Top Reasons For Business Failure

L

livinlowkey

New member
Just wanted to know why everyone thinks people fail at running a successful detailing business. I'd like to make a list of the top reasons and post forums to help prevent others from making the same mistakes. I believe the main causes are;



(IN NO SPECIAL ORDER)



1. Too much time worrying about if their job is immaculate

2. Not enough knowledge of business

3. Undercapitalized

4. TREAT IT LIKE A HOBBY

5. Poor customer service

6. Failure to target a SPECIFIC market

7. In it for the money (not creating a reputable company)

8. Poor budgeting (over spending in wrong areas)

9. No marketing plan

10. Just started the business cause of the good return on investment and not ready to put in the necessary time to be succesful.



I truly believe that most people fail cause they treat it like a hobby, bad customer service and not targeting or sending the wrong message to their target market.
 
livinlowkey said:
Just wanted to know why everyone thinks people fail at running a successful detailing business. I'd like to make a list of the top reasons and post forums to help prevent others from making the same mistakes. I believe the main causes are;



(IN NO SPECIAL ORDER)



1. Too much time worrying about if their job is immaculate

2. Not enough knowledge of business

3. Undercapitalized

4. TREAT IT LIKE A HOBBY

5. Poor customer service

6. Failure to target a SPECIFIC market

7. In it for the money (not creating a reputable company)

8. Poor budgeting (over spending in wrong areas)

9. No marketing plan

10. Just started the business cause of the good return on investment and not ready to put in the necessary time to be succesful.



I truly believe that most people fail cause they treat it like a hobby, bad customer service and not targeting or sending the wrong message to their target market.
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Good Post!!!



I would rate them like this.

1. Not enough knowledge of business

2. Undercapitalized

3.Skills

Example of marketing budgets for a few of my friends.

Roofer (5) workers, $3,000 a month, 7th year in business

Auto shop owner (10) workers $8,000 a month, 12th year in business.



The reason I give excellent customer service is because it’s part of my work ethic and I guess a big part of my generation and my parents. IMO bad customer service is so prevalent it’s becoming the norm in to days society. In my youth Mcdonald’s was processionally run and the workers had pride.
 
I agree, spending that extra 5 minutes listening to your customer complain how bad his week has been will go a long ways. Its the little extras that count. I try to learn as much as I can about my clients. I have only been open about 2.5 months and I had never lived here and didnt know anyone in the area. But regardless of not having rapport with the community I have already managed to round up just under $1000 a month in repeat customers. I just sit back, listen and empathize with them about whatever it is thats on their mind.
 
I agree with those reasons too. I think ROI estimates is a good reason people fail or get discouraged and quit. I know when I was researching this all these people told me I would be makin up to $400 a day or 1500-$1600 a week. Thats not true... You can make that much, but to get one complete detail a day averaging about $130 per is a hard task starting out. Thats a lot of new customers to find. On average I do about $100-120 a day. But its always changing.
 
I agree with the low pricing. The amount of time, effort, chemicals, and experience it takes to properly detail a car is extremely valuable.



If I personally detailied a car for someone else, I would charge $450.00. No negotiation.
 
Scottwax said:
One of the biggest is pricing your work too low.
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I haven't been doing this long but if there's one thing I've learned already it's that this is dead-on. Pricing too low effects not only your bottom line, but the quality of customer you get, how you're business is perceived, and your marketing.
 
I know that one of my problems is that I am too meticulous, do too much extra, use too much product because I do the extra stuff for no charge as a little freebie, and it takes me too long to complete because I go over everything again and again.....



for instance, I quoted 100 for a hookup detail, spent 7 hours on the outside only! I told this person I would only do the outside and she was ok with that because she thought the inside was clean....well, I got inside to move it then decided to vacuum, dress the interior trim, do the windows, and spot clean the carpets.....so yeah, I did a lot for nothing and it cost me time that I could have done another quick detail on another car, but I turn it away for the day. Lost that car in the end because he wanted it done that day....
 
toyotaguy said:
I know that one of my problems is that I am too meticulous, do too much extra, use too much product because I do the extra stuff for no charge as a little freebie, and it takes me too long to complete because I go over everything again and again.....



for instance, I quoted 100 for a hookup detail, spent 7 hours on the outside only! I told this person I would only do the outside and she was ok with that because she thought the inside was clean....well, I got inside to move it then decided to vacuum, dress the interior trim, do the windows, and spot clean the carpets.....so yeah, I did a lot for nothing and it cost me time that I could have done another quick detail on another car, but I turn it away for the day. Lost that car in the end because he wanted it done that day....
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In our market a full detail is about 3.5 hours labor. Any more is paint or interior restoration and charged accordingly. If you’re a hobbyist and you don’t mind working for free, 7 hours is ok. Can you sell the job for $350 at 7 hours labor?
 
I dont think I could sell the job for $350. Maybe here and there, but not steady enough to make a living.



I own an IT consulting business and a Kitchen+Bath business. I operate them both from the same office, just different staff.



I bill out SQL programmers at $80/hr.

I bill out DotNet programmers at $100/hr.

I bill out Project Managers at $100/hr.

These are for 40 hour weeks usually for 6+ months.



I bill out a cabinet installer at $50/hr.

I bill out an electrician at $90/hr.

I bill out an tile man at $45/hr.

There are on a job by job basis, but in this market, they are never not billing 50 hr per week.



I wish the detailing skill could sell for this kind of money. If it could, I'd shift my focus completely.
 
jsatek said:
I wish the detailing skill could sell for this kind of money. If it could, I'd shift my focus completely.
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With experience under your belt and if you have built a good rep, you should be able to command at least $40-$60 per hour in this industry. My average is about $50 per hour. Most of Philadelphia will not pay that, which probably explains why 90% of my business is in the surrounding counties.
 
Most detailing businesses fail because the people who operate the business are constantly trying to compete with other detailers and constantly lowering their prices. In the detailing business, that is simply a mistake. A low price may matter when you are doing wholesale restoration work for a dealership; however, most retail customers care more about getting a high-quality job and they usually have no problem paying a high price for that kind of service.
 
People buy from emotional. Lowering price is not a way to become successful. If you believe your work is worth 2x 3x quality, you should charge 2x 3x more. NOT LESS.
 
Is there a polite way to raise prices with existing customers. I am afraid it may drive them away and some are the main reason my business is still operating. For now their prices are the same, but my new prices are going out to a different market.
 
jvriii1942 said:
Is there a polite way to raise prices with existing customers. I am afraid it may drive them away and some are the main reason my business is still operating. For now their prices are the same, but my new prices are going out to a different market.
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Billing time is $50 a hour. Average 3.5 hour to do a full detail, $175 to $195.

Cost of living goes up about 3% a year and so should your prices. Clients aren’t going to complain if you raise your prices by $10 or $15.
 
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