Running an auto body shop is just like running any other business. You need to manage your expenses while maximizing your profits without reducing the quality of your services. Research shows it costs anywhere from $67,200 to $225,500 to start a body shop when you include all the money you’ll need to spend on renting/buying a space, inventory, equipment, advertising, and labor. So, what can you do to improve your shop’s finances? Use this guide to reduce unnecessary costs, so you can stay in business for years to come.
Buy Parts Online
One of your biggest recurring expenses will be keeping your shop stocked with quality replacement parts. Find a reliable retailer that sells diesel truck parts at an affordable price instead of going with a cheaper brand. Your customers depend on you for your expertise and access to the best auto parts in the industry. It pays to use brand names that people recognize, but you shouldn’t have to pay full price to buy them. Look for stores that ship in bulk to avoid running out of supplies when you need them most. The items should be delivered on a timely basis, so make sure the company has a good reputation when it comes to fulfilling orders.
Stock your inventory based on which parts are most likely to fail. Certain gaskets, sensors, tubes, and valves tend to break down unexpectedly on certain makes and models. Research the cars your customers drive to get a better sense of how they will need to be repaired in the future. For example, buy a replacement NOx sensor when working with diesel vehicles that use exhaust treatment systems to reduce toxic emissions.
Eliminate Unnecessary Inventory
You only have so much space to work with, so make sure you aren’t storing inventory that you don’t use. Go through your inventory to see which items are no longer in demand based on what your customers are driving. Consider reselling them to another auto shop or private buyer to make some extra cash. If you think you may need these items in the future, consider moving them to another storage facility offsite to keep them out of the way.
A cluttered workspace can also reduce efficiency. Your workers need to be able to see what they’re doing with a clean workspace to get the job done in a timely fashion. Keep tools and items in the same place with clear signs and labels, so your workers don’t have to spend as much time looking for the things they need. Encourage everyone to clean up as they go to create a safe work environment.
Automate Routine Processes
Time is money in any industry. You can save yourself time by automating processes that you might otherwise do by hand. Technology can make your life easier as a business owner in several ways. Start by using task-based software to track how much time you and your employees spend on various chores throughout the day. You are paying your workers to fix cars, so look for ways to free up more of their time.
Bring essential supplies to the work environment to maximize how much time they spend in the garage. Give your workers the tools to scan incoming inventory instead of having them count out each item. Your inventory management system should alert you when you are running low on supplies, so you never run out of stock.
Digitize Your Records
You should keep records of every job you have ever completed for several reasons. But filling out forms by hand can be a waste of valuable time and resources. You can speed up the reporting process by switching to a digital records system. Some programs will even automatically populate fields when you pull up an existing customer in the system, so you only have to enter this information once.
If you need to print off a copy or look up an issue from a previous job, you can quickly search for the person’s name or vehicle make/model in the system instead of going through drawers of paper files. Free up space in your office by getting rid of file cabinets to create a more productive work environment.
Invest in Your Employees
Your business is only as strong as your employees. Experts say the U.S. is headed for an automotive technician shortage that could leave your auto shop short-staffed in the years to come. Treat your employees well to encourage them to stick around. Give them competitive pay, good benefits, and a flexible work schedule to accommodate their busy schedule. Remember that some people may have children or another job to juggle, so be sensitive to their needs.
You should also try to be a mentor to your employees by helping them advance their careers. Find ways for them to learn new techniques and skills to keep them engaged with the job. The more you invest in your current crew, the less time and money you will need to spend training their replacement.
Running an auto shop isn’t cheap, but you can lower your expenses if you invest in your staff, buy quality goods at a good price and use the latest technology. Keep these tips in mind to save as much money as possible in the years to come.