AirPro Diagnostics: Tips for Running a Family Collision Business
For many collision repairers, COVID was possibly the most significant disruptor they ever experienced in their lifetimes.
Some shops hunkered down, hoping and waiting for the storm to pass. Then, when it did, they picked up where they left off, hoping they had enough savings and financial resources to carry them through.
Others who did not have the financial resources or desire either sold out or shut down their operations to find other lines of work, or they simply retired. For the unfortunate who were ill-prepared or already hanging on by a thread, it was the last nail in the coffin, and the death knell tolled.
For some, however, it was a welcome interruption to the normal day-to-day hustle and bustle of the collision repair industry.
Embracing the Challenge
One shop owner who viewed COVID as a welcome interruption was one of my clients, Clay Hoberecht, who owns Best Body Shop in Wichita, Kan.
Hoberecht was a fairly new shop owner with big dreams and a desire to serve his community with the finest service and workmanship available. He had recently moved from his current building into an adjacent, larger building owned by the same person he had been leasing from. The new building provided much more space and had better drive-by visibility. He was maxed out financially and wagered that he could conduct enough business in the new building to be successful. Then, COVID arrived and couldn’t have come at a worse time … or a better time for some.
Never having gone through such an event and not having a clue as to how long it would last, what damage would be done or what hurdles and roadblocks would be created, Hoberecht embraced the challenge. Instead of hunkering down until COVID passed, Hoberecht put his plans into high gear and used the industry and economic uncertainty to his advantage.
Once the COVID mandates took place, Hoberecht closed his doors long enough to clean, repaint, remodel the office and production areas, and refresh the new building’s exterior.
While this was taking place, Hoberecht acquired the needed state-of-the-art equipment for the new, larger facility, including a new semi-downdraft booth, paint mixing room and detailing area. This helped his suppliers move equipment and, instead of laying off his employees, he paid them to help refresh, remodel, and get all the new and old equipment installed and functioning. These activities not only kept his staff busy and gainfully employed but also helped local contractors keep their employees working in a lean and stagnant marketplace.
Hoberecht also went to the owner of the building he was leasing and offered to purchase the property (which included his prior building). The owner was no doubt uncertain as to what effect COVID might have and if, when or how the economy might rebound, so he seized the opportunity to sell the properties to him.
Once situated, Best Body Shop had a grand reopening and began a comprehensive marketing campaign via Facebook and other media, including billboards, explaining why Best Body Shop was the best choice for collision repair.
Hoberecht found that due to a 20% nationwide reduction in miles driven, other shops reduced or curtailed their marketing during the COVID shutdown. This allowed him to capture great discounts and reduced pricing for advertising, sometimes enjoying two-for-one and even three-for-one pricing — and he continues to enjoy this today.
Although I’m delighted with Best Body Shop’s accomplishments and success, I share this information not to merely boast about Hoberecht but also to help others see stressful situations that may arise as opportunities and not merely setbacks or problems.
As business owners, we must measure situations as risk vs. reward, remembering that without risk, rewards are minimal. Investors know well the sayings, “No risk, no reward,” and, “With great risk comes great reward.”
So let me bring this to a close by outlining several other current matters that should be seen as opportunities by all collision repair shop owners.
- Rising costs of goods and services. As each of us know, costs continue to rise. The increase in oil prices has affected everything from fuel for our vehicles to heating and cooling of our homes and paint booths to paint materials and the simplest plastic products, such as mixing cups. Additionally, the rising fuel costs have created increased costs for transporting goods to local markets, which have caused food and service prices to continually rise. Insurance prices have risen due to the shortage and higher cost of replacement for used vehicles. It appears everything will continue to increase … except the collision repair industry’s prices. It is well past time for collision repairers to learn their true hourly costs of doing business and what it takes for each to earn a reasonable profit. I can assure you that “one-price-fits-all” is a losing proposition, and continuing to allow others to determine the pricing of your goods and services will put you in financial peril.
- The involvement of original equipment manufacturers (OEMs) and their repair procedures should be seen as a welcome change in the industry. While the repairer remains the repair expert, many of the processes and materials that weren’t readily accepted by insurers are no longer an issue of discussion and should no longer be negotiated. With OEM procedures now the rule, the repair is either performed correctly or it isn’t. There is no longer any good reason to do the wrong thing. Now the “gray areas” are no longer gray — they’re black and white and must be adhered to!
- New auto technologies, such as advanced driver-assistance systems (ADAS), provide new opportunities for profitability and additional profit centers. Several of my clients have opened stand-alone calibration centers to offer calibration services to other collision repairers, auto glass repair providers, fleet services, mechanical service shops and consumers.
The World is Your Oyster
The old saying, “The world is your oyster,” means that you can achieve anything you wish in life or take your business anywhere if you have the desire to do so. There is no limit to what collision repairers can achieve in this country; they’re only limited by the limits of imagination and knowledge … and knowledge can be gained. All repairers have the opportunity to seek individuals who can help them to expand their knowledge; all they need to do is decide. Being successful requires three bones: a wish bone, backbone and funny bone.
The COVID issue continues in various degrees. Some areas are lessening restrictions while others are not. There’s no telling how long the aftereffects will continue.
The pricing we see today will likely increase due to fears of inflation and will never return to pre-COVID levels. Therefore, we’ll all have to adjust to the new norm and manage our business in a way that keeps it viable. Viability means profitability, and profitability means viability; without one, the other cannot exist. How well you manage your business will be determined by how well you can develop new strategies that will benefit your company and community.
This is not a time to stick your head in the sand and wait until COVID and its effects are gone. That may never happen. This is the time for the brave to take flight, be courageous, explore their current pricing and seek new opportunities to augment their current service offerings.
This is the time to be a leader in your community and show your neighbors that you care and are strong enough to not only weather the storm but be there for them in their time of need. And when business returns to normal, don’t stop — continue to be that local business that people can always count on.