All great companies have one thing in common: They realize industries and consumers need change, so they follow their customers. Apple provides a great example of this. When Apple started they were a computer company, but when that industry began to decline, Steve Jobs was able to see that his targeted customers were investing in music. This is why Apple Computers became Apple Inc. A few years ago the company’s online music sales exceeded its computer sales, and today it is a leader in the mobile device business (in addition to its sales of iPads, notebooks and desktop computers). In essence, Apple transformed to meet the needs of its customers. IBM and American Express are other great examples.
The automotive service and repair business is no different. Take engine builders, for example. Over the decades, the engine building business has transformed as well. More efficient engines have started to change the industry. As this progression continues, you will be seeing your customers, and repairing their engines, far less often.
Interestingly enough, most shop owners are not too concerned because they simply believe that all they will need to do is ratchet up their marketing efforts to bring in more new customers. Unfortunately, there is typically a finite number of potential customers in any marketing community, and your competitors have the same plan in place. So rather than fighting the inevitable changes, or doing business the same old way until your business is out of business, here are my recommendations:
First of all, shop owners typically diversify for one of two reasons. Either, they do it out of desperation, or out of inspiration. The ones that do it out of desperation are the ones that take the leap when they are struggling to pay their bills, and are scrambling to find any way to bring in a few more dollars. The ones that diversify out of inspiration are the ones that see the change in the wind, and take the necessary steps to ensure their continued success.
However, there is no one road that is right for everyone. If you are in a specialty business you may want to consider expanding into other service offerings. You already have the most important part, which is your customer base. Another option is to consider exploring servicing newer engines or a wider range of engines. Instead of simply working on race engines, or tractor engines or industrial engines, take a look at where you can diversify the kinds of engines you can build or rebuild. Be careful not to spread yourself too thin, but some diversity in your business will go a long way for keeping your business prosperous and profitable.
It is argued that, at one time, Bill Gates said, “If Santa Fe Railroad would have realized that they were in the transportation business, and not the railroad business, today we would have Santa Fe Airlines.” This is a message we should all take to heart, because the one thing that is certain is that our industry is going to go through many more dramatic changes. The first to embrace this reality, and make the necessary changes, will become the industry leaders for decades to come.