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Five steps to surviving this economy

February 04, 2009
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Editor’s Note: This article is included in the February 2009 issue of Professional Carwashing & Detailing®. If you would like to submit an article or topic idea for the Management Tip of the Week, please e-mail Editor Kate Carr.

Most detailers start in the business with a hopeful, positive attitude and some detailing experience. Most have probably thought about entering the business because they believed they could do it better and offer a better service to the customer. And, many did and are doing so.

The last few years were probably happy times that you spend building up business and fine-tuning your services. Then in recent months, volume and profits started to decline due to the economic crisis in the U.S. and the world. Suddenly, many detailers find themselves facing an unfamiliar and difficult situation. Just how will these businesses survive?

There are five steps a small business can take in order to survive an economic crisis — and in some cases, even thrive.

#1. Realize that the type of thinking that worked last year is not the same that will work this year.

Last year, customers came to you demanding your detail services. Now you have to be proactive to get business. This means you can no longer ignore the small things you didn’t have time to worry about before when business was booming.

You need to take advantage of the extra time you now have to rethink your business needs. Realizing that your business needs to change is the first step towards successfully navigating your way out of this mess. You must admit to yourself that your business is not perfect and that you cannot continue operating the same way you have in the past. It simply won’t work.

#2. Get reacquainted with the market.

The needs of your customers have changed because the downward spiraling economy has changed their priorities. You should take this opportunity to meet those new priorities, finding out what your customers are looking for today. This may cause you to add a new service you haven’t offered, or look at other services that might not have been a priority for consumers before.

For example, promote a lower cost maintenance service for price-conscious customers; or add something like a PDR or paint touchup for customers keeping their cars longer. Appeal to their new rationale (saving money and making conservative purchases) by emphasizing that your services will help strengthen and improve the life of their second most important investment — their car.

#3. Consider who/what touches the customer.

When your business begins to go downhill, you often look at employees as your greatest expense and they are the first line item to go. However, before making those cuts, you should look at your employees’ value rather than their expense.

To make this decision easier, consider which employees you can re-train to do other, more profitable services and which employees can be given additional tasks to take advantage of “down time.”

Avoid knee-jerk reactions to dramatically reduce expenses which can begin a “death spiral.” For instance, if you severely cut back advertising, you will cause your number of clients to reduce, which then reduces sales, etc. Advertising touches your customers.

I am not saying you shouldn’t look at cutting expenses. Instead, you need to reassess those that are crucial to your business (i.e. those that touch customers) and only cut or reduce those expenses that are not crucial to your survival.

#4. Look at your business more abstractly.

Look at your business not as what it does, but what it can do.

In other words, look beyond the services you offer and what you can change that you may not have considered before. This step will be influenced by re-evaluating the market and determining the needs of the public.

Once you understand how your business can abstractly affect customers, you can create services to match those new needs and you can alter your marketing message to emphasize this new impact.

Conducting interviews with customers is a great way to identify their needs. Ask your current customers what would make them more loyal, or if there is a service they wish they could have done at your detail shop that you do not offer today. Ask them why they think their brother, co-worker or friend does not use your business and see if these responses can help you improve your service offerings.

#5. No excuses. Take action.
As the economic situation continues to bring challenges for you, hard decisions and changes will have to be made. Once you re-evaluate your market and steps to be made, you need to follow through with those decisions. Wasting time to put off a hard decision will only worsen your situation.

Be straightforward with yourself and everyone who works with you. Your biggest fear should be that you aren’t going to pay enough attention to your business soon enough before it starts into a “death spiral.”

To follow up with this step you should have accurate financial information about your business and be active in every aspect rather than focusing on one. If you are keeping close attention to these aspects, nothing should come as a surprise and you will be less likely to act on impulse.

R.L. “Bud” Abraham is president of Detail Plus Car Appearance Systems, Portland, OR, and a nearly 40-year member of the car care industry. He is also a member of the Western Carwash Association Board of Directors.Abraham can be contacted at