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When is it time to cut your losses?

Jason Mccann
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Jason Mccann Newbie

Jason Mccann

Posted
Posted

We opened in January this year. I spent the past few years going to school and learning from a really successful mentor. Sales have been steadily increasing until mid May then almost everything dropped. The customers are coming in, getting estimates then either saying they cant afford it ie. "I'm just gonna sell the car"(most likely making payments from buy here pay here place and are just going to to abandon car), "I don't have ANY money" or everything sounds good, they make an appt and then never show(won't answer our calls). I feel like we have a really good formula and we have really happy customers(surprisingly happy) but when 90% of our appts are no shows and the other half walk its getting difficult.

 

 

our formula (things we do differently):

-Customer service is above any in the area including dealerships- we have sales backgrounds

-We are following up all leads - call backs, house visits, text

-we pick up and drop off customers and cars, any time day, night, or weekend

-Good location - high traffic count, clean, professional painting

-Best tech in the area - there is no one that can argue this fact

 

 

Our Pros

-Customers love us...period

-Most customers have repeat visits

 

Marketing

-Direct mail

-coupon book(the best results yet)

-facebook - we have the biggest auto repair facebook following in town

-we have visited most any local business personally and gave out flyers and a warm invite.

-fleet accounts - visited all fleet business in an 5 mile radius

 

 

It hurts me to face this reality but a happy small customer base does not keep the doors open. I wonder if this is common in my area(the bmw dealer said it happens in their service dept all the time) or if my expectations are wrong....

 

 

I know its only been 6 months I am just feeling discouraged and I don't want to spend alot more money on something that may never take off....

ScottyP Enthusiast

ScottyP

Posted
Posted

 

90% of our appts are no shows

Is that really true? Just seems hard to believe. I get maybe one no show every two weeks on a full schedule. Could you be hard selling them to get them scheduled? They finally say yes and then have no intention of showing? Just guessing here.

 

I put nearly zero sales pressure on my customers. Simply put I explain what's wrong, what it will take to fix it, the parts I use(sometimes), how much it will cost and when I can get them in. I think I sometimes use a little reverse psychology when it comes to my schedule. "Sir, I can get it in next Wednesday at one", "really, nothing sooner", "well if you can drop it off Friday and leave it I will fit it in". "sure, perfect". I do that quite often actually, not really bs'ing most of the time.

 

Also is your pricing in line for your area? What do you think caused the decline after good sales over the winter? What part of the country are you in, around here winter is the slowest and we get slammed in the spring.

 

Good luck man. There are much more knowledgeable people here then me and hopefully they can help you.

Mario Collaborator

Mario

Posted
Posted

I have had similar issues with the no call no shows. In my experience customers want it NOW, very few will wait (atleast in my area). We make the appointment for that very day, if it is going to take a few days, I tell them, but i try to keep the car with us. We normally give the customers a ride back if they can't get a ride, and start on the car. It may take a few days to complete if we are very busy (and we let them know in advance), but they minute they leave your lot with a quote they start calling around, price checking, and seeing who can get them in right now in this Mcdonalds/walmart land we live in.

slowtech Contributor

slowtech

Posted
Posted

First of all , there is no such thing as customer base in only 6 months. Assume these customers are giving you a test drive. The 90% no shows are probably shoppers also on the test drive. By how you are marketing you are casting a wide net. You can only count on a few good fish at a time. Loyal customers take time to build. A lot of time.

mccannable Collaborator

mccannable

Posted
Posted

We have a very high no show rate. Not actually 90% but up there. Hard sales are not apart of who we are. While we arnt afraid to assume the sale we are not a quick lube that pushes hard.

 

Prices, we are in the lower side of average for a legit shop.

 

We have so many cars towed in then towed to the customers house. I even bought one to fix and sell myself.

 

It's just frustrating right now. And again i know we are a very new business.

mccannable Collaborator

mccannable

Posted
Posted

Example:

Previous paying customer brings car in for Ac not working. We diagnosis as compressor and give a fair price. Cust says "yea, I already new it was the compressor, that's what the last shop said. I can't afford it". Our response is "what can you afford?" Cust says "I don't have any money I am just going to sell it."

 

I can't fault someone for having no money but why bother.

 

These senerios have become the norm. It hard to start a job same day as they always need their car(most likely stalling). I know for me personally I want my car fixed ASAP not next week so when I have taken it in the past to shops I want to pick it up done.

 

Another issue is parts stores. We have had a lot of issues with parts not fitting or missing parts that it "includes". Now this is not killing our business but added too the rest it wears a little heavier than it should.

 

 

/rant

mmotley Proficient

mmotley

Posted
Posted

We opened in January this year. I spent the past few years going to school and learning from a really successful mentor. Sales have been steadily increasing until mid May then almost everything dropped. The customers are coming in, getting estimates then either saying they cant afford it ie. "I'm just gonna sell the car"(most likely making payments from buy here pay here place and are just going to to abandon car), "I don't have ANY money" or everything sounds good, they make an appt and then never show(won't answer our calls). I feel like we have a really good formula and we have really happy customers(surprisingly happy) but when 90% of our appts are no shows and the other half walk its getting difficult.

 

 

our formula (things we do differently):

-Customer service is above any in the area including dealerships- we have sales backgrounds

-We are following up all leads - call backs, house visits, text

-we pick up and drop off customers and cars, any time day, night, or weekend

-Good location - high traffic count, clean, professional painting

-Best tech in the area - there is no one that can argue this fact

 

 

Our Pros

-Customers love us...period

-Most customers have repeat visits

 

Marketing

-Direct mail

-coupon book(the best results yet)

-facebook - we have the biggest auto repair facebook following in town

-we have visited most any local business personally and gave out flyers and a warm invite.

-fleet accounts - visited all fleet business in an 5 mile radius

 

 

It hurts me to face this reality but a happy small customer base does not keep the doors open. I wonder if this is common in my area(the bmw dealer said it happens in their service dept all the time) or if my expectations are wrong....

 

 

I know its only been 6 months I am just feeling discouraged and I don't want to spend alot more money on something that may never take off....

 

Don't give up. 6 months is not enough time to tell really. If you are really doing everything you say you are doing, you should be fine. If it was easy, everyone would do it. I had a pretty good dip right about 8 months after opening, followed by some pretty good months. I say keep at it for at least a year.

 

Funny timing, I just finished watching 'Pursuit of Happyness'. Watch that, then ask yourself when you should give up.

  • 2 weeks later...
carbtech72 Contributor

carbtech72

Posted
Posted

your first two years is going to be getting your name out and weeding out the scumbag, no money customers. It does get better, just stick to it. I wanted to close up during my first year. I think every shop owner has that feeling at first

slowtech Contributor

slowtech

Posted
Posted

Business ebs and flows when you have an established track record. The ups and downs become manageable to some extent. Even so, events out of our control always get in the way. Being new is hard mostly do to lack of having been through it before. It seems like everything is against you. And in fact it really is. You just have to be patient and dilligent in navigating rough stretches.

Dee1234 Apprentice

Dee1234

Posted
Posted

Ive experienced the same things as Ive been open only year and half. 6 months is not enough time to measure. I do read a couple of areas for improvement off the bat. #1 your customers dont have the money. Offer financing. GE CAPITAL is who i use. It works! Research that and get on board. #2 add more customers with flipping few cars if you can. Depending on your dealer laws, etc. this adds revenue for you and helps keep techs busy. #3 you said you have 1 of the best techs in area. Do you only have 1? If many folk are setting appointments bc you are busy then maybe need more help.

mspecperformance Mentor

mspecperformance

Posted
Posted

Any SB book will tell you that it will take 18-24 months before you can see real results. 6 months is too small of a sample. Believe in yourself and have a positive attitude. You seem to be on top of everything else. Good luck.

mccannable Collaborator

mccannable

Posted
Posted

We only have our lead tech that handles real repairs but maintenance,brakes,oil changes, ect are done by my partner. We have yet had to schedule many jobs due to our schedule. Most of our jobs are smaller(not many major jobs yet) so that hasn't been an issue.

Plus I'm there a few days a week helping with everything in between.

mspecperformance Mentor

mspecperformance

Posted
Posted

Is it possible you are lacking in inspecting for other/future repairs OR not selling them properly? I have my share of cheap customers however I also have customers that are conscious of driving safe and reliable. These are the customers you need to maximize on.

You should try to sell customers on anything they NEED. I use to have this mentality that if I recommend items for repairs to my customers they would think I'm a crook however with the right approach you should be able to earn their trust and have them receptive to your recommendations. Hell everyone need windshield wipers, sell all your customers wipers! Its a start.

mccannable Collaborator

mccannable

Posted
Posted (edited)

Well to further report this month has been a complete 180. If things persist it may be our best month. It's crazy how it just dropped dead for 45 days. I just sent my accountant our sales tax info for last month and it was truly sad to remind myself. But I believe we have ready doubled our gross profit mtd in July vs entire month of June.

Edited by mccannable
mikesauto2427 Explorer

mikesauto2427

Posted
Posted

Keep your head up. I don't if it's right. But at the start of every month I feel like the sky is falling. It helps me drive to make every month better than the last.

alfredauto Experienced

alfredauto

Posted
Posted

Keep the big picture in sight and don't worry about the short term. I used to get stressed about the ebbs and flows now I have a fleet of my own used cars that need to be reconditioned so if it's slow "GREAT" we get a car retail ready if it's busy "GREAT" we are busy and once we get everything fixed the garage needs to be painted. It sucks when it costs $1000 a week to go to work but it happens to everyone at some point. Typically when property taxes are due it's tight and the same thing when people get their Xmas credit card bills in the mail. This summer has been good so far but when people are on vacation they aren't in your service bay. If it's slow all the time for you park some cars out front and in a bay so it looks busy, people tend to go where everyone else does and if they see an empty parking lot they keep going.

flacvabeach Community Regular

flacvabeach

Posted
Posted

Heck, it took me three years to figure out I wasn't making any money. I would not be in business today if I had not enlisted the help of a coach. Get a good one, put aside your ego and do what they tell you regarding marketing, margins, hiring, etc. No one is a genius in all of the skill sets needed to be a success in this business. My family and I have been coached for seven years and will continue to be. It has more than paid for itself in increased car count, sales and terrific margins. I will be happy to talk about who I use offline - not going to promote here.

 

Mark Anderton

First Landing Autocare

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      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
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      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
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      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
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