Dave Arce owned Arce Racing Engines, an engine shop in San Diego County that built street and racing engines and also did machining, cylinder heads, crankshafts, injector rebuilding, engine balancing, installations and car repair. In 2016 he talked with host Reid Lunde about the roughly 20 years he had spent in the business since leaving a career in aerospace electronics.
Dave was 55 at the time. His wife ran a dance studio next door to the shop and also handled the shop's books. He raced a modified in a West Coast asphalt series and was working to bring bolt-on fuel injection to Saturday night circle track racing.
The heart of the conversation was about selling quality work to customers who shop on price. Dave explained how he stopped taking cheap partial repairs, how he handled the worst mistake his shop ever made on a customer's car, and how buying a few domain names put him at the top of local search.
From aerospace to a garage engine business
Dave went to Santana High School when it still had a strong vocational program, and spent his last two years in a three-hour daily electronics block. At 16 he was given a rundown 1963 Chevy truck with weak cylinders. The school's auto shop guided him through a valve job, and the truck ran.
He married young and went to work at 19, first building digital postal scales, then at Loral, where he spent 15 years in telemetry and avionics and ended up running customer service. All along he built engines in his garage. Around 1983 he ran what he said was the first display ad in the parts section of the San Diego Auto Trader, listing long blocks for small block Chevys, Ford 302s, Chrysler 318s and Chevy 454s. He sublet the machining, assembled the engines at home and delivered them.
Around 1993, PCs with plug-in cards started doing the same job as Loral's rack systems. A $40,000 unit could be replaced for about $10,000. Headcount fell, and Dave was told he would be moved back to the repair bench with a pay cut. The company offered a good severance package instead. The side business was doing well, so at 35 he and his wife decided to go out on their own.
Walking away from the bottom-feeder jobs
For years the shop took everything that came in, including what Dave called bottom-feeder work. A customer would bring in a part for a $20 or $30 partial fix. Those cheap repairs kept causing trouble. There were arguments over whose fault a failure was, and either way the customer ended up back on his doorstep.
Dave decided to stop doing partial repairs and sell only complete, quality jobs at premium prices. He was scared that turning the work away would leave him short. Income did dip. Over time the change brought in a different kind of customer, people with money who wanted to pay for a good job.
He said the real obstacle was his own lack of knowledge and confidence. Older engine builders had told him to turn away the $40 job, and he had insisted it would not work for him. Once he understood the work well enough to explain it, he could sell the complete job or decline the work.
It's about confidence building in yourself and having the trust and the words to look a customer in the eye.
His approach was to see the job from the customer's side and explain why the complete repair made sense, so they would not be back into the same engine months later. He said there were no shortcuts. He had to live through it.
When you damage a customer's car, say so
About 12 to 15 years earlier, a customer brought in a Ford LTD station wagon with a 390 and beautiful original paint for a full engine build of about $4,000. The job took about three weeks, because the shop would not order parts or do machining until the engine was out, cleaned and inspected. Everything went well until one of the last test drives. The hood was not latched, the secondary latch failed, and the hood flew up at about 25 miles an hour and bent the ends.
Dave said he had sold the customer on his shop, his people and their care with the car, and now he had to call and admit they had damaged it. The customer took it well. A body shop repaired the hood so it could not be seen, and the customer was happy with the job.
The lesson Dave and Reid agreed on was to tell the customer straight away, own the mistake and fix it. Dave said that is how the shop ran from then on, on both the sales side and the problem side. He added that an engine problem would have been easier to handle. Engine problems were part of the business and always fixable.
Moving the shop through a family crisis
Dave spoke openly about the hardest stretch of his life. After 15 years in their first building, the business was stable but not making much money. They were building about 12 engines a month, down from 25 at their peak. Then his wife was diagnosed with breast cancer.
He decided to spend nearly all of their savings to give her what she wanted. They bought a suite in a nice complex that was in foreclosure, so the price was good. They split it into a dance studio for her and a new home for the shop, with two bays, all the machining equipment, a separate engine room and a cleaning area. Dave said that money-wise it was horrible at first, but they were back on their feet and the building was gaining value. By the time of the interview she was about five years into treatment and doing very well.
Their days were long. She did the shop's books until 3:30, then walked next door and taught dance from 4 until 8.
Shop habits and tools that save time
Dave still surfaced heads with a stone instead of a CBN cutter, because a stone can cut diesel heads with hard pre-cups, and diesel heads were good money. He said he could hold a finish of about 15 to 20 RA, and that gasket makers had become more tolerant of rougher finishes on MLS gaskets. Ring and gasket suppliers who visited told him to keep doing what he was doing, because his engines were sealing.
His favorite tool was an air-driven valve lapping tool bought about a year earlier. Lapping the valves on a pair of V8 heads by hand used to take him about 20 minutes. With the tool it took about five, and the valves sealed noticeably better on startup.
Daily software included ALLDATA, Mitchell OnDemand and the engine specification program from the Automotive Engine Rebuilders Association, which holds bores, strokes, cylinder head specs and engine-specific service bulletins. For repair parts he used a Carquest app to scan a car's barcode at the vehicle, which sent the VIN to his computer so he could order online without typing anything.
Owning local search
Dave noticed younger customers walking out of his lobby to shop on their phones in their cars and coming back in. In 2009 he had bought out San Diego Engine Balancing. More recently, he and his son bought a set of domain names that matched how people in San Diego searched, such as San Diego engines, engine parts, cylinder heads and crankshaft. He said that moved the shop to the top of local results for those searches.
He was clear that search was only part of it. He estimated that about 60% of his business still came from word of mouth.
On the racing side, Dave had run in the Lucas Oil Modified Series since 2006. After a dinner with engine builder Doug Yates, he got throttle-body fuel injection legalized in the series. His FAST EZ-EFI unit bolted onto a standard 4150 flange, cost about $2,000, and tuned itself while other teams changed jets.
Key takeaways
- Cheap partial repairs bring comebacks and arguments. Selling the complete job can shrink the customer list for a while and improve it for good.
- Confidence comes from knowing the work well enough to explain why the right job costs more.
- When the shop damages a car, call the customer right away, own it and fix it.
- Pay attention to how younger customers find you. Matching local search terms can move you to the top of the list.
- Word of mouth still drives most of the work. Search adds to it.
- Small tools that cut minutes off a repeated job add up across every engine you build.
Selling complete engine jobs with My Shop Assist
Dave's shift from partial repairs to complete jobs depended on explaining the work clearly and charging what it was worth. My Shop Assist helps engine shops do that. Build estimates that list every machining operation and part, text the customer as the job moves along, and track technician time against each task so you know whether a job made money. Purchase orders keep parts ordering in one place, checklists keep teardown and inspection steps the same on every engine, and jobs export to QuickBooks. See how it works for engine and transmission builders.
If you are ready to stop chasing bottom-feeder work, start a free 30-day trial.
