One year ago today in the January 2007 issue of BodyShop Business, I asked you, our readers, what you wanted to change about your business in 2007, what you wanted to accomplish and what you saw as your greatest challenge. Not surprisingly, I received some impassioned responses, one of which I feel compelled to print here:
“My biggest challenge in 2007 will be how to handle the situation with insurance companies and direct repair. So as not to sound hypocritical, I’ll tell you that I’m a Service First shop for State Farm, but I don’t feel as if I’ve given up my quality and integrity.
“What we’re failing to see and understand in our industry is how we’ve let insurance companies take too much control over how we run our businesses. We’ve let that happen because we’re afraid we can’t survive without being on their so-called ‘preferred list.’ Body shops no longer take pride in being the highest quality repair shop because they’ve given that aspect up to agree to the terms put upon them by choosing to be a so-called ‘preferred shop.’ The insurance companies could care less if they’ve chosen quality shops to participate in their programs because they’re only interested in those shops assuming all legal and sometimes financial responsibilities related to the customers during the repair process.
“The sad part about all of this is that we’ve undermined our businesses, we have no kind of unity with other shops and, just like you said, 2006 was a tough year with 2007 looking the same.
“Maybe we all need to regroup and consider what direction this industry is going in. I’m a new business owner so I don’t have very many answers. I just hope I have enough courage and faith to continue my business and become more successful without being controlled by insurance companies.”
I checked in with this shop owner recently, and good news: Despite being a fledgling shop owner, he’s still in business! A lot of that has to do with his 20-plus years of experience as a body shop manager. What has also helped are his State Farm jobs, which comprise the majority of his work. But he knows as well as anyone that he’s put all his eggs in one basket, which we’ve seen in the past puts a body shop in a perilous position. What if State Farm were to pull the plug tomorrow? What if they asked for one more concession or else? Not a great bargaining position to be in. Even he admits, “I don’t know if I’m established enough to take a hit and survive.”
He says he’s very busy, and I have no doubt he is. Besides being one of the only Select Service shops in his region, he gets a steady flow of work from family and friends he knows from having grown up in the area. But as we all know, just because a shop is busy doesn’t mean it’s making money. And he seems to know that, too. He has no illusions of getting rich just yet; in fact, all he’s hoping to do is generate the down payment needed to assume his building and property.
Despite having more cars coming through the door than he can handle, he’s looking to get on yet another direct-repair program, but not just any. Progressive, for instance, is an insurance company he’s diametrically opposed to doing work for. “Every day they’re trying their darndest to take cars out of my shop,” he says. Sounds familiar.
The one thing in his letter I disagree with is that shops are failing to see how they’ve let insurance companies control their business. I think many shop owners see that quite clearly, actually. They just feel powerless to stop it or are afraid to stop it. When there are too many shops fighting for too few jobs, fear and irrationality rule.
Another shop owner wrote that his New Year’s resolution was to “stop losing good work to DRP shops.” As to how to do that, he said, “I wish I knew.” He counted growth and convincing consumers that they can come to his shop as the two top things he wanted to accomplish in 2007. The greatest business challenge he saw for 2007 was steering, and he concluded his comments by saying, “After about 34 years, I’m just about toast but I’m not done trying.”
It took a long time for this industry to reach the crisis point it’s at today, and it will take just as long to overcome a lot of the problems that are now so entrenched in it. But theoretically, it only has to take till tomorrow for shops to decide to start running their businesses the way they want to. We all know that’s easier said than done, but it can happen, and we’ve seen examples of it throughout the industry.
So, what are your goals for 2008? Have you set any? Will you look back after 2008 is over to see which goals you achieved and which you didn’t and analyze why? Running a business without goals is like driving a car without a steering wheel. That kind of crash is definitely not good for your shop.
Jason Stahl, Editor
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