Every shop owner knows that the only way to maintain positive cash flow is to cut costs. But when it’s time for growth, spending money is inevitable. Business owners are encouraged to use a portion of their income to put back into the growth of the company.
The question is, how would you know if this is the right time to invest in your growth? What are the signs? This article will tell you when it’s good to spend money and the signs to look for.
Should you really spend money to make money?
Even though having a huge chunk of cash in your bank account usually indicates that you’re far from being bankrupt, it doesn’t always mean you’re growing.
Having high cash reserves means that you are not reinvesting money back into your business. On the other hand, having insufficient funds can be detrimental to your auto repair shop when it comes time to order tools, equipment or parts.
The decision to spend money to make money depends on your goals and where your business is currently. Check out the signs below and see if any of these resonate with your auto repair shop.
5 Times Your Shop Needs to Spend Money to Make Money
1. When you’re overwhelmed with manual bookkeeping
It’s hard to keep track of your income when you do it manually. If keeping the books in order keeps you up at night and you think hiring a full-time bookkeeper is too much of an investment, you can get accounting solutions for your business.
Some of the best accounting tools for small businesses like yours are QuickBooks, Wave and Xero. They already provide you with tools for managing expenses, preparing payroll and processing taxes.
2. When you’re understaffed
Can your employees keep up with the number of daily customers? Are they already complaining about overtime and burnout? If you’re getting a surge in customer requests and you think your shop is biting off more than it can chew, it’s time to hire more people.
Employing more staff is usually a sign of growth because it means that more customers are walking through your door. Adding an additional employee can reduce the workload and
improve company satisfaction.
3. When your shop can no longer accommodate more customers
Not enough space to welcome more customers? Have you considered moving to a bigger location or setting up a new shop in a different city?
While some business owners are skeptical about opening a new shop in a new area, the benefits often outweigh the risks. Some customers are looking for something new to try. Some of them might have heard good reviews about your shop, but they can’t go because of the location.
If you have the funds to expand your business, you must leverage that opportunity. The only way to get more customers is by having enough space to attend to their needs. Don’t let your money sit in your bank account when you could use it to fund an expansion or renovation.
4. When you need to boost your marketing
In contrast to the point above, some shop owners need a little help attracting new customers. Even though you think your business is already getting by when existing customers come to your shop, you should start thinking about getting new bookings.
Social media is a free tool you could use to promote your business. If you want to target the right customers and increase your chances of getting shop visits, you must try doing social media ads.
Advertising on social media allows you to build an audience database, increase the exposure of your business and bring in new customers who are most likely to book a service from you.
It’s a good place to put your money, you could seek the help of social media marketing professionals to set the right metrics, or you can also learn, and do it yourself.
5. When your team needs a new skill set
If you are planning to offer more services, you also need employees with more experience. Hiring a new employee with more experience or training your current employees to learn new skills will inevitably cost you more money.
However, you are making the best use of your in-house talent by equipping them with skills, latest best practices and technology know-how.
You allow your staff to solve more complex issues and develop new talents.
In 2021, Gartner published a survey, which revealed that 58% of the workforce will need to develop new skill sets to be successful at their job. Not only that, giving employees the opportunity to upskill also increases retention. A separate survey by PricewaterhouseCoopers (PwC) showed that today’s workers (77% of respondents) want to upskill, and they believe that upskilling can boost employee morale, teamwork and satisfaction.
As you see, reinvesting in your business also means investing in the people who work for you. Your workforce is there to help you offer the best services to clients. To continue doing a good job, you also have to open new avenues for them to learn and excel in their profession.
Getting your business off the ground always comes with a price tag, but if you can manage your budget wisely, then you wouldn’t have a problem. Don’t be afraid to spend money to generate more money. Your business has a potential to grow – but first, you have to be willing to take risks and explore your options.