The Main Reasons Why Workshops Fail

01 Oct 2021 Helpful Tips


63% of workshops go out of business within their first 5 years. Running an automotive workshop is not an easy job. As a workshop owner there’s a thousand different things to do in such a short space of time. Often many workshops get side-tracked working in the business then on the business –increasing the risk of insolvency.

Here are the main reasons why Workshops fail and how your workshop can avoid them.

Too high overheads

No matter what business you operate, if you can’t keep your overheads down - you will go out of business! If your workshop is finding it hard to pay employee salaries, rent, for parts or taxes, you could be in some serious trouble.

To stay successful in the Auto repair industry you need to frequently assess your financial standing. Shop around, look for the best deals available. If your current parts provider isn’t giving you the best price, go elsewhere. Have a look at how efficient you are and explore the opportunities of cutting hours if necessary. It’s critical to keep control of your cashflow, if there is more money going out of your workshop then what is coming in you could be the next number on that statistic and that’s something nobody wants.

Related article: 5 tips to get better parts prices.

Not implementing goals and KPIs

Many workshop owners work on the run. They operate from day-to-day and don’t have a clear vision on where they want the workshop to be. If your workshop doesn’t enforce and work towards KPIs you are making a huge mistake! Things can slip under the ladder, and you could find yourself wasting money.

It’s so important that your workshop has defined goals that you want to achieve. Let staff know what is expected of them, monitor their performance, and make accurate changes to areas that need to be improved. The benefit of maintaining KPIs is it gives you a clear tangible performance tracker that indicates if your business is operating successfully. If something isn’t working you can instantly change it, instead of relying on “gut feeling”.

Related article: How to implement KPIs in the Auto repair industry.

No or insufficient Marketing

Years ago, reputation and word of mouth were the main ways workshops acquired customers. But in 2021, that’s not going to cut it. The auto repair industry is a seriously competitive market. If you don’t market to potential customers, you could face closing down.

To acquire customers for your workshop you need to implement a strategic marketing plan that targets people in your local area. I know what you’re thinking! Your not a marker! But there is plenty of ways you can market your workshop cheaply and easily.

Here are a few of the easy ways you can market your workshop:

  • Facebook & Instagram Business Page
  • Keep your website updated with relevant information
  • List your business on online search engines (Google, Yelp, Bing, Yahoo)
  • Collect customer reviews and post them online
  • Automate service reminders for past customers
  • Run an ad digitally or traditionally (newspapers etc)
  • Send customers monthly newsletters

Related article: How to get more customers for your workshop in 2021.

Poor Customer Service

If you take care of your customer, they will take care of you. Many workshops fall into the trap of focusing on sales instead of customer service. The problem with this is if you don’t fulfil your customers’ demands they won’t return. In the auto repair industry recurring revenue is king!

As competition continues to grow you need to provide a Wow factor to stand out! Simple great customer service techniques include:

  • Send SMS reminders the day before a customers appointment
  • Get your booking saved on your customers calendars
  • Give the customers car a quick clean
  • Provide customers with a small gift (keychain, magnet, stickers etc.)
  • Follow up with customers
  • Introduce a loyalty program

Related article: How to increase customer retention in the auto repair industry.

Inefficient use of time

Time is critical, if you don’t manage your time effectively you will hurt your business. We all know how busy workshops are on a day-to-day basis, if you find yourself getting caught on one task -another task will suffer.

To stay on-top of your daily tasks Workshops need to implement the correct systems that automate common tasks.

Not using a management software

On the topic of systems, a big mistake many workshops make is not investing in a management system. The problem with completing tasks manually is it takes time and increases the risk of error. A workshop management system like Workshop Mate automates all common tasks such as bookings, invoicing, quoting, accounting, customer reminders and job management.

The benefit of using a workshop management system is it frees you up to focus on growing your business.

About Workshop Mate

Workshop Mate by Jeal is a simple and adaptable workshop solution– allowing you and your mechanics to log in from anywhere at anytime.

Get all-in-one quotes, invoices, barcoding, parts inventory, SMS reminders, service history, job allocation and tracking, Xero/MYOB integration, and more to help you run your workshop efficiently.

If you’ve never used Workshop Mate, now is the best time to have a go.

Click the button below to start your 14-day free trial.

 Try it FreeGet your 14 Day Free Trial