5 Tips to Jumpstart Your Year
Many shop owners are asking themselves these days, “Why should I stay in the business? Am I really still profitable?” Shop owners who own their property may be asking, “Are the land and buildings worth more than what I make operating the business, after taxes, insurance and expenses?” Even with the drop in property values, the answer may be “yes.” One reason is that a collision repair center often occupies a fairly large space—one that may be attractive to a buyer looking for enough space for a large retail operation, mini-mall or chain store.
But even after a shop owner has looked at all options for selling the business, many, if not most, opt to stick it out. Why is that? Quite simply, being in business is often enjoyable. Sell, and you just may feel lost without industry friends and contacts. They might not say it exactly this way, but most owners and managers get a feeling of satisfaction from operating a business that they have worked at so long—a business where they understand every detail of their shop. Those who have survived in business a long time by now have developed a smoothly performing operation that they take pride in. A shop owner like that is unlikely to walk away.
Opportunities to Thrive
Assuming you choose to continue to play the game, what do you need to do to survive in this unusually difficult economy? Many authors and consultants suggest reviewing and possibly creating anew everything in your business every couple of years. A certain amount of this is dictated by changes in materials and technology. You may have already switched to waterborne paint. You may have added equipment to work with aluminum, magnesium or carbon fiber materials. But these are only a part of what you need for a New Year’s review and renewal.
Expand on the cheap
Given the economy, there may be a tendency to focus only on obstacles and problems. Do that, and you may miss out on new opportunities. While some shops have folded, other owners have seized the opportunity to buy good value on the cheap. Some have grabbed a shop at half the price they would have paid just a few years ago. Others have snapped up a used frame machine or spray booth at a fraction of what they would have paid not long ago.
Upgrade your talent
Probably the biggest opportunity in a slow economy is the available pool of talent. As shops close, perceptive shop owners see an opportunity to hire superior performers. When business is a bit slow, it may also be an ideal time to renew your existing employees: Get them training to upgrade their skills. Involving the entire shop in a renewal program should boost morale and may also elicit worthwhile ideas and suggestions.
Secure new funding
Another unrecognized source for renewal is funding. While it is true that many banks are reluctant to lend these days, new sources of funding are springing up. Credit unions have moved away from the narrow constituency that they served not long ago, to serving a much wider range of depositors and borrowers now. Venture capitalists may also be interested if you are providing some new service, perhaps aimed at electric or hybrid vehicles. SBA loans may also be easier to obtain, and other government programs are providing money for some small businesses. And a little research may turn up a local bank that stayed clear of subprime loans and still has money to lend to qualified businesses. There may also be a new opportunity if a supporting business closes in a shop’s area. I’ve suggested to some shop owners that they should put in an alignment system or a dash and theft damage specialty, or a glass specialty. Often, I’ve heard that they have a close working relationship with a provider of one or more of these specialties and don’t want to infringe on their business. But now some of these providers may have closed, freeing the shop to add the service.
There’s no guarantee any of these opportunities will make the business more profitable than selling the property. But there is an element of excitement in attempting to recapture that feeling of providing high quality services that please customers. When you do it well, those grateful drivers may eagerly write glowing customer satisfaction statements. Renewing old enthusiasms may be the best strategy of all.
Tom Franklin, author of Strategies for Greater Body Shop Growth, has been a sales and marketing consultant for more than 40 years.