5 Ways Automotive Workshops Can Increase Cashflow in 2022

04 May 2022 Helpful Tips


Strong cashflow is the key to success in any industry. Studies show that 90% of Australian business failures are due to poor cashflow. As overheads and operational costs continue to grow, generating cashflow has never been more important for Australian Mechanical Workshops.

Here are 5 Ways Automotive Workshops Can Increase Cashflow in 2022.

Forecast Parts Ordering

Parts have always and forever will be one of the largest expenses for all mechanical workshops. A big reason why many Workshops find themselves in a poor cashflow situation is because of inadequate parts management. Having too much or too little parts will have a negative effect on your workshops cashflow. Think about it If your shop has too many parts you will bleed money until the product sells. Whereas on the other side if you have too little stock, you may need to turn customers away.

To increase cashflow, workshops need to accurately forecast parts ordering. Use your businesses data and identify your sales cycle. Know how long it takes for a particular part to sell and how many parts you need in a period of time and order appropriately to meet your demand. The benefit of forecasting your parts ordering is it allows you to make strategic businesses decisions based on accurate real-time data and more importantly reduces the risk of having too much or little parts. The greater you forecast your parts, the less cash you will burn.

Related article: 5 Ways Australian Workshops Can Reduce Costs in 2022.

Focus on Customer Retention

As the Australian Auto Repair industry continues to change it’s becoming far more expensive for Workshops to acquire new customers. To minimise expenditure and to generate strong cashflow, workshops need to focus on having a high customer retention.

Reach out to your past customers, let them know when they are due for their service, send them booking reminders and let them know if they haven’t booked in at their regular interval. You need to do everything in your power to get your past customers back to your shop. Recurring Customers is the best way to maximise cashflow in the Auto Repair Industry in 2022.

Related Article: The Best Strategies to Retain Customers at Your Workshop.

Evaluate Your Part Suppliers

A common mistake that many Workshops make is remaining loyal to their regular supplier. The problem with staying loyal to your regular parts supplier is you could be paying far more for parts then you should be. At the end of the day the price that you source your parts for will have a huge effect on your shops cashflow.

To ensure you are getting the best price for parts, Workshops must evaluate their suppliers on a regular basis. Shop around, see if other suppliers will give you something better. The cheaper you can source parts, the cheaper you can offer them to customers.

Related Article: 5 Tips to Get Better Parts Prices.

Utilise Online Bookings

If your Workshop doesn’t have a dedicated Website, you are losing thousands of potential bookings every year. Research shows that 45% of Customers won’t consider buying from a business that doesn't have a website. With that being said your workshop must have a website to be successful in 2022.

The benefit of having a Workshop Website is it minimises your costs and simplifies the customer booking journey. In the click of a button customers can access your website and book in for a service or repair without having to contact your shop directly. The great benefit for your shop is you don’t have to have a staff member by the phone constantly taking bookings, they can focus on the more important jobs like servicing and repairing vehicles.

Related Article: What Customers Look for On A Workshop Website.

Expand Your Services

A great way to increase cashflow at your Workshop is by expanding your service offering. Expanding your service offering opens your doors to a greater share of the market. By expanding your offering you will be able to accept more customer vehicles and in turn generate more income.

Expanding your services may require some investment whether it be tools, equipment, or education. Before you think of expanding your offering its highly recommended that you consult with all relevant parties, do the appropriate research, and understand the risks, expansion is not for every business and must be planned thoroughly to be successful.

Related Article: 5 Opportunities for Australian Workshops in 2022.

Final Word,

Cashflow has never been more important for Australian Mechanical Workshops. To be successful your workshop needs to focus on having a strong and steady cash flow stream. The 5 tips mentioned above are a few great ways your workshop can increase cashflow in 2022.

We hope you enjoyed this article. To read more articles like this visit the Workshop Mate latest news page here.

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