Column by TOM BISSONNETTE … CONTINUED FROM PREVIOUS ISSUE
Three months into the new business I was feeling bruised and battered.
Down five staff members and working my tail off just to keep up I was lucky to have the remaining employees and my wife on my side. She was working part time at the local Technical College then she would come in and do reception work, bookkeeping filing —whatever it took.
The good news is that we were busy and growing quickly. I had a young painter recommended to me from another shop that was gracious enough to recommend he take the job because he could go no further than a prepper at their shop. His name was Dallas, and he took great pride in his work, immediately raising the bar for the quality of work we were producing. He brought one of his friends that was one of the best metal workers I have ever worked with—another notch up the quality meter.
The big boost came when I got a call from Chelsea Stebner. She was working at another shop in town and was not feeling that it was the place for her long term. My wife and I were thrilled to welcome her to business. Now I had somebody that understood my way of operating a business and was able to contribute towards growing it. Chelsea is strong where I am weak, she had my back in every instance that I dropped the ball and was a terrific addition to the front office. I could feel the tide was starting to turn.
My relief was short lived. We were busy, but I was running out of cash! Obviously, I missed the chapter on managing Work in Progress (WIP) otherwise I might not have found myself in this situation. Things came to a head when I had a Friday payroll to meet, and I did not have enough cash in the bank to cover it. I called Doug, my banker, and explained my situation. He asked me two questions: what is the total value of your receivables and what is the total value of your WIP? Fortunately, I was using a computerized management system and I was able to pull those reports in minutes then email them to him. He authorized the overdraft and life carried on. I had to do this several times, but I started to really focus on managing my WIP and cash flow, I always knew in advance when I could meet my financial obligations and if I could not, I simply called my supplier or the bank and explained my situation—they were always gracious. Eventually I managed to keep a cushion of at least three months of operating capital in my bank account. It was great to finally have more money than month and relieve that stress.
The Canadian Collision Industry Forum (CCIF) was just getting started in 2000 and I made a commitment to attend every single meeting. I certainly learned a lot from the various speakers but more importantly I was able to connect with successful shop owners like Glenn Hickey from Newfoundland, Dana Alexander from Fredericton, and Ken Friesen from Calgary—there were many others, but these were guys that I always looked up to and it was a privilege to spend quality time with them.
In addition to CCIF I joined a PPG Roundtable Group and I found it to be a wonderful experience. Not only did we receive timely and thought-provoking information, but I made friends with shop owners from across the country that I consider great friends to this day. Again, the information provided in the structured meetings was terrific but in between sessions and at meals I got to hear from other shop owners how they managed their business and the ideas that these conversations generated was simply amazing.
Some of you are so fixated on never leaving your facility; I believe that you are missing out on learning from and helping other collision centres learn from you.
Some of you are so fixated on never leaving your facility; I believe that you are missing out on learning from and helping other collision centres learn from you. I do not know any successful business owners that did it all by themselves. Generally, they are involved with some type of mentorship group. In addition, they are avid readers of books on business and human interactions. I discovered that the keys to success are found in the people you associate with and the books you read—it is that simple.
From 2000 to 2005 we established Parr Auto Body as being a great place to work and a great place to have your vehicle repaired. I am thankful to the staff and customers that have graced our doors over the years, every one of them contributed to our success and made us better. I was especially pleased to have my friend Don Pogoda join our staff after he had been away from the industry for the last 5 years. Don is a great mentor to our young people and customers love him. He is also a great mentor to me and had no problem letting me know if I was off base on issues—I needed that at times.
In 2005 I had my initial loans all paid off and I wanted to buy the building from the previous owners. The good news is that they were willing to sell, the bad news is that the banks wanted at least 35 percent down in cash! What use is a bank if they can’t loan you money when you need it? The mortgage payment was less money than what I was paying in rent!
In any case I was directed to the Business Development Bank (BDC) in Saskatoon and met with one of the loan officers who walked me through the process and was flexible with down payments and monthly payments. I was very fortunate going this route because the following spring we had a lot of high-water levels, and our property was flooding. I had to hire a company to build up the ground level around our shop, put in a storm drain and then pave the entire parking lot. By the time this was done I had spent another $150,000.00 which the BDC stepped up and helped me with! Business seems to be going from one challenge to the next, but things always seem to work out. I think two of the best attributes you can have been thick skin and faith!
It was around this time that I attended my first PPG Green Belt Lean Management School. Both Don Pogoda, myself and our main auto body technician Bert attended this week-long training where we had our eyes opened to the possibilities of running a lean shop. One of the key components of truly running lean is to have teams of people working in unison—this does not usually work as well with flat rate employees. We made the decision to switch our shop away from flat rate and go strictly straight time with a team pay element: to our dismay our lead technician, Bert, advised us that he thought we were making the right decision but that it was not for him—he had been a “lone ranger” for so long that he felt he would just move along. I hated to see him go but at the same time I respected his decision and that he literally gave up 10 years of seniority. We were fortunate to find another seasoned journeyman technician that was willing to work with our young technicians at an hourly rate.
Since then, with the exception of one employee, we have grown all of our journeyman technicians. Our production people are totally committed to the straight time team concept, and it has generally served us well, the challenge has been that once they finally get competent, they are prime targets for other shops and insurance companies to hire. In fairness we must accept when these young folk get an opportunity somewhere else but after having invested so much time and energy in them it feels like losing one of your family when they go.
To address this concern, I made the decision around 2010 to sell some of the shares of my business to key employees that I did not want to lose. In my next article I will explain how that came about and how we made it work for all of us.
TOM BISSONNETTE is the director of the Saskatchewan Association of Automotive Repairers (SAAR). Tom’s Tales is a series of Collision Repair magazine articles chronicling his journey through the collision industry, since 1982. Besides telling his story, Tom hopes that today’s shopowners and manager can learn from his victories—and his mistakes.
One Response
Always a good informative read from Tom.