Discouragement is the starvation of imagination. Does discouragement lead to a lack of imagination OR does the lack of imagination result in discouragement. Either way, we MUST remain imaginative during these times. Since its inception, the Automotive Recycling Industry has survived every economic downturn in the history of man. As a matter of fact, our industry actually grows during downturns in the economy. Once the Lockdown of 2020 ends, we will see an economy that will slowly return to normal - over a two year period. But, during that recovery period, people will be very hesitant to spend major amounts of money. We will see a prolonged dip in new car sales which will generate a major upswing in the utilization of Recycled Original Equipment (ROE) parts in the mechanical repair process. We are also hearing that insurance companies have concerns about the New OEM supply chain being affected for months and months following the Lockdown of 2020. They, the insurers, are now looking t...

With the global lock-down affecting everyone’s sales, we are all looking for ways to find sales dollars. We also all know that the Automotive Recycling Industry is counter-cyclical - when the economy is hurting, we do better. When the lock-downs are over and demand for ROE parts is increasing because of the recession, will you be ready to convert demand into sales? Many will truly excel in the coming months as demand rises and you are able to cash in on it. However, many facilities are not ‘connected’ correctly to capitalize on the opportunities that will exist. What do I mean by ‘connected’? Each customer type that we have uses a different method of finding our inventory. If you are not sharing your inventory so that it appears on the platform that potential customers are using, then you will not have the chance to sell your part. Many retail customers search online to find parts: eBay, Car-Part.com, Hollander Storefront, TradeMe, Etc. Body Shops using Estimate-Writing sof...

Will I survive Coronavirus? The bigger question: Will my business survive Coronavirus? We are in an uncertain time and none of us know for sure what tomorrow holds, much less next week or next month. I am writing this article from the safety of my couch on a Sunday afternoon - too concerned to leave the security of my own home on a beautiful day that is screaming ‘come out and enjoy’. I am pondering several questions today: Will all of the employees show up tomorrow? Have any of them been diagnosed with Coronavirus? Will others have to self-isolate? Will my state force everyone to stay home for two weeks? We cannot control much in our lives. We definitely cannot control this virus nor what the government is going to do to prevent people from dying. But, we can react to issues that we encounter with wisdom. Businesses are organizations that provide services or products to other organizations or individuals. The bare basic definition: People that help other people in exchange for co...

Every dollar of expenses reduces your Net Profit by the same amount. Conversely, every dollar of expenses that is reduced increases Net Profits by the same amount. Are you struggling to be profitable? Increase profit by reducing expenses. How can I reduce my expenses without sacrificing quality of service to my customers? Let’s dig into that question and see what can be done. Recurring Bills Each of us have recurring bills that we simply pay out of ‘habit’ each month. I’m talking about bills from you YMS Provider, a third-party software solution, a utility bill, and lease payment, and rental agreement, etc - you get the idea. There are certain bills that get paid each month without reviewing them - simply because of who they are from. It’s time to review these bills. Look for increased fees or increased rates that you did not agree to. Pull out the same bill from 12 months ago - is this year’s bill higher? Did you authorize them to charge you a higher rate? Spend the time, make a ca...

Rumors travel faster than the speed of sound. I thought I would devote one full blog to share my full story with everyone with a hope of dispelling many rumors that are incorrect about what is going on with me. I am a third-generation recycler that grew up in a family business. I have an older sister, Tammy, and a younger brother, James that also grew up in the same family business. My parents, Ed & Pat, allowed each of us to work in the business as much as we wanted. My actual work for the family business started in 1993 when my dad bought the largest competing salvage yard to our existing yard (that was founded in 1966). The ‘new’ yard was about 6 miles from our original site and I began working there in the summer and after classes got out - I was attending the University of Mobile to get a degree in Business Management and Accounting. I worked part time for three years while in school and became the full-time manager of the site in 1996, when I graduated from college. In 2...

In 2020, we plan to do $17M in Gross Sales. In 2020, we plan to dismantle 2,000 vehicles. In 2020, we plan to turn a 14.7% Net Profit. Each of these are Outcome Goals. Outcome Goals are very hard to predict. You should be focusing on Input Goals, not Outcome Goals. What is the difference? We all know that in-stock sales are directly proportional to vehicle purchases. As a matter of fact, there is a known ratio between the two. For the average recycler, the Cost of Goods for In-Stock Sales is roughly 43%. This number could range from 40% to 50%, but we will use the average of 43% for this example. This is a facility that probably focuses on a 2012-2013 model year for its average year purchased. For this example, we will also assume that this facility is 50% In-Stock Sales, 40% Brokered Sales, and about 10% non-part revenue. So, if this site sets a goal of $17M in Gross Sales for 2020, that would mean that In-Stock sales would need to be $8.5M, which is 50% of the $17M Goal. Stay...

Do you have a salesperson that steals deals from other salespeople? Do you have a dismantler that is capable of 15 cars per week, but you can't trust him to show up so you tolerate 8 cars per week? Do you have a Yard Technician that can pull 50 parts per day, but steals aftermarket radios from you? Character vs Performance: Which one is more important? In Simon Sinek ’s recent video, he discussed the relationship between Performance and Trust. Click the link and watch the video - it is short, but to the point. In this video, Simon describes an employee that has high abilities but low character as a TOXIC employee. This is a person that is always looking to ‘work’ the system or ‘cheat’ the commission pay system. A name just popped into your head - you have one of these or have had one of these employees in the past. I had one years ago. He could sell ice cubes to Eskimos. However, he would steal every single sale that he could. Every other salesperson stayed mad at him all th...

When sailing, a sailboat needs adequate ballast to offset the wind load created by the sails - in order to prevent the boat from tipping over. Ballast is weight added to the keel of a sailboat for the purpose of making the boat more stable. If a high wind load exists (by larger or more sails), the ballast must be heavier. How does this idea relate to the Automotive Recycling Industry? I have always been a dreamer with extreme passion and desire to improve anything I touch. I am always looking for new ideas and trying to implement changes to make things better or more profitable. However, I found that I can dream up new ideas, roll out new procedures, and change policies so fast that anyone under me gets overwhelmed, exhausted, and pushed to the limit. I have found that I need someone for me to ‘bounce’ my ideas off of - someone that will tell me the truth. Sometimes ideas are great, they just need to be implemented at a later date. Several years ago, I empowered one of my manag...

(Authenticity + Vulnerability) x Credibility = Trust I read a book recently that defined Trust by the formula above. I agree with this formula and have seen many relationships falter as a result of lack of trust. I would like to dig in to this definition of trust in an effort to uncover a deeper truth: Communication is the Foundation of Trust. The dictionary defines Authentic as: Not false or copied; genuine; real; representing one’s true nature or beliefs. In each of these definitions of Authentic, we see that some type of communication is assumed - whether that communication is verbal or non-verbal. Vulnerable : Capable of or susceptible to being wounded or hurt; open to criticism. Again, we see communication at the foundation of this definition: criticism is verbal communication. Credible : Capable of being believed; believable; worthy of belief or confidence. This word points more towards a history or experience with the other party. It is an opinion that is based on previo...

Too many operations manage by crisis instead of systematically learning and implementing changes. Today, I’m going to look into the two different mindsets of leading an organization: Reactive versus Proactive. Proactive A proactive leader is always looking to improve his or her operation. There is a constant yearning to learn something new and implement it. This type of person is probably a reader that reads several books per year - or listens to them (that’s what I do). There are two major components to being a Proactive Leader: Learning and Doing. Learning There are several ways to learn new ideas. I’ve already touched on reading. Don’t think that you have to read books or articles that are specific to our industry - any leadership or management material contains ideas that could be adapted to fit the Automotive Recycling Industry. The idea here is to constantly be trying to learn something from anything that you read. Figure ways to adapt ideas or suggestions to your opera...

Do you always seem to run out of money before all of your bills are paid each month? Do you fluctuate buying cars from month to month based on cash flow on the day of the auction? Does payroll dictate what types of cars you buy each week? You are not alone. Many facilities face these exact issues every week, if not every day. The question becomes: What can you do to help mitigate these issues? These issues are symptoms of a larger issue: Cash Management. As cars become more expensive, customers become pickier (is that possible?), and competition from the internet forces us to turn a lower gross profit per car than ever before, we must become keenly aware of our cost of goods, gross sales, returns, fixed expenses, variable expenses, and profit in order to stay in the game. But, what is the secret sauce? What is the secret mixture of cars that produces the highest net yield? These questions have different answers based on which facility is answering them. However, we all should...

It Won’t Happen to Me “Fire! Fire! Run!” That was the cry of an employee in the dismantling area of one of my sites on a cool March morning of 2009. The improper handling of gasoline coupled with a fellow dismantler working to cut a core support off of a vehicle resulted in a fire that ultimately forced us to completely rebuild the entire building. I never thought we would have a fire of this magnitude and had done nothing to proactively safeguard us from the possibility. “Your Files have been Encrypted” It’s Monday morning and this message appears on the screens of every workstation and the YMS Server. Your heart races and you are thinking, “Do we have a backup?” You are the victim of a ransomware attack that results in five days of lost sales, a draw on your Line of Credit at the bank in order to make payroll, and two salespeople are threatening to quit because their commission pay was low. Are you prepared for an attack like this? Proactive versus Reactive After mult...

Service Creates Loyalty Is there a such thing as loyalty these days? Are the customers simply shopping for price? Does our level of service influence the chances that a customer will order another part from us? I believe it does! It takes years to build a reputation with a customer, yet it can be lost in a matter of a few interactions, if not sooner. We all know this statement is true, yet we don’t train our people to think this way. Let me explain how two interactions with a new car dealership service department caused us trade our car in for a car from a different manufacturer. In 2018, we bought a new Volvo XC60 for my wife to drive. We loved the car. It performed well, it had lots of cool technology. We actually decided that it was a better car than the 2017 Mercedes GLC300 that we traded in to buy it. After zero issues for the first 10,000 miles, it was time for a free oil change. My wife attempted to schedule the oil change only to learn that there were no technicians on du...

Frequency, Reach, & Yield How have you worked to increase your gross sales in the past? Have you sent out mailers? Hired an outside sales rep? Made cold calls? Shared your data through a third-party? I stumbled across a simple idea a few years ago that changed the way I focus on increasing gross sales. Before I get ahead of myself, let me backup and explain another truth I live by: You can’t improve what you don’t measure. By measuring anything, you focus on it and start working to influence it. An example of this would be weighing yourself every morning when you get out of bed. By making a simple, mental note of your weight, you modify what you eat and how much you exercise on that one day. If you weigh on a daily basis, you will probably be working to lose weight or, at least, maintain your existing weight. By measuring it and knowing where you stand, you empower yourself to make minor adjustments on a daily basis that allow you to eventually reach your goal. My goal is 175 l...

New Year's Resolutions The health of your business is equally as important as your personal health. Have you made New Year’s Resolutions for your business? If not, I would like to challenge you with three ideas for the new year. Empower an Employee to Do More (Delegate) Delegation is a word that we all hear more and more, but we don’t truly understand what it means and how we can grow our operations by simply turning over responsibilities to someone else. If you are anything like me, you struggle with the idea that someone else will not do as good a job as you are doing. We are all alpha-leaders that think that we know best and don’t want to trust someone else with important tasks. However, delegating responsibilities allowed me to grow my facility much faster than I could have done it otherwise. I developed a rule of thumb about 5 years ago: If someone else can do what I’m doing and do it 80% as good as I can do it, let them do it for me. I started empowering other ...