Tommy Nickelson has overcome several obstacles in taking his Denton, Texas, shop, Advanced Auto Repair, from $300,000 to $2.5 million in sales. Marketing, customer service, human resources—all of that came easily to him as a manager.
But when it came to properly equipping technicians? That was a major learning curve.
“Some guys are content doing oil changes and brake jobs their whole careers,” Nickelson says. “But our techs, their thirst cannot be quenched when it comes to the latest tools.”
A technician for years, Nickelson has discovered that if you want tech- nicians to grow and help you succeed, you have to give them the proper tools to do it. But what about the problems that arise in accomplishing that feat?
“I know several [shop owners] that have purchased expensive equipment to be able to work on specific vehicle types, and some that use all manufacturers’ original scan tools,” says John Wafler, an instructor at RLO Training who has worked with hundreds of owners facing the issue of equipping tech- nicians. “This is a huge challenge for general repair shops: How do we afford this additional expense and stay profitable?”
Nickelson has worked with Wafler over the years, and his solutions for equipping techs serve as proof that investing in the contents of your employees’ toolboxes can go a long way.
THE PROBLEM: “Is it worth it to invest in this equipment?”
THE SOLUTION: With tools and diagnostic equipment constantly improving, equipping technicians is more expensive than ever, says Nickelson. Thus, for each and every tool purchase and diagnostic software update at Advanced Auto Repair, calculating the return on investment has become crucial.
“The most expensive tool you have is the tool you never use,” he says.
Using point-of-sale software, Nickelson can track each job and how often certain tools are used. Various factors are taken into account—such as durability, versatility, number of hours used, and price per job—to determine if a tool purchase is worth it.
He also tracks whether the tool helps with marketing, if it has made his team more efficient, and how his KPIs and revenue have been affected before and after the purchase.
“If it doesn’t generate revenue to pay for itself, it’s like an employee—it gets fired and you try something else,” he says. “The money you had budgeted for that moves on to the next one. Once it starts making you money, it becomes its own profit center.”
Through his shop management system, R.O. Writer, Nickelson can track the volume of work the shop gets from certain makes and models and how often his staff uses various diagnostic equipment. This helps him justify the cost of upgrading to newer models or investing in reflashing and reprogramming equipment.
Charging for diagnostics has helped Nickelson further justify upgrades. He’s even asked customers to split the cost of necessary reflashes required for certain jobs.
“If you don’t see enough Toyota diagnostics or reprogrammings to pay for itself, you scrap that and move on to Audi or BMW,” he says. “And then once you find that niche, it takes on a life of its own. As long as it’s making you money and generating income, it’s got a spot in the shop.
“Now you’re buying software that you can’t even put in your toolbox. It’s all about the subscription fees.” —Tommy Nickelson, owner, Advanced Auto Repair
THE PROBLEM: “Do I pay for my technicians' scan tools?”
THE SOLUTION: Scan tools have become an essential component of Advanced Auto’s success, as diagnos- tic work now makes up $250,000 in yearly sales.
But the diagnostic success didn’t happen overnight. It took years of investments and tests to decide which diagnostic equipment was most essen- tial for the shop. Nickelson will buy scan tools for everyone to share, but if technicians want unfettered access to their own diagnostic equipment, it’s up to them to invest.
“It’s the thing that is now becoming the most expensive in our shop,” Nickelson says. “It used to be the tools in the box. Now you’re buying software that you can’t even put in your toolbox. It’s all about the subscription fees.”
Nickelson says that investing in various OEM scan tools has paid off. “If you diagnose [a Ford vehicle] with just any scan tool, it’s going to lead you in the right direction. It’s going to tell you what the problem is,” he says. “But if there’s an update, a reflash, a reprogram available, it’s harder to find that through technical service bulletins than if you have the actual Ford scan tool. You can dial into Ford and it pulls the data and tells you what the latest calibration is. And then you can just hit that reflash, and you’re done.” Nickelson says that although some of the tools are very expensive, it’s very rare that he “spends too much” on diagnostic equipment because the investment always off in the end.
“It seems like the ones that are the easiest to use are also the most expensive,” he says.
In particular, two scan tools stand out for Nickelson: the Chrysler wiTECH (“It shows everything on one screen: if there’s a reprogram avail- able, if there’s a trouble code, if the module is not talking.”) and the Drew Tech scan tool (“It’s a pass-through device that emulates the scan tools. It can perform most of the same work as the OE scan tools.”)
THE PROBLEM: “How do I get my techs to invest in new tools?”
THE SOLUTION: One of Nickelson’s earliest problems was having enough quality diagnostic equipment to pass around the shop.
“A technician would get a good feel for one, and then somebody would be using it and it would slow them down,” he says. “They wanted to get the car done and move on to the next car, so they took it upon themselves to fix that by purchasing their own diagnostic equipment. Now we have an influx of scan tools.”
Getting those technicians to buy their own equipment, however, was the hard part.
In turn, Nickelson created a tool- purchasing program that aids techs in buying tools. He provides credits and gift certificates in lieu of bonuses and raises. By making the credits worth slightly more than the bonuses, he says he can ensure techs are restocking their toolboxes without spending too much.
Also, if a technician really needs a tool but cannot cover the cost, Nickelson will purchase it himself and then take the payment out over several paychecks. Requiring techni- cians to perform a certain amount of training keeps their certifications up to date, while also motivating them to keep up with and buy new tools.
“All the techs have to do 100 hours of training every year just to keep up with the tools that we have,” Nickelson says.
THE PROBLEM: “How do I make room for my tool purchases?"
THE SOLUTION: An inevitable problem arises from consistently investing in new equipment for your employees: You run out of room.
Finding space for tools is always an ongoing problem, Nickelson says, but his shop has been able to combat the issue by using proper storage units. Nickelson keeps 90 percent of his equipment in labeled shelving units, which contain the original boxes and the equipment for any tool shared by technicians.
Nickelson also purchased three rolling tool carts that techs can share, allowing them to utilize connectors, computers and tools they need for specific jobs. Through proper storage and tool carts, Nickelson says he’s able to avoid another common problem that comes with lack of space: overly large toolboxes. He limits the size of a toolbox that can enter the shop, reminding his techs of one mantra:
“The toolbox itself doesn’t make them money—it’s the stuff inside that makes them money.”
