Auto repair shop’s cost management: 5 tips to be more efficient

24 de January de 2022 5 minutes read Management

Giving special attention to auto repair shop’s cost management is always a good idea, especially in times of economic instability. The business owner must really take the time to plan the best course of action, and that is what we will talk about in this article!

After all, what is the impact of auto repair shop’s cost management?

Here at RIO, we know that many auto repair shop owners are not in charge only of the administrative functions – they prefer to get down to work, either alone or with their teams. In this context, talking about “cost management” may sound like one of those big problems that you will not have the time or inclination to deal with.

But it’s very easy to overcome this barrier, especially when this entrepreneur understands that, in the end, cost management in the auto repair shop is nothing more than controlling everything that goes in and out in the day to day business. Services, parts in stock, warranty claims, expenses with water and electricity bills, internet, equipment replacement and maintenance, employee payments… everything needs to be taken into account.

The idea is that, month by month, you have a complete report of how much money you needed to spend and how much came into the auto repair shop’s cash flow. This makes it easier to average out profitability when things are going well, and if the bills get tight, you can much faster identify a possible source of loss before the damage is irreversible.

Sounds like a good plan? Then learn how to get organized!

If the idea sounds interesting, the good news is that we have put together some practical and easy-to-implement tips. That way, you can improve the auto repair shop’s efficiency and secure extra cash to invest in professional growth! Take note:

1 – Register everything

When the owner of the auto repair shop is involved in both administration and operations, it is common for him to write down only the incoming money, even for the sake of control. But at the end of the month there are many expenses and it becomes difficult to pay all the bills.

To avoid this, the tip is to register absolutely everything, especially the expenses, daily following the result. Excel spreadsheets can be a good ally here!

2 – Create specific categories for costs and expenses

Not all money that comes out of the cash register is an expense, and it is necessary to understand the difference: water bills, electricity, rent, food, and office supplies are some examples of expenses. On the other hand, machine maintenance, salaries, and the purchase of parts are considered costs.

This kind of categorization helps to define how much to charge for the services and, especially, to plan the company’s monthly budget.

3 – Look for useful tools and solutions

Don’t be afraid to use technology for the benefit of the business. Standardizing and automating processes can help a lot in managing time, reducing costs that do not bring returns, and creating more revenue for the cash flow.

Researching, you can find good digital software alternatives that fit in your pocket and can even help you both in decision making and in managing costs in the auto repair shop.

4 – Make your team aware

It is important that your whole team is aware to take care and avoid waste, careful to not neglect equipment maintenance nor work with cheaper components.

The focus, in fact, should be on more common actions, such as lights on in empty places, unnecessarily equipment turned on, and waste of oils and lubricants in general.

5 – Find a reliable parts supplier

To close the list, we highlight the most important step to reduce auto repair shop’s costs: knowing very well how to control your stock and, of course, having a quality products supplier. A true business partner that won’t let you down and will help your company go further!

By using replacement parts with guaranteed origin, you not only guarantee your customers’ satisfaction, but you can also drastically reduce application defects and rework in the auto repair shop’s daily routine. In addition, the auto repair shop’s gains credibility and stands out from the competition.

And the best of all? RIO, for sure, is the best partner for you! We have a complete catalog of automotive spare parts for the main assemblers in the market, all with the orange guarantee, our trademark! Talk to us, get to know our catalog and gain a powerful ally for cost management in the auto repair shop!

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