Once your shop is off the ground and running, you will discover quickly that you alone can’t get everything done in a day. If you are reading this, you have probably found yourself in this situation. Naturally, you need the revenue to add staff, but if you can’t get everything done in a day and the demand is outpacing the output, you probably need to hire.
This should be the goal of your business anyway as the employees exponentially add to revenue and profit. If you can turn 10 hours a day at your shop and make a 30% profit, then adding three more mechanics multiplies that profit three more times.
Most small business owners started because they were passionate about that thing they do well and are happy to do it every day. If your love of fixing cars or building engines has led you to start your own shop, you are going to find out quickly that you can’t do everything well, so you need to hire for the things you don’t love. You may also find that very little of your time is actually spent on fixing cars.
But things like purchasing, getting paid, invoicing, taxes, and payroll eat up a lot of time. You can hire part-time for these chores, or even find a combination CPA and bookkeeper that can do these tasks on an hourly basis.
Most shops end up brining in bookkeeping in-house, as well as adding technicians to get the work done. The business owner ends up as the part-time service writer and fulltime salesman.
So let’s say you are building out your business plan for your shop and are looking at a three to five-year growth plan, you are probably asking yourself, who do you need to hire, in what order, and how do you know when its time to hire or financially feasible? Well, address each below.
When is it time to hire?
The answer is as soon as the demand for your business exceeds your ability to get it done. It’s not unusual to put people on a waiting list for a shop, but if that waiting list is more than a week, you are going to lose customers. If you are consistently pushing work out for weeks, its long past time to hire another mechanic. But keep in mind that as your additional mechanic doubles your production, your paperwork doubles too, and it will take more time away from working on cars. Before you know it, you need office help, or you need another mechanic to replace you.
Taking on employees is investing in the business, just like adding new equipment. Ask yourself, how much is my time worth? And then use that as a gauge. If the cost to pay someone to do these tasks is less than what your time is worth, then it’s time to hire.
If you are afraid to take the big leap of hiring a full-time person, you can always look into hiring part-time or hiring remote contractors for tasks such as taxes, payroll, and bookkeeping.
Keep in mind that you should only hire full time when the revenue of the business can support them, or if immediately after firing them, the capacity you gain (such as hiring another mechanic) pays for them.
What order should I hire?
You know that an auto mechanic shop is going to need someone to greet customers and handle payment, someone to handle payroll, taxes, and bookkeeping, people to service the cars, and someone to sell the jobs. In the beginning, you will do a little of all of these things, but your success will be determined by how quickly you rid yourself of the tasks that you don’t like doing and are not very good at doing. So, begin by hiring a person who is really good at the things you are really bad at. If that is back-office stuff, then you need a bookkeeper, if you aren’t very good at sales, then you need an ace service guy if marketing isn’t your thing then hire an agency and so on.
Don’t get caught in the trap of spending all your time on the small urgent stuff that keeps you from doing the really big stuff. That is the classic trap business owners fall into, and the big stuff is where the profit is.
What to look for in an employee
What are your minimum experience requirements?
Be specific about your expectations in all your job postings. If you would like a mechanic who has at least two years of experience, make that a requirement. An auto shop earns more when you can move more cars through the shop quickly, so a slow novice mechanic can cost your shop more in lost revenue than if you have paid more for an experienced tech in the long run.
How good are their customer service skills?
Even though you have hired or are acting as the front desk receptionist to greet visitors, all of your mechanics should also be able to clearly and courteously communicate directly with customers. Whether a customer decides to trust their mechanic’s recommendations relies heavily on his communication skills. Have potential hires roleplay how they would talk to customers in various situations, such as recommending a replacement part. Are they convincing? Are they pushy? Do you believe their advice?
The alternate model would be to have a service writer or writers who act as salespeople but are not technicians.
Pass a background and credit check
If your mechanic is going to be handling your money, make sure they pass a credit check. Doing so sets up a strong foundation of trust between you, your mechanic, and your clients. If your candidate has a spotty credit history, theft may become an issue. Background checks and credit checks protect you, your employees, and your business.
Discuss the commission plan
Pay structures can vary from shop to shop, just as the work structure can vary. Turning hours means turning profit, but so does the ability to upsell. Commissions might be a great incentive to bring on a more seasoned tech who does not have that extra earning potential at your competitors.
Make sure your candidate is a team player. A bad employee is like cancer, and it spreads fast and is hard to remove. A bad hire can turn your employees against you and can affect your revenue. Your candidate should get along with and support other technicians in the shop.