In many cases, partnerships can either make or break your business.
A topic that seems to come up frequently in discussions today concerns drivable versus non-drivable repairs. Whether a vehicle can be driven or can no longer move under its own power following a collision can have a big impact on a shop’s ability to repair, both in terms of time and capability.
Multiple challenges
Since the COVID-19 pandemic, the collision repair industry has had to contend with multiple challenges and one of the biggest many of us face currently is shop capacity. Quite simply, there aren’t enough front-end administrative staff and back-end technicians to handle the volume of R/Os we did before the pandemic. Couple with the fact that in many cases, collision centres have shut down or suspended their towing operations, and the result is a challenging situation when it comes to repairs, particularly heavier hits because they struggle to get parts and get those repairs completed efficiently and profitably.
That’s why, it is more important than ever to have good relationships and work with good quality partners and stakeholders. A key example is your insurance partners. If you are working with an insurer that cuts your estimates and challenges almost everything you do, the result can be a very difficult environment just to get a proper estimate uploaded in a respectable amount of time, never mind the repair itself.
If you find that is the case, and the process is further dragged out by requests for more images and documentation, that can have a huge impact on your shop’s productivity and profitability. Every time an estimator touches that file, they’re being pulled away from other tasks, such as bringing another vehicle into the shop and having it approved for repair. Additionally, because you still need to pay your technicians and staff, as well as pay for consumables and materials such as paint, the result can be a huge dent in your cash flow, especially given the amount of time you’ve invested in equipment, labour and parts.
Credit limits
On the flipside, there are shops that have dialled in their processes and over time, have been able to grow exponentially, meaning they are able to increase their R/Os and get more vehicles repaired and processed. The trouble with this is that the shop can reach credit limits with specific vendors, which then puts a strain on cash flow and the ability to order parts and sell future R/Os.
That’s why it’s so important to work with stakeholders and vendors that have the shop’s best interests. Sticking with insurers, it’s critical for a collision centre that not only does an insurer provide that shop with steady work, but also the ability to process that work in a timely manner so the shop doesn’t experience cashflow problems on a regular basis.
At Budds’ Collision Services, that’s what has led to us building specific shops with specific partners, because there is a solid history of mutual respect and priorities that align. This, in turn, allows both of us to provide a better customer experience while at the same time experiencing low staff turnover and being consistently profitable.
Revaluating your goals
While we hear that recruiting people to our industry continues to be a challenge, labour turnover doesn’t have to be. Those shops that struggle to retain staff, often do so because they are poorly managed and operated. And that might simply be the result of not partnering with the right insurer or even the right OEM partner for your business. If that’s the case, it is likely time for you to take a long, hard look at your business and reevaluate things, including your volume targets, profitability goals and stakeholder partnerships.
Businesses are constantly evolving and partnerships that were a great fit five years ago may no longer be, leaving the door open for new opportunities and benefits.
