Star shines brightly on higher ROs
Brea, Calif.—Before Patrick Howard took over the reins of Star Auto Service in February,the full-service shop, which opened in 1987, had always been price-focused instead of value-focused.
That quickly changed.
“I immediately changed the business model from being car count-oriented to focusing on an increased repair order amount, which drove revenue up with the same car count.”
Star Auto had about $600,000 in revenue in 2017 and saw around 1,700 cars with an average repair order of $340.
“Since I’ve taken over we have averaged $102,000 in revenue a month, so we have doubled the revenue with the same car count.”
Howard said with his system he has been able work on fewer cars and make more money, noting the average repair order is now more than $650.
“Those are just some of the ways I have been able to make this business more profitable,” he said. “However, I can’t take credit for this. All of these things were taught to me by BJ lee and Cecil Bullard of the Institute for Automotive Business Excellence.”
To accomplish the increase, Howard had to change the way every customer was handled, and “tool up” for the challenge of doing more electrical, electronic, and driveability diagnostics and repair.
“My policy is, every car that comes through the door gets a full 39-point inspection every time. Presenting all the work to the customer every time will drive your sales up,” he said.
“We also offer ‘no wait’ oil changes because when people have to wait for their car they are anxious to leave, so we provide either a complimentary loaner car or we put them in a rental. That way we have time to thoroughly inspect the car and present all of our findings.”
Howard said most shops don’t do this, or they discount repairs out of fear. Noting that discounting tells a customer you’re charging too much – which he said is not the case; 99 percent of the shops out there are not charging enough.
“It’s not just about charging more, he said. “It’s about adding more value, using high quality parts, providing a better warranty — we offer a three year/36,000 mile warranty — and making it convenient for the customer to do business with you. That’s the formula for success.”
He also had to make sure he had the right tools to handle every make and model, so he purchased an Autologic Farsight, an Autel Maxisys, and a Snap-on Zeus. The shop also upgraded its Hunter Hawkeye alignment system.
“The Zeus is a smart choice for anyone who wants the most troubleshooting and repair information possible without wading through unnecessary steps,” he said. “It’s not cheap, but we’ve already gotten our ROI because of everything it does and the time it saves. The Farsight has a lot of Drew Technologies software in it and a lot of diagnostic capability for driveability issues.”
The 5,000-square-foot shop has a service manager, who is taking a yearlong service advisor class from the Institute for Automotive Business Excellence, an office manager, and three ASE Certified Master techs, including himself.
“Each tech has a laptop at his toolbox with Mitchell and Identifix repair information, and we use the lab scope that’s built into the Zeus, which works for almost everything. We also give each tech a tablet equipped with Bolt On Technology Mobile Manager Pro for our digital inspection and customer photo process.”
Howard said as far as wiring repairs, in addition to replacing failed harnesses, modules, and switches, he has also done several repairs due to rodent intrusion.
“We solve a lot of electrical diagnostics that other shops can’t find and fix. For electrical issues, our policy is to test every single battery that comes through our door with a Midtronics EXP-800 and provide the customer with a printout.”
Star Auto sources the majority of its parts from WORLDPAC, but also uses FVP or ACDelco batteries, which it purchases from Factory Motor parts (FMP), he said. “They give us a five-year free replacement and $75 one-time roadside assistance on the FVP batteries. Everything we do is to increase value to our customers.”
Right now, Howard’s goal is to ensure that his business is cash flow positive, making at least 15 to 20 percent net profit.
“As long as I remain profitable I will have the money to invest in any future technology and training that we will need.”