George Witt Service opened its doors back in 2002. The idea behind the shop was to specialize in two Japanese brands, Toyota and Honda, and while the area in which is stands today was not in the desired location, it did have the right amount of space and parking.
Becky Witt, the founder, started the shop with a wealth of experience as service manager at different dealerships. While working at these dealerships she had shown her skill at implementing several measures to improve efficiency both with time management and with cost-effectiveness. As she recalls: “When I was working at local Honda and Acura dealership, we had a lot across the street which required the technicians to spend time moving cars back and forth. When I realized how much billing time was wasted by technicians, I created a plan to hire a driver and proposed it to my manager. When it was implemented, we were able to bill $5,000 more per month.”
Understanding the monetary value of time has driven George Witt Service to focus on the efficiency of billing hours, delving into the calculation of the cost of operation per minute. As Witt states: “We take all of our costs, salaries, overhead, parts, rent, electricity, and we calculate how much we need to make per minute to cover these costs.”
The Method and the System
In order to be able to achieve the given revenue goal per minute, George Witt Automotive has developed a series of systems that make the cost per minute achievable. As Witt says: “The two main timewasters are late customers and empty working bays.” To address these issues, especially the latter, the shop loads up the early morning appointments, not allowing for many more later on in the day, and if availability is limited, the customers are scheduled for the following day.
Once the appointments are made there are two actions that the staff at George Witt Service perform, the ticket (estimate) is written up when the appointment is set, and the expected parts are pulled from the shelf, labeled, and prepared for the technician to start the work immediately. In Witt’s experience, customers will have more time to discuss the issues or problems with their vehicles when they call to make an appointment than when they drop off their vehicles for service or repair. This allows the shop to have a deeper understanding of what each vehicle will require upon their visit.
Keeping the correct amount of regular-use parts in stock requires a finite balance of understanding the needs of your customers, making sure your shop is not overstocking and therefore potentially wasting money, and assuring you have the required space and inventory system to accommodate the parts. At George Witt Automotive there’s a policy of carrying more stock parts than those required. Witt doesn’t mind having obsolete stock in exchange for not wasting time waiting for parts to arrive, “We carry thousands of parts in our regular inventory, even if some become obsolete. We build that into our cost structure.” For Witt the cost of stocking parts is not the problem, it’s the cost of not having parts immediately available and the wait time incurred when this situation occurs.
Inspection and Proper Factory Maintenance
The expertise and know-how George Witt Service has in regard to the makes that they work with is a fundamental step in achieving the desired cost per minute benchmark. At George Witt Service the inspection process starts with the call for the appointment. While Witt assures that DVI’s are not required, and waste time, the shop’s process for the cost of inspection is built-in to the cost of the annual service. As Witt states: “The first thing we do is take a road test with the car. We then bring the car in, look under the hood, put in the air and pull the wheels, check suspension and actually measure all eight brake pads.”
Witt believes that proper factory maintenance with OEM fluids and parts is the best way to optimize billable hours. Becky Witt began Witt’s optimization by researching oils that could last up to 8,000 miles or one year. This way, her customers only need to come in one time per year. This single visit, which has the oil change as the main component, has additional service items included, all following proper factory schedules. Therefore, the once-a-year visit has now become an annual maintenance visit. As she says: “We do exactly factory-scheduled maintenance, nothing more. We don’t any “wallet flushes” or additional non-scheduled services.” By following the principle of scheduled maintenance, the shop has managed to make 80% of their business regular maintenance, and only 20% repair visits. As Witt confirms: “Doing it the way we are doing it, the cars are well maintained.”
From a Full Week to 2.5 Days of Work
At George Witt Automotive the office staff starts 30 minutes before the technicians do. Prior to this, customer cars have been scheduled in short increments, and when the technicians arrive, there are already cars in the bays ready to be worked on.
When Becky Witt started George Witt Service back in 2002, she had a clear idea of wanting to find work life balance for herself and her employees. The first measure she implemented was deciding to open just five days per week—most shops at that time were open six days per week. Witt has always looked at the business by the numbers and she soon realized that over any given Monday, the shop would receive, on average, 47 phone calls for appointments. The number of appointment requests would gradually decrease as the days of the week passed, and by Friday, there would be almost no appointments at all. “We’ve thrived on receiving cars early in the morning and having them out of the shop that same days”, as Witt states. It was soon clear to Witt that Friday afternoon was not productive enough to stay open, so she decided to close Friday at midday, and sales did not drop. As time progressed, the shop evolved into a 4-day week—removing Friday from the schedule completely—and again, sales did not decrease. At this point, Witt had also decided to work “by appointment” only on Thursdays, but she knew that she needed the right personnel to be able to shorten the schedule even more. After some creative hiring practices based on the hiring teachings of Bill Haas, she was able to secure the right technicians for this type of schedule. As Witt says: “We bill out 1.6 hours of labor per one hour of actual labor.” This effective labor rate is what has allowed George Witt Service to open, as of the past two years, from Monday morning to Wednesday at noon.
Understanding When to Say No
Not all money is good money, and not all jobs are good jobs. Understanding your real cost structure allows shop owners to evaluate what types of jobs are profitable and which ones are not. Many shop owners struggle turning down customers with the fear of developing a bad reputation or losing that customer for future business. Becky Witt’s cost per minute approach helps clarify why some jobs are not worth it. As she states: “You can’t fix it all. There are certain jobs that you either need to price accordingly or just say no.” In her 40-plus year career, she’s been able to narrow down her business model by optimizing and specializing. George Witt Service works with Honda and Toyota (plus Lexus and Acura). Over time and dedicated work, the know-how of her technicians and front office staff has allowed the shop to preempt the service and wear items that most vehicles will require, allowing maximum profitability, and turning down jobs that don’t produce the desired cost per minute. As Witt states: you have to have really good techs, you have narrow down what you do, you have to say no to the bad stuff, and you have to focus on the stuff you make money on.”
