Ep 112 - Coaching Call #20 | Mike is Going to Charge for Diag??

Tekmetric transformed my shop. Plain and simple. Want that for yours? Touch HEREASTA is coming up September 24-26 in Raleigh. Be there or be square, dog! Register now and use code confess25 for $25.00 off your registration. Sign up HERETurnkey Marketing takes the stress of doing something I'm not good at off my plate. And gives it to someone who is. Click HERE for more.Tired of your shop’s social media looking like every other repair shop on the internet? Stand out with 47 Consulting. Learn more HERESend your service advisor to hands down the BEST service advisor training in the industry (even other coaching companies agree). It's Elite Worldwide's Masters Program. The next one is happening in Dallas Texas, September 10-12. Learn more HEREWhen I used the maintenance tool for the fist time with Detect Auto, my mind was blown. My advisors had the same reaction - and then SO MUCH MORE TIME. Learn more about Detect Auto and book a free demo now! Mike Allen sits down with Matt Lofton for another open-book coaching session, digging into the real numbers behind one of Mike’s shops and figuring out what has to change to push it past 20% net profit. They break down car count, closing ratio, effective labor rate, gross profit per billed hour, staffing capacity, revenue per employee, and why a shop can look busy while still leaving a lot of money on the table. The conversation eventually forces Mike to reconsider one of his favorite controversial strategies—free diagnostics—and whether qualifying customers and charging for testing could actually improve the shop. As usual, there’s plenty of math, sarcasm, questionable financial decisions, and Mike reluctantly admitting that Matt may have a point. Timestamps 00:00 Mike Forgot the Most Important Podcast Preparation: A Drink 01:21 A $734 Power Bill vs. Matt’s Accidental Backyard Rainforest 04:25 Growing the Business Just Creates New Problems 07:35 Are Shop Owners Bad at Celebrating Wins? 11:33 Opening the Books: $115K Revenue, $530 ARO & 24% Closing 14:40 The Shop’s Best Month of the Year 15:18 Building a 20%+ Net Profit Goal 18:18 How to Calculate the Revenue Your Shop Actually Needs 20:41 Can the Current Team Produce Enough Hours? 25:45 “I Have No Excuse Not to Put $25K–$30K in the Bank” 27:04 Could This Be a 30% Net Profit Shop? 27:45 The Gross Profit Per Billed Hour Every Shop Needs to Know 30:21 The Problem With a 24% Closing Ratio 31:47 Your Loss Leader Doesn’t Have to Be for Everybody 34:29 23 Cars Out of 110 Generated $0 34:57 “We’re Not Hospice for Cars” 35:19 Should Repair Shops Have an Age Limit on Vehicles? 36:32 Mike Admits He’s About to Make a Bad G-Wagon Decision 39:58 Matt Sees Mike’s Effective Labor Rate and Gets Sad 41:12 Mike Calls Capacity Calculators “Mental Masturbation” 42:02 Should Mike Finally Start Charging for Diagnostic Testing? 43:15 What McDonald’s Can Teach Repair Shops About Pricing 44:04 Qualifying Customers Before Giving Them Something Free 46:25 Mike Promises to Rage-Bait Matt Again 46:54 Raising Effective Labor Rate Could Add $500K in Capacity 49:11 What Should the Entry-Level Diagnostic Fee Be? 51:41 The Revenue-per-Employee Hiring Benchmark 55:05 Is It Already Time to Hire Another Technician? 55:49 Why Your Shop Can’t Operate at Redline Forever 57:17 “Good Dude Is Not a Qualifier for Employment” 59:42 Mike Prepares to Admit He Was Wrong About Free Diag