Running a Shop

Disoriented by Losses

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RainsDisorientedByLosses

Last year did not end very well. And I was caught off guard. Not a good feeling.

I haven’t been ready to write about it until now as I was kind of licking my wounds. Several deals fell through. I had hoped to acquire three shops in a market we are already in. All three deals fell through and two of them were very far along in the process. I also had plans to take on investors and start on a path toward rapid regional expansion, even beyond those three. And to top it all off, on the home front, I had three offers all fall through with buyers of my home. It felt like a year of let-downs, to be honest. After 15 straight years of growing and pretty much landing every goal and deal I put my mind to, the streak had ended. Reality check. Wake up call.

The icing on the cake was the end of the year profit and loss statement. It wasn’t pretty. We invested heavily in the expected growth. New tools. New people. New capacity. We were leaning into growth and staffing and equipping accordingly. But the growth didn’t come. However, the bills did! Equipment is expensive. Adding staff is expensive. Paying attorneys for deals that never actually materialize is expensive. We ended the year across the board with very little margin, financially or otherwise.

That was a startling wake-up call. And I can assure you, it had my full attention. I was now fully awake to feeling like a failure. No growth through acquisitions. Hardly any organic growth. A bulging payroll. And bills for equipment that had to be paid.

I was at a loss for what to do. I started the year feeling very disoriented and unsure of myself. All I could think to do was get back to some basics. I feel like the basketball player who was trying to dunk and do spin moves but needed to re-learn simple skills like dribbling and layups.

What are the dribbling and layups for body shop leaders? I landed on three things.

1. Audit ROs.

This is the kind of work that I do not necessarily enjoy but it always yields great dividends, mostly in the form of learning where we can improve. My process is pretty simple: I open an RO and work through the tabs backward, noting anything that didn’t seem right.

I start by looking in the event logs and notes. Did we fully fill out the event logs for when the vehicle was dropped off, started, completed, delivered? Did we upload a final bill if it’s one of our insurance partners? Are there notes that verify we kept the customer informed and reasons for any delays or problems with the file?

Next, I move onto the attachments. Do the photos tell the story of the damage we were to repair? Are there scans of our quality control hard stops and OEM procedures? Are the parts invoices and four-wheel alignments spec sheets attached? Do we have a direction to pay?

And on it goes. Tab by tab, taking notes on anything that is missing or doesn’t make sense and following up with the managers in charge. It’s not rocket science but I can tell you after doing roughly 50 audits this year, I have started to see patterns of problem areas. And from those patterns, I can start to put new processes in place and hold my team accountable to improve.

2. Deep dive on the P&L.

Diving deep on the P&L means going line by line and cross referencing everything with QuickBooks, credit card statements and the bank statements. This is probably my least favorite thing that I have to do. But I have to. If I want to know where my money is coming from and where it is going exactly, this is the only way. When I had one shop, it was pretty straight forward. Now, with three locations, I found it is easy to get sloppy and out of touch. This is how I’m getting back in touch with my financials.

3. Establish a meeting rhythm.

We have faithfully had a weekly results meeting with all the general managers of the shops. But, where I let things slide was in the weekly one-on-one meetings with the GMs and also the monthly meetings with the whole team coming together over a meal. This is where I get to share the most important things we need to focus on and build that culture of care into the whole organization.

This one is simply getting repeatable days and times on the calendar and marking them out for the entire year. Will there be exceptions? Of course. But that’s better than trying to be spontaneous and just hoping for the best week to week. There is a fine line between delegation and abdication. I let things slip into the latter more often than I care to admit.

Are you feeling like your shop is out of control in any areas? Hopefully you can find some simple handles to grab a hold of like I did and start to reign things in. The last thing you want is to be surprised by poor performance. Trust me. I’m speaking from painful, recent experience. But simple handles go a long way toward course correction. I hope to have a better report on that soon.

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