If you’re planning a long-distance trip – for pleasure or business – it’s likely you’ll take a plane to your final destination. Flying is a quick and effective way to reach a far-off land full of fun and excitement.
Of course, the scenario never changes. You settle into your seat and the boarding door closes. The flight attendants take up a spot at the front of the plane and run through their safety briefing.
Buckle up, the oxygen mask will drop in case of an emergency and make sure your seat belt is buckled at ALL times. And in the event we travel over water, there’s a life vest just in case we crash!!! Of course, they never say that, but this is what they are preparing the passengers for.
If you travel regularly – or even occasionally, I’m sure you know the words by heart. And, you may pay little attention to the message because you’ve heard it so many times.
The repair industry has seen unprecedented growth over the last two years; double-digit and highly profitable times! Even prior to the COVID outbreak (that idled most shops for no more than six weeks in 2020), there hasn’t been a major downturn in the U.S. economy since the 2008-2009 crash.
Needless to say, it has been a pretty smooth flight. So smooth, in fact, that some shop owners may have taken their eye off some key elements that will fundamentally stabilize them through potentially rough times.
So far in 2022, it has been announced that inflation hit a 40-year high, gas prices averaged above $4.50 per gallon and the fighting in Ukraine adds a degree of uncertainty to our economy.
Uncertainty breeds uncertainty. Miles driven drop, customers tighten their grip on their wallets and car counts start to slow. As sales slow, technicians aren’t as busy and the money train comes off the tracks.
Business planning is a key element to your shop’s success and being intentional about each decision your shop makes adds to the likelihood that your business will thrive in good and even somewhat challenging times. Like anything, you should prepare for the worst and hope for the best, so if something heads the wrong way you are not caught off guard.
FIVE POINTS FOR BEING PREPARED
NO. 1: FOCUS ON FUNDAMENTALS.
Blocking and tackling drills kick off the NFL season, and while 40-yard times may get the most attention from fans, coaches focus on the fundamentals. During OTA’s and throughout the season, the fundamentals are what any great team or business is built upon.
Review the trends of the essential key performance indicators (KPIs) in your shop daily.
- Average repair order
- Hours per repair order
- Car count
- Daily sales
- Inspections completed
- Approved vs. deferred repairs
Hopefully, you have a daily sales goal. Once you set your sales target, monitor it each day. How are you trending: up, down or sideways? Next, take a look at your KPIs. How did you do that day? What needs to be adjusted? Is there a KPI that sets off an alarm? An example might be a high car count but low average sales per repair order. You have a busy shop but not a profitable one. Figure out what caused it and address the “why.”
If you’re looking for an easy way to monitor key aspects of your shop, ask about our SOC Scorecard. Visit shopownercoach.com/scorecard-demo to see an overview of a simple, automated method to track your numbers.
NO. 2: MARKET YOUR SHOP RELENTLESSLY
Market to your existing customers, reminding them that you are there and reviewing the services you provide. Most shops are full-service, yet how many customers know your shop’s true capabilities? Never take for granted that your customer “knows.” Assumptions like that are the reason they may end up at a competitor just because they received a mailer that resonated with them at the right moment.
Here’s a solid guideline: set aside no less than 6 percent of your sales as an advertising and marketing budget, allocating 4.5 percent of sales to marketing to existing customers and 1.5 percent of sales to new customer acquisition.
NO. 3: CREATE AWARENESS OF A WELL-MAINTAINED VEHICLE
With high gas prices, consumers are looking for ways to save money. It’s a well-known fact that a properly maintained car is a more fuel-efficient one. Use your website, social media, counter displays, slides on your digital menu board, on-hold-messaging and email campaigns to promote what your shop can do to help. Highlight your shop’s capabilities to solve their problems and, most importantly, your digital inspection program to find problems before they become critical.
The Car Care Council, AAA and even the EPA validate the correlation between maintenance and fuel efficiency. Don’t take for granted that your customers know about improving fuel efficiency or that they will look to you for help on their own.
While Tesla and other electric vehicles garner widespread interest during periods of high gas prices, the average consumer will connect the dots that the total cost per mile driven is likely higher with electric vehicles versus internal combustion-powered vehicles. In many cases, it takes decades of ownership to realize a net savings driving an electric car.
Awareness and education might be the difference between your ability to continue to maintain a customer’s current vehicle and their purchase of a new EV.
NO. 4: CONTROL WHAT YOU CAN CONTROL
The topic of expense management may not be as cool of a topic as new equipment, hiring, marketing or promoting your shop. But, any time spent looking over what cash is heading out the door will always yield dividends. A careful review of your expenses can reveal unexpected dollars sapping your bank account and going into someone else’s pocket. In good times it is easy to disregard a can of brake cleaner here, a broken part there or half-used fluids with the cap missing, simply because the cash is flowing.
Establish goals and communicate to your team what you want from them. Encourage everyone that doing their part in expense management is in the shop’s best interest and theirs.
NO. 5: COMMUNICATE WITH YOUR TEAM
Think back to what it was like during the early days of COVID. The outbreak, the lockdowns and the uncertainty put all of us on edge.
With the current economic and global climate, your team might have a similar feeling of uncertainty that we all had in early 2020. Take some time in an upcoming team meeting or in one-on-one conversations to gain some insight into the mood of your team. Then, take action accordingly.
As a leader, your job is to look ahead, steer the ship and rally the team. Your position as the leader of your shop puts you in a position to move the emotions and outlook of the entire team. Keep in mind, you set the tone in your shop be it positive or negative.
If we pay attention to the headlines we can get a glimpse of what might come. It’s kind of like autumn: we know when the leaves turn and days get shorter that colder weather is right around the corner. Maintain your awareness. In doing so, you get a glimpse of what’s up ahead and won’t get caught out in the cold without a jacket; nor will turbulence ruin your day.