If you’re managing your shop effectively, then maybe it’s time to consider broadening your scope from collision repair to cosmetic car care.
Diversification can be an excellent source of additional revenue in your collision repair business if it’s done for the proper reasons and with the proper management.
For nearly 25 years, I’ve been involved in the car care industry, and I’ve seen hundreds of different operators jump at the chance to diversify their primary businesses in hopes of boosting revenues.
These diversification schemes have taken many different forms. Car washes add gift shops and snack shops. Detailers offer accessories and other related services such as windshield chip repair, paintless dent repair and paint touch up.
For many, the experiment’s been a successful venture. But for many others, the diversification effort ended up generating little of the expected increase in revenues and created even more management headaches.
Because the operator was hoping to excuse the poor management of his primary business by adding another source of revenue to the business – in most cases, another source that required as much, or more, management. As a result, the same poor management that characterized the primary business was apparent in the diversification effort, too.
So, if you plan to diversify your collision repair business with additional services, be sure that you’re first managing your collision repair business properly. Remember, a marginally operated body shop will only result in a marginally run diversification effort.
Before You Diversify
If you’re convinced that you’re operating and managing your collision repair business properly, then you can consider diversification. But if you see some areas where you need to sharpen up your business, do that first.
Before deciding what to diversify into, look at the investment you already have in space, personnel and equipment that you can use. In short, utilize the resources at your disposal.
You also need to consider the added demand on your existing floor space, personnel and the dollars required to offer new services.
List the Possibilities
A good method to determine which car care services will be best for your business is to make a list of all the possibilities.
After making the list, evaluate them in terms of your geographic location. Many services are only viable in certain areas of the country. For example, rustproofing is in demand only in coastal areas or where salt is used in the winter to melt snow and ice.
After making your list, look around the area to see which aren’t readily available and ask your current customers what services they might need or require.
Hidden Benefits of Diversification
Many of the diversification ideas you come up with will not only provide an additional up-sell to your existing customers, but attract new customers.
For example, in many parts of the country, window tinting has become a staple in the auto service business and has its own draw. Windshield-chip repair has also surfaced as an in-demand service. Even paintless dent removal is becoming a service that many motorists are interested in.
In short, these individual draws will provide an excellent traffic flow to your collision repair business.
Some of you may be conservative and feel comfortable with your current business – so you want to resist change. But keep in mind that today’s motorists are seeking service and convenience in their purchases. They want one-stop shopping as much as possible.
As the marketplace evolves, so must your business. Maybe it’s time you stop limiting your options by saying you’re in the collision repair business. Broaden your options and consider yourself in the cosmetic car-care business instead.
Business diversification will be the name of the game in the coming years, and it can provide a lucrative payoff if approached properly. The trick is to evaluate yourself and your capabilities to handle it and then survey your facility and personnel capabilities – and build on that.
Writer Bud Abraham can be reached at [email protected] or (800) 284-0123.