Monday, 30 June 2003 17:00

Valuable resources are hidden rignt in your shop

Written by Tom Franklin

A couple of months ago, I wrote an article on "Funding Risk." Most shop owners want to grow their business, but in today's economy, it seems a bigger concern is simply not going backwards -- growing smaller. Taking risks to grow seem doubly dangerous when just surviving is difficult. Nevertheless, it is vital to keep growing, and finding the resources to grow may be easier than you imagined. 

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Many years ago, a very wise man told me, "There really is no scarcity in the world. It's just that most people don't recognize or don't fully use the resources within and around them." By taking a deeper look, you may find you do have the resources to "fund your risk."
 
No scarcity of resources?

 

When I was told there was no scarcity of resources, just unrecognized, unused, or underutilized resources, it seemed to me a foolish, simplistic statement. How could this be true when people are homeless, are starving, lack medical attention and sometimes even clothing? How could it be true when businesspeople are scrambling to get their share of an ever shrinking pool of customers?

Over the years, I've come to believe what I was told: that there really is no scarcity of resources. There are sufficient available resources for nearly every need that people have, but I've also learned that people often ignore, reject, or deliberately avoid the very resources that are available to fill their needs.

Unemployment may be high in one state while jobs go begging in another. But people hate to change, even if it means survival, and so many refuse to pick up and move to where work is available. It seems to be human nature to suffer a scarcity of resources rather than reaching further or deeper to find the resources they need.

Sell that truck

What does this have to do with "finding money to market and grow your shop?" I've been trying out this "hidden resource" principle on some of my clients, and so far I'm finding it to be true. I started with resources right in plain sight, but possibly unused, unrecognized, underutilized or misused.

One client and I walked around his shop to check out the various spaces and equipment, doing a cost/benefit analysis as we went. The idea was to evaluate each space and each piece of equipment to find out if it was more cost than benefit, or more benefit than cost.

In one area, he had an old tow-truck parked. When we evaluated the potential benefit of selling it, it was obvious he would be lucky to obtain $1000 for it. He had tried to sell it, but had no takers at that price. Then I asked him what could be an alternative use for the space it took up. He said he gets $25 a day for storage. If he was able to charge storage for that space 30 days a month, he would make $750 a month. In a year it would be $9000. He had parked the truck there for five years.

For storage, the space had a potential total value of $45,000. Of course he wouldn't have had a vehicle in that space being charged for storage all of that time, but even 10% would have yielded $4500, probably five times what the truck was worth. It would seem he would be ahead to give the truck away.

Liquidating assets

While liquidate usually means to sell off the merchandise of a failing business, actually the word literally means "to make liquid." If you have old equipment or assets standing around, they're simply a solid mass, taking up valuable space. By selling them off and liquidating them, you gain cash flow that can be used to power greater growth.

Most of us put off updating and upgrading equipment, capacity, software, and systems, but doing a cost/benefit analysis can reveal some surprising opportunities. I recently had a computer crash and was surprised to learn that I could double the computer memory for less than $100. For a very small expenditure the com-puter was brought up to the current state-of-the-art (which probably means for only about six months, but at least it does run twice as fast now).

It can be beneficial to take stock once a month or so, and ask yourself: "What unrecognized opportunities are slipping past me?" Make a list and reach out to grab them. Chances are we miss out on unrecognized resource opportunities all of the time.

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Hidden value of space

Space is perhaps one of the most valuable "hidden" resources. In our present-day economy, most real estate appreciates. Every day I see businesses close their doors because they can get more revenue from leasing their property than they can from operating their business on the property.

In large cities, where space is very limited and expensive, freeing up space by selling off (or getting rid of) an old vehicle or piece of equipment can yield increased revenue. In other areas where a shop may have more land or space than they are actively using, the value of the unused space may be more "hidden." One shop had rented some unpaved space to a customer to store a couple of unused boats. A little cost/benefit analysis revealed that if he spent a few bucks to put down a little blacktop, he could be making revenue providing secure overnight parking.

Human Resources

Probably the most difficult resource of all to deal with is people. How many people working for you today are producing at less than their full capability? How many work at their job half-heartedly, producing less than half of what they are capable? What can be done to increase their productivity and make use of that "underutilized resource?"

I was recently in one of a chain shop's facilities. I was stunned to find estimates written by estimators who acted like they were working for a tight-fisted appraisal company instead of the body shop. Straight parts replacements were on the estimate without charges for the necessary R&I time. The profitable add-ons like undercoating, rust-proofing, weld-through primer, etc. were left off. These estimators were costing that shop dearly.

I've heard complaints that commission-based pay encourages technicians to take short-cuts and do hurry-up jobs instead of focusing on quality. This may be true, but people respond to incentives. If there is no incentive to do a quality job, it's just human nature for many to not bother. Somehow bonuses and incentives must be built into the pay structure to reward quality work.

Barter for marketing deals

I've rarely been in a shop where the shop owner hasn't made a deal at one time or another to fix a car in exchange for some services. One shop owner's entire computer system was built by a guy who needed major body and paint work on his car and was willing to exchange services. Another got his phone system put in.

Most recently I was at a shop that had a magnificent sign across the front of the building. It was eight feet high, made out of corrugated fiberglass, and had a waving American flag painted all the way across the forty foot front on top of the building. The guy was a sign painter who needed collision repair work and had no insurance coverage. He was eager to make the trade. The name of the shop is American Collision Center, so it was a perfect sign for the shop.

Simple marketing moves like fixing up your waiting area, front desk, or washrooms, or blacktopping and painting markers on your parking area, could probably be worked out with some bartering. Even radio, TV, and print ads can often be gotten via deals to do exchange work on media vehicles.

Key to greater growth

The key is to stop being held back by a lack of cash. Resources to help market and grow your business may be available by exchanging a little of the idle time of an underutilized technician, by liquidating some unused assets, by getting a better return on your investment in space, or simply by making the highest and best use of your time.

Valuable resources exist everywhere we look. Take the time to reach out to find the ones that will make your business grow and prosper.

Tom Franklin has been a sales and marketing representative and consultant for forty years and is the author of the books, "Business Battlefield Marketing for Body Shops," "Tom Franklin's Top 40 Marketing Tactics for Body Shops," and "Strategies for Greater Body Shop Growth." His marketing company now provides marketing solutions and services for body shops and other businesses. He can be reached for questions or comments at (323) 871-6862, by fax at (323) 465-2228, or by E-Mail: tbfranklin@aol.com.

 

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