About 50% of our professionals are starting to notice the crisis of scarcity of raw materials. Result: The things get longer. But don’t panic. As with any bump (life is what it is, sometimes it’s high, sometimes it’s low) we don’t need to get nervous or strategize. And here they are our strategies for dealing with the shortage crisis in a repair shop and prepare yourself NOW. Because the sooner you respond to the problem, the better prepared you will be and it won’t affect your business.
Where does the crisis with the shortage in a reformed company come from?
It may seem ironic that now that the upgrade market is doing well, dealers « suddenly » They not only extend delivery timesbut in some cases they even overtook us (up, of course).
The scarcity crisis is due to a labor shortage in the ports. Let me explain that the demand for COVID has increased as expected, but with values much higher than expected. The factories have started production at full speed, but sales cannot meet this demand. It exists Labor shortages in portsYes, the goods get stuck in the ports. In summary, going on vacation is like having a multiple traffic accident in full operation. We all want to go on vacation, but we can’t because there was an accident and the autobahn is no longer giving way.
It is important to understand this point because some sources say this crisis should be temporary until between February and mid-2022. It is important that we don’t panic, but we can’t wait to find ourselves in a good one To find the constitution again. The sooner you cover your back, the better.
7 strategies to weather the shortage crisis in a reformed company
Most of the strategies I’m going to suggest aren’t very attractive in terms of selling. I am aware. But at the same time, I’ll also give you advice in introducing you to hostile trading-level strategies (remember, any advice you need to consider and Find out what can work for your repair business).
increase prices
Yes, the first thing you have to do, and I’m not talking about increasing the prices of the products, no. I’m talking about raising the price of your work. This will be the key to having a good time during this crisis. And why don’t you just raise the prices of the products? Well, because you need to spend more time working on your structural costs. I will give you a simple example to help you understand:
Imagine your expenses monthly plans are € 5,000 / month (€ 60,000 / year) when counting: your salary, telephone, office, water, electricity, gasoline, minibus rental, etc … Well, imagine it normal now You do 10 repairs a year. You have to transfer € 6,000 for each job, only from a fixed fee. Well, what is very possible now is next year because of the delays instead To complete 10 jobs, you can 8. to lock. This means that in Each job must have an effect of € 60,000 / 8 = € 7,500.
Another way to calculate how much it will take for a price increase is by the number of days that you slow things down. For example, if you calculate that you are 1 month late, you need to transfer € 60,000 / 12 = € 5,000 to spread over the number of jobs you normally do.
Be careful when choosing products
- Choose local products: Because one of the main problems is the distribution itselftime limit they get a little shorter If it is a national product whose raw materials are also obtained in Spain. Focus more on ceramicsand not so much for the tree, for example. Most of the products depend on the production of raw materials in other countries, but if the production is at least domestically, the problem with the international distribution of the product is not as serious.
- Select other basic products: Select products simpler qualities depending on when the customer is to be attracted now. This is a trick that many professionals who use STIMAT use: they offer several low budget product options that leave the cheapest by default so as not to give the impression on first visit that they are more expensive than the competition.
Reduce your labor margin, increase the product margin
Take advantage of the news that is coming out all over the place and make the products more expensive, less labor. That means that 6,000 euros more (which we saw in the previous example), transfer them more to the product margin and less to the labor margin. Why? Well, because the customer will understand, because he sees in all the news that the prices of the products have increased. More clearly: Imagine a product whose cost has increased from 30 euros to 40 euros. you before They sold it for 35 euros and now they sell it for 50 euros instead of 45 euros. This way you increase the margin of the product and keep the price of your labor in the market.
Remember this with RESPECT, our Budget program and sales toolYou can set product options and update your price base at the same time (and even update the prices of multiple offers at the same time).
START FREE FORECAST
Get more works
It really is time to do more! The demand continuesIt’s not a market crisis. So it’s smart Start some works step by step to « limit » the stay of the deliveries. You already know you can use ours when you need a boost MARLET to find 100% filtered customers.
FIND 100% FILTERED CUSTOMERS
Be honest with your customers right from the start
If you not only do not have financial problems, but also want to sleep peacefully at night, then be honest with your future customers, that is, manage their expectations. If a job is usually slower than the hours you normally set, in a crisis like this you know very well that it will take longer than you expected. Say It Even if it may seem uncomfortable at first, it will save you a lot of misunderstandings later.
Define the contract clearly
In all fairness I don’t think this is the turnkey budget time. The market is too uncertain about time right now to reassure anyone that you will get through on time. Don’t play it. Do not sign such a clause. On the other hand, contrary to the previous advice on product margins, you can follow a different strategy at the contract level: Offer product prices and increase your workforce, if he buys the product directly or you are transparent, show him your real price at the time of purchase so that the customer can propose the increase himself during the operation.
Request a higher prepayment rate
Request a larger advance payment so you can collect the most affected materials early on. From my point of view, it is a measure to be honest I wouldn’t recommend it to anyone my buddy … Mainly because he’s exhibiting High risk customer. On the other hand, it forces you to have a bearing that many of you don’t. As optimal: if the customer had an object in his possession in order to be able to recover the material at work. And for me always to always be completely transparent to the customer.