As the owner of a smaller shop, I’ve always tackled problems head-on. From technical challenges to customer concerns, I’ve handled it all with determination. However, for far too long I ignored the inevitable. I convinced myself that if I kept working hard, the economic pressures and industry changes wouldn’t affect me. Like an ostrich with its head in the sand, I hoped that things would eventually improve. But now, the reality is clear: I’ve been avoiding the writing on the wall.
The Small Changes I Thought Would Work
In hindsight, the changes I made were more like Band-Aids than real solutions. I updated paint and material invoicing, improved efficiency with technicians, and tweaked marketing strategies. While these were important, they didn’t address the industry shifts that could determine my business' future. I took the easy route, hoping things would get better on their own. But the warning signs were there: the insurance industry is pushing for lower repair costs, competitors are undercutting prices on fleet work, and whispers of an impending recession are growing louder. Yet, I kept hoping that if I ran my shop the same way with small tweaks, things would work out. That’s not how the market works.
The Wake-Up Call
Now, it’s impossible to ignore the storm on the horizon. The insurance industry continues to undermine shops to lower costs, and the industry is facing rising material costs, fewer skilled laborers, and growing competition. Additionally, consumers are looking for cheaper, faster options, making it clear that old strategies won’t cut it anymore. I stuck my head in the sand, hoping the economy would improve or insurance companies would start paying for what’s truly needed. Instead, I find myself further behind than if I had acted sooner.
The Steps I Should Have Taken
Looking back, there are key steps I should have taken earlier to better prepare for today’s challenges:
- Fighting the Insurance Industry: I spent countless hours negotiating with insurance companies, but we still struggle with what they pay for labor, paint, and supply costs. I could have better utilized my team if I weren’t so focused on insurance jobs that don’t pay what we deserve.
- Diversifying Revenue Streams: I relied too heavily on traditional collision repair. Adding services like detailing, paint protection, or mobile repairs could have helped offset slow periods and provided a buffer against tough times.
- Investing in Technology and Training: I’ve been slow to adopt new technology in repair methods and customer service management. Investing in tools like CRM systems and AI could have improved operations and customer experience, especially during tough economic times.
- Building Financial Reserves: While I’ve always been good at saving, I could have put more focus on building a larger emergency fund to withstand slowdowns. A strong financial cushion would have allowed me to ride out lean periods without drastic cuts or stress.
- Focusing on Employee Development: My team’s success directly impacts my shop’s success. I should have focused more on team-building and providing ongoing education to improve efficiency and work quality.
The Road Ahead: Weathering the Storm
Although I can’t change the past, I can take steps now to turn things around. The challenges of a recession and evolving industry dynamics aren’t going away, so here's how I plan to face the storm:
- Strengthening Relationships with Field Adjusters: I’ll work to build stronger relationships with the few adjusters still out in the field. They are often the ones trying to help us, and fostering these connections will help in the long run.
- Strengthening Relationships with Customers: Working with my team and me on building those personal relationships with customers we don’t know so they feel welcomed and comfortable at the shop and want to use us and recommend us, even if they only come in one time to the shop.
- Expanding Services: I’m diversifying my offerings to include more mechanical services, paint protection, and paintless dent repair, all in-house. These services will act as a buffer when traditional collision repair slows down.
- Building Financial Reserves: I’m focused on financial planning, ensuring I have enough reserves to handle potential downturns, and cutting unnecessary spending.
- Investing in My Workforce: I will continue to invest in my team’s development, both in technical skills and customer service, to ensure they are ready for new repair methods and can offer superior service.
Conclusion: No More Hiding
The storm is coming, whether in the form of a recession or ongoing industry changes. For too long, I’ve kept my head in the sand, hoping things would improve. But now, I understand that my business will only survive if I make real changes. By confronting these challenges head-on and adapting to the evolving landscape, I am determined to weather the storm and come out stronger on the other side.
