If you’re watching this video, the odds are that you are an automotive shop owner. One of the ten knowledge principles we at You Net Results teach is to know your True Cost of Doing Business. What does that mean? You need to ask yourself how much it takes to build an automotive repair shop that is financially healthy.
There are so many pitfalls and mistakes that repair shop owners can make. It’s up to you to make the effort to understand your profit and losses, as well as regularly review your score sheets. Only then can you stack up cash and set yourself up for success long term.
True Cost of Doing Business Discussion RecapGary Gunn, AAM opens up this clip, in which he is detailing the ten financial knowledge principles. Knowing the true cost of business means knowing what it takes to be financially healthy in the automotive repair industry. Knowing your numbers, as well as how to read them, is essential for any auto repair shop owner.
He went on to tell a story of an owner in his class years ago. This owner declared that he planned to slash repair prices because he had paid off his shop’s building. Gary literally asked him to leave the class. This kind of thinking doesn’t come from a smart business mentality. Rather than subtracting from his monthly income, he should have invested the money he previously put toward his building expense. Stacking up cash today could mean weathering a major storm in your future, or even retiring early!
Educate yourself. Look at your scorecard daily, weekly, monthly, and annually. If you estimate your true cost of doing business too high, then you are putting undue pressure on yourself and your team.
If this sounds intimidating, fear not! You Net Results is here to guide you to learn the true cost of doing business and stack up cash for your shop. Learn more about our Anchor Financial Reporting group monthly program here!
Brian and YNR Member Andy read a passage from Gary Gunn’s book Turnaround Point – The Recipe for Going Broke. Are poor auto repair systems and processes leading to you ultimately shutting your doors? Read on for some tips to dig your shop out of the hole.
Going Broke Discussion – Is It Too Late?Andy opens the clip reading an account of Larry, a shop owner who was definitely going broke. His shop was not open on Saturdays, and potential customers instead went to a competitor. He also required clients to set appointments for their repairs. The reason? He was worried that too many cars in the queue would cause chaos that his staff couldn’t handle.
Brian tags in to read the hard fact that the automotive industry has changed. You can’t require every customer to set appointments anymore. Limiting your potential business like that makes you a “no” company. If your customers do not get a “yes, today” answer from your service advisor, they will take their money elsewhere. A six day per week 7am-7pm schedule is a great idea to help open yourself up to new business by adding convenience. Besides, if you are worried about handling more customers, then maybe it is time to think about hiring more staff and examining your current systems and processes.
In addition to understaffing and delaying your customers, low parts margins and poor phone skills are factors in going broke. Leave no stone unturned, because your livelihood and your staff’s financial wellbeing, could depend on it.
Does your auto repair shop lack direction? Could you really be going broke? Perhaps your business plan has stalled out. Therefore, you need an experienced automotive industry coach to help you. Then why not schedule a FREE business strategy session with Brian? You’ve got nothing to lose, so sign up today!
