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Are Shop Expanding into Different Areas?


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In this competitive and ever changing economy, are there shops that have ventured out and added different forms of income streams. For example, many shops have started to sell used cars as a means to add more income to the bottom line. Other shops have added a car wash or detail center.

 

I am curious to hear from other shop owners if they plan on expanding their business by adding new services or products?

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  • 2 years later...

I actually have done the opposite. I have scaled back, we used to have a used car division on site. We removed the sales side because it would really hurt the service department on a bad month. We decided that we were going to focus on improving operations of our service dept. With local dealerships really working hard to irritate their customers we saw the economy issues as the best opportunity to grab hold of the people that are now starting to count pennies again. I deal with European cars so lots of owners just want car fixed, not really concerned about price, but now they start to care. This has proven to be one of the best "big" decisions we have made (we also have moved within the last 3 years, also scary).

 

I suggest in any market the small shop or independent shop concentrate on working their reputation and word of mouth advertising, especially this day and age. Invest in ways to promote yourself through reviews online and customer referrals. I mail customers that referred someone a $25.00 gas card, who doesn't like gas????!!!!! and it's directly related to what we do so the connection is there. I tell the new customer I want to thank their friend for the referral and tell them what I'm doing.... gets the chain reaction happening, before I know it I send the new customer a gas card.

 

Now regarding new ways to make money I constantly think about what else I can be doing with what I have. Obviously most of us sublet repairs for customer convience and make a fair profit off the work. What I would like to discuss, maby we should have a new thread for it, is control module repairs. Some of these repairs are so common that anyone can fix them, the time just needs to be spent to look into it. Otherwise we ship them out and wait 1-2 weeks, car is disabled ect.

 

Case is a warranty issue I'm working on for a Jaguar, the ABS module has 2 bad solder connections, well the whole ABS module and pump assembly was replaced with a used unit, then car comes back because of intermittent warning lights. Well the used module has the same failure as the customers original. Now I'm fixing it on my dime so of course I'm not gonna pay for a rental car for 2 weeks, I'll fix the solder connections and re evaluate.

 

Bottom line, what are the areas of our business that we can do things in house and make more money rather than paying someone else to do it. Thoughts????

 

 

damn just realized how old the original post was... But I think this is a valuable thing to be thinking about.

Edited by YoungBuck
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We have somewhat of a different background. We were initially (and still are) a car wash with a detail center that actually added repair versus the other way around. The car wash portion of our business is still the "main" business. Our full detail shop which is located on the same property but in a separate building is an 8 bay garage that just never had all 8 bays occupied at the same time with full details. That was the main reason we installed lifts and added auto repair. We now have 4 lifts installed and are a state inspection facility and a full service auto repair shop. We still do a lot of full details as this building and business is known more for the car wash and detail side but we have increased our car counts from 0 initially to about 25 cars a day for auto repair/maintenance services.

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Pretty cool story 5 Star Auto Spa!

 

I think if it happens organically, why not add services. I have found that if you are going to do it, you have to be fully engaged and committed to seeing it through. Throwing up a sign and waiting for new customers probably isn't going to work as well as getting out there sending out email and media blasts and really promoting your new service. Also working out the organization, quality and work flow of your new services is really important. I love theory planning, I wish I was as good implementing as I am dreaming stuff up!

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  • 1 month later...

I just finished the book Blue Ocean Strategy, which I HIGHLY recommend, especially in regards to this thread. It is a business book on every Fortune 500 must-read list I have seen. I know most of us are busy, so I will summarize Blue Ocean Strategy below and how it applies to us:

 

In summary, there are two "oceans" in business marketplaces:

 

The Red Ocean: This is your standard, competitive, dog-eat-dog marketplace where similar businesses are competing based on similar metrics. It is an old, well-established market. Our auto repair sector is a prime example of this. We are competing with each other based the same metrics of who offers the best warranty, who offers the best prices, who treats customers the best at the front counter, etc etc etc. We try to distinguish ourselves in one way or another, but at the end of the day, we are still competing in the same arena. Another good example of this would be the beer industry. There are hundreds of beer brands all competing with one another. It's a well established market with competition around the same metrics ... taste, quality, cost, packaging, marketing, etc etc etc.

 

It is very possible to win in this dog-eat-dog market, but it is not easy. Due to the heavy competition competing in the exact same areas, it is a struggle to become the very best and achieve a high net profit.

 

The Blue Ocean: This is a new marketplace. It is a marketplace with little or even no competition from other companies. It is a marketplace where the first one in gets to define the new metrics. It's a wide-open ocean of possibilities and freedom. A few good examples of Blue Oceans follow:

 

Cirque du Soleil - Look what Cirque du Soleil did with the circus industry. They took an old well-established market (circuses) and turned it on its head. Instead of competing on the old standard metrics of who had the best clowns, the most elephants, the best prices, etc, they shifted their focus to creating an entire new genre of entertainment. Cirque du Soleil brought Broadway to the circus and created an entire new form of entertainment. It is incredible. The best part is ... nobody competes with Circque du Soleil anywhere. They simply dominate the market. If you have not been to one of their shows, go to it. It is an unforgettable experience.

 

Yellow Tail Wines - Yellow Tail noticed that only 30% of Americans drink wine regularly ... the other 70% find wine too complex, confusing, and too complicated to enjoy. Yellow Tail made a decision. They said, "We can compete in the cutthroat world of regular wine drinkers and hope for a small piece of that 30% pie, or we can go over a completely untapped market of non-wine drinkers. The 70%." Therefore, instead of competing on the standard wine metrics price, wine label, wine vintage, etc, Yellow Tail did the opposite. They created a wine that even wine-haters would actually enjoy. They created a simple wine with simple flavors that still gave the illusion of drinking a complex wine. Thus, instead of a cutthroat competition for the 30%, Yellow Tail went into the untapped Blue Ocean of the 70% who don't drink wine and soon became one of the largest wine exporters in the world.

 

Nintendo Wii - Historically, Nintendo competed in Red Ocean against the Playstation and the XBox. Both companies wanted to make the best games, the best graphics, the best price, etc. etc. And, historically, Nintendo did a great job in this battle. However, they realized that they were all competing for the exact same customer base: young males. Young males buy the vast majority of gaming systems. Nintendo, Playstation, and XBox were all competing directly for these young males. Well, what about older folks? And females? Why not market to them too? After looking at this missing demographic, Nintendo entered the Blue Ocean of older and female customers by developing the Wii, a very simple, fun, party-like gaming system that was an instant hit.

 

The real question now is ... what is the Blue Ocean for our industry? What can we offer that NOBODY in our marketplace is offering? Better prices? Nope, someone will always beat us there. Better service? Possibly, but we'll probably get beat there by somebody, somewhere. A better location? Dealer trained techs? Shuttle cars? Wifi in the waiting room? A national brand name? Better marketing? More bays? Quicker oil changes? All have been tried with great success. However, they are rapidly becoming the norm, a Red Ocean.

 

I'm looking for the real game changers to our industry. Is there a Blue Ocean that we can tap into and be the only players in our region?

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Thanks, Joe. Still looking for those new markets. Right now, the only "Blue Ocean" I see is hybrid / electrical work. Very few independent shops are touching it, leading to no competition. However, on the flip-side the ones that do go after this work compete directly with the dealership and fight for a very small customer base.

 

Interested to see what new markets other guys on here are getting into.

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I know my shop is very different than most others, since I specialize in the same brand (Toyota/Lexus/Scion). This allows me to focus all my time/money/energy onto just those vehicles. With that, I now cut and program keys for those vehicles, perform rock chip repairs, wheel repair (curb rash), Hybrids are a breeze, minor body work, ECM and other module programming, air bags, theft modules...

 

There isn't much the dealer does that I can't do. Come to think of it, about the only thing they probably do that I don't, is detail/car wash, window tint, and leather/interior repairs (I mean leather tearing, cracked dashes)... That being said, you better believe I've been searching for a mobile window tint guy and a detail shop I can trust and work out a discounted price with them... Leather and dash repair is tricky, so I've found a place that does that, but I don't do it in house... Give me 3 more months of talking to folks and networking, and I'll do everything the big boys do, but for less.

 

My biggest problem, is trying to get all this information to a customer. I tell them I do everything a dealer can do, and they follow up with questions like "what about keys? Can you do them?" or "My air bag light is on. Is that something I have to take to the dealer?"

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It' can be a struggle with customers that may not know all the services we provide. It takes a Total Car Care approach and letting people know what we do.

 

For example,let's say we do windshield replacements, we should be checking every windshield every day. Sometimes we wait for the customer to ask, but they may not ask and assume we do not offer that service.

 

A more proactive approach is perhaps the best wat to go.

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It' can be a struggle with customers that may not know all the services we provide. It takes a Total Car Care approach and letting people know what we do.

 

For example,let's say we do windshield replacements, we should be checking every windshield every day. Sometimes we wait for the customer to ask, but they may not ask and assume we do not offer that service.

 

A more proactive approach is perhaps the best wat to go.

 

Absolutely right, Joe!

 

I decided last week to have a slide show on our TV in the office, instead of a satellite/cable TV feed. The slideshow displays the different services we offer, so during the write up and check out process, they are constantly being reminded of what we offer now.

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  • 1 year later...

I only use to do mobile repairs. Than I branched out into towing. The towing grew faster in 6 months than my repair business did in two years. It also allowed me to pick up additional work at my descretion. I became affiliated with a motor club. Their rates were not the greatest , but 7 out 10 times, I did the repairs. Snow storms were great because repairs were slow, but towing was through the roof. Winch outs was my big earner this winter.

 

Start up can be pricey because of the truck and the insurance, but, I had my truck almsot 90% payed off within 12 months.

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I offer a couple different services but all under different business names to keep away from Jack of all trades master of none stigma.

 

We have auto repair, heavy in domestic support (factory scan tools and special tools). Pearson Auto

 

Car audio, really mostly auto starts. Excessive Audio

 

Hydrographics, that I started as a hobby but I am the only one doing it with in a 300 mile radius and my equipment is the largest in the state. Hydrographics By Johnny5

 

Each one is also its own entity so that if something happens to one it doesn't take the whole deal down.

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I expanded into used cars, it keeps the bays full during slow times. Its fun to go to the auctions. The dealer plates are handy. Headaches increased 1000x, for me its a lot easier to fix cars than sell them. The profit on a used car from the auction is so low you wouldn't believe it, the only money I make is when the trade sells if its a good one. If I just sold cars for a living I would quit.

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I should add that I also have a farm, we raise yaks. Talk about poverty, there's absolutely no money in small scale hobby farming. I sell 1 or 2 calves a year for $1000 if I'm lucky, I buy $1000 worth of hay a year. Do the math. It keeps me grounded that's about it.

 

I used to sell on eBay out of the shop, that was good money but eBay took 10 hours a day, plus the regular 10 hour work day. Something had to give, I gave up the internet sales.

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I buy a fair share of cars from customers, if we've been servicing them I'm confident to pay full price. I buy trades from local dealers too, if they serviced the car its odds in my favor. The auction is a fun and exciting way to lose time and money, like a casino. I try to buy repos at the auction from the banks, they usually need extensive cleaning but at least I know what I'm getting into with the CR's. The good news is most dealers are impatient, if a car doesn't bring the money 3 weeks in a row they will usually give it away the 4th week. Nobody will touch it at that point. The auction takes up a full day, plus 2 full days reconditioning. Money is spent, I wait to get it back. Hence my negativity, I make more in 3 days behind the counter or wrenching than I do when a car sells, a lot more. No cash tied up, no mystery when I'm going to get paid. No mystery if it comes back with a warranty issue.

 

That being said, when I have 5 or 10 cars waiting for lift time we are always busy. Customers notice busy shop activity and are attracted to it. They also notice an empty parking lot, which is avoided like the black plague to passer by's.

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I know my shop is very different than most others, since I specialize in the same brand (Toyota/Lexus/Scion). This allows me to focus all my time/money/energy onto just those vehicles. With that, I now cut and program keys for those vehicles, perform rock chip repairs, wheel repair (curb rash), Hybrids are a breeze, minor body work, ECM and other module programming, air bags, theft modules...

 

There isn't much the dealer does that I can't do. Come to think of it, about the only thing they probably do that I don't, is detail/car wash, window tint, and leather/interior repairs (I mean leather tearing, cracked dashes)... That being said, you better believe I've been searching for a mobile window tint guy and a detail shop I can trust and work out a discounted price with them... Leather and dash repair is tricky, so I've found a place that does that, but I don't do it in house... Give me 3 more months of talking to folks and networking, and I'll do everything the big boys do, but for less.

 

My biggest problem, is trying to get all this information to a customer. I tell them I do everything a dealer can do, and they follow up with questions like "what about keys? Can you do them?" or "My air bag light is on. Is that something I have to take to the dealer?"

I have a print-out on the counter that's bright yellow and says at the top: "Check This Out!!!" I call it my "Check This Out Sheet." I list 15 things that we do or are certified in. It gets a lot of attention, and people ask me if my name is really "HI-Gear", because it says that Hi-Gear is the owner.

 

I would do something like this, Mmotley:

 

Check This Out!!! *** Some of our Special Services!!! ***

 

1) Ignition Keys "Custom Cut" and Programmed

 

2) ECM (Electronic Control Module) Programming, Re-Programming, and Flashing

 

3) "Air Bag" Light and Safety Restraint System (SRS) Repairs and Service

 

4) Security System and Anti-Theft System Repairs and Service

 

5) Rock Chip Repairs

 

6) Minor Body Work

 

7) ***** DID YOU KNOW THAT WE LOVE HYBRIDS??? ***** Hybrid service is not a Mix-Up Here!!! *****

 

8) Full Computer Diagnostics for TOYOTA ** LEXUS ** SCION

 

9) Extensive Parts Resources

 

10) IN-HOUSE PARTS SPECIALIST

 

11) We absolutely LOVE delivering to you a SMOOTH-RUNNING, RELIABLE JOB!!

 

12) We love to hear about the great referrals you give us *** Please Share

 

Print this on bright colored paper and hand out with every invoice or estimate!!

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