Is Less More?

Should we increase the amount of services we offer as a business?

Decisions, decisions.

It’s often something that as a business owner you will consider, I know I certainly did. For the independent garage you might look at adding air-conditioning servicing, Engine re-mapping or even MOT’s.

We should take time over these decisions, however at times I have seen them made on a whim. Often just because the local factor has a good deal on the equipment. Sometimes there is not much planning as to what might happen, or be needed after the equipment purchase. Areas to consider may be; are the staff experienced with the equipment, what is my return on the investment or do my customers even want the service?

There is a lot to think about here and hats off the those of you that do the maths and research the demand. After all you do not want that new equipment gathering dust in the corner. Yes, we have all done it!

Looking at it a different way.

What is often not considered is how much we already offer? How many of our services are underused or when sold, prevent us from carrying out more lucrative work. For instance, if your technicians are being utilised to fit tyres as you do not have a dedicated tyre fitter, which is the more profitable task; Fitting tyres or another job charged at your current labour rate? Only you will know the answer to that.

Once you have decided to invest in new equipment, is it worth researching if the new purchase can be paid for by the selling of current underutilised equipment? Hopefully your garage management system would be able to tell you what isn’t selling as well as you thought. You can then consider if it is because customers are not aware that you carry out the service, or it isn’t working for your business model. Very often we can be more profitable by streamlining our service, rather than expanding it. Make our options smaller but do them extremely well. Think about what you are best known for and what makes the most profit? Maybe by cutting the less profitable jobs during the week, you could offer more of what you are best known for, is faster to do and makes a higher return.

Make sure it fits with your business.

I am not saying don’t buy the engine remapping equipment or the latest AC machine, but rather consider will it be a profitable service? You may need to look at which staff members will use it, does it involve training, will it fit with your current business image, or will customers even expect you to provide the service?

We all must be careful to not invest in too many new ideas, only to quickly move onto the next. This has the danger of diluting who and what we are. For those of a certain age, think Woolworths. Apart from pic & mix and CD’s, I still don’t know what were they about?

The equipment suppliers are always very quick to tell you how much money you can make from the purchase, but not how hard it might be to sell it in the first place. Especially if it doesn’t fit your business model.

Less may be more?

On the contrary, considering what already doesn’t work and increasing what does, can provide instant benefits. Ask your customers what they like best about your service, if you ask for feedback then you might already know. If possible, make that service better and shout it from the rooftops. Whether you are known for being a brand specialist or a fast in/out service centre it makes no odds, just do it well. In lessening your offering you are restricting potential problem areas, lowering the need for complex procedures, making your systems more efficient and easier for staff to complete to a high standard consistently. The end result very often equates to a higher profit level.

Summary

There is always a need to expand and grow your business and to offer more to your customers. However, considering how we do that is an interesting subject given the amount of services we can potentially offer.

If you would like help with streamlining your services or a transition of your business model, then please use my contact page and we can arrange an initial meeting.