As I head into the new year, I always find it a good time to take a step back and reflect on the past year in the shop. I usually aim to do this in December, but with the hustle and bustle of the holiday season, it often gets pushed to the side. Instead of stressing about missing that target, I’ve made it a habit to evaluate everything in January. Amid running the shop and handling the constant frustrations that insurance companies throw our way, it's easy to overlook key areas of our business. Many shops focus on things like paint discounts because they’re often being solicited by vendors, but when was the last time you took a comprehensive look at your business as a whole?
Reviewing Vendor Relationships and Discounts
One area I always revisit at the start of the year is my relationships with parts vendors. Over the last year, I’ve noticed a trend where discounts on parts slowly drop from 40% to 38% or even 36%, only to bounce back and forth, gradually settling at the lower rate. It’s as if the vendors are hoping we don’t catch the fluctuation and change. To avoid this, I track these changes closely and call vendors out when I see it happening. I also pull my invoices at the beginning of the year to compare spending with previous years. This helps me assess whether our purchasing volume is increasing, decreasing, or staying the same.
If my purchases are steady and my discount is average, I’ll use this data to negotiate a better deal. After all, I’m a loyal customer who always pays on time, and that loyalty should be rewarded. If I’ve been buying more, I don’t hesitate to push for a better discount and contact the parts manager directly. Along with looking at discounts, I also evaluate delivery speed, return processes, and order accuracy. This is a good time to explore other vendors who may offer better terms, and I’ll reach out to negotiate with them if necessary.
Fleet Accounts and Referral Partners
Another key area I review annually is my fleet accounts and referral partners. These accounts play a significant role in our business, so it’s important to evaluate how frequently they’re sending us work and whether we’re maintaining good relationships with them. Some of my larger fleet accounts receive special rates due to the volume of business they provide. I’ll assess whether these rates are still valid, especially if the volume of work has decreased. If needed, I’ll raise the rates accordingly.
When it comes to referral partners, I review what we’re doing for them to ensure that the relationship is mutually beneficial. Am I offering meaningful incentives for their referrals, such as a discount on repairs or a free service like headlight restoration? Do we take the time to show appreciation with small gifts or gestures of gratitude? I also evaluate how often they refer customers and how we can keep those referrals coming in. Each referral partner should be treated uniquely, so I tailor my approach depending on the value they bring to our business.
Standard Operating Procedures (SOPs)
I also take the time each year to review our shop's standard operating procedures (SOPs), especially regarding capturing the keys. Are we following the procedures as outlined, or have employees made changes to the way things are done? If there have been tweaks, are they improvements we should adopt or should we revert to the original processes? It’s important to regularly assess whether our SOPs are still working efficiently and whether there are areas we can improve to save time and resources. Efficiency in operations leads to better use of time, improved customer service, and ultimately, more profitability.
Reviewing the Budget and Financial Efficiency
Reviewing my shop’s budget is another crucial part of the annual reset. I constantly look for ways to cut costs and improve financial efficiency. One of the best decisions we made a few years ago was switching to paying our charge accounts with a cashback credit card. This has earned us between $35,000 and $50,000 in cashback annually, which has been a great boost to our bottom line. However, this year, we saw some companies start charging a surcharge for credit card payments. To offset this, we’ve had to switch back to paying some accounts with checks, as the cashback reward was no longer worth the surcharge.
The Big Picture: A Comprehensive Reset
The point of this annual reset is to review everything in the shop and identify areas that need attention or improvement. Even if things seem to be running smoothly, there’s always something that can be improved upon. It’s easy to become complacent and turn a blind eye to issues that are affecting efficiency, customer service, or profitability. By taking the time to do a comprehensive review of your shop’s operations, you’re not only identifying areas for improvement but also ensuring that you stay proactive rather than reactive to challenges.
Remember, you don’t know what you don’t know, and by conducting this review, you can prevent blind spots from damaging your business in the long run. Doing so will help you avoid letting pride or ego get in the way of growth and success. A little humility and self-assessment go a long way, and with a clear focus on the year ahead, you can ensure that your shop continues to thrive.
