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4 New Revenue Streams That Could Jumpstart Your Profit Margins

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How to diversify your diesel repair business with profit-driven equipment and services.

In ballroom dance, there’s a common move known as a pivot. Participants step forward with one leg and then turn to the opposite side. It basically allows partners to change direction in an efficient and effortless manner when executed properly.

Similarly, repair shops must often maneuver in the same way—especially as independents struggle to generate more earnings beyond the point of break-even. Although your prices, quality and speed of delivery can get buyers to your door, their demands and lifestyles eventually change.

So what can you do to stay a step ahead of the competition? A number of operators pivot off their base businesses and add new revenue streams. Asking questions such as “What else do my guests need in relation to my core product service line?” and “How can I fully utilize the resources I have right now?” prove useful when deciding where to turn.

[When we’ve added other offerings], we knew they were things our audience would appreciate.

“Find out what customers want,” says Peggy Lawless, co-owner of Professional Fleet Services in Wichita, Kansas. “[When we’ve added other offerings], we knew they were things our audience would appreciate.”

Jon Schuberg looks for alternative sources of sales that can easily bolster otherwise quieter times of the year. “Being in Michigan, our income fluctuates so much during the winter months,” says the service advisor at Quality Truck & Tire Service in Clare, Michigan. “We had to figure out a way to continue earning a profit when it’s cold and icy outside.”

Here’s how Schuberg, Lawless and other savvy industry leaders used timing, technique and teamwork to make bank with business-boosting revenue streams.

Towing and roadside services

Schuberg says alternative profit centers can fill the gap if a reliable one suddenly slows down. “We now have towing, over the road service, shop repairs and trucks we fix and sell,” he says. “We stay busy!”

Investment

Adding towing and roadside work to the operation was a no-brainer. “In the summertime, we deal with a lot of farmers, and their business falls off in the winter, meaning they’re not coming to us,” Schuberg reveals. However, the drop in temperature gives rise to a load of other truck hazards his shop can capitalize on. “Frigid midwestern winters [cause] constant winch-outs and freeze-ups,” he says.

Quality Truck and Tire's heavy duty tow truck used to bring in profit year-round.

Photo courtesy Quality Truck & Tire Service

Quality Truck & Tire Service’s towing division transports heavy duty vehicles year-round.

Integration

One person’s white-out is another’s windfall, so incorporating this profit center entailed more in machinery and training. A tow truck had to be purchased along with an additional service vehicle and tools. Personnel needed to earn their commercial driver’s license in order to operate the trucks, and the shop’s off-site crew received extra safety coaching before hitting the road.

Despite these barriers to entry, Schuberg estimates the shop now generates roughly $25,000 to $30,000 in monthly revenue from both divisions.

Inspirations

Quality Truck & Tire Service has positioned itself to bring in the big bucks during all four seasons. “Farmers in the spring, motor homes in the summer, and no-starts in the fall and winter—we take in all types of jobs,” Schuberg says.

After a decade of offering roadside work, Schuberg says the biggest problem for his company so far has been staffing. “Finding people to carry out the calls when you have 24/7 support and towing is tough, but our investment has resulted in success,” he says.

Diesel particulate filter (DPF) cleaning

When in doubt, listen to your customers. Lawless didn’t always service DPFs in-house, but once more buyers started approaching her for work, she thought it might be a good idea to consider a pivot.

Investment

FSX DPF Cleaning Machine

Photo courtesy Professional Fleet Services

While its price tag is steep, Peggy Lawless believes her DPF cleaning machine has proven itself as a solid investment.

In 2015, Lawless decided to add DPF cleaning to her range of offerings. DPFs, which remove soot from a truck’s diesel engine, get clogged over time and can fail [to learn more about servicing this component, read Turn DPFs Into Your BFFs]. Although the cleaning equipment costs tens of thousands of dollars, which is why most repair shops outsource the procedure, Lawless took the plunge into DPF work after growing tired of her vendor’s long turnaround time. “It cost $70,000, including installation, but was a good risk,” she says.

Integration

Labor is minimal, according to Lawless. “Basically, we only needed electricity after the equipment was purchased,” she says.

Inspirations

Once Lawless marketed the new profit center with phone calls and flyers, her shop found itself with a huge profit margin. She notes the device runs daily and serviced 250 DPFs last year.

Tips for Staying True to Your Core Business

Adding new revenue streams represents a growth opportunity for many facilities. However, repair shop owners run the risk of overextending themselves if they neglect their central operation.

“Any new income source should be done on a pilot basis without disrupting the core business,” says Rob Wilbur, master consultant at Management Success (a company in Glendale, California, that provides training and coaching for repair shop owners and service advisors). “That means research should be done as to its potential volume and income for the location.”

Building off Wilbur’s advice, we asked our industry experts for their best tips on staying focused while diversifying.

“It’s all about the scheduling. We allow enough leeway in production to remove a tech from the workflow in the shop in order to send them into the field without causing staff employee issues.” –Debbie Jennerjohn, Ultimate Truck Service in Ridgefield, Washington

“You just have to remember not to reinvent the wheel. Find out what you can easily add, get the equipment and staff and then advertise for it.” –Jon Schuberg, Quality Truck & Tire Service in Clare, Michigan

“Your primary goal should always be running the core business. Also, make sure you’re not taking on too much risk. Adding techs, ordering new parts, conducting additional billing work and the other tasks that go along with them can create too much demand and strain on staff if you’re not careful.”–Peggy Lawless, Professional Fleet Services in Wichita, Kansas

“Remember to have everything in place: plan daily, look at numbers and ensure you have reserves, so you don’t overextend.” –Buck Monson, Monson Truck & Trailer Repair in East Moline, Illinois, and Davenport, Iowa

Mobile preventative maintenance

Debbie Jennerjohn has devised a win-win situation that keeps drivers on the road while she reels in work.

Investment

The co-owner of Ultimate Truck Service in Ridgefield, Washington, kickstarted a mobile preventative maintenance division last year. This way, her regular customers wouldn’t have to shuttle their heavy duty vehicles back and forth.

Integration

Jennerjohn stocked one of her service trucks with all the filters that her techs would need to perform the jobs. “Since we’re just doing preventative maintenance, we can use a level C or B employee,” Jennerjohn says. She called in existing staff members to do the on-site visits, and they were then trained on how to carry out assignments on the road as opposed to in-shop.

Inspirations

Tasks can be performed after hours. Plus, needed repairs are often found at the same time, which increases the revenue gained from each visit. The appointments are also done in bulk—a minimum of 10 vehicles in one call. “It’s only profitable if we do multiple in one trip,” Jennerjohn says. “We started the program with a 50 percent profit margin.”

What’s more, Jennerjohn enjoys the extra visibility her mobile division brings to her area. “The trucks with our logo are seen out and about,” she says, resulting in free advertising for the business.

Big rig wrapping

It was almost an accident how Monson Truck & Trailer Repair ended up with a graphics and truck wrapping business. The process involves printing custom graphics on vinyl and applying it in pieces to a vehicle—resulting in a sharp-looking mobile billboard. It’s removable, can replace a paint job and lasts for up to five years.

Investment

Buck Monson, co-owner of the Davenport, Iowa, and East Moline, Illinois, facilities, gradually purchased 21 service vehicles over the years. Then, his management training consultant—seeing the overabundance and branding potential—talked him into purchasing the machinery and vinyl to wrap those rides for promotional purposes.

Soon afterward, Monson discovered he would need to start offering custom wrapping to others. Doing jobs in volume was the only way to earn a profit and make up the cost of the equipment.

Integration

Monson started his business in 2014 and admits he wasn’t paying close attention to it at first. As a result, the numbers tumbled when he tried to expand too quickly. “I pushed my growth,” Monson says. “It fell hard for a while.”

Over this year, however, he’s turned it all around. Monson opened his eyes to the details of the operation and hired a graphics department manager who excites him. He’s learned that talented, trustworthy employees surround themselves with other quality people, and his new recruit was recommended by someone who already works for him.

Monson was worried he wouldn’t be able to afford the salary for this new member but was thrilled to come to an agreement. “He’s great,” Monson says. “He challenged me immediately and was completely honest about where I was doing the wrong things while also offering a solid vision for the future.”

This department manager also included shop certification in his master plan. “I didn’t even know the facility has to be 3M-certified to work with any government funded agencies,” Monson says. “Now I know, and thanks to my bringing in an expert, it’s done.”

Monson Truck & Trailer Repair's pink Breast Cancer Awareness Flatbed truck.

Photo courtesy Monson Truck & Trailer

Buck Monson wrapped a flatbed truck to promote breast cancer awareness.

Inspirations

As an added benefit, Monson’s offshoot also promotes jobs for his repair department—since vinyl cannot be placed over rust. Therefore, his techs need to fix the issue before the wrap is applied. Plus, the division includes custom decals and stickers, digitizing, embroidering, signage and even t-shirts to generate extra profit.

Monson’s projections indicate he’ll be profitable by the end of the year. With all he has learned, he feels good about what once seemed like a hot mess. “For a while, we put the cart before the horse,” Monson says. “But now the horse is hitched up correctly, and we’re ready to go!”

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