and we’re doing great. You look at your numbers. Mm-hmm. You’re actually not doing good.

You may feel like you’re, you know, it’s like, shoot, we’re slow. We’re, we’re kind of like that. And you look at your numbers and they’re actually doing great.

Carter Pembridge: Right?

Sal Garcia: So you cannot run a business by feel.

Carter Pembridge: It, it’s so true. I mean, we talk to people all, all the time and Absolutely. You know, sometimes they say, oh, well, you know, we’re, we’re booking out two, three weeks and, and we do it on pen and paper, and it’s like, okay, well man, you, you don’t really know what you don’t know.

[00:24:00] So I’m gonna ask you some questions like a doctor, and then we’re gonna jump into the actual numbers, right?

Khrist Hussein: Mm-hmm.

Carter Pembridge: Um, and that’s a great example. There are other great examples too, right? Like, for example, throwing it out there. Profit per hour is a great tool. I always make sure I, I, I make sure we bring that up.

I wanna make sure people understand it. And really what it is, is you’re gonna input your expenses as a business, your overhead, right? So you truly know on a ticket by ticket level quickly. You don’t, this isn’t something that you have to do every time. You do it one time and then in the future, from then on, it’s gonna tell you, hey.

We’re making our money, or hey, we’re losing our money. Even if we think that GP number’s nice. You might be spending, you know, something on your, you’re, maybe you’re paying your tech a bunch of money and, uh, you’re losing money on that job still. Maybe we gotta bump it up somewhere. So just little things, little things that they don’t even, people just haven’t really thought about quite yet.

Right. So now to your point

Sal Garcia: Exactly,

Carter Pembridge: you could, you could be slow and actually be quite good. You could be busy and you could be quite [00:25:00] bad. Exactly. You just don’t really know exactly. So,

Sal Garcia: well the, the other one also you look at is now that you mentioned as far as with the tech and, and, uh, the GP number is everyone puts in the, well, first of all, you have to put in your technicians, you know, how much you pay ’em per hour in the system to actually have a GP number, gross profit number.

Right? But is that number accurate? Now, I’ve gone one step further, um, to where in my, in my p and l in my regular accounting, uh, my technicians is, uh, what they call, you know, it’s unloaded. And I don’t account for their benefits, their tax, all that stuff. It’s just there. And I’m, and I’m su for shooting for a certain gp, right?

Mm-hmm. But over in, in the shop boss, it’s actually more of a, not a fully loaded number, a partially loaded. What I do is I take the last three months I take for that technician how much labor, how much labor dollar was connected, uh, was, uh, collected. How much, uh, hours they put into, I kind of do the math.

Okay. What was my true [00:26:00] cost per hour of labor bill by that technician for the time he was here? Mm. And of course it’s gonna be more than what it’s, you know, his actual hourly is.

Carter Pembridge: Mm-hmm.

Sal Garcia: And I enter that number in Shabos, so that way it’s a little more accurate on what my GP number is and my gross profit per hour is a, that’s huge.

It’s closer to a true number. And, and I review that about every three months.

Khrist Hussein: Yeah. Okay.

Carter Pembridge: I love that. It looks like we got a question here for you, Sal, as well. Advice for increasing efficiency of techs who are okay with a low base. Low base.

Sal Garcia: Okay. Uh, so as far as increasing, uh, efficiency on that, it all comes down to what is, uh, what motivates them.

Okay. If they’re okay with, uh, with a low base, first of all, how low is the base? Because the base should really be, you know, barely enough to pay their bills. Like in California, if someone has to have their own, uh, their own tools, it’s a hundred thousand dollars

Carter Pembridge: a year, right? In California

Sal Garcia: it’s, it’s, uh, it’s double The covers rent,

Khrist Hussein: actually.[00:27:00]

Carter Pembridge: Yeah.

Sal Garcia: No, uh, no, no. A hundred thousand is, is basically just rent only. Uh, okay. But, uh, but that ends up being, um, you know, we’re double minimum wage. I mean, there’s some cities like San Francisco where minimum wage is like $22 an hour, I think, or something like that’s something outrageous. It’s not that.

It’s what the state minimum is Currently. The state minimum, I believe is 1650 an hour. So if someone has to have their own tools, it’s 33 an hour, right? So 33 an hour is typically what I have as a base for the technicians here, and then depends on how good their skill is and so on. 1, 2, 3, $4 per step. So let’s say at $3 per step at 80% productivity, it’s another $3.

90%, it’s another. So now there’s $6 on top of the base and so on. Hmm. So what it is, is that base has to be something where you’re basically paying minimum wage, okay?

Carter Pembridge: Mm-hmm.

Sal Garcia: But you have to make sure you have the work there and everything for them to be able to produce better. Now, if they’re okay with that, with the real low base and everything, it’s like, ah, well I’m okay with that.

What’s their work [00:28:00] quality like? And what are they actually producing Now, if they’re okay with just that low base, but they’re only producing 20 hours a week, but it’s good quality work. Depends. Does the math make sense to keep them or do you start looking for replacements? If they’re, if they’re really low there and then they’re, uh, you know, their work’s not that great anyway.

Why do you still have ’em there?

Carter Pembridge: Hmm.

Sal Garcia: Uh, there’s some people that are not money motivated, so then you have to find out what else motivates them. You know, do they like taking more time off, spend more time with their family? Well, then instead of being a higher pay, then it’s like, okay, they accumulate vacation time at a higher rate based on, that’s

Carter Pembridge: a good point,

Sal Garcia: how much they produce.

Carter Pembridge: That’s a really, really good point, Sal, because you know, oh, why I, I’ll tell you what, you know, that’s. It’s funny how that works. We all know people like that. Now, me, I like to buy things. Okay, so for me it’s money, right? But for my wife, it’s all about, you know, just, Hey, I want, I want the, I want time off. If you give me, if you gimme the option of a time off and it’s [00:29:00] unpaid, I’m taking it.

Right? That’s just, that’s just how it works. So it’s just different rewards systems. That’s a very good point.

Sal Garcia: Very point. Exactly. So, so like anything else, okay, what motivates them? What is it? And then also have a conversation. I had a guy here that he was doing decent for about two years. All of a sudden his, his quality went down.

It’s like, what happened here? It’s like, and I had conversations like, okay, is everything okay? Everything okay at home? Everything. Oh, everything’s fine. Everything’s fine. Well, finally, he made some big mistakes that I couldn’t produce. Like, okay, well everything’s fine, but you can’t work here anymore.

Carter Pembridge: Hmm.

Sal Garcia: You know, because there may be something going on that they’re not willing to say. If they’re not willing to be open, they’re not willing to talk about that. There’s nothing you can do to help them.

Khrist Hussein: Well, you’re right. And that’s part of your job. Your efficiency, your, uh, productivity is identifying where they’re missing or they’re hitting.

Um, I want, I wanna circle back around ’cause uh, that I’m probably gonna take it offline. The productivity versus efficiency, I absolutely love. I think that’s such a. Solid metric that I’ve never really looked side. I want, I wanna get [00:30:00] back on, on, on task here and if that’s your number one productivity, right?

Mm-hmm. Productivity. Yep. We talked about PPH Carter ’cause that’s probably one of my favorite ones that I’ve ever had. Sal, what’s another one that you, uh, productivity where money is, money is being leaked. Let’s get back

Sal Garcia: on,

Khrist Hussein: on the money, on the floor topics. Mm-hmm. What’s number two to you?

Sal Garcia: Um, number two is really, again, those, uh, you know, those, uh, you know, you’re forgetting about brake clean.

You’re forgetting about those cleaners. You’re forgetting about that you’re forgetting about, you know, when you check something out, you know, are you actually billing the customer for the checkup diagnosis? The biggest one is people, uh, too many a times, like, you know, oh yeah, it’d be, we’ll check it out for this much, but if you do the repairs, we’ll waive the, the testing fee, you know, diagnosis fee.

It’s like, why are you giving away that time? Mm. You know?

Carter Pembridge: Yep.

Sal Garcia: Uh, because you spent the time, you know, you, you have the knowledge and experience to figure out the problem. Why are you giving away [00:31:00] that time?

Carter Pembridge: Mm.

Sal Garcia: You know, oh, well, so and so down the street does it so I have to do it also. Right? Why are you running your business based on what someone else is doing?

Carter Pembridge: Right?

Sal Garcia: I have no idea what the shops around me, what their labor rate is. I don’t even know what the dealership’s labor rate is around here. I don’t pay attention to what they charge for hour, because I’m not gonna be asking for their permission for what to charge.

Carter Pembridge: Right.

Sal Garcia: You know, mine,

king Kong got

nothing on me, baby.

I love it.

Carter Pembridge: That’s the market rate.

Khrist Hussein: That’s how it’s,

Carter Pembridge: yep.

Khrist Hussein: That’s, you gotta run, you gotta run your rate, which you’re gonna bring to the table. Good idea.

Carter Pembridge: And people will tell you if it’s not worth it. ’cause they won’t pay it. They won’t, they won’t come to you. But as long as they’re coming to you and they’re paying it, that means it’s worth it.

It’s worth their time. And, and they trust you for it. A hundred percent. Yeah. And actually wanna dive in on that. Go ahead.

Sal Garcia: Yeah. Well, and if one person’s, you know, comes in, it’s like, oh, that’s too much and everything. You know, don’t take it to heart. I’ll be like, oh, you know, I need to lower my price. ’cause they’re No, no, no, no, because I’ve had ’em, I’ve had literally in the same day, you know, uh, what we don’t do no change, we call a service includes oil change, tire [00:32:00] rotation, vehicle inspection.

Carter Pembridge: Right.

Sal Garcia: And we have our price. And we had one person come in. It was a Toyota and we told ’em what it was, or they, or they called up and they’re like, oh, that’s too much. And everything. The same day we had another person come in with basically the same brand of car and everything, and we told ’em what it was.

They’re like, oh, wow. That’s cheap.

Carter Pembridge: Mm-hmm.

Sal Garcia: Mm-hmm. So, you know, don’t, don’t, because one person says that it’s too much. Don’t start all of a sudden second guessing yourself and everything because you know that person is just not your customer. There’s enough work to keep everyone busy, and not everyone is gonna be your customer.

Carter Pembridge: Oh, and, and nor do you want everyone to be your customer, nor do you want everyone to be your customer right now. Um, you said it just a second ago, right? In inspections, and this is always something that pops up. ’cause you know, we have conversations with different folks at different points of their business and you know, some people, and I want to touch on what you think the important of a digital vehicle inspection might be.

But I also want to touch on, um. Some people tell me when I ask them, because you’d [00:33:00] be surprised, Sal, how many people do not do them? You would be surprised. Um, some, oh,

Sal Garcia: I’m not surprised.

Carter Pembridge: How, how, how, how, what would you say to someone who would say, I just feel guilty about I, I feel bad about trying to sell more work.

’cause I feel like they’re judging me, that I feel like they’re putting me into the basket of trying to rip ’em off. What would you say to these folks?

Sal Garcia: Well then how would you feel if the car was just at your, uh, at your shop for an oil change service and everything? You didn’t test the battery as part because you don’t have an inspection process where you test the battery every time and then the next time the car comes in, you see it has a brand new battery and you ask about it.

Oh yeah. A week after I was here last time. Yep. My car wouldn’t start because the battery went bad.

Carter Pembridge: Mm-hmm.

Sal Garcia: It was there with you. You could have caught it. You could have sold him a battery. ’cause selling based on what it actually needs. Don’t ever sell something the car doesn’t need.

Carter Pembridge: Mm-hmm.

Sal Garcia: But if it does need it, you, you advise them of it.

[00:34:00] If they don’t buy it, not a problem. I always tell people, it’s like, you know what? My job is to let you know everything we see on the vehicle. Exactly. If you choose to do anything else, you’re not gonna hurt my feelings. As long as you are aware of it. I’ve done my job.

Carter Pembridge: Mm-hmm.

Sal Garcia: Hundred percent. Right? And that’s just it.

See, too many people start thinking, it’s like, you know, oh, you know, you’re getting bossy, or this, or you’re getting, you know, you’re, you’re getting pushy. It’s like, no, you educate.

Carter Pembridge: Mm-hmm.

Sal Garcia: You advise, you know, and then they’ll let you know what they want to do. And

Carter Pembridge: that’s a good call. And that actually ties into the, the question we got here.

What, so we talked, we touched on that, right? So building up trust with your customer, giving them kind of a dealership level experience, or forget that better than that, the sal level experience. What would you consider to be an acceptable percentage of, uh, of comebacks? Based on, uh,

Sal Garcia: that’s a difficult one to say because I, we have, our comeback rate is so low.

I’m talking about we do maybe one job as a comeback, as a warranty, uh, every [00:35:00] two months.

Carter Pembridge: Ah, okay. Right

Sal Garcia: on, man. That’s for you. Because we use the quality parts, because we actually take care and how we do the jobs and so on. It’s very low. Now, that one person that I ended up having to let go because his work went down, it really came down to he left the wheels loose on the car, on three different cars in two months.

Carter Pembridge: Mm-hmm.

Sal Garcia: Okay. That’s beyond just a comeback. That’s unacceptable, right? I should let him go off for the second time, but it actually took a third time before I let him go, because he’d been in here so long. It’s like, you know, I, I kept on cutting him slack and so on. Finally like, Nope. So as far as what is an acceptable, uh, percentage, if you really want to track it, I would say, you know, make sure you’re not above maybe like 3%.

Khrist Hussein: Well, I, I, I will say your number is low as compared to what, you know, any, any, any typical shop I’ve talked to, even personal experience. Um, that’s great. And I, I. I mean, I’ll probably, would you attribute it a lot of that to making sure you have a proper inspection process in place? Is that, is that a safe assumption

Sal Garcia: to say?

Is that

Khrist Hussein: helpful? Well,

Sal Garcia: [00:36:00] I’m not sure because see, the thing is I consider a comeback, a job that you did that something didn’t go right and you have to redo the job.

Carter Pembridge: It’s a workmanship issue.

Sal Garcia: It’s a workmanship issue or a defective part issue. That would be a comeback. You know, if it’s something that, uh, now if it’s something that goes wrong on the car and you didn’t catch it, that’s not necessarily necessarily a comeback, but it’s still something that you have to be aware of because that does affect mm-hmm.

The trust that people have in you.

Carter Pembridge: Mm-hmm.

Sal Garcia: They trust you to take care, take care of the car. Um, so it’s all in how you see it. Some people look at that as a comeback. It’s like, wait a minute, but did you actually repair that? Well, no. How is that a comeback?

Carter Pembridge: Mm-hmm.

Sal Garcia: You know? Yeah. Now is it, is it something that should have been taken care of?

Yes. But it’s not quite classified as a comeback.

Carter Pembridge: Yeah.

Sal Garcia: And then, then of course you have the technicians that are having major issues where it’s not a comeback, it’s in their left.

Carter Pembridge: Interesting point.

Sal Garcia: So there’s always those.

Carter Pembridge: And actually, so, so that brings [00:37:00] me to this now. So, so one, right? We talk about profit leaks.

Well, losing a customer. For workmanship issue or missing something that’s a huge profit leak. ’cause you just lost however much money per year. I mean, a current customer you have is more valuable than one that you haven’t quite got yet. Um, so, so that’s one profit leak there. Um, another one too, like let’s talk about.

Ki since we’ve really kind of done on accident process here, let’s just go ahead and, and wrap up the process with the customer too. What are you doing follow up wise, right, to make sure we’re, we’re trying to get that guy back in, or are you doing anything?

Sal Garcia: Honestly, I’m not doing anything actively. I’m doing more passively.

I have a CRM, um, and it sends out mm-hmm. You know, thank yous, it sends out, you know, reminder of, uh, previous recommendations. It sends out reminders, but I’m not actually having someone call the customer partially because right now we’re very understaffed. We’re pretty loaded up with the [00:38:00] work. Mm-hmm.

Consider the low staffing. Mm-hmm. And I feel that sometimes you start doing a lot of that. You may start, you know, you have people coming back and all of a sudden it may overload us ’cause. If we have people call, if we have so many people calling for appointments and our next appointment’s, like we can have two weeks out,

Carter Pembridge: right?

Sal Garcia: They’ll go somewhere else. So it’s like to try to avoid that a little bit. We try to really manage it. Again, you don’t wanna over on your marketing and all of a sudden you can’t handle the work. Those people may never call again. If they’re a new customer and you can’t get ’em in for two weeks, they may never give you another chance.

Carter Pembridge: Right,

Sal Garcia: exactly. Good point. So make sure that you are able to manage your marketing and, and your follow up and everything to what you can actually do in your workflow.

Carter Pembridge: No, I, I love it. Completely. Great call.

Sal Garcia: And,

Carter Pembridge: and you know, maybe this is a good place and I’m gonna, I’m gonna try to summarize this too best I can here, and I love, this has been great.

So, so to wrap it up really, and, and you, and you fill in the gaps here, Sal, what it really comes down to, from what I’ve understood here, is just making sure that. You know, profit leaks, just as simple as [00:39:00] making sure you’re giving the best level experience, right? You’re, you’re making sure you’re taking care of a customer.

You are checking all the things that they might need. Um, you know, you are making sure that, that they, they do trust you. There’s that communication level. Your texts, they, they feel comfortable, they feel confident knowing what they need to do. Um, and that’s just going to. Obviously you have to have the system set in place specifically, but overall, like as long as you’re, you’re giving the best level customer experience that you can, that’s gonna be the best way to make sure you’re avoiding those, those profit leaks.

That fair to say?

Sal Garcia: Exactly. I mean, you see, the thing is if you give that amazing experience, you, I mean, you wanna leave them saying, wow. You know, and so by doing that, as you plug up those leaks, you know, when you, you know, as far as make sure you bill for the time, make sure you bill for all the supplies you use.

Also, you know, if you’re given the great, uh, amazing service, all those things, when you actually bill them, they won’t complain about it. Mm-hmm. If you’re not giving [00:40:00] good service and you, when you add in all these, the, all these other little things and so on, now they may feel like they’re being nickel and dimed.

What’s this for? This one little thing. What’s this one little thing here? You know? Because the service wasn’t there to justify it all.

Carter Pembridge: Mm-hmm. Oh

Sal Garcia: no. Absolutely. So at the end of the day, it comes down to the service. That really is what it is. And I always tell our customers when I talk to ’em directly, especially that our job, our primary job is to provide peace of mind.

Carter Pembridge: Mm-hmm.

Sal Garcia: Which is of course take care of the car. But if they come in because they ha they hear a noise. We take it for a quick drive and the noise is just something that’s annoyance. It’s not a safety issue. It’s not in the brake, something like that. It’s just, you know, something to not worry about for now.

We’ll, we’ll check out the next service.

Carter Pembridge: Yep.

Sal Garcia: Now they’re comfortable that they’re okay with it. Now, they’re no longer scared. We have not charged ’em 1 cent, but yet we provide a peace of mind. We’ve done our job. Absolutely are. And we, and we’ve built up absolutely, you know, Goodwill there and everything, and now they’re gonna come to us the next time because the fact that we didn’t try to get money out of ’em for something that was really nothing.

We’ve really [00:41:00] built that trust.

Carter Pembridge: Absolutely. Well put, very well put. That’s something here. You know, we bring people on here to shop Boss too. I mean, everything’s about that. Everything’s about trust, right? Um, you know, here at Shop Boss there’s some, it’s always that hesitancy to, to really take that step.

Right? And, and you, like you said, you have to provide that customer service. You have to be there for people. Uh, and you have to make sure that they know they’re in good hands. They’re gonna be okay. You know? So it’s so important. So important.

Sal Garcia: Well, transparency. Fear of the unknown, you know, and that DVI is the best way to give ’em transparency.

Carter Pembridge: Mm-hmm. Mm-hmm.

Sal Garcia: You know, when you say that, you know, don’t know about how many people are not using it. I, my personal thoughts on that is like, I think only about, maybe at this point it’s up to maybe 35% of shops are actually doing DVI, I see a feel 65 that are not doing DVI at all. Out of the ones that are doing DVI, I think only about 20% of them are actually doing a proper DVI.

Carter Pembridge: And, and, and. Yeah. And that, that’s, [00:42:00] that’s actually a good point because sometimes you talk to people and they’re like, yeah, well, we do ’em sometimes. It’s like, okay, well then what? Sometimes is it like almost never, you know what I mean?

Khrist Hussein: And how are you doing that sometimes because it’s always, it’s muscle memory, right?

You have to have it in place. That is,

Carter Pembridge: yeah. No

Khrist Hussein: such an efficient tool. Now when you say a good DVI Sal, um, not to extend this too much more because I think we’re coming up to time shortly, uh, but just a, when you say a good DVI, you mean a strict process in place or ease of access?

Sal Garcia: You, you, you have everything.

You, you have a strict process. You have something that you, you, you know, you look it over, you have it set, you have the key points there. You not only, uh, take pictures of anything that’s yellow or red. Should have a picture. Okay, now I say should, because there is one that let’s say on the air filter, if it requires tools to take out the air filter, take a look at it.

We’re not gonna take it out. If there’s no tools needed, take it out. Take a picture of it. Take a picture of the air cleaner housing. Here’s where your filter is. It was not taken out because, uh, you know of what is needed to do it. Check your [00:43:00] records. If it hasn’t been done in so much time, we recommend doing it.

Carter Pembridge: Mm-hmm.

Sal Garcia: Take a picture of that so they know where it is. You know, take not, not only take pictures of the things that are yellow and red, but also take a picture of certain things that are green that are good. We always take a picture of the results of the batter test. We always take a picture of the results of the brake fluid, uh, tests.

You know, we always take a picture of the tread depth, uh, on the breaker, uh, remaining. You know, those are good ones that you do that every single time and it’s consistent.

Carter Pembridge: No, absolutely. And, and we talk to people as well. Just think about it from the customer’s perspective, right? Mm-hmm. Uh, think about it from my perspective, right?

I sit in an office all day, right? You don’t want me working on your car. Trust me, I’m gonna be breaking stuff more than I’m gonna be fixing anything. He barely does the job

Khrist Hussein: he’s supposed to. You don’t

Carter Pembridge: want Exactly. Me and Khrist, there’s a, there’s a trend here that we both don’t work. Yeah, exactly. Um, no. In all seriousness, if I see something come by, right?

If I bring my car to the shop and the guy calls me and tells me something’s wrong, hey, yeah. Spark plugs need to be changed. It’s gonna be, [00:44:00] you know, whatever it’s gonna be. It’s like, okay. All right, man. Just do what I do, what I brought the car for. Mm-hmm. You know that. Just let’s do that. Or if, here we go.

Khrist Hussein: It’s

Carter Pembridge: here we go. Exactly. Or if a guy calls me up and he says, Hey man, check this out. So I just took this video. I took some photos too. I actually even have a photo of like a, a, a, good, whatever the part is that you need. I’m gonna show you what this looks like. This is killing you for this reason. Your fuel efficiency is bad right now.

You’re going to the pump two or three more times a month. Because of this, we can knock this out for you, right? Such a better ex now I actually feel like I, I’m, I know what they’re doing in the shop. They’re people. They’re not just touching it with the magic wand and all of a sudden the car’s fixed. Um mm-hmm.

But, but I, I trust them. Right. And that’s so important from a customer’s per uh, perspective. It’s all trust, so it’s

Khrist Hussein: all trust.

Carter Pembridge: Yep. Um. Anyway. That’ll go ahead guys, and I appreciate everybody in here, everybody in the background setting this up as well. Uh, everybody who joined and, and thank you Matt. Thank you Ryan, for, for jumping in the comments there.

We’ll be doing more sessions just like this [00:45:00] and we want to have more, more shop owners on and hear different stories. And, uh, an excuse to, to not do our, our main job here for 45 minutes outta the day. That’s the best part’s. Cool. So prep work.

Khrist Hussein: I mean, we got over for a lot today. That’s

Carter Pembridge: good. Exactly. Our

Khrist Hussein: boss isn’t listening.

Is he? Is Kirk listening?

Carter Pembridge: Exactly. Right on. Alright guys. Hey, I appreciate everybody. We’ll go ahead and wrap this bad boy up until next time. Take care, guys.

Khrist Hussein: All right. Thanks a lot guys.

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