Episode #196- Leveraging the Slowdown: Turning Downtime into Opportunity

Episode Notes: 

The never-ending rollercoaster of collision repair business has taken another dip, and shops across the country are feeling the pinch. After years of unprecedented backlogs following COVID, the industry is experiencing a significant slowdown that's becoming the talk of every industry gathering. But rather than panicking, this moment presents a unique opportunity to strengthen your business foundation.
 
 This slowdown stems from several converging factors that are well beyond our control… however, successful shop owners recognize that these cyclical downturns are inevitable—and can be leveraged to your advantage.
 
 We explore 4 critical areas every collision center should focus on during slow periods. 

1st, finding creative ways to fill those empty stalls—from municipal vehicle contracts to specialty refinishing work that keeps your paint booth productive. 2nd, strengthening your marketing efforts, as data shows shops that maintained consistent marketing during busy times are significantly outperforming those who didn't. 3rd, implementing shop improvements that often get neglected during busy periods, like developing SOPs, optimizing shop layout, and conducting thorough financial reviews. Finally, catching up on training and education that positions your team to handle the next wave of technological advancements.
 
 The most successful shops view these slowdowns not as setbacks but as strategic opportunities to prepare for the inevitable upturn. By investing in these four key areas now, you'll be positioned to outperform your competition when business rebounds… because as history has shown us, it always does!

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Chapters

• 0:00 Industry Slowdown Reality Check
• 4:44 Four Key Areas for Improvement
• 5:04 Fill the Stalls: Finding Alternative Work
• 11:17 Level Up Your Marketing Strategies
• 15:24 Shop Improvements During Downtime
• 19:55 Training and Education Opportunities
• 21:24 Closing Thoughts and Call to Action

Transcript

Speaker 1: 0:00

Well, guess what? Our cyclical business slowed up again, right, but this time it's a major talking point at industry get-togethers and in the shops themselves. Some are alternating tech days on or off, or closing a little earlier, some are getting a little bit more creative and some haven't missed a beat, but everybody seems to be freaked out right now and concerned for their futures. So let's everybody stop, take a deep breath and bring the blood pressure back down a bit Now. Take this opportunity to see if we can leverage this little break in the action, take advantage of the slowdown and actually set ourselves up for the eventual comeback.

Speaker 2: 0:43

Welcome to the MindWrench podcast with your host, rick Sellover, where minor adjustments produce major improvements in mindset, personal growth and success. This is the place to be every Monday, where we make small improvements and take positive actions in our business and personal lives that will make a major impact in our success, next-level growth and quality of life.

Speaker 1: 1:12

Hey, what's up everybody. Welcome to the MindWrench Podcast. I'm your host, Rick Silover. Thanks so much for stopping in. If you're a returning listener and haven't done so already, please take a minute and click the follow or subscribe button and then rate and review the show. When you rate and review the show, the algorithms for Apple, Spotify, Google Podcasts, iHeartRadio, Amazon Music and all the other platforms will see that it's valuable and show it to more people that have never seen it before, and hopefully it can help them too. I would really, really really appreciate your help, sharing this word with your friends and family as well, and if you're a brand new listener, welcome. I hope you find something of value here that helps you in your personal or professional life as well. Please make sure to click the subscribe or follow button so you never miss another episode.

Speaker 1: 1:56

This week we're going to talk about what do we do when our workflow finally slows down. Our collision industry business may be very unique in many ways, but like most service businesses, it's very cyclical in nature. We used to be able to anticipate our workload by the seasons, right, you know slow in the fall when school starts and have a nice blast of work when deer hits here in the top half of the US We'd be busy in the wintertime, except for the holidays, then a little sporadic in the spring and much slower when the summer finally settles in.

Speaker 1: 2:28

Anyone that's been operating a collision center for at least 10 years or so knows this and has survived the ups and downs, the rollercoaster ride of crazy busy to hope to god. Something shows up here because we got nothing scheduled for next week, right? Well, all that went right out the window during COVID. We went quickly from nobody on the roads during the lockdowns and shops dead across the board to busier than ever, growing backlogs measuring in months, not weeks, and we've stayed right there up until about the fall of 2024. Well, guess what? Our cyclical business slowed up again, right, but this time it's a major talking point at industry get-togethers and in the shops themselves. Some are alternating tech days on or off or closing a little earlier. Some are getting a little bit more creative and some haven't missed a beat. But everybody seems to be freaked out right now and concerned for their futures. So let's everybody stop, take a deep breath and bring the blood pressure back down a bit Now. Take this opportunity to see if we can leverage this little break in the action, take advantage of the slowdown and actually set ourselves up for the eventual comeback.

Speaker 1: 3:39

Yes, there are a few factors in play here, compounding the issue. I believe everyone's burned through all their post-COVID work. Industry stats show that there were 9% fewer repairable claims, it has been a mild winter here in most of the northern states, insurance carriers are totaling vehicles at lower thresholds and there's been an air of economic uncertainty, mostly due to political chaos. Even the large MSOs are feeling the pinch with their reduced workload as well. So the big question is what do we do when it slows down? Well, that's a great question, one with many great answers, as well as a few bad ones. Before we get a beer bong table on top of the frame rack or start up that floor hockey league with your other local repair shops, or just say I'm done with this trade and turn your building into a grow house, let's take a few minutes to turn this negative into a positive and maybe just see how we can best leverage our available free time in this cyclical slow period to set ourselves up for the next wave of three to four week backlogs.

Speaker 1: 4:44

Instead of bitching, whining and worrying, let's roll up our sleeves and get to work on these four crucial areas for improvement. Number one fill the stalls back up. Number two level up your marketing. Number three shop improvements. And number four training and education. Number one fill the stalls back up.

Speaker 1: 5:04

The best way to get things rolling again in your empty stalls is to fill them up with work right? Maybe not always the normal work you've grown used to, but some work will run cash flow through your shop better than no work Agreed. I don't want to make this sound like it's simple, because it isn't, but it's not impossible either. It just takes a little hustle and a little creativity. The great thing about having a body shop is there's many types of work you can process that may not exactly be traditional collision, but can be accomplished with the same equipment, the same technicians, and it can be a great bridge to get you through the lean times without having to send your techs home unnecessarily. Here are a few accessible resources that I've seen in my career to gain some additional work some traditional, some non-traditional. That has been successful for many shops over the slow times we all face. Please take note here you may need to adjust your mindset a bit or check your ego before approaching some of these non-traditional resources, but remember the goal keeping your highly valuable techs working and not sitting at home or, worse yet, hunting for busier shops and keeping positive cash flow moving through your business. Those are your priorities Now.

Speaker 1: 6:15

First place to look for new work is your local municipalities, the police and fire departments, the county and city work trucks. These vehicles all usually take a pretty good beating during their work schedules and they need repairs consistently. Most already have had other shops doing their work, but maybe they're dissatisfied with current results and will appreciate a higher level of service. Maybe it could just be something simple like more professional communications, responsiveness or local reputation at your shop. It's not always price. How about the new car dealers in your network? Some dealerships in your market do not have collision shops and have to outsource that work to local body shops. Check with those service directors or managers. They may already be using another shop. But here's your chance to prove your business can provide a better experience for both the dealer and, most importantly, their customers. Start asking a few questions. You might be surprised at what you find out.

Speaker 1: 7:12

If you're looking for a competitive edge for your business or a more effective jumpstart to your personal development, I'll make your first step super simple. It is a fact that an incredible number of the most successful business owners nearly half of the Fortune 500 companies top-earning professional athletes, entertainers and industry leaders like Microsoft's Bill Gates, former President Bill Clinton, oprah Winfrey, richard Branson, amazon's Jeff Bezos and Salesforce's Mark Benioff, all have one thing in common they all have at least one coach and some have several that they work with on a consistent basis, someone that helps guide, mentor and support them, challenge them, help them set and achieve goals that move them forward and then hold them accountable to follow through driving personal and professional growth. Working with a coach has many substantial benefits. Just for an example, 80% of coaching clients report improved self-esteem or self-confidence thanks to coaching. 99% of individuals and companies that hire a coach report being very satisfied and 96% would do it again.

Speaker 1: 8:14

If, deep down, you know it's time to make those improvements in your business or your personal life that you've kicked down the road year after year. If you're tired of knowing there's a better version of you waiting to shine but unsure of how to bring that version to light. If you're tired of wanting to enjoy a more successful business but not sure how to start, and if you don't want to go another 12 months without better results but you don't want to go it alone, then take the first step. It's super simple. Sometimes talking to the right person can make all the difference. Go to wwwrixelovercom contact and I'll set you up with a free consultation call with me to see if one-on-one coaching is right for you. Fleet vehicles Now, most large companies have several vehicles within their fleet.

Speaker 1: 8:58

You know, just take a drive through a couple industrial subdivisions near your shop and you'll see that Service companies like the cable company, other utilities, plumbing, electrical, hvac companies, lawn services, pest control or any other type of delivery-based service has multiple vehicles that can need collision or paintwork Insurance carrier branch visits. I know this sounds really old school, but it still can be a fruitful venture if done right. Plan a few visits to smaller carriers in your market that don't have that 1-800 number. Come prepared with some solid, positive data about your shop that they would find attractive, like a one-sheet that includes maybe all your OE certs, your five-star customer reviews, your Google Ads stats, pics of your updated equipment, etc. Forget the free box of donuts. They don't care about that. Bring a quality leave behind with your company logo or name on it.

Speaker 1: 9:55

Then there's community projects Things like refurbishing local city or park benches, maybe the light posts, or how about the parks and rec playground equipment. There's plenty of opportunities throughout the year. Check with your local chamber of commerce for what may be needed. Then there's small batch paintwork. You know one of the great things about having a paint booth it doesn't really care what you're painting cars, trucks or widgets it provides the exhausting and baking just the same. Now I've seen many non-vehicle items being painted at various shops when they're slow and some of these additions can be so profitable that they can be continued even when the collision work picks back up.

Speaker 1: 10:35

Just got to get a little creative with your scheduling. One shop I know was painting a special glass coating on top of these big glass panels that went into high-rise buildings. Now this work was so profitable it continued for years even when the shop was busy. I had another shop that was doing custom color changes on home window frames, things like entrance doors on high-end homes, motorcycles, snowmobiles or boat parts for local dealers. I even had a couple shops that did nothing but boat motor propeller refinishing. I look at it this way Almost everything you can see has a coating on it. That means your opportunities are only as limited as your vision and creativity.

Speaker 1: 11:14

Now the second key to what you should be doing when you're slow. Number two level up your marketing. Unfortunately, the majority of collision centers don't make marketing a consistent practice. Most tend to wait till business drops off before they even consider spending anything in the advertising or marketing category. But the most important and positive impact of consistent marketing was highlighted during a recent 20-group meeting I attended and surprise, surprise those shops that kept their collective foot on the pedal when it came to advertising and promoting. Their shops were significantly busier than the rest. Some still have maintained a good backlog of work to boot. Now, just for reference, about 10% of your gross sales should be a healthy budget for your advertising and marketing, but I've seen many shops can get creative with just about 5% of that here are some areas for focusing your efforts Google ads.

Speaker 1: 12:09

These are not cheap, but the 5-star reviews and having an impressive number of reviews is truly the best measure of your shop's reputation. In today's world, having a rating of four and a half or better will put you in the top pages of search engines when someone's looking for the best or the top shops near them. There's no better spend of your marketing budget than Google ads, and it's best if you have a professional help you with this process, as it is a little tricky. Social media posts and engagement. Having a great, easy to use website and a healthy, consistent social media presence in today's connected world is essential for staying relevant with your car crashing community. And, if you think about it, everybody these days goes right to their phone anytime. They need anything A service, a meal, large purchase or just about anything that requires spending money. Most want a good recommendation, and they can get all that from their mobile device 24-7. Now if you don't show up when they search, it's game over for you. Right, and here's a pro tip You're busy running your shop and probably don't fully understand how this whole social media thing works, so outsource this task to Gen Zers or high schoolers. They tend to live right in this stuff every day and they know what gets eyes on a post right. Then there's radio spots. I know once again this may sound a little outdated as Yellow Page ads, but it's not. Many businesses thrive on the radio spots that play constantly and consistently on FM stations of the genre that resonates with their core audience. This type of media is not super expensive, it's easy to update and make changes to and it's great for upcoming events or announcements that can get to tens of thousands of years on a daily basis.

Speaker 1: 13:55

Then there's community engagement. So local community engagement is a fantastic way to not only expand your potential customer base but can also build a strong bond to your business within your community. Joining a chamber of commerce, attending some of their meetings, providing an educational event at your shop or offering something like a free seatbelt check or a free child care seat installation those type of events can build tremendous trust within your market. Sponsoring local athletics teams is also a great way to get your name out there in a positive light in a positive light. I've seen many shops for years, at the bare minimum, do this, mostly because their kids play on the team or they find it's one of the most affordable ways to promote their shop. Joining a Rotary Club, knights at Columbus or VFW post always presents additional opportunities to gain new business. And if you've never been part of a local B2B or a BNI group, those are just local, connected businesses within the community that meet regularly and exchange opportunities to work with each other. If you haven't joined one of those groups yet, what are you waiting for? I know several shop owners that love these groups. Not only will you create a new income stream for your shop, but many have made great connections and lifelong friendships from these groups. Not to mention, it's good to have a connection from your B&I family when you need goods and services that are outside of your expertise. Okay, that brings up the third area of focus shop improvements. Just being honest here, damn near every shop I've ever been in has had at least a few things that could be implemented or approved upon, whether it's a process flow, shop layout, equipment related financial metrics or something lacking in the training side of the business.

Speaker 1: 15:44

Today's ultra elite collision center operates at a very high level of efficiency and profitability, but we're not all there yet, right? So there's always a need to work on the business and not in the business. Can we agree on that? During our busy times, we use the excuse of being too busy to avoid or delay doing the things that ultimately help our shops run better. So while we have a gap in the production, it's a great time to knock a few of these things off our list. As I mentioned earlier, this cyclical business will get busy again, so let's be ready for it with a few needed improvements, starting with SOPs, or Standard Operating Procedures. They help build structure, consistency and accountability into running a successful collision center.

Speaker 1: 16:30

So what are SOPs? Well, they're prescribed written methods that are routinely followed for specific operations and situations. They help to ensure consistency in quality and work and are essential as a list of necessary tasks and how to perform these tasks for business success. Slps are not something new. They have been used in most industries for decades. However, their application in the collision repair business has been relatively less common, but it is starting to gain ground.

Speaker 1: 17:00

Here's a quick gut check to see if SLPs are needed in your shop. Does the way the customer service reps answer the phone, communicate with and onboard your customers seem to be inconsistent? Is every one of your ROs processed the same throughout metal, paint and final delivery? Are your Google or CSI reviews suffering due to delayed deliveries, poor communications or inconsistent quality? Well, if you've answered yes to any of those questions, then you need SOPs. If you don't have any written SOPs already, enlist your vendors to help building them. They aren't that difficult and there's many pre-built templates to customize available, and they're excellent tools for both new and existing employees to use. And they're excellent tools for both new and existing employees to use. And if you do already have SOPs, maybe it's time to review them to see if they need updating.

Speaker 1: 17:53

How about the shop production flow? Shop floor plan or layout may not be optimized for smooth production flow. Although reorganization of your complete shop may not be probable right now, there's many minor tweaks and adjustments that you can make while the stalls are not all full. That'll help the flow when you do get busy again. Also, it's the perfect time to 5S your shop. Please consult with your paint suppliers. They're very familiar with this process and can provide training on how to accomplish this improvement.

Speaker 1: 18:23

But, in a nutshell, 5s is just a structured program to clean, organize, remove all unneeded stuff or junk and install visual clues to help ID where things should go, when they're not being used and then how to sustain this clean, organized environment. Listen for a hint on what that looks like. Next time you visit a doctor's office or, more importantly, when you visit an ER, notice how all the carts, the supplies, the rooms, front desk areas, they're all set up visually, they're organized, labeled. You can quickly see exactly where everything is at. Then you can dive into your financials. You know you can't monitor and make improvements what you don't measure right.

Speaker 1: 19:06

Getting your arms around the financials of your business can seem impossible when you're slammed. Still not an excuse to ignore it. But to run a successful and profitable business, it is mandatory. Use the available time to review your KPIs. Look at the last three months of your P&L to see where your gross profit's been running. What about your net income? Are you in the 10% to 20% range or are you in the 0% to 5% range? If you don't know how to figure that out or aren't using a P&L statement just yet, there's no shame in that, but it would be shameful not to explore how to get help with that.

Speaker 1: 19:42

There are plenty of resources that can assist. Find a good business coach coach or attend some night classes, or just hire someone that you can trust. That knows the collision shop bookkeeping. Lastly, training and education. What can I say? I always hear shop owners, managers and techs put off any type of training or educational opportunities because they're simply just too busy. They can't afford to miss a day just for some stupid class. Sound familiar?

Speaker 1: 20:10

Now is the absolute best time to catch up on training or attending educational seminars, webinars, whether in-house or off-site. This really doesn't need any explaining. We all know the value of being up-to-date on training and there are multiple resources for this. Here's just a couple of examples Paint company trainings or offerings. You know CSR or front office estimating, blueprinting, production or throughput, painter certs or research. There's plenty available. Just talk to your paint company on what you need.

Speaker 1: 20:42

I-car or ASC modules there is always more trainings needed yearly OEM certification I would highly recommend gaining as many of these as possible and then use them in your marketing efforts. And then industry training provided by organizations like Mike Anderson's Collision Advice or Dave Lure's Elite Body Shop Solutions or Kristen Felder's Collision Hub and several others out there. And then, lastly, equipment manufacture classes. Catch up on the latest in different welding operations, digital measuring, plastic welding and bumper repairs and many other things. So there you have it Four key areas to spend your slowdown time in.

Speaker 1: 21:24

Number one filling the stalls back up. Number two leveling up your marketing. Number three shop improvements. And number four training and education. Now, there's no reason to just sit and play solitaire on your computer waiting for the next assignment to hit your email or walking customer to ask for an estimate. No need for a floor hockey league although that would make some really great YouTube videos, I'm sure and absolutely no need to start that grow house your buddies are trying to talk you into. There's many ways to utilize your slow time to work on your business and put yourself in a position to capitalize on the next wave of crazy busy that's eventually going to hit your door. Well, that's all I had for you today. Thanks again for tuning in. I really appreciate your support and I hope you have a great week. I can always be reached at wwwrickselovercom, where you can find all my social media links podcast episodes, blog posts and much more. Bye.