When work slows down, shop owners need to get busy. Now isn’t the time to think there’s nothing you can do to respond to the current situation.
Here are some positive steps you should consider taking.
Close out those repair orders (ROs.) I’ve been preaching for years that ROs should be ready to close the day the car leaves, but I know that often doesn’t happen. Now is the time, however, to get any outstanding ROs closed and billed, and then recommit yourself to not getting behind on supplements and paperwork.
Don’t put off knowing your options. Now may be a good time to get your bank or landlord on the phone and find out what your options are if you’re struggling to make a full payment. They might be willing to let you skip some or all of a month or two and tack that money on later, over time. Have those conversations before you really need them, so you’re prepared.
Manage your credit. Hopefully you have a good credit line established before now with a bank that’s a good partner for your business. But if not, start those conversations.
Follow up. I mentioned this in a previous column about improving your “capture rate.” When a DRP assignment comes in, start contacting that potential customer immediately through multiple means. Go back through estimates you’ve written in the past six months to follow up with customers who didn’t schedule in the work. These are things that are easy to let slide a little when you’re busy, but now is a time to make them a priority.
Get them committed. Consider asking a customer scheduling a repair for a small deposit to help ensure they don’t back out. Tell them parts can sometimes be a little harder to come by quickly, but for, say, a 10% deposit, you can start the parts order immediately to help ensure they are there when the car arrives.
Chase your money. If you have parts to return, that’s like money gathering dust on your shelves. And get after your receivables; that’s actual money of yours sitting out there.
Look at your expenses line-by-line. There are “must-have” expenses and there are “nice-to-have” expenses. Your estimating software subscription and business insurance are “must-haves.” But office cleaning services or landscaping services may be “nice-to-haves” but things you could be doing in-house.
Don’t stop marketing. One expense I would not cut out is marketing. Now more than ever, your name has to be out there, top of people’s minds when they need you.
Reduce staff only as a last resort. I’m not a fan of furloughing or laying off staff unless you have little choice. There are some shops that may have gotten “a little fat” before this in terms of office stuff. But in any case, if you have to do it, make your choice judiciously. Consider who are the people you could always count on to be willing to stay late or come in during a weekend to help a customer or get a car out. Hang on to the people who are really going to help you and your business.
If you must cut hours, do it fairly. If you’re trying to reduce the economic hit by spreading a reduction in work time for all of your hourly employees, try to find ways to do it equitably. One shop told me they needed to temporarily have each of the company’s five office staff take one day off a week. Each week, they drew names out of a hat to determine, for the next week, who was staying at home each day, so everyone took the same cut, and the choice was random and fair.
Keep them busy. The last thing you want is people standing around with nothing to do but get negative or scared. If there’s no work, have employees take online training, or do maintenance and repair of equipment and the facility. Or offer them free use of the shop, by letting them bring in family members’ vehicles to change the oil or brakes. Keep them busy.
This is no time for those leading a business to sit idle and just wait for things to change.
Mike Anderson