By Tony Netherly
We all have most likely made ourselves a promise or a resolution at some point to change something in our lives, and it is usually for one of two reasons: 1) We have found ourselves in a very uncomfortable, or maybe even downright painful place; or 2) boredom has overtaken us and we just want something different.
As fast as things are changing every day, I would be surprised if anyone who is engaged in the collision business is bored. However, every collision shop owner I have spoke with in the last couple of years seems to be really feeling the discomfort and pain, so here are a few New Year’s Resolutions I think our industry needs to make, or better yet — just do.
1. Multiple Shop Owners: Secure your business with quality and service. It is a free enterprise, and the business person who develops a footprint that expands to multiple locations is certainly not doing anything wrong, but you need to play fair. Do not discount everything you do to secure business, because it is destroying our industry, not just your single-shop-owner competitors.
2. Single Shop Owners: Manage your business! Many small shop owners need to follow the same practices that larger multiple-shop owners follow and track the numbers. Even if you are in your business every day and feel like you are on top of everything, you will be surprised what is escaping, and it is usually your profit.
3. OEM Parts: Accept that there is a place for the aftermarket parts industry. Every technician loves working with OEM parts, because they fit better and take paint better. The problem is they are more expensive, and the shop owner pays for them out of his profit. With the alarming rate that cars are totaling, limiting what we can repair and squeezing margins, we cannot survive without the aftermarket parts industry.
4. Aftermarket Parts: Embrace a standard. Not all aftermarket parts are created equal; and if you cannot adhere to some form of certification process, you should not enter the structural parts arena.
Aftermarket is certainly a viable option on many vehicles, but we do not need to sacrifice consumer safety in order to sell a few more parts.
5. Software Providers: Communicate with each other. There are some great systems out there, but not one of them has it all.
If a shop owner could pick and choose the pieces without having to hire both a programmer and an IT guy to make it work, that would be great. We are definitely behind the technology curve, and we need the software companies to help us catch up.
6. Paint Companies: Stop buying each other’s business and figure out how to help shops get profitable while remaining profitable yourself.
The truth is, paint is such a small piece of the pie that it could be given away, and a poorly run business would still lose money. Price increases affect gross profits. Helping shops track and analyze costs in order to document shrinking profit margins caused by product price increases would be a huge help. If shops understand what products they’re losing money on, they can be more careful making selections. Also, having documentation regarding increased costs would be an advantage when processing rate requests.
7. Insurers: Educate your customer. It happens over and over again that a customer has an accident and discovers in the repair shop office that they have a large deductible, don’t have full coverage, have no rental, and are restricted to aftermarket parts. How do these people buy a policy and have no idea what it covers? I recently had questions about my own policy and went to my agent, who could not even produce a copy.
8. Equipment Companies: Make the tools we need affordable. Every tool company seems to be trying to put one more bells or whistles on their equipment and the prices just keep going up. Give us quality without the extras, at a price we can afford.
At this point I will get off my soap box and be real. Every issue I have just commented on is going to cost someone some money. But the facts are that the Collision industry is shrinking, and there are only so many cars to repair. There are also only so many parts and so much paint to sell.
My suspicion is that what you might lose in one area would be found in another, or gross profit would actually be so much better, it would more than balance out. Think about it: good cycle time, happy consumer, and everyone making a profit. It almost sounds like a wonderful life. •
Tony has worked in the collision industry for over 32 years. Starting as a technician and working up to manager as well as spending time as an estimator and vocational instructor have given Tony a wide-angled look at the industry.
Tony is also Tennessee’s busiest I-CAR Instructor and the Executive Director for the Tennessee Collision Repair Association. You can contact Tony at 731-394-5628 or E-mail Tony at tony.nethery@yahoo.com
