How’s Business?

How’s Business?

I have been calling around to readers and asking: “How’s business?” The majority of the responses are positive. Thirty percent are up, 30 percent are even and 30 percent are down from 2007. The remaining 10 percent are reporting significant gains or losses. The responses are consistent with survey results on and the recent Automobile Service Association’s annual survey.

Looking back to previous surveys from several sources asking the same questions, the 30/30/30/10 results are consistent for the last decade in good times and bad. Even during great economic times like 1998 and the late 1980s, some shops struggle and go out of business while others grow.

In my opinion, the 30 percent of down shops are hanging their problems on the economy and not increased dealership competition, gas prices or vehicle complexity that were the chief antagonists just 18 month ago. Problems that they can not do anything about. Growing shops have realized the challenges have changed, but the opportunities are the same.

Every shop owner/manager I talked to is concerned with the state of the economy and how it is affecting the behavior of their customers. Most said that the majority of their customers are keeping their cars longer and are willing to make an investment when it does break down. But, they also said that some customers have cut back their budgets and auto repairs were the first to go. But, they can only put it off for so long until the car comes in behind a tow truck.

The one word I did hear a lot was “erratic” month-to-month performance when compared to previous year’s repair/maintenance mix, car counts and average repair order price. The majority of shops said that October was one of the toughest months. The shop owners chalked it up to consumer confidence after the stock market drop. But, many owners also said that November and December were the best months on record as cold weather rolled in.

During my phone calls, I noticed one thing about the shops that were even or up from last year compared to down shops. Shops that are up knew their numbers like the sports scores and statistics. The down shop owners could rarely quote numbers or they did not even track the information.

How’s business? On a shop level, it is what you make of it. You can either wallow in negative economic numbers like unemployment or market closings, or you can look at this time as one of the greatest chances to transform your business.

Overall, I would say that the aftermarket is positive and insulated from the current downturn, but changing. In these changes are opportunities to flourish and grow.

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