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How to Increase Your Diesel Repair Shop's Value Through Recurring Revenue

Have you taken a look at your revenue streams recently? Do you know where the bulk of your money comes from each month? As we've mentioned throughout this series, people who are looking to purchase a business want to make sure that they're making a good investment, and odds are they'll be willing to pay more for a business that has clear sources of revenue. money magnet recurring revenue | Highway & Heavy Parts

So, it's important that as you're preparing your business for its eventual sale that you take a look at where exactly your revenue is coming from. Do you have a consistent revenue stream? This is definitely something potential buyers will want to know about as they look into your business. 

As you plan ahead for the future of your shop, work on your revenue streams. The more consistent and predictable they are, the more valuable your shop will appear to buyers. That's where recurring revenue comes in. We'll take you through what this is and how you can get some recurring revenue streams in your diesel repair shop.

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What Is Recurring Revenue? 

Just like it sounds, recurring revenue is a source of income that reoccurs. You can count on it coming into your shop on a regular basis, whether that be monthly, weekly, or annually. 

This can come in many forms, depending on the business. Perhaps the most recognizable form of a recurring revenue stream is a membership structure. Customers pay a monthly fee to receive continuing service. The business can count on having a certain amount of money each month multiplied by the number of members it has. 

Think of it like a magazine subscription. You pay a certain amount of money each month (or perhaps a lump sum each year at a discounted rate) and a magazine is delivered to you each month. Often, this is cheaper than purchasing that magazine from a store each month, providing value to you as the customer.

This structure can be especially successful if it's an auto-pay system where the customer has to contact the business to opt-out. Then, you're not waiting for the customer to send in a check or call in with a payment. Instead, you can count on the payment coming to you at the same time each month until that membership is cancelled. 


Why Is Recurring Revenue Valuable to Your Diesel Engine Repair Shop?

Buyers like to know where their money is coming from and your shop will be worth more to them if they can see that you have consistent and reliable revenue coming in each month. A potential buyer will want to know what portion of your revenue is recurring and they'll likely look into the quality of those streams. The higher the quality, the more your shop will be worth. 

In some ways, these revenue streams give potential buyers and business valuators a look into the future of your business. If you know where the money is coming from in the future, your shop will look like a much more stable investment. 

Think of it this way—if the money is coming in reliably every month without the new owner having to do anything, they'll be able to put more of their time and money focusing on growing the business in other ways. 

Even if you aren't wanting to sell your business any time soon, investing in creating recurring revenue streams for your diesel repair shop can help you. You won't have to spend as much time each month making sure you have enough customers coming in to keep the lights on. If you know a certain amount of money will be coming in each month, you can focus on other ways to grow your business.

Looking for other ways to build value? Read our article on creating value for your diesel repair shop!


How to Create Recurring Revenue Streams for Your Diesel Repair Shop

This all sounds well and good, but how exactly do you make it work for your shop? It might not seem like the normal structure of a repair shop lends itself well to the recurring revenue model—people come in when their engine breaks, right? 

Yes, that's true, but there are definitely ways you can keep those customers coming in every month. For starters, you'll definitely want to work on creating repeat customers. It takes less time to keep a customer than it does to try and find new ones. So, make sure you're working on customer retention.

More than that, though, you want a way to get that money coming in predictably. Something we've recommended in the past is trying to get customers coming in for routine maintenance checks and repairs, rather than just when something breaks. This could save your customers money by catching failures before they become major issues, and it can keep them coming back into your shop on a regular basis. 

Don't feel like your marketing is bringing in the right customers? Check out our post on marketing to your target customer.

You can take it one step further, though. Incentivize these maintenance checks. Maybe you could create a membership program where they pay at regular intervals and come in to get the standard recommended maintenance checks done. You could offer this at a slightly lower cost to those that pay for the whole year in advance, or maybe throw in oil changes if they sign up.

Somehow, you have to be providing your customer with an added value, just like the magazine subscriptions do (paying less than you would in a store). This is especially powerful if you can market to them as saving them money in the future by catching those failures. Then, you not only are saving them money, but you look like you're looking out for their best interests rather than your own bottom line.

In reality, though, you'll likely make money not only off the maintenance checks, but on any additional repairs those checks lead to. So, in the end, it's a win-win for both you and your customers, in addition to helping you increase your diesel repair shop's value.


If you're looking for ways to begin increasing the value of your diesel repair shop and making it more attractive to potential buyers, focusing on recurring revenue streams can really help.

Want to bring more profits into your shop? Check out our Repair Shop Value Program!