Make 2017 Your Year

Jan. 1, 2017
Three savvy industry veterans discuss how to plan for success in the new year and beyond

Typically, Maylan Newton receives one of three reactions.

    “That’s impossible. It’ll never happen.”

    “Wow, that’s a lot. … I’m not sure I can do it.”

    And then there’s the third shop owner that, when asked if he or she is ready to put in the work necessary to increase gross sales by 20 percent within the next year, responds to Newton with an impassioned:

    “Alright—let’s go after it.”

    You can imagine what the next 12 months of each scenario has in store: The first shop undoubtedly goes backward, declining in sales, more than likely on its way out of the auto care industry; the second, somewhat-committed company might see modest, 5 percent growth; and then, almost always without fail, Newton says the business belonging to that final go-getter will see 10–20 percent growth—if not more.

Unless you’re willing to sit down and take a long, hard look at your business, Newton, CEO of Educational Seminars Institute (ESi), says you cannot possibly begin to plan for a better 2017. And thanks to three industry experts that spoke with Ratchet+Wrench, you now have some distinct, tried-and-true, refreshing strategies for setting (and achieving) the necessary goals and benchmarks your shop needs to succeed in the new year.

If you’re ready, all you have to do is say:

“Alright—let’s go after it.”

A Unified Effort

When Don Foshay sits down to map out his auto repair network’s next phase of growth—which, thus far, has consisted of growing to seven locations (one being a wholesale shop), 80 employees and $16 million in annual revenue—he doesn’t do it alone.

Foshay claims brainstorming sessions have allowed Don Foshay’s Discount Tire to compete with the MSOs and dealerships in the Portland, Maine, area. Committees consisting of managers from each of his six locations meet regularly to discuss financial reports and address industry trends, giving Foshay varying perspectives on issues and allowing him to delegate duties for the upcoming year.

“It gets everybody invested in the actual fixing of the problem,” he says. “As opposed to everyone just getting an email from me, saying, ‘This is how it’s going to be fixed.’”

Form the Committee

Foshay knows how lucky he is to have six managers for brainstorming sessions. However, he doesn’t believe a smaller shop is inherently limited by its staff size.

“Even one, lone location can pick out three people for an hour-long meeting each month,” he says. “Just get the ideas flowing.”

Foshay has even partnered with area competing shops to negotiate better prices on parts and materials. He recommends joining a regional committee (for him, it’s the New England & Tire Association) to find shops facing similar problems.

“It’s absolutely an option, especially when you’re competing against larger chains that have  multiple stores and greater HR resources,” he says.

Designate a Time and Place

Foshay meets monthly with his managerial staff. He limits meetings to an hour and a half (“So we’re not frying them after a long day”) and hosts everyone at a relaxing location outside the shop (“Sitting down over a cup of coffee or a beer just helps get so much more done”).

“Fortunately, we have enough flexibility and have enough coverage to where we can pull each person out of a store for whoever is on the committee,” he says. “Just be sure the time and date is set so everyone can be prepared to leave the shop.”

Finding 20 Percent: Focus on ARO & Car Count

If you’re part of Newton’s third group and you’re ready to put in the work to consistently achieve year-over-year gross sales increases, you need to start by evaluating your business’s numbers.

The first steps toward increasing gross sales by 20 percent are actually quite simple, Newton says, and involve taking a broad look at your sales, ARO and car count.

If you wanted to make an extra $240,000 in 2017, and your ARO is $500, that indicates you’d need 200 extra vehicles that year, or an extra 40 cars per month flowing through your shop.

However, if your shop physically cannot handle more cars per month, then your ARO needs to rise to make up the difference.

“And remember, it is possible to have too many cars,” he says. “Your ARO drops, and you spend more time doing admin things, buying parts and warranties, than you do actually repairing cars for money.”

From there, brainstorm with your team for strategies on growing either your ARO or car count requires some planning. Increasing your shop’s car count could require some new marketing techniques or improving efficiency; for raising ARO, invest in sales training and target vehicles that require more expensive repairs

Brainstorm the Problems

As a group, Foshay and his managers go over shop numbers and find areas where improvements can be made. They could cover anything from strategizing a push for 20 percent growth in gross sales to many of the problems the committee has actually addressed in the past, such as streamlining parts purchasing, choosing a management system, and combatting the technician shortage.

Gathering data from the shop’s three management systems (for shop production, tires and wholesale) to back up their cases, managers will present plans that identify the biggest impediments to growth and how to best fix them.

“Generally we have four meetings before we have something concrete that says: This is how we’re going to attack this,” Foshay says. “And then, we also have the follow-up meeting to get some results and feedback.”

Assign Duties

Finally, when the committee has decided to focus on an issue and has formed an action plan, Foshay delegates duties to his managers. He doesn’t always use all six managers (that way he can split managers between two or three action items), and designates duties according to everyone’s strengths.

Finding 20 Percent: SCAN Your Business

To aid mapping out your production goals, Newton says it’s good to set some benchmarks with a good “SCAN” of your business.

“It stands for ’Shop Critical Assessment Numbers,’” Newton says. “Just like you use a scanner to repair cars, I can use certain numbers to diagnose your business over the telephone.”

The SCAN numbers are split into categories covering gross profit and billable hours. Here are the benchmarks Newton says you should be hitting:

Gross Profit

  • 70 percent gross profit on labor (unloaded)

  • 60 percent gross profit on parts

  • 63-66 percent gross profit on total tickets

Billable Hours

  • 2.8 hours per repair order for general repair shops

  • 3.6 hours per repair order for specialty shops

  • 3.5 hours per repair order for transmissions shops

Map Out Your Training

It’s a no-nonsense approach for Jill Trotta: If you’re not equipped to repair the cars of the future? You can’t be RepairPal certified.

“If you don’t know about adaptive cruise control and lane departure and collision avoidance systems, it’s going to affect your ability to do basic repairs. Even a regular brake pad replacement will be affected by these systems that are on the car. You could really put somebody’s life in danger by not being trained to do it,” says Trotta, program director RepairPal. “So we turn away a pretty good percentage of the shops that actually apply.”

So in order to get ahead, Trotta, an active member of the Car Care Council Women’s Board and an ASE certified technician and service advisor with 24 years of experience, says you need to stay on top of trends and plan out your yearly training schedule.

Finding 20 Percent: Set Expectations

Although, as the leader of your shop, you’re the one setting the goals, you don’t have to improve the shop alone—in fact, it’s impossible.

“Too many times we do this in secret and we don’t share any information and then we’re mad at them because they didn’t achieve it,” Newton says. “But in reality, we didn’t tell them that expectation. And it’s very hard to hold people accountable if you don’t set expectations. This starts with better leadership, establishing this stuff, letting them know what’s expected, and then the other side of that is holding them accountable to what we decided.”

And while it’s pretty easy to explain what your goals are for the shop, it’s another to explain how they’re achievable.

Take your ARO and car count goals: If you tell your team you want to increase sales by $240,000, that seems like a lot, right?

“But if you tell them it requires us to finish two more cars a day at our current ARO, it doesn’t seem so bad,” Newton says. “If your ARO is $500 and we complete two more cars a day, that’s $5,000 for the week, $20,000 for the month, and $240,000 for the year.”

Set Goals

Setting goals for training should be a company-wide effort, Trotta says. Host quarterly sessions that cover the key national and regional events, discuss what training will be most beneficial to the shop, and then set incentivized goals for achieving a certain amount of training per year.

“We have shops in our network that require techs to attend 40 hours a year,” she says. “That’s quite a lot, but it’s needed. Those techs are going to be happier, to feel more professional and supported, and be able to diagnose cars more quickly—and fix them right the first time.”

Trotta recommends requiring, at minimum, 20 hours per year of training.

Finding 20 Percent: Take Ownership

Once it is known what benchmarks are essential for achieving 20 percent growth, Newton says to check those numbers weekly and keep employees accountable for meeting them at weekly check-in meetings.

“Every week, the techs should get a productivity report, and the service writers should get a sales report that says, ‘This week, you sold this much. If you keep going at this pace, this is what you’re going to do at the end of the month,’” he says. “That way they have an idea of where they’re at so they can correct it if they’re not going to meet the goal.”

But don’t just discuss everyone’s goals—let them become a mantra around the shop.

“For service writer staff, they should be written on card and put on their monitor, so every minute they’re staring at the computer, they’re staring at their goals,” he says. “Each technician should have their production goals written on their toolbox. If it’s not in their face, they’ll lose focus.”    

Form a Budget

This number will depend entirely the number of hours of training you’re requiring, but Trotta says putting an actual number on each employee’s training budget puts the importance of training in perspective.

“Training and retaining your technicians will retain them because it makes them feel valued,” she says. “If you invest in that kind of training, you’re going to make up the cost with the amount of money you’re able to charge and how quickly you’re going to be able to diagnose cars.”

Trotta recommends dedicating 1-3 percent of your budget to training each year.

Visit for tips on making ongoing education a core component of your culture.

Choose Your Events

Trotta spends much of her year giving presentations at industry events across the country. Here are the ones she believes are essential for managerial and technical development:

AASA Vision Conference (March 29-31, Chicago)

ATE Training Expo (March 24-26, Seattle)

NACE/Automechanika (July 26-29, Chicago)

WORLDPAC STX (April 21-24, Dallas)

Ratchet+Wrench Management Conference (Sept 24-26, Lombard)

Regional training through WORLDPAC, ASA, AASP, O’Reilly Auto Parts, NAPA



Let Trends Guide You

Trotta spends much of her time evaluating data culled from thousands of shops using RepairPal—all of which should be used to shape your goals for education and training in 2017 and beyond.

In particular, Trotta says the company’s Top 20 Most Expensive and Top 20 Most Affordable report (see sidebar), which calculated the average cost of four common auto repairs—water pump, alternator, brake pad replacement, and oil change service—on popular 2010 compact, hybrid, mid-size, and SUV car models. The results signal what vehicle money-conscious buyers might be inclined to purchase, and which models offer the biggest returns to shops—all of which can guide your training focuses.

“As far as training goes, these are things you should know,” she says. “If you have Audis and Lexuses in your market, your training should be focused on those models. You’re going to make more money working on them.”

“And with hybrids being so affordable, I suspect hybrid training will become a necessity soon,” Trotta adds. “Most of the shops that apply for RepairPal don’t have hybrid certifications, and that needs to change.”

2017’s Most Affordable and Expensive Repairs*

Top 10 Most Affordable Models

  1. Nissan Altima Hybrid - [Hybrid] ($673)

  2. Ford Fusion Hybrid - [Hybrid] ($768)

  3. Toyota Prius - [Hybrid] ($784)

  4. Nissan Sentra - [Compact] ($931)

  5. Nissan Altima - [Mid-Size] ($986)

  6. Mazda CX-7 - [SUV] ($988)

  7. Mazda6 - [Mid-Size] ($1,026)

  8. Ford Explorer - [SUV] ($1,052)

  9. Honda Accord - [Mid-Size] ($1,060)

  10. Ford Focus - [Compact] ($1,064)

Top 10 Most Expensive Models

  1. Lincoln MKZ - [Luxury] ($2,649)

  2. Audi A4 - [Luxury] ($2,259)

  3. Lexus IS250 - [Luxury] ($2,234)

  4. Volkswagen Jetta - [Compact]  ($2,114)

  5. Volkswagen Passat - [Mid-Size] ($2,087)

  6. BMW 328i - [Luxury] ($1,965)

  7. Mercedes Benz C300 - [Luxury] ($1,960)

  8. Mitsubishi Lancer - [Compact] ($1,931)

  9. Infiniti G37 - [Luxury] ($1725)

  10. Chevrolet Malibu - [Mid-Size] ($1,633)

*Find out the top 20 in each category at

2017’s Most Affordable and Expensive Repairs (note: should replace sidebar from print story)

Top 20 Most Affordable Models

  1. Nissan Altima Hybrid - [Hybrid] ($673)

  2. Ford Fusion Hybrid - [Hybrid] ($768)

  3. Toyota Prius - [Hybrid] ($784)

  4. Nissan Sentra - [Compact] ($931)

  5. Nissan Altima - [Mid-Size] ($986)

  6. Mazda CX-7 - [SUV] ($988)

  7. Mazda6 - [Mid-Size] ($1,026)

  8. Ford Explorer - [SUV] ($1,052)

  9. Honda Accord - [Mid-Size] ($1,060)

  10. Ford Focus - [Compact] ($1,064)

  11. Mazda3 - [Compact] ($1,068)

  12. Hyundai Elantra - [Compact] ($1,088)

  13. Ford Fusion - [Mid-Size] ($1,093)

  14. Honda Civic - [Compact] ($1,120)

  15. Hyundai Santa Fe - [SUV] ($1,179)

  16. Hyundai Sonata - [Mid-Size] ($1,188)

  17. Kia Forte - [Compact] ($1,190)

  18. Subaru Impreza - [Compact] ($1,191)

  19. Subaru Legacy - [Mid-Size] ($1,213)

  20. Toyota Camry - [Compact] ($1,244)

Top 20 Most Expensive Models

  1. Lincoln MKZ - [Luxury] ($2,649)

  2. Audi A4 - [Luxury] ($2,259)

  3. Lexus IS250 - [Luxury] ($2,234)

  4. Volkswagen Jetta - [Compact]  ($2,114)

  5. Volkswagen Passat - [Mid-Size] ($2,087)

  6. BMW 328i - [Luxury] ($1,965)

  7. Mercedes Benz C300 - [Luxury] ($1,960)

  8. Mitsubishi Lancer - [Compact] ($1,931)

  9. Infiniti G37 - [Luxury] ($1,725)

  10. Chevrolet Malibu - [Mid-Size] ($1,633)

  11. Chevrolet Equinox - [SUV] ($1,604)

  12. GMC Acadia - [SUV] ($1,603)

  13. Volvo S80 - [Luxury] ($1,600)

  14. Chrysler 300 - [Luxury] ($1,578)

  15. Acura TL - [Luxury] ($1,537)

  16. Nissan Murano - [SUV] ($1,503)

  17. Honda Pilot - [SUV] ($1,480)

  18. Toyota 4Runner - [SUV] ($1,480)

  19. Kia Sportage - [SUV] ($1,469)

  20. Kia Optima - [Mid-Size] ($1,454)

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