Between the high upfront costs of running an auto repair shop and seasonal fluctuations in demand, it can be hard to achieve a healthy cashflow. Here’s how hummpro can help.
Achieving a healthy cashflow is a challenge in any industry, but it’s especially difficult if you run an auto repair shop. Whether you specialise in tyres, cracked windscreens, collisions, or regular repairs and services, you probably need to deal with insurance companies alongside individual customers, and they can take several weeks to approve payments. Combined with the fact that you generally need to purchase replacement parts upfront before you’re reimbursed, you can easily fall into the red.
Instead of spending cash or dipping into your savings to pay for parts and other expenses, you can gain some breathing room by using hummpro, a buy now, pay later (BNPL) app built specifically for small businesses. With access to up to $30,000, you can use it like a credit card to pay for the things you need to keep your business running on a daily basis, or buy additional equipment to expand. And you can take advantage of multiple interest-free repayment options if you’re facing a cash flow crunch.
Here are some ways to deal with the biggest costs in the auto repair business — and how hummpro can help.
Long payment times
Most customers pay their bill when they pick up their car, but if you offer extended payment terms to customers for larger bills, or if you need to wait for an insurance company to approve a bill, you might be waiting several weeks or months to receive payment for your work. If you haven’t factored these longer payment times into your budget, you could run into cashflow issues.
Having a BNPL payment option like hummpro in your pocket means you’ll never have to worry about how to pay your monthly utility bills or buy the parts you need to serve your customers, while you wait for an insurance company to reimburse you. You can also offer your business customers with larger bills the option of using hummpro at checkout, while your other customers can use humm, the consumer version of hummpro. They get flexible interest-free repayment terms, while you get paid upfront. It’s a win-win.
High upfront costs
As a car mechanic, a lot of the money in your business is tied up in the parts you need to purchase to make repairs. While individual parts may not cost very much, they can really add up, and you generally won’t be reimbursed until the customer settles their bill. This means you may not have the cash to invest in new equipment or marketing to grow your business.
Instead of using your cash on hand to pay for parts, you can use hummpro.
All your purchases in a given month are bundled into a single balance, making it easy to stay on top of your finances, and you always have at least 30 days to make a repayment. By this time, the customer will likely have settled their bill, so it won’t impact your cashflow. You can also improve the customer experience by using hummpro to buy expensive parts on behalf of your customers instead of asking them to pay for them upfront.
Understanding the ups and downs of your cashflow cycle is the key to staying in the black. As an auto repair shop, you’re probably busiest in the summer and before school holidays, when people are gearing up to go on road trips. You can plan for these seasonal fluctuations by ensuring you have plenty of funds available to buy more car parts when demand is high and meet your financial obligations when business is slow.
Keep your auto repair business running smoothly with access to interest-free finance from hummpro.