What's Your Two-Year Plan?

What’s Your Two-Year Plan?

After two years, our industry finally had its homecoming.

It is December 22nd 2023. You are closing the shop or locking up your toolbox for the long weekend or a vacation. What does the shop look like? What does your toolbox look like? What new training certificates are on the wall?

While Christmas 2023 is a long way away, it is not impossible to visualize this future timeframe. You can look at current trends and events to build a crystal ball you can control. 

For a shop owner it is always good to have goals to measure your success. Setting obtainable goals over the next two years is key. Looking at car counts, average invoice and overall profitability are important for survival. My best guess is measuring and reducing the time between when the customer pulls into your parking lot and when they pay their bill is key. 

Parts delays and difficult repairs are only going to increase. The shops that are going to survive will be the ones that can schedule the technician, part and bay so the vehicle spends the least amount of time will be the true measure of success. But being able to come to a confirmed diagnosis in or under the allotted time, will become more critical. 

Chances are, hiring new technicians will also get harder in the next two years. Part of your two-year plan should be to build your current technicians and retain them for a longer period. Training is an investment that builds capabilities and loyalty.

If you ask some shop owners what will keep them up at night about the next five years, they will say electric vehicles. But, the two year window looks different. The majority of repairs in 2023 will still be on internal combustion vehicles, no matter where you are located. 

While electric vehicles are showing staggering growth and gaining market share, the total number of EVs registered is only a three to four million in 2021. This is a drop in the bucket of the 276 million registered vehicles. 

Even at the projected growth rates, the electric vehicle population might represent 6 to 9 million vehicles registered in 2023. If you live in California, electric vehicles should be part of your two-year plan. But if you are in St. Louis or Cheyenne, you might want to wait a while before trying to corner the market. 

Hybrid vehicles will offer more replacement opportunities as they age. The new opportunities will include high-voltage battery replacements, inverter diagnostics and HVAC service. But, they will also include mundane services like rotating electrical, strut replacement and brake service.

If you want a preview to what you will be working on in 2023, look at the latest batch of TSBs for 2019, 2020 and 2021 vehicles. One trend that will be more prevalent is programming and reflashing.

What do your customers look like?

The 2023 customer will likely be a lot like the 2021 customer. But chances are they will be keeping their vehicles even longer and will be more willing to invest in repairs. This is because new car prices are likely to get even more expensive.

If you have been in the business for more than a decade, you have realized that the automotive repair business is almost recession proof. In my 30 years in the aftermarket, I have seen four recessions and a pandemic. Even as markets have collapsed and the unemployment rates spike, people still need their vehicle fixed.

What is the Parts Forecast?

You have probably realized that there is an issue with parts. It is not that the parts are unavailable, it is just they are in a warehouse on the other side of the country. In my opinion, it will only get worse. Many supply lines and inventories have been leaned out to the point where any disturbances can leave shops waiting forever for parts. 

But I think this is an opportunity. Shops that can schedule the part and technician so the customer has the least inconvenience will prosper.

Christmas 2023 is about 730 days or 104 weeks away. You can plan now, or just react and live day to day. It is your choice.

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