How to Make Your Auto Repair Shop More Profitable
Updated: Apr 26, 2022
If you run a car repair shop and want it to be successful, there are many aspects you must keep in your sight. A car repair shop is a tough work to handle. It is one of the most challenging industry domain to retain customers in, and your service has to be top-notch. The business also requires technically qualified and experienced mechanics, who can spot a problem and work on it swiftly.
A car repair shop is a tough work to handle. It is one of the most challenging industry domain to retain customers in
In this article, we will focus on how to make auto repair shops more profitable.
It is no secret that delivering a great service will not ensure success by itself. Although your crew might solve even the most complex issues, the auto shop will go bust eventually if the whole thing does not earn enough money. Raising prices to improve money income is one of the options, but this will make your auto repair shop less competitive. Instead, you should consider ways to improve your business.
Here are some ways that auto repair shops can accelerate business and take their business into the next gear.
MORE CARS EQUALS MORE MONEY
For a start, let’s cover the basics: more cars equals more money. As keeping your bays filled at all time boost profits like nothing else, increasing the number of cars that go through your shop should be your primary focus. To make this possible, an overall repair process needs to be as short as possible.
More cars equals more money!
However, achieving this can be quite tricky, as your choices are limited. Naturally, doing this at the expense of quality is anything but a good idea. On the other hand, pushing your technicians too hard will have a negative impact in the long run, as dissatisfaction and fatigue will take its toll. In the end, your only options are to optimize the workflow and to enable your technicians to work more efficiently. There are many ways to do this, varying from staff training to specialized tools and equipment.
RIGOROUS VEHICLE INSPECTION
Perform a detailed multi-point inspection on every car that goes into your shop. In most cases, customers bring cars into the workshop either for regular maintenance or if there is an apparent issue. However, that does not mean that there are no other potential issues that are yet to reveal themselves. This is where a systematic inspection and analysis comes in handy, as it reveals these 'hidden' problems. Dealing with them before they get out of hand not only will generate additional income, but it will also raise the overall credibility of your workshop.
INVEST IN THE RIGHT CAR DIAGNOSTIC TOOL AND SOFTWARE
Use latest technology and software solutions which will work instead of you. Daily shop routines have many time-consuming tasks that can be automated using appropriate software and tools. Relieved from unnecessary loads, you and your staff will work faster and more effectively. This will leave you more time to focus on the important jobs. The same goes for communication with customers, as using e-mail, SMS or instant messaging services can save you a lot of time spent on phone conversations.
The same goes for communication with customers, as using e-mail, SMS or instant messaging services can save you a lot of time spent on phone conversations.
EXPAND YOUR SERVICES
Offer additional services that can be performed while the car is in the shop, as this is another great way to increase your profits. However, there are a couple of things to consider. One of them is to focus on services that are simple and require little time or advanced tools. Another aspect is to push services that are visually easy to spot or clear to report through a diagnostic report. For example, a customer might leave a car in the shop for an oil change and will pick it up tomorrow. Although this job will take only an hour or two, that car will still be around for the rest of the day. This can be a good opportunity to perform a quick digital AC performance test and accurately diagnose auto air conditioning problem. Get a fast approve over the phone and fix any issues even before the customer is back to pick his car up. And this is where your workshop steps in.
Another aspect is to push services that are visually easy to spot or clear to report through a diagnostic report.
IMPORTANCE OF CUSTOMER LOYALTY
Consumer behavior in the auto repair sector can be summed up in one word — Trust! Once a shop manages to solve a problem on time, thoroughly, and with civil service, they gain a customer for life. Price may not matter as much anymore to such a consumer, as several car owners have bad experiences with inattentive service and sloppy work.
Consumer behavior in the auto repair sector can be summed up in one word — Trust!
Repeat customers are the lifeblood of the net profit margin of your auto repair shop and are especially essential to increase the average profit margin for auto body shops.
If you are not able to retain customers, it often happens that word about sloppy service spreads easily in the neighborhood & this will hurt your auto repair shop profit margin drastically. It is important to take heed of customer response to the business.
ASSESSING CURRENT EXPENSES
With parts and assemblies being a considerable part in overall repair expenses, there is a lot of room for increasing profits by getting parts at prices as low as possible. This is best done by having a single supplier, as you can use a bulk volume to negotiate a good discount. Still, avoid cheap aftermarket parts. As they are usually low-quality items that don't last long, using them will have a negative impact on customer satisfaction. Instead, find a parts store that offers good quality parts combined with low-price and try to get a deal. And if it is a local store that offers a daily delivery service, it is even better. Having parts delivered in your shop will save your time, as frequent trips down the parts store are not required.
While at this subject, we must not forget aftermarket parts and additional equipment. Although a lot of money lies within it, this is a market niche often over-sighted by shop managers. It may seem that with eBay, Amazon and various online shops, nobody would buy such parts and accessories in the shop. Still, there is a long way between buying a part and actually installing it on the vehicle. This is where your auto repair shop might find a market share for increasing profits. However, make sure to offer parts that your technicians can install quickly and easily, and that apply to cars frequent in your area.
MAKE DATA-DRIVEN DECISIONS
Lastly, but probably most importantly, keep yourself informed. With a margin between success and failure so thin, being at the information cutting edge is not an option. There are several things to consider here. One of them is having steady and reliable sources of technical information, which will keep you updated on the latest trends in the industry, service bulletins and similar. Passing out this information to your technicians will help them to track down problems quicker and more accurately. Secondly, you need to be familiar with the surrounding market. Imitating others will not bring much success. To find new opportunities and niches, you should try a different approach and think out of the box. Finally, keep your eyes open for the latest technology and advanced tools to maximize efficiency and stay one step ahead of your customer.
Keep your eyes open for the latest technology and advanced tools to maximize efficiency and stay one step ahead of your customer.
Take your time and strategize, now that you have a grasp of the innumerable and various ways to increase your auto repair shop profit margin.
And whatever you are trying to increase car counts and revenue, boost productivity or communicate easier with customers, Internet of Things technology and Smart solutions can help you achieve your business goals.
You can truly transform your business with a few concrete and clear-cut decisions!
Why don't start with a reliable and affordable car AC diagnostic tool?
Ref: Dr. Nima Mehrdadi
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