Every business struggles with certain aspects of building a thriving business. Auto repair shops are no different. Some businesses struggle with customer service, and other efficiencies. While other businesses struggle with hiring quality employees. Automotive repair shops tend to struggle in similar areas. Below is a list of the 7 biggest mistakes auto shops made in 2017.
1. Failing to Have a Business Plan for Your Auto Shop
Deciding to start an auto repair shop is the first decision of many you will have to make as a business owner. There will be many decisions to be made along the way. One of the biggest mistakes auto shop owners make is failing to have a plan.
When running a business you must have a basic plan in mind. How are you going to begin? Where do you want your auto shop business to go during the first year? At what point should you hire employees? Where will you buy parts from? The list goes on.
Before starting any business the owner needs to put together a business plan. Understanding where you want your auto shop business to go, and how you’re going to get it there, is essential. A business plan breaks down the steps you will need to take to make your auto shop a huge success, it can even go so far as to plan how you will cash out and retire.
2. Failing to Conduct Auto Shop Market Research
If all a business needed was a few friends telling them that they have a great idea and they should run with it, no business would ever fail. Unfortunately, a few friends and family cannot keep an auto shop business running for years to come.
An auto shop business owner must understand who their target audience is, and market to that group.
Another mistake auto shops make is not conducting thorough market research. There are companies who will do a market analysis for you and it could be the best thousand dollars you ever spend. Some of the most basic things you should know include
- How many other shops are within a 5 mile, 10 mile radius of your proposed location?
- How many homes are there in the same radius?
- What income brackets do those homes fit into?
- How much driveby traffic does your proposed location get?
- Are there planned road closures/expansions in the near future?
It is important for any business to conduct market research that will narrow down who their target customers are. When using automotive repair shop marketing dollars you will want to use them in a way that will reach the most targeted audience.
3. Failing to Realize Marketing is a Investment
Once you have conducted market research, and now know who your target audience, is it’s time to invest in marketing. Many auto repair shops fail to realize how important marketing is. They figure most people own cars and will always need auto repairs, making their business indispensable. What they fail to realize is that there are plenty of auto shops to choose from.
You must invest in marketing. Every dollar you invest should show you a return, this is shown by using the referral tracking system that any good shop management software system will include.
As you are opening your repair shop you should do a soft opening so you can iron out any problems before you get too busy then start marketing. Marketing comes in many forms
- Opening celebration – do a charity event, use a local radio station to help market it.
- Vouchers to current customers so both they and a referral get a discount
- Postcards to every house in a certain radius
- Ongoing contact with past customers – this can be service recommendations, discounts for your quiet times, even birthday cards
- Gift cards for local charity groups to use in their fundraisers – oil change coupons are usually a cost effective item to give away. Ask for a mention in the leaflets or ads they produce and at the worst way thing of it as brand awareness.
- Email marketing and text marketing are amongst the most effective ways to market to current clients.
The only way your business will grow is by building brand awareness, generating leads, keeping customers happy so they become brand advocates, identifying your audience, and going after it.
4. Failing to use Social Media and a Website
Reaching a large number of people is easier than most business owners understand. Social media is an avenue that every business, small or big, should use. One of the easiest ways to use social media to help your auto shop is by having a good website. Websites are inexpensive, easy to create, and simple to maintain. If technology is not your thing, there are many businesses out there that are willing to maintain a website for a small fee.
Whether or not you like Facebook it is a part of the vast majority of your potential clients life. Facebook ads are very cheap to run and owning a Facebook page costs nothing. Post regularly and it’s reach will grow.
You can post car maintenance tips, positive reviews, links to useful content, local charity event information and anything else that may be shareable.
5. Failing to Charge Properly for Products or Services
To compete with all the competition in the automotive and transmission shop space, some shop owners fail to charge the proper amount for products and services. When that happens the business does not make enough profit and can fail.
It is important to properly charge your customers so your automotive shop makes a profit. Do not try and start a price war with your local competitors, no one wins in a price war, not even the end user when a good shop goes out of business.
Automotive shop software is a vital part of your auto shop business. Great software will prevent these mistakes in pricing from happening, by notifying you when a job is not profitable before you sell it.
6. Failing to Understand Auto Shop Accounting Basics
Usually automotive repair shop owners have a lot of experience with the automotive repair part of the business. Yet, they don’t have a lot of experience with the accounting piece of the business. By failing to understand accounting basics many automotive shop owners have failed.
No matter how good your bookkeeper or your CPA is you should try to understand the basic accounting processes involved with your business.
Good automotive shop software for your auto repair or transmission shop should integrate to Quickbooks Online and have automatic data transfer , this takes much of the worry out of day to day accounting tasks.
7. Failing to Put it in Writing
There was a time when a simple handshake was enough. It is not enough anymore. By failing to put a contract in writing, a business owner has no way to enforce it.
In many states you have to get a client to sign off on the estimate and keep contact logs to record what they have been told and what they have approved. Having disclaimer information printed on the estimates and invoices is vital and every Repair Order system should do this automatically
Running an auto repair shop business can be quite complicated. There are many aspects of the business. A business owner is going to make mistakes. Being aware of mistakes that have been made by other business owners can help a new business owner avoid making the same ones.
Failing to: have a plan, conduct market research, invest in marketing, use social media and a website, charge the correct amount for products or services, understand accounting basics, and put everything in writing, are the biggest mistakes auto repair shops made in 2017. Be smart about your auto repair shop or transmission repair business and don’t make those mistakes in 2018!