Top 10 Machine Shop Business Tips
Engine Pro recently held a series of 8 focus-group meetings in the Midwest. Each meeting consisted of 8 to 10 machine shop owners and a moderator. Three questions were asked during the meeting. “What’s working? What’s not working? What do you need most to help you ‘make it’ for the next 10 years?” After talking with 70+ machine shop owners, the Shop Solutions Top 10 owner tips was created. Here is Tip #5:
Tip #5 – Charge More Than the Appliance Repairman Does
Here is how Jerry, a Minnesota machine shop owner, increased his net profit by 10 percent. Jerry was forced to stay home one morning to meet the clothes drier repairman. The technician arrived in a new pickup truck with his hand out for his $75 “tailgate fee” (See Tip #3). The tech grabbed a tester from his belt and diagnosed the problem in 2 minutes – a faulty fuse. The fuse and installation cost $50 on top of the service call. Jerry could have driven across town to purchase the $2 fuse and installed it himself. The repairman left 20 minutes later with $125.
Jerry was upset that the repairman could walk out of his house with more money in 20 minutes than Jerry’s business earns in two hours. And Jerry drove a 15 year old truck. Jerry realized that he had a bigger investment in his cylinder head department than this guy had in his whole repair operation. It was time for a change.
Two areas for improvement were addressed: Cost control and pricing strategy. On the cost side, Jerry made lots of little changes that added up to a 15 percent reduction in expenses. He swapped incandescent bulbs for florescents, installed electronic thermostats and he shopped all his services, such as insurance. He even disconnected his land-line phone in favor of using a cell phone, eliminating the redundant charges while reducing his long distance bill.
Adjusting his selling price was the big factor in increasing his net profit. In the past, Jerry set prices based on his perception of the market. His hourly rate was set at $55 years ago because his competition charges that rate. With the help of his accountant, he created a budget and a realistic sales projection. Jerry determined how much he needed to earn every day to reach his goal of sending two kids to college and retiring at age 65. Jerry started selling machine work packages (See Tip #4) and he raised his hourly rate from $55 to $100.
He made personal visits to his regular customers, reintroducing himself and explaining his pricing and service policies. His business increased and so did his profit.
Bottom line: Don’t be afraid to price your services at what they are worth, and be willing to seek professional help.
Steve Rich
Sterling Bearing Warehouse
Kansas City, MO
Removing Honda Intake Manifold Gaskets
If you’ve ever struggled with the removal of 4-cylinder Honda intake gaskets, you’ll really appreciate this tip. Buffing pads are dangerous to aluminum and won’t reach around the manifold studs on the head. Scraping takes about 30 minutes and extreme care not to damage the head. Instead of scraping, take about 3 minutes to heat the gasket around all ports and studs with an acetylene torch and the gasket lifts right off the head. This has saved us a lot of time and frustration. Be careful not to overheat the head, which can cause the aluminum to anneal.
Jim Keever, Jr.
Keever Auto & Machine, Inc.
Hutchinson, KS
Removing Ball Bearing Oil Galley Plugs
Ball bearing oil galley plugs are tough to remove from a blind passage. The easiest way I’ve found is by using a body shop welding gun. These guns are advertised in most tool magazines for about $150. The gun welds a stud similar to a dowel onto the steel ball. Use a slide hammer to collect the stud and pull it out.
Scott Turf
Lee Auto Parts
Waukegan, IL
Installing Ford Powerstroke Injector Tubes
Not all injector tubes require expensive tooling to install properly. Ford/Navistar Powerstroke injector tubes, for example, are easy and profitable to replace. First, thread the ID of the old tube with a tap, and using a punch, drive it out from the deck side. Then clean the tube bore, seal the mating surface and drive in the new tube. The head must be pressure tested. Some tubes also seal fuel and oil, so be certain to also test these passages.
Mike Oxbig
All Pro Truck & Sales
Rockford, IL
2.0L and 2.4L Chrysler Crankshaft Sprocket Removal
When a 2.0L or 2.4L Chrysler crank sprocket is stuck beyond a puller’s capability to remove it from the crankshaft, I drill the accessory pulley bolt hole out to the edge of the sprocket. Then I insert a tapered punch and strike it. The weakened gear easily splits and slides off causing no damage to the small snout of the crank.
Buying a new sprocket is a lot cheaper than the time it takes fighting to remove and save the old one.
Mike Simon
Engine Parts Group
Chicago, IL
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