ATLR just lost a customer

[DaveInDenver]

He was paying tech's $100k+ per year in salary

The shortage of good mechanics is leading them to get paid more (very deserving in my book) but that also leads shops to charge more for shop rate.

I didn't want to presume to know what a mechanic earns but if this is the ballpark then $200 makes sense. It's pretty typical for an engineering firm to have between 3:1 to 4:1 in bill rate-to-pay and I assume that's about the range most businesses end up.

 

[Burt88]

Also, unlike many other service industries, automotive techs have to buy all their own tools. The shops may have some specialized equipment but every mechanic has to invest in all the new tools and tech to perform all the work necessary on increasingly overcomplicated and ridiculously engineered vehicles. So in the case of $100k a year and a properly stocked tool box valued nearly as much, that money doesn't get very far. And every year the car manufacturers come up with some other specialized nonsense. Until we say enough is enough and stop buying every overpriced thing that's shiny and new we will continue down this road. Costs will continue to rise so better to figure out a way to work on your own stuff.

 

[DaveInDenver]

Do you know @Burt88 if a mechanic has to keep his own laptop and software or is that shop overhead?

The annual subscription to professional TIS (Toyota's Technical Information Systems is what gives you legal Techstream) is $1,360 currently (plus a $20 fee for each key/immobilizer code you pull down, but you have to join NASTF to be eligible to even do that, which is $425 for a 2-year membership). If you want to work on even just a few brands that will add up to a lot of money.

Software is a major part of my business G&A expenses when I had my own full time firm. AutoCAD alone with a couple of industry specific packages will be several thousand. Add in specialty tools or CAM you quickly get to a budget of $10k annually for it.

 

[nakman]

One other thing that bears mentioning is how with any business, the paying customers have to subsidize the non-paying customers. Every time you ask for a quote, ask a question, argue about parts, talk about your upcoming trip, etc. that costs money. I've seen a few small guys fail because they did their math solely based on a labor rate for when they were actually doing stuff... like charging $50/hr to weld a cage or bumper. But they quickly learned that they weren't getting paid to drive across town to pick up more argon, and they definitely weren't getting paid debating with the next person about how long it should take to weld a bumper. So rather than attempt to itemize and charge for every single effort, the smart ones just inflate the rate they charge for the actual work being done.... as it's pretty easy to put in 60+ hours per week but only be "working" 25 of them. amhik...

 

[Burt88]

Do you know @Burt88 if a mechanic has to keep his own laptop and software or is that shop overhead?

It's a mixed bag. Depends on what the mechanic prefers to get the job done. It's kind of like some guys like Snap-On and others use Matco. The shop is only going to invest in basics and mechanics are responsible in getting more specialized. I'm sure in the case of specialty shops the shop will require use of specific programs and supply what's necessary.