-
Business hemorrhaging…
Hello all,
First post here, quick hello to everyone and thank you for setting this place up as an active community for discussing the subject of managing an Auto repair center. It’s been quite hard to find such a forum where appropriate information could be found, I was very impressed with the discussions as well as the information going around here and decided to go ahead and register to share with you my experience; or ordeal as I see it.I will try my best to keep this summarized and as articulate as possible to relay my issue; but I might miss out and make it long, so please bear with me, I am new here. 🙂We own an auto repair center in Kuwait, started operating since August 2012 – It was very hard in the beginning as the market was a bit saturated with this type of business and no proper planning/consultation was done to consider a proper location, the hiring process, poor decision regarding marketing – Basically we had a very bad start.Over the days we picked up the mess and cleaned up the act after learning our lessons the hard way regarding running the business, hired the right people, started running after credit insurance company contracts and have set up a strong solid shop. The main issue we are having though is that we are not able to break-even. Average monthly revenue comes in and around $50,000, but we are always in the red around $25,000 after all expenses are payed.Our location is a total of 1500 Meters sq., 790 are the actual work floor, 210 is parking and the other 500 is the Mezzanine with the customer lounge as well as our offices.Rent comes down to $16,775 per month.Salaries average $30,000 per month for a total staff of 27 people and only 15 are Productive, the rest are Management/Accounting and Admin etc.Our Gross Margin averages 50% monthly, so out of our average $50,000 of revenue, $25,000 go to material and parts etc.Just a summary of what our Pro’s and Con’s are regarding our business to detail it more :-Pro’s :-A) Very Strong set-up regarding the shop, customer’s usually just passing by are attracted by our facade.B) Capability to get several contracts easily due to strong contact’s in the marketC) Very advanced compared to this market (The US overshadows Kuwait regarding quality and customer service plus the usability of technology to assist, some companies are still using paperwork and have a scrap-yard set-up)D) Large Customer lounge with dealership standardsE) Latest Equipment/Fully Equipped Shop and constantly updating technology.Con’s :-A) Expenses are A LOTB) Inability to go above ~$50,000 in revenue even with the multitude of contractsC) There is no proper “System” in place, seem’s a bit disorganized at timesD) There has been no proper study but it “seems” as if productivity is low as well as efficiency, staff seem slow at work.E) Gross Margin is not on our side, 50% of revenue goes to Materials and Parts; according to that calculation we need to generate around $105,000 per month to Break-even.If you reached this far, THANK YOU! I appreciate the gesture of going through those boring details but we are indeed struggling and paying this from personal finances, we are a family business with little experience in this market, it was very lucrative at first but the steps carried out at setup were abysmal.I have a lot more to discuss over the coming post’s but I would to keep this first one summarized to my problem and how to tackle it, it is becoming stressing and time consuming, as a commercial pilot I do not have time to constantly tire with this and am about to throw in the towel.I think to play our my information above into an image and show more of what our business is, including the image gallery, please check out :-Thank you all.
Log in to reply.