Why does this business fail repeatedly?

[southkogs]

Re: Why does this business fail repeatedly?

Might also look into what type of ratio of auto-owners to oil-change-joints typically makes for a good profit situation. It sounds like you may have a small market to deal in, especially considering that in smaller towns folks lean toward doing their own oil changes.

Though, I think the "service level" aspect is sounding like a possible winner.

 

[DaNinja]

Re: Why does this business fail repeatedly?

Good analysis posted in #67 Bubba.

 

[GA_Boater]

Re: Why does this business fail repeatedly?

This is located in Bethany, MO. (pop 3000 +/-) which is the largest town in the area and Wal-Mart draws traffic from the surrounding area.
This is the one and only quick change shop within that same 40 mile distance.

I think I see the problem. This is in a rural (farming?) area and the potential clients are hard squeezed to keep their heads above water given the state of the economy. And even when times are good they do their own auto maintenance because they always did. I think that the fact that no other QC shop is within 40 miles should be telling you something.

I just looked up the population of Harrison County, home of Bethany, and the population is 8800, or 5800 excluding Bethany.. You need a larger base to support the shop.

 

[tswiczko]

Re: Why does this business fail repeatedly?

Bubba, I didn't read all the posts but here are some links on the population demographics and economics of that area,...If I have the right Bethany Missouri that might help shed light on why it doesn't do well..

Good location sometimes isn't enough,
http://factfinder.census.gov/servle...G00_DP5YR3&-ds_name=&-_lang=en&-redoLog=false

Total population about 2,975
18+ about 2,275

Population in work force about 2,300
Population in workforce 16+ that drove alone about 1,200
Population that carpooled about 1,000

I know this doesn't cover service vehicles a company in the area may own or fleet vehicles. but with a little math you can get some round(very round)numbers like what it would gross you if you serviced the vehicles of say35% of the work force that drove to work alone and get an idea of possible income and compare that to current business earnings the company has

I don't know what you pay for an oil change in your neck of the woods but I pay about 45 dollars for an oil change about 3 x a year, = $135@year.(cheapest one)

 

[bassman284]

Re: Why does this business fail repeatedly?

Bethany MO. Slo-o-owly I turned. Step by step. Inch by inch...

Back in the mid 70s, I was an OTR trucker out of Iowa City Ia. A lot of my runs were down I35 to KC, OKC, Dallas and points south. Back then I35 ended at Bethany and we had to take US69 (known as the Ho Chi Minh trail) to rejoin 35 about 5 miles north of Cameron. Used to be a nice little truck stop at Bethany where you could take on provisions for the trek ahead. OK, hijack over.

Bubba, from your analysis it sounds like a fairly simple and inexpensive upgrade in facilities and service would go a long way to making the place a lot more attractive to the local folks. Some decent chairs, recent magazines and a well maintained coffee maker would make a big difference. Than add a service turnaround that doesn't quite let them finish that cup of coffee.

Being a small town guy myself, I've seen the tendency of some small town businesses to think the locals don't really need a whole lot of frills and comforts. I've also seen how much the locals appreciate those frills and comforts if someone takes the trouble to provide them.

I really don't know if making customers comfortable is enough to make a viable oil change business, but at least they wouldn't dread coming to your shop.

 

[stackz]

Re: Why does this business fail repeatedly?

didnt read past the first page but it was already mentioned anyway. the building is next to a walmart supercenter and the economy is in the crapper.

the people that dont do their own oil changes are going to go to walmart.

most standalone oil places charge like $30+ for an oil change which is $18 at walmart. instead of sitting in an oil change lobby, you can simply get some shopping done while waiting at walmart.

and you dont get the pressure to swap your air filter, get a coolant flush, etc that usually gets pushed at oil change places. when you decline the service, they also normally get pissy and say the car will fall apart if you dont get that new belt put on oh my! lol.

walmart they dont care, they just do what you ask them to do and you get your shopping done and go home and you're done with it.

with a walmart supercenter as the competition, a stand alone oil place is doomed.

and as said before, all the profits from oil changes are sucked up by the people who come in with their engine on its last legs, get an oil change, the engine blows up and they sue for damages saying it had to the be the oil change not the lack of maintenance that caused it. walmart is so huge it barely makes a ripple when dealing with these people. even if the lose money with a single oil change, the amount the rest of the people spend shopping while waiting more than makes up for it.

 

[Cheetah 210es]

Re: Why does this business fail repeatedly?

didnt read past the first page but it was already mentioned anyway. the building is next to a walmart supercenter and the economy is in the crapper.

the people that dont do their own oil changes are going to go to walmart.

most standalone oil places charge like $30+ for an oil change which is $18 at walmart. instead of sitting in an oil change lobby, you can simply get some shopping done while waiting at walmart.

and you dont get the pressure to swap your air filter, get a coolant flush, etc that usually gets pushed at oil change places. when you decline the service, they also normally get pissy and say the car will fall apart if you dont get that new belt put on oh my! lol.

walmart they dont care, they just do what you ask them to do and you get your shopping done and go home and you're done with it.

with a walmart supercenter as the competition, a stand alone oil place is doomed.

and as said before, all the profits from oil changes are sucked up by the people who come in with their engine on its last legs, get an oil change, the engine blows up and they sue for damages saying it had to the be the oil change not the lack of maintenance that caused it. walmart is so huge it barely makes a ripple when dealing with these people. even if the lose money with a single oil change, the amount the rest of the people spend shopping while waiting more than makes up for it.

It was mentioned after 1st page that the Walmart doesn't have an auto center.

 

[DECK SWABBER 58]

Re: Why does this business fail repeatedly?

Negatives I can see that may play a part.



Someone mentioned advertizing and as I think on it I don't believe I ever seen an ad or a flyer for the shop under any of the previous management. (Not good)

The customer waiting area leaves a LOT to be desired. It's too small, was less than sparkling clean, typical magazines that should have been thrown away a year ago, coffee pot that may have been used to breed fungi, poorly lit, and too Spartan. Really cheap chairs / seating. My wife says its "creepy" for a woman to sit in. Absolutely nothing for parents with children.

Service is way too slow and what should be a 10 minute in and out is more like a half hour. I got the impression that because business is slow the employees see no reason to hustle when there is work. The last time I used the place I had to lay on the horn several times before someone opened the overhead door to let me in.

Never seen any of the previous operators provide uniforms for the help. Most wore jeans and work shirts. That may not seem like a big deal but the wife didn't like them sitting in her car because they didn't "look clean". Also looked like they would hire any warm body.

I've gotten the feeling that the employees felt they were doing me a favor because I was interrupting whatever they had been doing to kill time in the back room. (Way too much free time and not concentrating on the customers.)

Poor / limited signage at the location, nothing on the main street (Miller) and nothing on I-35 at all.

Poor selection of oil brands. All the previous operators tried to push people to use their bulk oils. I even had one of them tell me if I brought my own oil they would use it. (Um, why do I need you then?)

Almost no provisions for the handicapped and elderly. Retired farmers now living in town is a big chunk of the population. (In talking with the possible future partner I've suggested a pickup and delivery service for people in town, you can drive anywhere in the town in 5 minutes or less. We'd pick the car up, change oil and any other service and take it back to them. Could be a huge plus with the elderly in the winter. Would also consider having a mobile oil change van.)

Very little automation w/computers. No tracking of customer history. I doubt they could even come up with a list of customer names for a mailing.

Not ran on a professional level. I come away with the feeling that the previous operators were regular shade tree mechanics that seen a shiny new building and figured anyone can change oil and it would be a cake walk. In talking to them none had any previous management experience.

None of the previous operators had any sort of fleet service contracts which I found strange as there are several companies that run fleet vehicles. (Mostly trucks.)

I think these negatives DID play a huge part, which makes it pretty clear why the previous owners repeatedly failed.

Having been a small business owner for the last 28 yrs I think I can speak with experience that "word of mouth" advertising is everything. From the above description I wouldn't think the word of mouth would have been to good. And it doesn't sound like they tried to market themselves at all. I think you have identified the basic reasons why this business keeps failing. I say go for it.

 

[tswiczko]

Re: Why does this business fail repeatedly?

I am looking into a few things,there is not a city within 35 miles of Bethany with a population of more than 10,000But there are 57 cities within that 35 mile radius including Bethanyand here are the counties and their total population according to 2007 census

 

[Maclin]

Re: Why does this business fail repeatedly?

I just had a random thought on this, wondering why the WalMart does not have an Oil change or other Auto service. Seems their demographic and marketing research shows results that would not warrant it, just sayin', may be something to consider.