Having the opportunity to visit and work directly with several collision repair facilities each week, I see a few common themes in the industry. If any of these are occurring in your business, it is time for you to make a change.
If we look back to the good old days, most shops didn’t have to do much work to get the cars needed to pay the bills. Cars just arrived and everything was good. There are many shop owners who are still in that mode of waiting for the cars to arrive. The difference is that the cars aren’t coming in the way they used to, and the owner is now wondering what happened in his shop, which is doing half the volume that it was doing in the past.
I also see shops that have very little diversity in where the work they are getting is coming from. Compare this to your investment strategies. If you invest all your money in one stock and that stock tanks, what are you left with? Your financial advisor will tell you to have some diversity in your investments to minimize the risks. But when you compare this to many shops today, they rely on one insurance program to provide the volume of cars and quickly find themselves in trouble if they see a decrease in volume or are no longer part of that program.
Lastly, I see many owners who, when they purchased the business, had the dream of making a ton of money and also the time to spend with their family and friends. The reality is that they find themselves working from 7 a.m. to 11 p.m.; they are painting cars, picking up and dropping off cars and parts and performing other similar tasks. The owner doesn’t have time to see their kids or take a vacation. Most often, this is due to lack of leadership and a failure to plan. Some owners focus more on getting the cars they have out the door than they do on the hundreds of thousands of dollars needed to support the business this year and next.
As a shop owner, you are the CEO of your business. However, if you expect to survive, you need to plan. You need to commit the time to plan. I’d bet that if you looked at what you did yesterday, you could have had an hour or more (somewhere) to focus on your business. You just chose to do something else with the time. So, what could change if you devoted an hour five days a week to focus on your business? Below is a breakdown that should help you make more money, grow the business and give you more time to spend time with family.
Monday
Devote time to review estimates or repair plans from the previous week. Was the estimate or repair plan built correctly? Did they comply with your internal rules or those of the insurance programs you are involved with? Are items missing? Compare parts and sublet invoices to the final repair order. Are parts or sublet costs missing on the final repair order? Are there discounts on the RO and if so, why? Look at the labor on the ticket. Are the times correct? Are there labor operations missing or not billed at the correct labor rate? How many supplements were processed and are they for the same items multiple times? There is so much to learn and discover in this area that it is worth your time.
Tuesday
Review your key performance indicators: total sales, average repair order (ARO), weekly gross profit margin, cycle time and shop productivity. Did you hit the sales volume needed to hit your goal? Did you have the car volume and ARO to do so? Did you hit the gross profit margin for your financial model? If not, which profit center was below your goal or needs to be worked on: labor, parts, paint and materials, sublet? Was the shop productivity where it needs to be to drive the sales and labor profit needed to support your financial model? These are all targets that need to be broken down to the ticket, the hour and the day for the estimators or repair planners and reviewed by you. You need to monitor these at least weekly.
Wednesday
Devote time to relationships and new business growth opportunities. Focus on your insurance relationships. Are there additional DRPs that you should be pursuing? Are your insurance KPIs leading your market area or are there areas that you need to improve? What current and potential business accounts need attention? What additional services are you considering offering? Work on diversifying your revenue sources.
Thursday
Focus on your marketing plan. How many cars do you need to hit your goals? How many marketing pieces or efforts are needed per day, per week, per month? How does your shop show up on a Google search? Are you getting positive reviews from your customers? What are your response rates for each marketing effort? What are the sales and ROI for each? Are there marketing efforts with no return that you should stop? Most management systems have the ability to produce customer reports. Review the reports, measure results and create/focus/measure your marketing plan. You need to devote time to marketing to grow your business.
Friday
Devote time to review what you learned from the previous four days (Monday through Thursday). Review each area of the business, and implement procedures and processes that have been found to be missing. Is there training that you need to provide to your team to make them more effective? Is there equipment needed to make the shop more productive or to implement a new service? If you discover an area that isn’t performing well, determine what needs to be changed and focus effort in that area. Involve your team in these decisions. If you involve them, they are more likely to adopt and support the effort. Devote time to adjusting your weekly, monthly and annual plans.
The key is to be proactive rather than being reactive. If you devote an hour each day to your business, you will begin to see success. If you have more time, you can go deeper into each area and really drive your business. Don’t wait until you realize you are in trouble. Start now.
You can visit http://www.ationlinetraining.com/abrn1311 to download a checklist that you can use as a guide to plan your time to allow you to focus on growing your business, improve communication with your team, delegate important tasks to your team, make more money and spend more time with your family.
