If you’re a garage owner, you’re probably aware of the costly nature of this industry. Your profit margin can become very limited if you’re not making the most of your investments. To make a profit from a garage, you need to make every penny count while ensuring efficient workflow.
So, where do garage businesses lose money? The answer lies in the wasteful spending that often goes unnoticed by garage owners until it escalates and becomes more apparent.
Wasting garage money can lead to significant losses in your garage. This wasted money stems from seemingly minor issues, such as improper inventory management, and you’ll keep losing money unless you promptly address these problems.
In this blog, we’ll explain how to identify wasteful spending and cut down on it before it impacts your car garage profit.
One of the most common areas where garage owners overspend is inventory. They either find themselves spending too much money on stock that isn’t required or no money at all when demand is at an all-time high.
You can increase your garage sales profit by maintaining an optimal stock of garage parts. Analyse your inventory thoroughly and make a list of things that are essential for daily operations versus those that are used less frequently.
For instance, prioritise ordering parts or products frequently used in bulk while reducing the purchase of less popular items. Ensure that you’re consistently able to meet the high-demand products without overstocking. This way, you can avoid wasteful spending in your garage and ensure your shop operates more efficiently.
You can streamline your daily garage operations and manage your inventory optimally using TechMan’s garage management software. It can help you lower your expenses, making it more likely for you to profit from your garage.
Car repair businesses can be classed as a seasonal business due to the seasonal variations in demand. You may see more customers in peak seasons like winter, while the warmer months could leave you with little demand. To compensate for these seasonal challenges, garage owners often end up overstaffing or understaffing, which leads to lower car garage profits in the long run.
What’s more, when you’re overstaffed and lacking customers, your employees might lose motivation and become complacent with their repairs, affecting overall productivity and output.
It’s important to adjust your staff capacity depending on the changing seasons to avoid unnecessary expenses or delayed services. During busy periods, ensure you have the right team size to handle the increased workload, but avoid overstaffing during historically slower months.
You can evaluate your staff’s productivity and labour costs using Key Performance Indicators (KPIs) and adjust staffing levels accordingly. Consider implementing flexible schedules that allow your mechanics to work based on demand to increase their efficiency.
Outsourcing non-core business functions (such as accounting, marketing, IT support, or customer service) can be an effective way to increase the profit of your garage. At the same time, regularly reviewing how these services impact your garage sale profit helps ensure you’re not spending more than you’re gaining.
Take time to assess the external services you rely on and reconsider their functionality in your garage. For instance, basic admin work is something that could be handled efficiently in-house and doesn’t necessarily require outsourcing.
Additionally, take a step back if you’re outsourcing niche tasks, such as specific car part repairs, due to a lack of technology or staff expertise. Consider whether that money would be better spent upgrading your equipment or training your team to use the right technology instead.
If outsourcing services is necessary, explore your options for external service providers to ensure you’re getting the best rates. If possible, negotiate with suppliers to reduce costs on less important services to avoid wasteful spending.
Many garage owners spend significant amounts on developing marketing strategies, hoping to attract new customers. However, advertisements can be subjective and not bring in the results that you might have desired.
Some platforms or campaigns might initially seem like a good idea but fail to deliver the expected results. When owners don’t realise it early on in their marketing stages, they end up wasting garage money without even realising it.
To cut wasteful spending in advertising, regularly assess the performance of your marketing campaigns. Are you getting enough leads from your current advertising channels? If yes, are the costs of the marketing services enough to justify your garage sales?
You need to ask yourself these questions to narrow your advertising offers to those giving the best ROI. Additionally, you could utilise relatively affordable options like local SEO to effectively advertise your garage without paying a hefty amount.
Reducing wasteful spending in garage businesses can be difficult because unnecessary spending often goes unnoticed for a long time. Spotting them is key to taking the appropriate steps to increase the profit of your garage.
If you’re wondering where your garage is losing money, TechMan can help. Let our garage management software help you identify areas which can be handled better financially.
Additionally, our software includes advanced features like accounting, customer management, personnel management, stock control, and reporting to give you better control over your operations.
Click here to learn more about our services or contact us to request a demo now.
Explore TechMan in real-time in a working garage and see how our extensive integrations can simplify your operations and save hours of time every day.
