Getting away from the day-to-day grind and going to a seminar or conference with fellow shop owners and machinists has rewards that far outweigh the expense, and often may even present new business opportunities. At the Engine Rebuilders Association Tech Expo (AERA) I attended this past April in Indianapolis, a presentation given by John DeBates, owner of Auto Machine, Inc., on business profitability and opportunities offered just such insights.

John came armed with his accountant who helped us to understand a business plan, which we could implement in our own shops. They outlined a strategy to achieve increased profit margins on our core business of engine rebuilding services. This was done by tracking our time to perform tasks and making the proper adjustments to the customer-billed hours.

John also shared with us examples of add-on services that could be beneficial to our more traditional business with carry-over into the non-automotive and industrial customers. John cited his purchase of an EDM machine, which was used to disintegrate broken bolts in cylinder blocks and heads.

He found a company with a government contract that needed to have broken studs removed from metal plates. Looking at the costs in that industry, he was able to charge an hourly rate nearly double that of his automotive equivalent. This example stirred a lot of conversation from the attendees as to whether or not we are charging enough for our services, or whether that industry is overpaying for theirs?

The part of the presentation that interested me was the simple approach the presenters took to look at all business opportunities. They broke them down into segments that included market need, competition, capitalization and manpower. Using this as a cornerstone in a business plan, let