Opening a business... doing a market study... help me out
10-Mar-2004, 05:15 PM
#41
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definately i am planning on accomidating cars of different nature. we plan on bocoming affiliated with some shops in the area and holding different events... aswell as having a bay that will acomiate cars that are lowered because that is a big market and alot of shops arent equipped to handle lowered cars
and as far as getting a job with us, ill let ppl know when we have the shop open and feel free to come in and bring a resume... i defenately want to hire people with experience, knowledge, and a passion for cars
thanks for all the info guys, ill keep everyone posted as things progress
and as far as getting a job with us, ill let ppl know when we have the shop open and feel free to come in and bring a resume... i defenately want to hire people with experience, knowledge, and a passion for cars
thanks for all the info guys, ill keep everyone posted as things progress
10-Mar-2004, 06:50 PM
#42
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Join Date: May 2002
Posts: 47
Originally posted by bbarbulo
KEEP THE PRICES SLIGHTLY UNDER AVERAGE - it's simple economic theory. You are entering a market of perfect competition, where consumers percieve every oil change place as good as the next. The two things above try to lift you ABOVE the rest of the oil change places so that you are distinct in the minds of customers, but for them to know that they must come in first! In perfect competition, since ALL products are percieved to be the same, the lowest price in the neighborhood gets 100% of the business. Think for example ONE gas station where gas is 50 cents, and it's 60 everywhere else. That one station, even though it's making 10 c less profit, is getting 90% of the business, so as long as they are making ANY profit - odds are they'll make more $ than any other station around. Get what I'm saying?
KEEP THE PRICES SLIGHTLY UNDER AVERAGE - it's simple economic theory. You are entering a market of perfect competition, where consumers percieve every oil change place as good as the next. The two things above try to lift you ABOVE the rest of the oil change places so that you are distinct in the minds of customers, but for them to know that they must come in first! In perfect competition, since ALL products are percieved to be the same, the lowest price in the neighborhood gets 100% of the business. Think for example ONE gas station where gas is 50 cents, and it's 60 everywhere else. That one station, even though it's making 10 c less profit, is getting 90% of the business, so as long as they are making ANY profit - odds are they'll make more $ than any other station around. Get what I'm saying?
In the world of perfect competition everyone charges the same price ... if you lower you price slightly, the 100% demand to one shop drives the price up as it simply cannot meet demand. Therefore to maximize earnings, it raises prices so it can balance demand and max price. This max price that it charges is eventually the market price which everyone is charging.
In the gas station example one of two things could happen, the station at 50 will raise price to meet demand, as the essene of economics is supply and demand meeting. Or there is a price war and the all lower their price to the point that P = MC (margianal cost) ... but in the long run no gas station is that stupid.
However, in a realistic sense yes having low prices is a good selling point; however, triggering a price war in the neighbourhood is the best way to get run out of business. Since you are just getting established, i'll assume the more established firms are better equiped (financially and client wise) to sustain a price war. A better way of differentiation, as everyone has mentioned, is service. As i see it, the oil change business does not have room to wiggle in terms of costs for materials, but if you can get materials at a lower cost; you'll have more ammunition to fight the cost war. But seriously, the best way to stay in business is to operate a clean shop, keep your promises, be honest, and treat customers fairly.
another idea, is loyalty programs. 10 oil changes and one is free or of some sort of bargin that doesn't affect price is a good way to operate. You avoid a direct price war, and can generate a good list of clients.
11-Mar-2004, 10:54 AM
#43
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Join Date: Oct 2003
Location: T-dot-O
Posts: 3,125
when i was a kid i worked for "CT-PIT STOP" good place, they did **** like oil changes, diff oil change, tranny oil change(gasket and filter) american junks, and stuff like that u know + the local **** under the hood top up fluids, etc.....besides that its a good business as long as u got a good reputation, offer discounts, to ppl from here, and their families, and accomidate ppl with(lips, bumpers, and dumped cars, <<VERY IMPORTANT, and well like i said drive clean and inspection is good, but u gotta be certified, and be a mechanic, so u know....id hire some kids 15yrs old to wash cars man, in the coin wash for 5$- 3$ to coin wash, 2$ to the kid, haha, gives u that automated sense, without u paying man....
11-Mar-2004, 12:48 PM
#47
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Posts: n/a
Originally posted by Buff 'n Stuff
good luck... you'll need it. mark my words.
that is all I have to say.
good luck... you'll need it. mark my words.
that is all I have to say.
good thread ppl, great insight
11-Mar-2004, 07:23 PM
#48
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Join Date: Sep 2002
Location: 416
Posts: 1,625
i dont really like the places like oil changers, jiffy lube, etc.
because they charge upwards of $60 for an oil change, when i can take it to my dealership and get it done for $30
while $60 will get my oil changed in 15-20 minutes, i usually have no problem dropping my car off @ the dealership...... and i get a free car wash!
but... out of all the places i've been to, oil changers was one of my favorites, the staff didnt try to get me to buy every service they offered.... or wipers..... or bulbs.....etc.
good luck!
because they charge upwards of $60 for an oil change, when i can take it to my dealership and get it done for $30
while $60 will get my oil changed in 15-20 minutes, i usually have no problem dropping my car off @ the dealership...... and i get a free car wash!
but... out of all the places i've been to, oil changers was one of my favorites, the staff didnt try to get me to buy every service they offered.... or wipers..... or bulbs.....etc.
good luck!
11-Mar-2004, 08:33 PM
#51
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Join Date: Apr 2002
Location: in the MOSH pit
Posts: 5,550
There are a few questions you need to keep in mind.
What are your overhead COSTS? rent? advertising? empolyees? insurance? etc...
What are your financial NEEDS, how much to need to make to make this business worth while...
Take that COST + NEEDS = GROSS income
from you GROSS find out how many oils changes you need to make in order to reach that GROSS number...
thats a good place to start
MEANING you need to find out if its profitable!
and break it down into real numbers
What are your overhead COSTS? rent? advertising? empolyees? insurance? etc...
What are your financial NEEDS, how much to need to make to make this business worth while...
Take that COST + NEEDS = GROSS income
from you GROSS find out how many oils changes you need to make in order to reach that GROSS number...
thats a good place to start
MEANING you need to find out if its profitable!
and break it down into real numbers
11-Mar-2004, 08:37 PM
#52
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Posts: n/a
oh yes, thats been done, we spent a few days with these numbers and the numbers look pretty good
i have taken all the steps needed, i was a business student so preparation is key
this thread was simply to see what peoples opinions were about the services oil changers provded and to see who lived in the area i am setting the shop in
i mean the advice given here is a great read, but they are steps i have been following all along
i have taken all the steps needed, i was a business student so preparation is key
this thread was simply to see what peoples opinions were about the services oil changers provded and to see who lived in the area i am setting the shop in
i mean the advice given here is a great read, but they are steps i have been following all along
12-Mar-2004, 12:34 AM
#53
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Join Date: Apr 2003
Location: Brampton
Posts: 3,129
Originally posted by cosmicjim
it does make logical sense, but there are some flaws to your economical assessment. yes the products may be the same and perfectly substitutes, but the market of oil changes is far from a perfect completition. With many random variables such as location and limited demand, the assessment you make may be logical but flawed from an economical point of view.
In the world of perfect competition everyone charges the same price ... if you lower you price slightly, the 100% demand to one shop drives the price up as it simply cannot meet demand. Therefore to maximize earnings, it raises prices so it can balance demand and max price. This max price that it charges is eventually the market price which everyone is charging.
In the gas station example one of two things could happen, the station at 50 will raise price to meet demand, as the essene of economics is supply and demand meeting. Or there is a price war and the all lower their price to the point that P = MC (margianal cost) ... but in the long run no gas station is that stupid.
However, in a realistic sense yes having low prices is a good selling point; however, triggering a price war in the neighbourhood is the best way to get run out of business. Since you are just getting established, i'll assume the more established firms are better equiped (financially and client wise) to sustain a price war. A better way of differentiation, as everyone has mentioned, is service. As i see it, the oil change business does not have room to wiggle in terms of costs for materials, but if you can get materials at a lower cost; you'll have more ammunition to fight the cost war. But seriously, the best way to stay in business is to operate a clean shop, keep your promises, be honest, and treat customers fairly.
another idea, is loyalty programs. 10 oil changes and one is free or of some sort of bargin that doesn't affect price is a good way to operate. You avoid a direct price war, and can generate a good list of clients.
it does make logical sense, but there are some flaws to your economical assessment. yes the products may be the same and perfectly substitutes, but the market of oil changes is far from a perfect completition. With many random variables such as location and limited demand, the assessment you make may be logical but flawed from an economical point of view.
In the world of perfect competition everyone charges the same price ... if you lower you price slightly, the 100% demand to one shop drives the price up as it simply cannot meet demand. Therefore to maximize earnings, it raises prices so it can balance demand and max price. This max price that it charges is eventually the market price which everyone is charging.
In the gas station example one of two things could happen, the station at 50 will raise price to meet demand, as the essene of economics is supply and demand meeting. Or there is a price war and the all lower their price to the point that P = MC (margianal cost) ... but in the long run no gas station is that stupid.
However, in a realistic sense yes having low prices is a good selling point; however, triggering a price war in the neighbourhood is the best way to get run out of business. Since you are just getting established, i'll assume the more established firms are better equiped (financially and client wise) to sustain a price war. A better way of differentiation, as everyone has mentioned, is service. As i see it, the oil change business does not have room to wiggle in terms of costs for materials, but if you can get materials at a lower cost; you'll have more ammunition to fight the cost war. But seriously, the best way to stay in business is to operate a clean shop, keep your promises, be honest, and treat customers fairly.
another idea, is loyalty programs. 10 oil changes and one is free or of some sort of bargin that doesn't affect price is a good way to operate. You avoid a direct price war, and can generate a good list of clients.
When Bruno was talking about perfect competition within the oil change market, i'm sure he was assuming ceteris paribus. Location, quality, convenience, ect... are all assumed to be equal at every location.
13-Mar-2004, 01:36 AM
#54
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Join Date: Jul 2002
Location: Hamilton
Posts: 2,696
Originally posted by Buff 'n Stuff
good luck... you'll need it. mark my words.
that is all I have to say.
good luck... you'll need it. mark my words.
that is all I have to say.
many have come, but few have succeeded when it comes to the type of business you are getting into.
hence "good luck".
13-Mar-2004, 01:50 AM
#55
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Join Date: Jul 2002
Location: Hamilton
Posts: 2,696
also, if you want my advice... come up with a fresh idea, something new that will attract customers. if you try to open this business and be like 'everybody else' (mr.lube, jiffy lube, oil changers, etc) i can guarantee you that it won't survive for very long, no more than 2 or 3 years. try to think of ways to convenience your customers better than your competition will... more so than having a cheaper price, because most people will go to where ever the service is fast, convenient and the quality of workmanship can be trusted (first & foremost), and the company uses quality products. the cleanliness point was also brought up in a previous post here. the image (the lot, building, signage & staff) must be presentable and you must have well-trained, professional employees.
there's a lot to it, maybe more than you think. i'm not trying to pursuade you and change your mind (although it doesn't appear that way)... simply trying to forewarn you.
(guess i had a little more to say about it
)
there's a lot to it, maybe more than you think. i'm not trying to pursuade you and change your mind (although it doesn't appear that way)... simply trying to forewarn you.
(guess i had a little more to say about it
)
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