If your priority is to increase your annual revenue and maximize profits – we know a couple of things that should help you along the way. Combine the advice from the article and experiment and you’ll have a better chance of reaching your goals. Here’s the list of tips.
Reconsider Your Parts Markup Strategy
A key takeaway from a recent PartsTech industry report is that many shops are not following the expert’s recommended benchmarks for gross earnings on parts. Over 52 percent of the average gross monthly parts earnings falls between 30 – 49%, while the recommended range is 55-60% and above. Around two-thirds of the shops will benefit from changing their parts markup strategy to reach their KPIs.
Cut Fees on Card Transactions
You know that card transaction fees might be too much for businesses that are just starting. Consider researching some alternative merchant services for small businesses. Instead of paying a flat fee for credit and debit card transactions – some merchants offer to charge the wholesale cost of running a card on top of a flexible processing fee.
Improve Shop Efficiency & Productivity
Investing in productivity and shop efficiency often results in the most revenue gained in the long run. One way to do this is by hiring an additional service advisor if you currently have 1 per bay. Shops with 2 service advisors per location had an average of $ 35,000 higher revenue per bay than shops with just 1 service advisor.
The other excellent way to improve efficiency is by utilizing auto repair software that automates and simplifies your entire shop management. ARI(Auto Repair Software) does that for your business.
Have more predictable appointments
Seasonality plays a major role in most auto repair businesses, but you can always take measures to counteract big revenue swings. Start by setting up a target percentage for your online appointments.
If more clients are booking your services online – you know how much you have in advance and don’t stress out that you are having a bad day. Plus you are more effective when planning your resources.
Be smart about reports and budgeting
Looking at stats will give you many ideas on how to be efficient with your finances.
If you know when it’s high and low season based on historical data – you can redistribute your marketing budgets to maximize pŕofits. You can increase the budget for leads in the low season and increase the budget for repeat clients in the high season!
*See ARI’s dashboard feature for more ideas related to recent business results.
Craft the right upselling strategy
Upselling is awesome when done the right way. Take the time to gather enough feedback from your clients and update your current parts& labor bundles based on the results you have.
Also, don’t miss what others are doing successfully, and take inspiration from others when there’s a seasonal happening or a major event.
Final thoughts
There are always new things to learn when optimizing your auto repair business performance. We hope we covered at least some of the relevant points that will bother you when choosing the right path for your auto repair shop. Share your feedback if you used the advice and found it effective!