By Joe Marconi
We are almost into the 4th quarter of 2022, which means that you need to consider your 2022 tax return. Many shops are having a very good year, which means there may be more taxable income at your bottom line.
What do you do to plan for and minimize paying taxes, while still maintaining a cash reserve?
By Eric Roberts
Firstly let me say that I an just a regular guy from the UK who is the owner of a seven bay service centre/garage. I am not a financial expert. The dreaded inflation is upon us again. For the guys as old as me then this is nothing new. Back in the 70,s we had 15% inflation, but we all got by and lived for better trading days. Here in the UK we have always looked up to the USA because of your business prowess. So what do you guys look out as your worst enemy!
When prices are going up then I find that the gap opens between rich and the poor's disposable income. So this question will effect garage owners in different areas. My garage is in a poor area with many immigrant families who drive cars. So this means we have to be more flexible with pricing. Finding out if your customer can afford that service ! For this reason we devised a three tier service pricing structure. This has also the effect of not loosing your profit margins.
The lowest price should include an oil and filter change and a general vehicle check over. This way we find the customer will perhaps be able to afford a service and your profit margins wont drop. This is just one small idea that we carry out! What do you guys do in these times of high inflation ?
If only we had a crystal ball to peak at the next 5 years. As a shop owner, you might still be booked out 2-3 weeks, but with gas prices, inflation, the great resignation, interest rates, and new and used car costs, what do you need to pay attention to in the short term to continue to be profitable and relevant? Chris Cotton, AutoFix Auto Shop Coaching, Chris Cotton Weekly Blitz Podcast Hunt Demarest, CPA, Paar Mellis and Associates, Business by the Numbers Podcast Joe Marconi, Executive Council Member, Elite Worldwide. Joe’s Episodes HERE. Michael Smith, Managing Partner, Herzberg Smith and Co, Michael Smith’s previous episodes HERE Jaron Kleber, National Sales Manager, Repair Shop of Tomorrow
Key Talking Points
Your employees should be your greatest strength. Invest in THEM to secure their future and the future of your business. Connect the dots with their goals and the company’s goals. Don’t ignore the people in your shop. Don’t get complacent. Productivity, efficiency, and effective labor rate are the 3 most important numbers in your business Systems, operations, and procedures. SOPs will set you free! Important to train the whole team on “what right looks like” so that everyone is rowing the boat in the same direction. It’s not about the one, it’s about the all. TEAMWORK makes the dream work. The automobile service industry is undergoing a literal revolution. The boomers are increasingly aging out, the number of independent competitors is shrinking fast, being a future top-shop will require much more business sophistication in the future, and the third-party investor feeding frenzy has begun. Smart owners need a strong business strategy, steeped in their legacy and exit strategy, to lead through these changes rather than just playing catch-up. Baby boomers retiring- 80-85% aren't worth making a private equity investment Shop owners coming from outside the industry- thinking from a business perspective Elevating the industry through training and coaching Profit vs cash- cash brings personal spending habits into play, preserving cash Will it slow down? It matters what you do during the good times that will help you survive the bad times. Don’t let car count carry you. Redefine who you are and honed in
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By Joe Marconi
It appears that the economy is not out of the woods yet, with inflation and the Feds looking to raise interest rates more.
While gas prices are down (at least for now), there are other economic factors in play here that may affect your customer's wallet.
So, is it time to tighten your belt a bit and squirrel away cash for a rainy day?