Management: 10 Ideas to Improve Shop Profitability

Management: 10 Ideas to Improve Shop Profitability

Profitability is the number one concern of shop owners across the country. In research we've conducted through the years, we found that roughly one-third of shops experience sales growth compared to the prior year, one-third said sales were flat and the last third reported sales lower than the prior year. As the cost of running a shop continues to escalate, it’s important to always ....

By Jeff Stankard
Publisher

Profitability is the number one concern of shop owners across the country. In research we’ve conducted through the years, we found that roughly one-third of shops experience sales growth compared to the prior year, one-third said sales were flat and the last third reported sales lower than the prior year. As the cost of running a shop continues to escalate, it’s important to always have your eyes open for ideas you can implement to improve sales, cut costs and make your shop more profitable.

With the goal of providing you with ideas to improve profitability, Babcox Research asked a sample of shop owner readers for their ideas on this topic. We got dozens of great responses, so thank you to those of you who responded.

10 Ideas to Improve Shop Profitability

  1. Survey the competition and see if you can raise prices. Don’t just look at what is advertised in the newspaper; make some phone calls too.
  2. Take care of the customer and teach them about the need to keep their vehicles maintained.
  3. Conduct very thorough inspections. Teach employees (especially new hires) how to perform a proper safety inspection.
  4. Make the extra effort to communicate with customers so they understand the importance of doing a complete repair.
  5. Watch what you spend. Don’t waste materials and stop giving things away. Make sure every item used on a repair is billed-out, including “extra” time.
  6. Hire good techs. Provide and require on-going training.
  7. Get the right profit margin and don’t rely on a “suggested” list price.
  8. Give the customer what they want because a returning customer will bring in more referral business.
  9. Actively work your customer contact list/management database to drive traffic to your shop and bring back good customers.
  10. Do the work right the first time and use quality parts. One comeback can destroy a good week.

If you have any other ideas you would like to add to this list, send me an e-mail ([email protected]) and we’ll add them to our list on the website.

Here’s to some more profitable days ahead.

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