Focusing too much on specials?

[MattW]

So I've been running my shop for a little over a year now, taking in whoever I could at whatever rate I could, regardless of profit margins. Recently I've started becoming more selective and strict on my markups and margins, and lo and behold I think I get more business now than I did catering strictly to the customer's wallet.

 

So now that I'm more set on my prices and have a matrix setup for parts markup, I figured I set up some generic specials on oil changes and things of that nature. I read someone's idea on here about advertising factory scheduled maintenance instead of just oil changes, and I thought that was a really good idea, so if it's okay with Junior I'd like to run with that idea in my shop.

 

Now on to the problem. I think I'm taking these flat cost services too far. I have one set up for standard service/oil change (4qt/5qt, conventional/high mileage/synthetic) and I have a flat cost for EGR delete kits on a couple of the newer diesels. But wait, I can set up one for CV Axles too! And everyone has a brake special! Maybe a set price for timing belts on most 4-cylinders! Oh wait, transmission services too! See where I'm heading with this? At what point do you differentiate between a flat cost service and quoting on a vehicle-by-vehicle basis?

Edited July 22, 2011 by MattW

[xrac]

I would only flat cost a few things like oil changes and a basic disk brake jobs. I would be careful on doing more than that because you can cost yourself too much money. It seems like today that every vehicle is different and it is harder to flat charge things.

[Joe Marconi]

Flat pricing or what I call, menu pricing, works for a lot of services: Wheel align, tire rotation, wheel balance, fluid services, LOF, etc. While just about any service or repair can be menu priced, trying to bridge that concept to many repair jobs can have a negative impact on your bottom line. A lot of repair work is vehicle specific. The job of assigning menus can be a daunting task, but not impossible.

 

Be competitive on the services that consumers regularly compare to with other shops, but you need to be very profitable on repair work. If not, you will not make it.

 

We often base of price structure on what the "other guys" are doing. We compare ourselves to the average shop. Remember, build an outstanding business and you can charge accordingly, but be careful, if your shop is not perceived as top notch, you will never be able to charge what you are worth.

 

Personally, I don't want to be the average shop, anyone can be average. I strive to be the best and hire the best. It's like a ball team. Does a ball team work to be average and hire average ball players? No, they work to be the best and know that they can be the best with the right players, training and equipment. We are the same.

 

Look at your margins, understand the numbers of your business and your breakeven. And never, never, never, base your bottom line or sales goals on breakeven. Just paying the bills is not the reason you went into business. Making a profit is.