Tips to Drive Auto Repair Shop Profits

tips to drive auto repair shop profits

Estimated reading time: 4 minutes

Typical vehicle repairs such as changing the oil and oil filter, brake work, replacing batteries, and engine tune-ups keep our nation’s automotive repair businesses busy. According to IBISWorld, the auto mechanics industry will achieve annual growth of 3.5% this year¹. If you own an auto repair business, this is good news. If you plan well, your auto repair shop profits can increase.

However, you cannot just assume that a high-traffic location and a large business sign are all you need to attract new customers and generate a steady income. Many things need to be done to keep your business moving forward. Balboa Capital is sharing these tips to drive auto repair shop profits. We think you will find them to be quite helpful.

Hire skilled auto mechanics.

We do not need to tell you how important it is to have skilled mechanics in your auto repair business. Well-trained, capable, and reliable auto mechanics are the backbone of your operation. They can pinpoint vehicle problems and perform repairs quicker because they know what they are doing. This makes your customers happy and increases your word-of-mouth business.

Once you find the best mechanics for your shop, compensate them fairly and offer excellent employee perks so they do not look for employment elsewhere. Keeping the same mechanics and avoiding a high turnover will help your auto repair shop maintain quality service. In addition, your customers will be glad to see the same mechanics each time they visit your repair shop.

Give your shop’s schedules a tune-up.

When your customers’ vehicles need to be repaired, they want it done quickly. Unfortunately, this might not be an option if your mechanics are booked solid or certain parts need to be ordered. On top of that, it is hard to gauge how much business will come your way. You might be busy one week and have hardly anything to do the next. All of these things can make scheduling difficult.

To balance out the workload, meet briefly with your mechanics each morning and go over the needed repairs. Then, set realistic timelines for completion, and communicate them to your customers so they are not left wondering. Once you get your scheduling tasks in order, your mechanics will be able to perform a sufficient amount of work each day without compromising on quality. In addition, they will not be overwhelmed with a heavy workload resulting in job burnout.

Keep your customers informed.

Nobody wants to take their vehicle to an auto repair shop, whether it is a minor fix or a full-scale repair. People consider it an inconvenience, regardless of needing their vehicles worked on. So, listen to them when they arrive at your shop and give them honest and straightforward recommendations. If you try to upsell parts or services to your customers, make sure they are needed.

Then, make a point to keep your customers informed about their vehicles’ repair status. Notifying them via phone, text, or email with updates is a great way to build trust and provide better service. It can also minimize the chances of dealing with unreasonable or unhappy customers later on.

Maximize your cash flow.

You can better pay your bills, meet your weekly payroll demands, and buy inventory and parts for your auto repair shop when you maximize your cash flow. Some ideas include minimizing your inventory by stocking fast-selling items only, such as tires, windshield wipers, and batteries. Also, avoid stocking up on things that might collect dust on your shelves.

If you need a specialized part for your customer, inform them that you will try to order it and that it is not commonly available at most auto repair shops. Another way to help improve your cash flow is to finance auto repair equipment, which does not require a significant initial cash investment. Lastly, send invoices immediately, and use electronic payments and accounting software.


Balboa Capital, a Division of Ameris Bank, is not affiliated with nor endorses IBISWorld. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.