ABRN offers financial help to collision repair shops to weather the current recession

Jan. 1, 2020
ABRN will be posting financial-focused articles to help shops survive in difficult economic times.
Sramcik ABRN recession KIP benchmarks key performance indicators

You don't have to work in business very long to discover that sources of information, inspiration and direction can be found from all over. One of the best sources I found in the past year was the owner of a pizza shop near my home.

I'll call him Ted. Ted turned out to be a great source of information since before becoming a successful pizza entrepreneur he worked in the automotive industry for more than two decades. Ted worked in management both in sales and service and made a pretty lucrative living for himself – actually a very good living. That explains why, when he hit middle age, he was able to shift gears and get into food service where he soon made an even better living. For Ted the transition was easy. He said the basics of any service-based business were the same.

I used to talk to Ted nearly every Sunday last fall during football season when I'd pick up an order. Our main topic of conversation was surviving in a down economy. His business was feeling the effects. His response: cut hours; try special offers and, mainly, "just keep working at it," which he did.

Right after the Super Bowl, I found out he was shutting down the parlor. Great, you're probably thinking, just what I needed to hear – a depressing business story.

Actually, this is something of a success story. Let me explain.

Ted actually owned a small chain of pizza shops. The one he closed always had been the weakest link, which is why he spent Sundays there – to concentrate on ways to fix it. Ted ran his entire operation by the numbers. He continually tracked his business using every possible financial means and factor. He utilized benchmarking and KPI much the same some of you do.

He knew all of his costs and how each impacted his bottom line. Ted tracked every dollar that went into or left his business. He could tell you, off the top of his head, how many orders of pizzas, wings, sodas and other items he had to sell each hour to make an acceptable profit off the labor, materials, utilities and other costs he had invested.

Here's a key point. When he shut down this particular shop, it was still making money. That profit was declining sharply with each month, sinking well below the drop off he was seeing at his other shops. Ted factored in the rate of that decline with projections for the local economy and realized he quickly would be running in the red with no upturn in sight.

He closed that business to protect the rest of his operation. Because he closed it before it began running a deficit, he didn't lose any money and was able to transfer the employees from that location to his other businesses. He made a necessary cut to keep the rest of his operation intact. Because he monitored his business so closely, he made that decision on his own time. He didn't suddenly discover the poor shape his business was in and have to scramble to make a decision.

We want to help you make the same kind of informed decisions so your business too can survive. This month's cover story "Financial Benchmark" (page 58) focuses on benchmarks, KPIs and how you can use this data to both weather the current economic storm and keep your shop on the right track when times are good.

Bolstering this information, we've also produced on-line exclusive stories covering the investments you need to keep making, key cuts you should be focusing on and vital business training for you to pick up. We'll be offering even more help in the days and weeks ahead. We're dedicated to helping you, so stay tuned.

Here's one bit of info I'll leave with you today. An economic downturn can be an ideal time to remake and grow your businesses. It grants all of us the time to work on our operations and can help motivate employees to be more open to change to protect their livelihoods. It's also a great time to reach out for help from colleagues, business associates and anyone with a good mind for business - whether that person is repairing cars or selling pizzas.

Contact info: [email protected]

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