Lead With Hope

There is not one person reading this who is not impacted by the COVID-19 pandemic. The need to close down businesses and create social distancing will change the economy for the foreseeable future. Small business owners are some of the most vulnerable to this. 

“Every business is going through this,” Dave Schedin, CEO of CompuTrek Automotive Solutions, a coaching company for the automotive industry specializing in cash flow, says. 

Although it may seem bleak at the moment, automotive repair shops may actually have an advantage. While many small businesses had to or continue to be shut down, auto repair shops have been deemed “essential businesses” by a number of states, allowing them to stay open. 

In order to come out of this in the best way possible—and learn a valuable lesson for the future—Schedin shares his tips on how you should go about handling your relationships with your staff, customers and vendors. 

How should you approach difficult conversations with your employees when they’re unsure about their—and the company’s—future?   

No. 1, shop owners need to make sure their team feels safe. Not just from the coronavirus—safe in the longevity of their job. Speak hope into people. Leaders need to create a clear plan of what he or she is doing to handle the current situation and communicate what they’ve done in precaution already. Daily meetings are a great idea. Even more than one per day. Don’t let unspoken thoughts not be spoken. Check in with your employees and let them know what’s going on. It’s important to let them know the financial stability of the company. If you don’t have cash reserves, it can be a challenge. 

What should you do if you’re not financially stable? 

You can still build hope—but you need help from everyone. Communicate the importance of banding together. Let your employees know that everyone is impacted by this, so if they’re thinking of going somewhere else, chances are that other places are not hiring. 

As a leader, you need to put a plan in place and the truth is, it’s going to be difficult. Many shops will have to cut wages—maybe 25–50 percent in some cases. Rotational schedules and reduced salaries and wages will help, in some cases, keep the doors of a shop open, so communicate that to your employees. We need to make sure everyone’s core livelihood is protected, even if that means dropping employees down to part time. Owners can’t be afraid to spell the truth out. If we band together, we have a better chance of surviving and coming out the other side. 

If you are in financial trouble, what can you do? 

As soon as possible, start reaching out to lending institutions. Reach out to the Small Business Association (SBA). Reach out to your accountant. They have resources that can help you.

The great thing about any obstacle is that it teaches you something. One of the lessons from this is the importance of building up a cash reserve. This is my philosophy: In your cash reserve, you should have anywhere between $20,000–$30,000 for each tech you have in reserve, depending on your business model. You could also do it per bay. For example, $15,000 in reserve per bay. Let’s say you have $100,000 in cash reserve. That will allow you to operate for 2–3 months with almost no income. 

However, this is the key: When that reserve drops to $99,999.99, you need to think of your reserve as a penny short. You need to keep building more. You need to build a reserve for marketing. This doesn’t mean you can’t use your reserve—don’t go into debt when you don’t need to—but remember to build it right back up again. 

If business is slow, what should shop owners do to keep businesses afloat? 

If you’re slow, now is the time to take advantage of training. Now is the time to upgrade and start servicing hybrids. Get your people trained. This way, when things get back to normal, your staff can perform on higher levels.

Another piece of advice that will help get customers in and hopefully prevent layoffs is get customers through the door. You can have someone work remotely and call customers. Get on the phone and go after your database like you never have before. Say before all of this, you were closing 10–12 cars per day and now you’re closing 4–5. With some phone calls, you could bring it up to 6–8, which can make a huge difference. 

Now is also a great time to make updates to your shop or equipment. If you’ve always wanted to paint, pay your staff to paint rather than paying a company. Make sure that when it is business as usual, you’re ready to go full force. 

What about customers? How can shop owners reassure them and get them to continue to come to their business? 

By this time, everyone has heard the same message over and over. Keep a fresh perspective and reach out to customers. Remind them that you’re still there for them without making a sales pitch. 

Businesses should reach out and explain what they are doing to ensure their safety. For example, offering pick-up and drop-off delivery, no-touch payment and authorizations and no-touch key drop boxes, to name a few. Also, find a way to differentiate. One shop I work with, when they pick up a vehicle, they’re also offering to fill the customer’s car up with gas. It’s the customer’s money, but they’re making it so the customer has one less place to go and preventing them from going out when they may feel unsafe. 

You should also find a way to show them appreciation during this time. If you have reward points, offer triple the points, or something along those lines, to get customers to come in when you might be slower. Offer bundle pricing to entice them and remind them that you are still honoring warranties. 

Is there anyone else shop owners should reach out to?

One of the most forgotten about is vendors. Have clear communication with your vendors. With a forced lock-down in mid-March, many shops may need an extension to pay bills. Start having these conversations early about how to extend due times. Ask for price breaks. Let them know that you’ll stick with them, but you need to work out a plan.