Auto Service World
News   October 21, 2022   by Adam Malik

Why you need to pay attention to economic tea leaves

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Automotive aftermarket businesses need to do a better job of paying attention to economic issues so they know what trends are ahead for their business and plan accordingly, according to coaches.

Just as you would look to the sky to see if you should roll your car’s windows up in case of rain, paying attention to economic news will help you and your business be better prepared, said Vic Tarasik, founder of Shop Owner Coach during a recent webinar.

“It doesn’t mean it’s going to [rain] but you’re at least prepared for it,” he said during the webcast Navigating the Rapids Ahead. “You know how to read the signs. The thing I would suggest is, start looking at what are the signs of what could be coming.”

That means paying attention to the news to see what leading indicators are saying about where the economy might be heading. That way, you can prepare your business for what is likely to come. Take housing for example — a slowdown there impacts a lot of people, and the economy is likely to contract.

“They’re so busy with trying to push work through the door,” Tarasik said of shop owners, who typically wear the proverbial fireman’s hat while in the business. “They go from crisis to crisis. I encourage them to stop, step back and look at what’s going on economically.”

Even when things go south for some, there’s always a need for vehicle repair, pointed out fellow panellist Murray Voth, president of RPM Training. So even if the economy contracts by a certain amount, the number of vehicles on the road isn’t reduced by the same amount.

“Of 26 million cars on the road, maybe during a recession, there are 25.4 million cars. There’s always, always an economy,” Voth emphasized.

Tarasik agreed. “The economy didn’t contract by half. But yet you hear the excuse for that: ‘Well, my sales plummeted 50 per cent.’ A lot of that has to do with: Did they do the inspections? Did they do the follow-up? Do they have the processes?”

Voth also recommended looking at your client base. If you have a lot of blue-collar workers, or those who are always using coupons, asking for discounts, do some of their own repairs, you’re likely to feel the hit. If the construction sector slows and you have a lot of clients working there, you’ll likely feel the effects.

“But if you have a great mixture of clients, where you have some blue collar, you have some white collar, you have people in tech — there’s always aspects of the economy that are booming, always. There’s always something that is booming,” Voth said. “Find out what’s booming, and are you attracting those kinds of people with their cars to your shop?”

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