Menefee: Spotting Unprofitable Repairs

Oct. 3, 2024
Lessons Learned from Experience Can Show Which Jobs to Accept and Which to Turn Away.

There should be a course on how to identify unprofitable repairs. But for most of us, it’s a matter of trial and error. Each shop has its own learning curve in figuring out what works. When I first took over my shop, I said “yes” to almost everything that came through the door. Unfortunately, that approach didn’t always work out, and there were times it came back to bite me. I can’t tell you how often I found myself wondering, “Why did we take on this job?” or “What were we thinking with this repair?” 

Several years and quite a few gray hairs later, I’ve learned to be more selective about the jobs we take on. I now have a much clearer understanding of when to pass a job along and when to accept it. 

 

Turning Away Jobs the Right Way 

It’s important to remember that turning a job away doesn’t mean leaving the customer in the dark. No matter the reason, we have a responsibility to guide them in the right direction. This means not just saying "no," but also offering advice and referring them to someone who can help. People remember how you treat them, and we want them to think of our shop as helpful even if we couldn’t handle the repair. That way, when they or someone they know needs automotive help in the future, they’ll come back to us or refer others to us. 

Instead of leaving customers stranded, we want them to say, “This shop couldn’t handle my repair, but they gave me excellent advice and pointed me in the right direction.” 

 

What We Say No To 

So, what kind of jobs do I turn away? One of the biggest things I’ve learned to pass on after years of figuring it out is major, time-consuming repairs. Recently, I declined a job that would have cost over $40,000. Could it have been profitable? Absolutely. So why did I turn it down? The issue was time and resources. I would’ve needed to assign one of our top technicians to the job, tying them up, along with a bay, for at least two weeks probably more. 

Although that job would have made us money, I realized we could earn just as much, if not more, by focusing on smaller or medium-sized jobs. These jobs could be completed faster, freeing up my tech to keep working on other cars and bringing in steady profit, rather than being stuck on a single big project. 

Another type of repair we tend to avoid is on older vehicles that require removing and reinstalling trim pieces. It’s not that we don’t like working on older cars, but we all know the risk. If you remove a door panel from a 2004 model, chances are the tabs will be brittle and could break. Even when we explain this risk to customers, if it happens, they often still blame us, leaving them with a negative impression of our shop. 

The same principle applies to older vehicles needing suspension work, especially when it’s clear no maintenance has been done. Once you replace one worn-out part, the stress on the remaining old parts often causes them to break, one after another. Customers don’t always understand this. They come in for one fix, and when they have to return for more issues, it leaves a bad taste in their mouth. 

 

The Customers You Shouldn’t Take 

There are also customers we’ve learned to avoid—like those who watch a YouTube video and think the repair should only take a few hours, and therefore shouldn’t cost much. These customers never seem to understand the full scope of what goes into a proper repair and are rarely satisfied, no matter the outcome. 

Another big group we avoid are customers who want to do partial repairs to save money, especially when it compromises safety. We don’t mind doing partial repairs if safety isn’t at risk, but when it is, I have to draw the line. I don’t want my shop to be held responsible if that car ends up in an accident because a customer chose not to address safety concerns. It’s a tough decision, but ultimately, we’ve found it’s best to refer these customers elsewhere, to protect both our shop’s reputation and safety standards. 

 

Profitability Isn’t Always What It Seems 

The key takeaway here is that a repair may seem profitable on the surface, but it might not be. If a job is going to tie up your best tech for longer than expected, or if the vehicle’s condition is such that it’ll lead to further complications, that repair is likely not as profitable as it seems. And if the customer walks away with a bad impression because he or she didn’t understand the complexities of the repair process, it’s definitely not worth it. 

We may never know the true cost of losing potential future customers because someone left with a negative experience. That's why it’s so important to be selective about the jobs we take on, ensuring that both the shop and the customer come away with a positive result. 

 

Sponsored Recommendations

Best Body Shop and the 360-Degree-Concept

Spanesi ‘360-Degree-Concept’ Enables Kansas Body Shop to Complete High-Quality Repairs

ADAS Applications: What They Are & What They Do

Learn how ADAS utilizes sensors such as radar, sonar, lidar and cameras to perceive the world around the vehicle, and either provide critical information to the driver or take...

Banking on Bigger Profits with a Heavy-Duty Truck Paint Booth

The addition of a heavy-duty paint booth for oversized trucks & vehicles can open the door to new or expanded service opportunities.

Boosting Your Shop's Bottom Line with an Extended Height Paint Booths

Discover how the investment in an extended-height paint booth is a game-changer for most collision shops with this Free Guide.