Small Business Advisor Edmonton

4 Ways to Increase Profit Margin for your Auto Business

Profits are the ultimate goal of every business. They are incentives when your earnings exceed the amount spent on starting and operating a business. But, how do you determine that your business is earning profits? Many businesses compare profits with the amount of business they get. While that may prove useful in some cases, it is not an accurate measure of profit. You may have many customers lined up, but your auto repair business may still not get you profits. Organizing your operations to offer effective customer services that boosts your quality and reputation will add to profits. Here are a few tips to increase profits for your auto business.

  • Plan Appropriate Schedules

Planning schedules that provide sufficient time for repairs yet keeping your technicians productive is the key to efficient operations. Many businesses overpromise their deliverables and timelines in order to secure a customer. This can lead to inefficient repairs or late deliveries, resulting in a bad reputation and loss of a customer. To prevent this, gauge the number of repairs your technicians can perform per day. Accordingly set daily goals for your technicians and take no more than that amount of work per day, even if this means turning down work. This will ensure maximum productivity, good reputation, more customers, and finally increased profits.

  • Reduce Labor Costs

Many auto repair businesses resort to buying cheaper parts to increase profit on sales. While this makes a slight difference to your profit margins, you risk your reputation in the process. A bad reputation can lead to losses. Instead, focus on reducing your labor costs. You can adjust the benefits offered, increase your retail labor price, and optimize your labor costs by adding hours to your technicians’ schedules. Additionally, you can use outside sources to pay for training your staff such as government programs or vendor-supplied training.

  • Offer Reports and Maintenance Tips

When customers find something else broken down soon after taking the delivery, it ruins your reputation. Plan your technician’s schedule in a manner to provide them with time to inspect the vehicle for additional problems. Inspections, followed by providing reports and tips for vehicle maintenance to your customers will boost your reputation. This helps you retain customers resulting in added profits.

  • Rely on Quality Service to Get More Business

Shifting your focus to effective customer service will reduce marketing costs in form of referrals. While you cannot eliminate marketing, providing great service will automatically attract new customers through referrals. Additionally, you can provide incentives to customers for getting referrals. This may include a free offer or a discounted service. This increases your customer base, which in turn raises your profit margins.

The customer is the king. With increasing competition levels, you must ensure your customers receive top-notch service. This helps in bringing in and retaining clients to increase profits for your auto business. While these were a few tips, consulting a business advisor will offer you more useful tips for your situation to increase profits for your auto business.

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