5 Steps to Help your Shop Avoid Hidden Costs

Avoid these 5 common mistakes that cause auto shops to lose money in the long run! Hidden market costs are prevalent, the good thing is that they are unnecessary and avoidable when you know where to source.

Here are the 5 main areas where we commonly see auto shops losing money:  

Inventory Sourcing 

Sourcing parts is commonly an area where auto shops are ineffective. Having a proactive approach instead of a reactive one is key, there is always room for improvements. Don’t wait until your inventory gets too low before filling your next order. By keeping detailed records of your inventory, you are able to gauge which parts need to be ordered ahead of time. 

Scheduling Inconsistencies 

When shops are ineffective at scheduling, it creates idle time for your team and limits their ability to service customers. Having an excess of vehicles waiting to be serviced or a part to be delivered creates a hurdle for accepting new jobs, you simply don’t have enough space in the shop. Effective scheduling is important when it comes to inventory sourcing, job availability and working around your operating hours. 

Tool Inventory  

When auto shops have poor planning, it limits the possibility to take on new work. Your team of employees should be busy but not overwhelmed. Creating a strategy that aligns mechanics to the right number of scheduled jobs is key. Organizing the right number of tools per job is an overlooked step. Your shop should maintain enough tools to service jobs without having them be disorganized throughout the service area, leading to idle time spent searching for equipment and being unable to service jobs effectively. 

Poor Training Practices

Poor training can lead to job inefficiency and a loss of revenue. If your mechanics are not properly trained on your customer base (such as collision repair, maintenance jobs, or refurbishing), your results will be slower and outcomes will be worse. In some cases, this ends up leading to additional unpaid work when the quality wasn’t executed from the start which takes your focus away from other sources of revenue. Keeping your mechanics up to date on the changes in vehicle models is important! Utilizing online manuals is a great way to keep your mechanics up to date on the latest advancements, such as electronic or battery-operated features.

Legal Recourse 

When shops do not complete quality work, the legal implications can cost your business revenue when the outcomes of your repair don’t meet the market standards or legal requirements for collision repairs. Poor quality parts that do not meet OEM standards can malfunction, making your shop vulnerable to diminished value claims.