How can you make your automotive business more profitable?
The automotive repair industry has seen some major shifts in recent years. Today’s cars last longer than ever, and more people hang onto their vehicles longer.
Between that and cars being built with incredible technology, the demand has increased over the last several years.
If you’re struggling to be profitable, or you want to increase your profits, you’ve come to the right place. These are the top seven ways to increase the profits of your automotive business.
Look Over Your Financials
Most business owners know what they’re not profitable. They don’t know why. They don’t keep track of their finances well or they just have someone else handle that with no understanding of what’s really happening in the business.
Profit is defined as the money that’s left over after costs and expenses. If your business needs to increase profits, you have to look at how much you’re bringing in, and what your expenses are.
It’s also a way to determine where you need to focus. Either you need to bring in more money, or you need to adjust your expenses. You can also do both, especially if you feel that cutting expenses would lead to a decrease in the level of service you provide.
1. Do a SWOT Analysis
Have you been in business for a while? When was the last time you sat down and analyzed your business?
Take the time to do a SWOT analysis in your business. This helps you examine where your opportunities weaknesses, opportunities and threats are.
Find the opportunities for your business and examine what you are doing well. You’ll also need to look at what you’re not doing well and external things like the economy.
You can still do this exercise if you just started your auto shop.
There will be things that you discover in this process that can help you increase your profits.
For example, let’s say that one of your weaknesses was that your employees spend too much time talking to customers on the phone. You can look at why that is and ways to get them to focus on activities that generate revenue.
2. Tackle the Low Hanging Fruit
In your SWOT analysis, you probably saw a few changes that can make a big difference immediately.
In the example above, you discovered that your employees spent too much time talking to customers on the phone. After further investigation, you learned that it was because they were playing phone tag with customers to schedule appointments.
You would rather see your employees working on cars to decrease the time it works on cars and creating more room in the schedule to work on cars.
A great way around this is through online scheduling. Customers love the convenience of scheduling online, and they’re automatically reminded of appointments.
Your employees can see the schedule for the day and prepare for those appointments. They’re spending less time on the phone and more time repairing cars.
That was a quick way to become more profitable. If you can find easy fixes from your SWOT analysis, be sure to implement them right away.
3. Charge More for Your Services
As we noted earlier, you can either cut your expenses or do more to increase your revenue. One way to increase revenue is by charging more for your services.
Charging low prices doesn’t serve anyone. If you compete on price alone, you will never have a profitable business. You’ll have to rely on having a lot of customers to be profitable.
If you have a lot of customers, you’ll have to have more employees and more space to serve them.
It’s much easier to serve fewer clients, give them a great automobile service experience and charge more for that service.
4. Shift Your Service Priorities
One other way to make your automotive business more profitable is to do profitable work. When you looked at your financials, did you find that there were services where you were losing money?
With those services, you can cut them loose and add services that are more profitable.
One area that’s profitable is working with imported cars. You could focus on repairing imports or even buying and selling them.
You can also provide an auto import service check for customers who are buying imported cars. You can read more about that option.
5. Invest Resources in Marketing
If you’re looking to increase your profits, you’ll have to get new customers. That means that you’ll have to find creative ways to get your name out there that won’t break the bank.
You’ll have to invest time and/or money into marketing, but the payoff can be great.
Marketing tactics like search engine optimization and social media don’t require money, but they do require time and expertise.
Other ways to market your automotive business is to network and get involved in your community. You can also write auto tips in your local newspaper to increase visibility and your expertise.
6. Manage Employees Well
Your employees are an important part of your business. You lean on them to provide excellent service to your customers. You rely on them to do quality repairs.
You need to make sure that they’re motivated to do their best every day and that they’re doing work that generates revenue for the business.
One way to do that is to empower them. Get them involved in your business and ask for their opinions. It will show that you appreciate them and you value them.
7. Encourage Customer Reviews
When people are looking for an automotive business, they’ll go online. Even if they have a referral, they’ll go online to check out your business.
They’ll look at your website and learn more about you. They’ll also check reviews from other customers before the schedule an appointment.
You’ll want to have as many positive reviews as you can. In your newsletters and on your receipts, ask customers to provide a review. You can also send out a follow-up email after their service appointment.
An Impressive and Profitable Automotive Business
Being the owner of an automotive business can have a ton of challenges. You can have issues with employees, get enough customers in the door, and you have to be profitable.
In just a few simple steps, you can turn your business around and maximize your profits. Would you like to know more business tips?
Take a look at these business advice articles.