Hempy: Maintain Your Margin When Costs Rise

When costs increase, many operators immediately look outward. But the best response usually starts inside your own operation.

Key Highlights

  • Identify and eliminate small inefficiencies, like unnecessary product use or slow bay transitions, to reduce waste and improve margins.
  • Enhance team productivity by optimizing service flow, clarifying responsibilities, and training for speed and consistency without cutting hours.
  • Implement thoughtful pricing strategies to reflect service value, ensuring profitability while maintaining guest trust and satisfaction.
  • Prioritize guest retention through excellent service, accurate work, and positive guest experiences, as replacing lost customers is costly.
  • Focus on consistent disciplines—better controls, training, and guest care—to strengthen your operation during tough economic seasons.
 

There are seasons in our business when growth comes easy. Costs are stable, price increases are normal, and growing car count can cover a lot of mistakes. Then there are seasons like this one. Oil moves up rapidly. Labor only gets more expensive. Insurance renewals come in higher than expected. Parts and supplies keep creeping upward. Suddenly, small inefficiencies that once felt manageable begin to matter a great deal.

When costs rise, many operators immediately look outward. They blame the market, the supplier, inflation, or the competitor down the street. Some of that may be fair. But the best response usually starts inside your own operation. Rising costs have a way of exposing what was already weak.

The first place to look is waste. Waste is rarely dramatic. It lives in small daily habits. Too much product used on routine services, poor inventory controls, or unnecessary overtime. It can look like rework caused by preventable mistakes. Slow bay transitions that require extra labor hours to produce the same number of cars. One missed detail may not seem important, but multiplied across hundreds of vehicles and many weeks, it becomes expensive. We recently discovered that our team at Oilstop was flying through the brake part cleaner. It wasn’t because they were trying to be wasteful, but because they were using it for all undercarriage cleaning. A simple change can yield significant savings when you pay attention to waste in your business.

The second place to look is productivity. Margin pressure does not always require cutting hours. Often it requires getting more from the hours you already pay for. Is the team positioned well during peak times? Are responsibilities clear? Is the service flow efficient, or are team members making extra steps all day long? Have you trained for speed and consistency, or are you hoping experience alone will solve it? Better systems often create better margins without reducing service.

Next consider pricing discipline. Many operators avoid price increases too long because they fear losing guests. That fear is understandable, but delayed pricing decisions can quietly do real damage. A thoughtful price adjustment, paired with clear value and a strong guest experience, is often better than slowly eroding profitability month after month. I meet many operators who haven’t raised their prices in years. While scary, price increases (within reason in your market) are important to value your service properly. It can allow you to make sure you aren’t cutting costs where you shouldn’t, like hiring great talent to serve your guests. Guests will notice price, but they also notice trust, convenience, friendliness, and confidence. Price is only one part of the decision.

Lastly, protect retention. In a rising cost environment, replacing lost guests is your most expensive cost. Marketing to attract a new guest costs more. New competition can be louder. The cheapest guest to acquire is always the one already in your bay today. That means the greet matters. The service quality matters. Accuracy matters. How the guest feels when they leave your bays matter.

There is no magic answer when costs rise. Even the best operators do not solve it with one bold move. They will solve it through dozens of small disciplines practiced consistently. Better controls. Better training. Better pricing decisions. Better guest care. When the environment gets harder, fundamentals matter more. And operators who stay sharp during difficult seasons usually come out stronger on the other side. Keep up the hard work serving your guests with excellence.

 

About the Author

Scott Hempy

Scott Hempy

Scott Hempy leads the team at Oilstop Drive-Thru Oil Change and Happy's Drive-Thru Car Wash. Oilstop and Happy's are rapidly growing their footprint of oil change and express car wash locations across the West Coast, combining convenience with an outstanding emphasis on guest experience. Prior to Oilstop & Happy's, Scott was the founder and CEO at Filld, a SaaS-based software solution for last-mile oil and gas delivery companies. He was recognized as a member of the Forbes 30 Under 30 class of 2016 for starting Filld. 

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