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Reducing expenses at your detail shop

July 14, 2010
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Here are three tips to reduce unnecessary expenses at your detail shop, courtesy of www.AutomotiveManagementNetwork.com.

1: Examining marketing costs

A few years ago, marketing budgets were relatively small. A few years before that they didn't even exist! Today they are often a huge part of the expense statement (you do have this area broken down to a dozen or more lines, right?).

Here are a few marketing costs to look at for some savings.

  • Discounts: Use them when you have to instead of just giving them away when they may not be required to make the sale.
  • Switch to more email: It's a lot cheaper than snail mail.
  • And, speaking of snail mail: Send it only to people who are reasonably likely to respond.
  • Postage: Check into permits which can reduce costs significantly.
  • Vendor programs: Make sure to audit the cost vs. benefits each year before you renew.
  • Printing: On line printers are often far less costly than local stores.
  • Radio: Consider Google or similar types of radio ad purchases.
  • Yellow Pages: A recent news article stated that this method is dropping fast, including the internet versions.

The bottom line is that you need to thoroughly review all marketing costs at least once a year and keep this area of your budget under control.

2: Are you paying too much in taxes?

Of course there are a number of taxes that you simply have to pay and there is nothing you can do about them. But, are your property taxes too high? How about your personal property taxes?

Real estate values have been dropping like a rock. Have you checked to see if the value of your property should be reduced? Might you be over reporting the value of your equipment? These are easy things to overlook when we review our expenses.

You probably pay plenty of taxes already. Don't pay any more than you legitimately need to pay.

3: What about your building?

We certainly need to keep our buildings in excellent condition to project the best image to customers. However, we also want to get the most out every dollar we spend in this area.

Several suggested areas to review include

  • Snowplowing;
  • Lawn care; and
  • General building maintenance.

Are you shopping for the best deal every year for these services? Have you considered which services you can have your employees handle? Rent is another large expense for many shops.

If you are in an area which has taken a severe economic hit, have you asked to renegotiate your lease? Maybe the landlord wants to do what he can to keep you happy and increase chances of renewal. It won't cost you a thing to ask!

Tom and Deb Ham are the owners of Automotive Management Network, an online forum to exchange information about the management of all types of vehicle service facilities, independent auto repair shops, car and truck dealers, franchises, fleets, body shops and more. More information can be found at www.AutomotiveManagementNetwork.com.