Tips to Help Your Workshop Profitability Tip 1: Send your customers reminders where it's time for a service. Virtually every dealer has a computer system that makes it relatively easy to send out reminders like this. Tip 2: Make sure your sales department also promotes your service department. A lot of sales staff are totally focussed on selling cars - this despite the fact that it's the service department where the profit is made. Getting a separate brochure about the service department printed is by no means a bad idea. The brochure, which the salesman hands to the buyer when he makes the sale, contains the salesman's own business card plus a card on which the date of the first service has been filled in. The moment the customer accepts this card, he has agreed to come back. And it is the sales staff who have a crucial part to play here. Tip 3: Compare the price of the suppliers of parts you order frequently. Where ordering parts is concerned, a great many dealers work on the principle that we order this part from supplier X because that's what we always do. A thorough comparison of the prices and quality offered by at least three suppliers can do wonders. When you carry out this sort of vendor rating exercise, do watch out for delivery times too. Tip 4: Make sure that bonuses for the service manager are related to those paid to the parts department staff. Add the profit made by the service department and the parts department together and give the service department staff and the parts department staff an equivalent share of the profits. If the staff are dependent on one another for these sorts of bonuses, you can be sure that the service department manager will always get his parts on time from now on. Tip 5: Keep a close eye on the cost of work you contract out. There are occasions when, as a result of carelessness, the cost of work that was contracted out - getting a car towed, for instance - does not appear on the customer's bill. The mistake is only discovered after the customer has paid for the repair and left. You are never going to make a profit this way. Tip 6: Take a critical look at the way you handle paint jobs. A lot of workshops use the supplier's cans to mix paint, without giving it a second thought. The plastic cups from the paint sprays are not only 25% cheaper, they are also easier to use. Tip 7: Check the hours of all your staff. Generally speaking, dealers keep a close watch on the hours worked by their workshop personnel. But they are not the only employees. It can really pay to look at the productivity of the other, non-technical staff. Tip 8: Improve your stock control A great many service departments do not have a good stock control system. This makes it relatively easy for staff to take things home with them. A mechanic who uses one-tenth of a can of brake fluid can easily walk off with the rest. If you keep a separate record of what each mechanic uses in a month, you can easily check where any stock shortages are ending up. Tip 9: Use the available hours more effectively. Every service department has peaks and troughs. There are days when there are always a lot of customers, and there are days when it is usually quieter. By working in shifts and gearing the number of mechanics on duty to the peaks and troughs. You can make more efficient use of the available hours. Tip 10: Save money by training your staff. How do people become managers? Often because they happened to be in the right place when someone left. This does not mean that they know how to manage. Although training courses cost money up front, they pay off in the long-term. Tip 11: Always give the customer a complete, all-in estimate for a repair. This tip obviously has everything to do with customer relations and customer loyalty. A customer who reaches the cashier only to find he has to pay more than what had been agreed often becomes an ex-customer. The amount quoted in the first place should be the amount he pays. Tip 12: Give the service manager/adviser a fixed sum for handling complaints. Give your service adviser a fixed sum every month to handle any complaints. Give him or her the leeway to spend the money on dissatisfied customers as he or she sees fit. If there are no complaints or the adviser has money left over at the end of the month, he or she gets to keep it. Making the adviser responsible for the budget will certainly bring down the number of complaints.