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It’s far from business as usual: just keep on going

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Autotechnician asks garages what steps they are taking in light of the coronoavirus outbreak.

We’ve all seen the pandemonium at the supermarkets recently as some take to stockpiling as a means to cope with the unknown. We are at the very beginning of the outbreak and life as we know it is going to change significantly for the foreseeable future. As we go to press, the schools have just closed, public transport is being restricted and we have just entered a lockdown. Our household still relies on our vehicles; to pick up supplies for elderly parents and my ex-husband is using his car daily as he is a keyworker at a primary school. Motorists tend to place the health of their car way down their list of priorities, but we’ll be checking in with our local garage to ensure the cars remain safe, despite their MOTs being suspended.

Communicate the importance of keeping vehicles safe and well maintained to your customers and get servicing and ‘put off’ repairs booked in now. If you have not done so already, create a hygiene checklist for the workshop and put things in place to ensure both staff and visiting customers will not be at risk. Is there anything you could implement, such as a mobile service, that could work for you? An increasing number of garages are introducing a collection and drop-off service to support social distancing and get around the problem of self-isolating. One week ago, we asked our friend Edward Grigg if it was business as usual at Swanley Garage Services – “Business- wise we are doing quite well, and the virus doesn’t seem to have affected anything so far. We are pretty much fully booked for the rest of the week anyway. Two of my substitute MOT testers are retired and help on odd days. They are reluctant to come to work as they are close to the older age bracket. We have called the business rates people this morning and they have said we should be eligible for a year off. They are just waiting for confirmation. We are providing a contactless collection and delivery service to our customers should they be worried. Apart from that, we are just taking each day as it comes.”

CHALLENGING TIMES

Autotechnician spoke to Gareth Davies who runs a German marque specialist workshop in South Wales. Here, he describes what he has already put into place and shares his thoughts on how to approach the challenge.

“The current outlook for small and medium businesses is very uncertain. If ever there was a time in 15 years of self- employment that has caused me real concern, it is now.

HYGIENE CHECKLIST

Use gloves where possible and wash hands frequently.

Frequently wipe down the following areas with disinfectant spray: Door handles, reception surfaces, keyboards, phones, pay terminals, work surfaces, kitchen, toilet.

If providing a collection and delivery service: Take a seat cover and wipe down the following on collection and again at delivery: Key, door handles, wheel, gear stick, handbrake, steering column controls. Do not use touchscreen controls or the radio.

Having flourished through a financial crash and recession, built a business up to one that employees six staff and enjoys a routinely full order book, the current pandemic has crept up out of nowhere. This is likely to be a management flaw on my part, not keeping fully abreast of the situation, being in ‘technician’ mode for too many hours a day and not in strategist mode for long enough. Now there’s a whole new problem to troubleshoot, that is much deeper and requiring greater levels of analysis than any fault we have had on a vehicle. I am confident that we can sustain a period of disruption and uncertainty, but what is the current measure of instability. If only we knew!

“We have been holding regular daily meetings as a team to discuss the strategy and immediate plan to circumnavigate the unfolding events and developments. Initial measures were taking stock of how we needed to change our daily activities to meet the safety needs of our staff, customers and suppliers. We’ve implemented strict hygiene ‘must do’s’ when receiving customers vehicles in, from front of house, to completed vehicles pending collection. We have then further advanced this to using our courtesy cars as collection and delivery vehicles for those who cannot make it to the garage, or who prefer not to. It becomes a fight or flight situation that like for many is still very fluid and must continually adapt to be able to achieve our operation priority – fixing cars and putting money in the till.

“It looks increasingly likely that the UK will be forced to enter a period of shutdown or reduced mobility for a period of time, to assist with the control of this global pandemic. The plan and strategy for the business continues to evolve behind the scenes to some extent to deal with the changes. I’m fortunate that none of the staff have children of a school age, but the school closures will certainly pose a new challenge for customers and staff of businesses alike.

“I am sure many Independent garages will be anxious as to the future of their businesses if trading has to be ceased for a period. The outgoings will continue to tick away while no revenue generation is taking place, so reserves will be hit. My advice to anyone would be to monitor the situation closely. If you’re in need of financial assistance should we get to that stage, don’t be afraid or too proud to take it. I’ve felt mixed emotions over the past days and weeks, thinking (selfishly) about all the efforts applied over the last 15 years to make a decent small business succeed, and that this global pandemic will undoubtedly have a significant effect. Do I want to see this potentially fall by the wayside, because of circumstances beyond my or anyone’s control? No, I don’t, not If I can help it.

“I intend on using all the help I can get to ensure we come out the other side, all my great team of staff keep their jobs and get paid properly. The government have rolled out a plan of financial assistance to businesses and individuals, which in my opinion is reassuring. It signifies, like many other states, that we should try not to panic. We should try, where possible, to continue with some degree of normality and do our very best to whether the storm – keeping one eye on the prize and the other on the outside world.”

“The current and overriding message after every meeting we’ve had so far, which I am sure is the mantra of many of us, is keep going. Keep turning out the work, putting money in the till, all for as long as we can. If we can put a smile on our faces while we’re at it, even better.”

GETTING BUSINESS THROUGH THE DOORS

We spoke to one business owner who is pulling out all the stops to get work booked in by making customer contact a priority with his reception staff. All service reminders, that up till now were sent out as automated emails or texts, have changed to phone reminders and outcomes of conversations are being recorded and circulated to its other branches.

The workshop owner has told staff: “It is paramount that we make every conceivable effort to keep work coming in. Once we have these vehicles on-site, we must identify all work needed and do our upmost to upsell. Free Vehicle Health Checks should be conducted to all vehicles and additional work estimated and chased with an enthusiasm never before seen. We alone have the ability to save our jobs and our income.”The business will be extending opening hours and shift patterns to suit demand and take payments over the phone whenever possible. “The paramount fact is that we MUST say yes. Whatever the client wants is what we will do, be that weekends or evenings, just say yes and we will overcome.”

  • Call customers one month before work is due and make the booking.
  • Tell your customers that you are open and intend to stay openPlan workload as far as possible so that you can secure the parts needed to do the work.
  • Reassure customers that you can collect and return the car without direct personal contact, and that you will be following strict hygiene protocols when handling client’s vehicles.
  • Ask customers if there is anything else you can do.
  • Say yes when they have a request, particularly around hygiene concerns, and if they are within an ‘at risk’ group, reassure them that you will act responsibly.

REDUCE THE IMPACT CORONAVIRUS HAS ON YOUR BUSINESS’ CASHFLOW

The outbreak of the Covid-19 coronavirus disease has affected and taken thousands of lives, but it is also having a growing impact on the global economy and possibly your business. The fact is that just as some people will die from the coronavirus, some businesses will fail. Here are some actions our accountants A4G in West Kingsdown have put together that workshop owners among you can take to boost your balance sheet’s immunity:

1. Utilise all the help that is available from the Government

The Chancellor announced a £330bn package of guaranteed loans. At time of writing, we are waiting for exact details of how this will work but it is likely to be a loan from your bank (or maybe another one) which is guaranteed by the government. This is an extension of the Business Interruption Loan scheme announced in the budget.

2. Start forward planning cashflow issues

Cash flow will be the greatest concern for most businesses. Cash may begin to stop flowing but demands for payment continue. You may have little control over debtor payments in the months to come, but you can control your outgoings. Use a cashflow planning tool so you can precisely plan what you are spending every month.

Plan servicing in advance with your regular customers to ensure their vehicle is safe and ready for use.

Also, consider ‘spring cleaning’ your finances, by switching utilities, reviewing your direct debits, de-cluttering etc. to reduce your outgoings.

3. Communicate with your creditors

Although it’s the part that we all fear – talk to your creditors and explain your situation. Transparency is always the best way with your creditors. They want their money back so it’s likely that they will work with you to put together a repayment plan that suits you both, in order to get it.

It is then essential you stick to your terms and conditions to prevent them potentially issuing a court claim against you.

4. Ensure you are using the best accounts package for your business

The right accounts package is key to preventing cash flow problems – software that has the potential to alert you of any problems that are likely to arise, before you find yourself drowning in the middle of it all.

5. Calculate your real break-even point

The phrase “real break-even point” refers to the level of sales you need to cover your costs and leave enough profit to cover tax and the drawings you need to live on. Conducting a breakeven analysis is vital to:

  • Help set sales targets
  • Identify your required gross profit margins
  • Understand the impact of an increase or decrease in prices
  • Be able to consider whether you need to reduce yourdrawings

www.a4g-llp.co.uk

FURTHER RESOURCES:

The HMRC have set up a helpline specifically for the self employed and business who are struggling now. Call the Coronavirus helpline on 0300 456 3565 to get advice on tax and any benefits you can claim for page34image83072www.gov.uk/ business-support-helpline.

A Coronavirus HR factsheet is available on www.autotechnician.co.uk, which will answer some of the most common questions workshop owners and employees will have over the coming weeks, including:

  • What should I do if I have employees within vulnerable groups, such as pregnant workers?
  • What do I do if someone refuses to come into work?
  • Do I have to pay employees who have Coronavirus?
  • What do I do if my employee can’t come to work due to school closures?
  • What if I have no work available for my employees?
  • If I have to lay-off staff, do I have to pay them?Health & Wellbeing support:Automotive charity Ben, offers a Helpline for automotive industry people, that remains open and operating as normal. Ben Helpline (Open Monday to Friday 8am – 8pm) page34image10387208081 311 333, email supportservices@ben.org.uk. The charity encourages readers to make use of their tips, advice & tools online at page34image104640www.ben.org.uk and get in touch via the Helpline if tailored support is needed.

James Dillon has created the ‘Automotive Support Group’ on Facebook, along with Andy Savva, Darren Darling, Steve Scott, Tom Denton, David Massey and Andy Crook, to help the trade in these unprecedented times.

The focus is on positivity, wellbeing and to provide an information hub for anyone looking for help and guidance. It is free to join and participate in. Search for the Automotive Support Group on Facebook or click HERE if you are reading online.

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