Can you ever make up for lost sales?

[Joe Marconi]

In 35 years in business, I have never had a winter like this. In total, we lost about 2 weeks’ worth of sales. And, I know that I am not alone. There are many other shops with similar loses. So, the question is, “Can you make up for lost sales?”

 

I really don’t have a clear answer. One thing I do know; with what it takes to be in business these days, we need to do a better job at planning for downturns. Whether is due to winter storms or other reasons.

 

I also know that we need to set aside a budget that can be used during any downturn.

 

But, this strategy only addresses the loss. Putting away money to use on a “rainy” day is fine, but it does not make up for lost sales.

 

We need to rethink what we need to make during the good months, to maximize sales and profits.

 

Your thoughts?

[alfredauto]

I don't have a good answer for you Joe, when its busy we "make hay when the sun shines" and try to prepare for the worse. This year has been a roller coaster ride. January found us sweeping the floor while we had the highest grossing February on record. Last week we worked overtime every day, but today I'm looking at three cars on the schedule for next week. March is a high expense month for us too, we opened in march so insurance and everything renews and tax deadline is close.

 

Being in a rural college town feast or famine is a way of life. All our money is made September through May, excluding the winter and spring breaks. You can play hockey in the street in July, its a ghost town. I plan my budget and discretionary spending based on a 8 month year, if we have a good summer I squirrel it away.

 

If 2 weeks off is breaking you I would take a close look at payroll, maybe run a leaner crew if your customers will accept longer wait times. Maybe branch into used cars, detailing work or wrecker service to keep the cash flowing during slow times.

 

Maximizing profits is good, reducing expenses is easier to control.

[cdhowell]

IF a bad winter kept customers at home, Are the sales really lost or just postponed ?The work still needs done unless they went south for the winter.

[mspecperformance]

That would only make sense if say your loss of 30k in sales shows up as increases in business in the subsequent months.

[Joe Marconi]

Customer that have postponed work will return. The issues is with production capacity. To make up for the lost sales, you will need to increase production. You can do that by extending hours, which will add to increased costs. Or, you can improve production per tech per day, which is not that easy. We may have to be selective in the type of jobs, choosing jobs that maximize profits.

 

It will be interesting.

[alfredauto]

My issue is reality interferes with my business plan. I would love to do hub bearings and brakes all day, or put on 100 tires a day. No matter how much I advertise we still have to do low profit jobs to fill in the blanks. I've often thought about switching gears and installing jasper engines and transmissions. While the volume is much less big jobs keep the techs productive. A customer that wants a new $5000 engine to get another 5 years out of his car is probably a keeper.

[cdhowell]

I utilize all the down time I get. There is always something that needs done. Lift inspections. New belts on the compressors. The flickering light in the bathroom. Leaking airlines etc. This might not work out for the flat rate techs. But my hourly guys are not standing around waiting on equipment to be repaired when the real work starts again.

Edited March 19, 2015 by cdhowell