Running a business of any type is no easy feat. This is especially true of auto repair shops, where you may feel focused on simply getting cars in and out of your shop. Here are a few factors that may be affecting the success of your shop – and how you can avoid them.
Poor Sales Performance
Maybe you already have an effective marketing campaign that’s bringing customers into your shop, but you still seem to have no money at the end of the week. It’s possible that your service writer doesn’t really understand sales. They may be spending time being friendly and personable – and they should – but they fail to take advantage of sales opportunities. Good service writers set out to offer a profitable solution to each customers’ problems. That doesn’t mean that you need to find a new service writer. You can create one with solid training.
Develop a systematic approach to the selling process that makes it easy for your service writer to make a sale. They should have a good understanding of how to cost-justify repair work, as well as being able to explain the benefits of a specific repair or maintenance procedure by heart. Asking the customer when they’d like to schedule their next appointment while they’re in the shop makes it easy for them to say yes. Another trick is to use an assumptive close. Instead of asking your customers if they’d like to have certain services performed, change the phrasing. Say, “All I’ll need is your go-ahead, and we’ll get started on your repairs right away. This makes it less likely that the customer will decline the recommended services.
No Marketing
Decades ago, marketing for an independent business was as easy as hanging a sign outside your shop advertising quality repairs. Times have changed. There’s too much competition and noise from your competitors to not have at least limited marketing. Your marketing plan should be simple to implement and based on proven strategies. Sure, you could experiment with creative tactics, but you may end up wasting precious money and time. Some easy-to-implement marketing strategies include:
- Keep your website updated with useful blog posts
- Create regular social media posts
- Collect customer testimonials and reviews, which can be posted on your website and social media accounts
- Send out helpful monthly newsletters, which can include information about services, promotions, and automotive tips
- Send personalized service reminders via text or email
- Develop a follow-up program to check-in with customers after they’ve visited your shop
- Use signage to promote specific products or services
Inefficient shop flow and use of time
Time is a precious resource, so it’s essential for your shop to have effective time management techniques. Failure to manage your shop’s time wisely can hurt your business’ potential and cause frustration for your team and customers. Utilizing ProfitBoost auto shop management software can help you manage your time more wisely.
Our integrated labor guide means allows your service writers to make accurate estimates on repair work needed and the amount of time it will take. This eliminates the need to pull quotes and estimates ad hoc and frees up more time for the service writer. Having accurate time estimates also allows your team to stay on schedule as well as ensure that you’re taking on as many repairs as possible without becoming overloaded.
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The Numbers Aren’t Working
Your auto shop is extremely busy, but no matter what you do, there’s nothing left after you pay employee salaries, mortgage, equipment financings, and taxes. In some cases, even though you’re consistently making money, you actually seem to be losing it. Why can’t you seem to get out of the red? If this is your situation, it’s time to take a close look at your profit margins on your services and develop a plan for how much business you need to meet your profitability goals.
The Absence of Systems
Good business owners in any industry have clear, well-defined procedures for all their daily processes. Shops that fail generally have no processes in place. If you don’t have procedures for how you’d like your shop to run – from answering the phone to performing services – employees will find their own ways of doing things. This creates inconsistency and may even cause you to lose business. You should develop a process for each task in your shop to eliminate the need for guesswork.
Bad employees or not enough employees
Having the right employees can make or break a business. A service writer who won’t sell or a technician that repeatedly makes mistakes on repairs can be damaging. Over time, customers may even avoid your business because they see your team as lacking knowledge or being unreliable. Building a strong team will give your customers confidence to keep coming back and make referrals to their friends and family.
Likewise, not having enough employees can be bad for business. If you have one technician who is handling the work of two people, the chances of burnout and low morale are high. It also limits the amount of work your shop can take on. There’s also the issue of customers having to wait longer for appointments or for their cars to be ready by the time you estimated. Unless they’re already a loyal customer, both issues are likely to make them choose a different shop next time. You should have enough employees to be able to handle the workload and effectively meet estimated timelines.
Failing to Measure Results and Define Goals
Many shop owners go with the flow. They run their business with a day-to-day mindset, without clear goals or paying attention to the numbers. This can be a huge mistake, as it paves the way for letting crucial information slip under the radar. How can you know which services are most profitable, which ones are losing you money, or where you can reduce your overhead? This is a good way to get into debt or get burned out.
Having clearly defined goals allows you to have a mission to achieve. You know where you’re currently at, and where you want to be in the future. This allows you to make better decisions, do a better job hiring employees, and have more passion for managing the shop. Using ProfitBoost’s profit analysis reporting goes hand-in-hand with defining – and meeting – your goals. Using specific settings, you can create your set minimum and desired (or optimal) percentages of profit on jobs, parts, and labor. You can determine whether each job meets your desired profit per hour (PPH). This will enable you to make data-driven, informed decisions. Service writers can also use the profit analyses to focus in on profitability targets and make decisions on sales and volume.
In closing, the best way to ensure the success of your auto shop is to be proactive with its management. While there’s no guarantee for the success of any business, avoiding these common mistakes will go a long way in keeping your business running smoothly for years to come.