NACE Chairman Jerry Burns and CARS Chairman Aaron Clements met in a staged “coffee café“ to discuss the ins and outs of running a successful business.
They covered prominent industry issues and shared ideas to kick off the NACE opening general session Thursday morning. Their exchange preceded keynote speaker Captain Chesley “Sully” Sullenberger.
Keeping up with constantly changing technology is difficult for both sides of the business.
“Cars with new high-strength steels and new electronic control systems present challenges, and it’s tough to keep up with all the new scan tools,” says Burns.
Clements said that marketing and attracting new customers are ongoing challenges for mechanical repair shops.
“That’s something we could learn from mechanical repair shops, because we aren’t used to selling,” Burns says. “We are used to the tow truck bringing the cars in or the insurance companies bringing their cars to us. We have to learn to sell the job, to sell additional scratches and dings, and look for other opportunities, such as headlight restoration. We need to work more on selling and understanding our customers.”
Many mechanical repair shops are accustomed to advertising to get customers and to sell their services, Clements said. The alternative is to raise rates.
“I wish I could raise my rates,” Burns says. “If I try to raise my rates I can sit and watch a parade of tow trucks line up to take cars out of my shop. We have learned to do more with less. If we can’t raise our labor rates, we have to find a way to decrease our costs by working more efficiently.”
Information availability is better than before and has not been a big problem for the collision repair business, according to Burns. OEM Web sites, the National Automotive Service Task Force (NASTF) Web site and third-party information providers offer a host of useful information, he said.
The closure of many OEM dealerships recently has opened up opportunities for collision and mechanical repairers to expand their customer base.
“Collision shops can get some of that collision business that dealerships had when they shut down their businesses,” Burns says.
One concern for both groups is legislative issues that don’t favor repairers or small businesses in general. Burns mentioned the potential repeal of the McCarran-Ferguson Act, which has been a priority of the Automotive Service Association’s agenda.
Succession planning also is a concern for all businesses. Burns said he has a couple of sons who enjoy the business and plan to take over his business.
“We all need to work on succession planning, whether it is our children or a key employee,” Burns says. “And everybody should have a back-up plan because the initial plan doesn’t always work out as expected.”
Many shop owners think they will live forever and enjoy the business forever, but that doesn’t happen, Clements said.
Burns laments the concept of “funny time” and said the industry needs to adopt real-time rates. Funny time is charging a lower labor rate but additional hours to cover the actual costs of the repair. Mechanical labor rates are often twice as much as collision labor rates, which have been held done by competition and outside influences.
“Funny time isn’t very funny,” Burns says. “We need real times to work with and repair shops need to charge real hours.”
