As we come rolling into a new year, it seems a question on the mind of every shop owner, large and small, is "What do I have to do to make this a significantly more profitable year?" I've noticed that there are similarities be-tween superior performance in various games and sports and superior profitability in a body shop. The superior basketball or football player and the superior poker or chess player have winning characteristics that, in a shop owner, could also result in superior performance and profitability. 

Franklin

Perhaps the most obvious is the chess master who (1) draws on a recall of thousands of games played in the past, (2) observes every piece on the board in the present, comparing its position to all of the other pieces, (3) sees the future in every piece, recognizing opportunities or consequences in every potential move, and (4) boldly takes action and makes the move that is strategically most advantageous.

The deciding factor, however, is how close to correct he or she is in "seeing the future" in the move. The success of the poker player also depends on "seeing the future" in the moves of the other players. And key players on the basketball court or football field must correctly anticipate the moves of specific players on the opposing team to prevent that team from scoring, or to open a path for their own team to score. In every case, the ability to "see future moves" accurately can determine winning or losing.

How can a shop owner increase the odds of winning, of being significantly more profitable in the coming year? How can he or she "see the future" to grasp opportunities to win, or head off consequences that could result in loss? A workable answer to these questions may determine how well his or her shop performs in 2006!

Anticipating driver's habits

Fuel costs and people's incomes in 2006 may determine whether they will fix damaged vehicles or take the money and run. What can a shop owner do to increase the chances that drivers will choose to fix their cars? Obviously offsetting some of the cost could make the difference with potential self-pay customers. Some shops have arranged time-pay plans with finance companies like Home Finance, or just arranged to take a broader range of credit cards. And, of course, many shops lighten the customer's load by providing a rental car and/or free towing.

An innovative move by one shop owner I met involved offering a rebate for referrals. I questioned the legality of this strategy, but he assured me his lawyer said it was legal if the rebate was given for a specific service or value provided. I still think it may not be legal in many states, but the rebate strategy is now used by many businesses and may have some legal application in a body shop.

Changes in vehicle construction

There can be little doubt that vehicle manufacturers will be using more light weight metals and plastics to cut fuel consumption in vehicles. As these new methods of vehicle construction come about, shops will require new skills in working with aluminum, magnesium, and the structures of hybrid vehicles. This may open the door to more profitable relationships with some dealerships who will be willing to outsource collision repairs to shops with technicians certified to work with these new materials and structures.

I know of several shops that have obtained more business from Mercedes, BMW, and Jaguar dealers because of having workers skilled in the use of Celette frame machines, aluminum welding, and more. Getting the jump on these new skills may be one key to "seeing the future" and profiting from it.

Anticipating insurance changes

Insurance companies have experienced huge losses due to natural disasters this past year. Most shops have experienced their efforts to cut costs by refusing to pay for certain operations and trying to minimize claims costs. One strategy has been to contract with multi-shop consolidators and franchises where they can negotiate lower prices for volume referrals. This strategy backfired in 2005, when consolidator M-2 went bankrupt with vehicles locked inside of fenced and guarded closed shops.