Industry Advice Ask Mike: What Are the Three Biggest Ways Shops Fail?

with Mike Anderson

This month, we “ASK MIKE” to share his thoughts on the biggest ways shops fail at their businesses. We at Hammer & Dolly hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.

Hammer & Dolly: Many shops have done a great job of keeping up with the demands of the industry, but other facilities have problem areas that they need to change. Based on your experience, what are the top three ways shops fail?

Mike Anderson: When a former body tech, estimator or manager opens their own shop, they tend to abdicate and not delegate. Delegating is assigning a task to somebody, following up with them and ensuring that they’re doing things to your standards in a timely manner. Abdicating is when you ask someone to do something but don’t follow up with them. When that person doesn’t meet your expectations, you get upset with them. I see shop owners fail by abdicating their financial role in their business instead of delegating it. 

Most people who start a body shop gravitate toward their comfort zone – estimating, fixing cars, body/paint, whatever – and abdicate their role in making sure their numbers are right. Most shop owners know how to QC a body tech or their painter or estimator, but they may not know how to do that with the person who’s managing their books. Along with that, people tend to overextend themselves. The sign of a good, healthy business is having six months’ worth of operating expenses in its bank account. But many shops don’t manage their cash flows when they start making money. It’s a major problem when a shop doesn’t know how to manage its numbers. 

The second thing is that most shops become ‘order takers.’ They get work referred to them through DRPs. When things slow down around the country, people don’t really develop their sales skills. They’re not focused on upselling and getting the keys; they’re just taking orders. 

The third piece is that many shops haven’t fully developed their soft skills. Shops will send techs to OEM training or send the staff to estimate training, but they don’t focus on soft skills and developing teams as individuals – and that includes the owner/manager. People don’t pay enough attention to investing in leadership training and customer experience training. 

H&D: Obviously, there are plenty of courses out there – including many hosted by you – that help shops address these problem areas. Everything sounds great in a classroom, but that doesn’t mean that an attendee will make those lessons stick in their business. What can shops do to ensure that whatever they learn in a class will work for them in the long term? 

MA: It’s a good idea to get involved in a 20 Group. We at Collision Advice do 20 Groups, and there’s also the Coyote Vision Group. Every paint company has one, and there are 20 Groups by Collision Hub and David Luehr [Elite Body Shops Solutions]. If you surround yourself with peers, you can benchmark yourself to them and better know how you’re doing. If there’s a skill you’re lacking or a financial component you don’t understand, there’s usually someone in that 20 Group you can connect with to help you figure out the pieces that aren’t your strengths. 

The biggest thing you can do is just get involved in your industry through WMABA at the state level and the Society of Collision Repair Specialists [SCRS] at the national level. There’s a saying: ‘To teach is to learn twice.’ Being involved in an association and aiding others will help you develop your skills even more. 

H&D: Let’s look at the positive side of the coin. What are some encouraging signs you’re seeing in the industry? What are some areas where shops are succeeding today that they weren’t five years ago?

MA: Five to 10 years ago, people really weren’t researching OEM repair procedures as much as they should have been. More people are using them now as guides to repair vehicles safely. Although the industry has improved in this area, we’re still not where we need to be. In our ‘Who Pays For What Survey?’ only 39 to 40 percent of shops are researching the OEM procedures every single time. We have a long way to go, but things are better than they were five years ago when only 19 percent of shops were researching vehicles. When techs don’t research the OEM procedures, it’s often because they don’t have time or don’t know how. Owners and managers need to schedule the work in a way that gives the techs time to look up the procedures – and more importantly, to learn how to utilize those procedures. There are a lot of resources available to shops regarding OEM procedures. There’s the OEM training that Collision Advice does for several manufacturers, and there’s I-CAR, Collision Hub and others. Additionally, shops should be wary of social media. There’s such a thing as a Toyota-certified tech, but there’s no such thing as a YouTube-certified one. 

Want more? Check out the December 2024 issue of Hammer & Dolly!