Incorporating Interior Restoration into Your Business 
Adding a Potential Profit Center

By Mark J. Bollman

When putting together the annual marketing plan and strategy, many businesses in the automotive aftermarket industry weigh the pros and cons of adding or expanding products and services to meet the evolving needs of customers. The addition of interior restoration services to an existing business, such as a car detail shop, carwash, dealership, etc., can build loyalty with new and existing customers, increase revenues and give a competitive advantage in an increasingly crowded marketplace. The United States alone spends $11 billion annually on used car restoration, which presents a significant profit potential for companies looking to grow their bottom line.

Interior restoration encompasses everything from restoring and dyeing leather, vinyl, fabric and plastics inside a vehicle; to repairing nicks in dashboards and door panels. As the president and C.O.O. of Creative Colors International (CCI), a franchise company that has been involved with interior restoration for more than 20 years, I have seen the segment evolve into a lucrative market. Offering services including interior restoration and repair can be profitable. However, it is not always the best option for all existing automotive aftermarket businesses.

When considering the addition of any new product or service as a potential profit center, several questions need to be addressed before taking action:

• Is this business compatible with your existing business model?
• Is there a demand for such a service among your existing customers?
• Are new customers asking for this service when they come in?
• What will this require from you in terms of capital and staffing?
• Will you have enough capital for the initial investment?
• How do you get started — what are the some of the options?

Is This Business Compatible with Your Existing Business Model?

Business owners need to evaluate if interior restoration and repair is a viable option to include as part of their current operations.

Listen to your customers — Is interior restoration a service they need and want? Customers are the best source to determine when a change is needed and can help you identify a gap in service offerings. If customers are frequently asking for a referral from you for interior restoration companies, then you are essentially turning away potential profits, as well as new client referrals. Customer requests can help you determine demand for particular services, as well as get a pulse of the changing marketplace.

Consider potential industries and target customers – Any place where there is vinyl, leather or fabric could present a potential customer. Auto dealerships, used car auctions, rental car companies, body shops, insurance companies, moving companies, furniture stores, restaurants, boats, limousines, busses, planes, casinos, hotels — the options are limitless. If your shop is situated near a boat marina or RV retailer, there are ample opportunities for targeting a new customer base right in your own “backyard.” The convenience of your own location can help determine which industries you are more apt to target.

The advantages of adding interior restoration services include diversification of your current product offering, value-added service and convenience to your customers, ability to tap into different industries and knowing that it will give you an edge over the competition.

What Will This Require from You in Terms of Capital and Staffing?

There are three key steps to determine if this is the right niche for you:

Research
The initial thought of adding an interior restoration profit center has already crossed your mind. Now it’s time to pick up the phone and begin calling area businesses that perform such services. Compare products and services offered, and ask what kinds of repairs are most requested by customers. Is it rips in leather or vinyl, or cigarette burn holes that need fixing? This will help you narrow down your focus as to what types of services you want to offer potential clients. Also explore existing customer requests that you have received previously to help you determine the demand.

Initial Investment
Investment decisions will need to be made at a financial and resource level. As with any business owner starting out, when adding on a new profit center, one needs to determine the business model to be followed and the subsequent start-up costs associated with it. In terms of resources, one would need to determine the materials, real estate, personnel and labor capital. A thorough cost-benefit analysis will help you determine if this is a feasible option for you. For example, if you invest in a franchise that operates mobile units, there is a significantly lower operating expense than with running a physical storefront location.

Time Investment

Time is always needed to get the second business up and running. Researching the industry and sourcing out individuals that have experience with interior restoration can be quite time consuming. Don’t underestimate how much time it will take to get started, and don’t get discouraged. Think of the initial time it took to begin the business you are currently operating. It didn’t begin overnight. Make sure that your profit center is just as successful as your existing infrastructure, and that customers are receiving the most care and quality of work. Once the foundation has been set and the research and time has been invested, the reward will seem far greater than if you were to spend a minimal amount of time setting up an additional profit center.

How Do You Get Started?

A decision must be made early to determine the route you will want to take with adding on interior restoration services as a profit center. The options range from partnering with a local business to investing in a franchise concept, or going on your own. All three options or business models vary in their method of operations, logistics and the cost vs. revenue structure.

Partnering with an Area Business:
Outsourcing services from an independent operator can benefit your business by allowing you to offer on-site interior repair services without having to turn potential customers away. If you partner with another business offering this service, you won’t have to worry about hiring employees, investing much time or dealing with the hassle of researching the industry. Usually with outsourcing, a customer will come in, ask for the service and an appointment will be made with the outsourcing company to perform the repair. Prior to beginning, the two businesses will have to determine the following: revenue split, added fees for time and labor, and the process through which a customer will pay.

When selecting a company to provide these add-on services, be careful to check their references, insurance requirements and coverages, and ask for several demonstrations. The company you choose should be fully trained and certified to perform the repairs. Outsourcing interior restoration can help full-service carwashes and detail shops provide additional services without huge additional costs.

Incorporating interior restoration into your business satisfies the customers’ needs while competitively positioning your business against other niches. Investing in your current business by adding an additional profit center can help target a new segment of customers, add credibility and increase revenues. In time, the customer is well-aware of the commitment your business has made to keep their satisfaction levels high — while also providing them with quality results and convenience to get the job done.