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Oh my… I’ve inherited an Auto Recycling Facility

by Sandy Blalock, ARA Past President and Executive Director of the Indiana Auto Recyclers Association, 11 Eastwind Lane, Edgewood, NM 87015 505-228-0401 bconsulting4u@gmail.com

So now you have inherited a recycling facility and you really do not know where to start. You have a great business background but not a lot in running an automotive recycling facility. The computer system is a bit of a mystery seems like a lot of information but how does one just start it up and sell parts? Your employees are uncertain what you are all about and have only really been told that you will certainly fail. The place is a mess in more than one way, no one seems to understand what their real role is in the business and now you have to take charge and move it forward.

My advice? “Just do it”.

In this modern world of auto recycling there are many small family run operations around the globe. They struggle to keep abreast of the many challenges we all face in business not to mention the automotive recycling business. Salvage is just as difficult if not more so for these operators to acquire. Competition is tough, customers are tougher and when you have to start anew it is somewhat a daunting task. So many recyclers over the years have found themselves in the same boat and have gone on to success so how does one “just do it”?

First and foremost don’t be afraid to ask for help and advice. There is plenty out there and it usually just takes a phone call. Get involved in recycling associations such as your state, provincial and ARA. The money you spend on these endeavors will pay you dividends in what you learn and save just by belonging. Remember do not be afraid to ask for help when you reach a crossroad with no signs of where to turn. There are lots of industry experts willing to work with you. Make sure that you align yourself with others who support your goals and initiatives. Stay away from those who tend to want to slow you down or discourage you in any way.

So let’s get started … first pick your battles, as you cannot fix everything all at once.

You might want to consider these to give you a sense of direction:

• What do I want the future to be?
• What benefit do I want to give to my customers?
• What returns do I seek?
• What standards am I aiming at?
• What values do I believe in?
• What values do you want your company to be known for?

Do start with a mission statement such as “To provide quality cost effective parts to our customers in a timely, efficient and environmentally safe manner. To at all times be a good neighbor in our community and put the needs of our customers and community first and foremost.” This is only one example, sit down and think about this. It does not have to be carved in stone and can change as your business grows. Once you have your mission statement in place let’s get to work.

Walk around your facility and write down what you see and make note of what you would like to fix or make better and also note what you feel the company’s strengths are already in place. Spend some time on this, as you want to select the things that will make the most sense and give you some return on your investment so that you can continue making improvement over time. Make sure that tour involves not only the outside but also all storage areas, office, sales area, dismantling area and even your office.

Spend some time sitting in your customer waiting area and watch the activity. It is important that you see what your customers see. Are your employees set up where they can address your customer as soon as they arrive? If not make that change first. Make sure that your sales people have some space to work that will give them some sense of privacy when talking on the phone with your customers. Nothing is less appealing to customers than sitting and listening to your salespeople talk on the phone. They feel like they are not getting all their attention.

Another important thing to remember first impressions are very important so make sure the reception area is not cluttered and has something to entertain your customer during their wait such as magazines, snacks and drinks. Make sure your signs and décor are positive and reflect the image your want to convey. Don’t scare your customers with negative signs such as “no cash refunds”, etc. as those convey distrust of your customers and while they are waiting they have plenty of time to draw conclusions as to the type of business you run. Also make sure if they are going to have to wait for their part more than a minute that your sales person asks them to have a seat away from the counter so he/she can continue to work.

After you dial in your front reception area next go to your dismantling and production areas and watch the workflow. Are your employees working efficiently or are they running around looking for the right tool because they do not have it right next to them. Are they using power tools? If not make sure that becomes part of their job description. Make sure they have all the necessary tools at hand where they can reach them without much movement away from the vehicle. All good mechanics know what tools they will need for any make or model so that really should not be an issue for your dismantlers. If the work area is not conducive to good workflow make sure that your employees work with you to make the necessary changes to improve that. Hold them to the task of cleaning up and keeping their work areas and equipment in top working order.

Watch every single employee that you have to make sure they are making the most of their day. If you see someone who is not staying on task and seems to need some sense of direction it might be a good time to sit down and review your employee job descriptions. Remember every employee should know clearly what your expectations are for him or her, so they are always productive and make the most of their days. If you do not have an employee manual make that one of your priority items.

Once you have a good view of what is happening on a daily basis sit down and look at the list you made and begin to prioritize what needs to be addressed. First make sure the employee manual and job descriptions are done and with the analysis of your facility you have more information to assist you in putting that to paper. Once that is done make sure to have a meeting with your employees and go over it with them. You can have a general meeting to discuss it in it’s entirety then schedule meetings for each employee to go over their specific role and responsibilities and make clear your expectations of each of them. If there are changes or improvements that need to be accomplished set timelines and goals for those and make sure that you hold each employee and yourself accountable for their part.

With your list in hand make sure to set your own personal goals for each of the items you need to work on. Be strategic with each goal, as they will set you on the right path to success if you manage them so you see improvement each and every day. Some of the changes may involve more than an investment of time so you will have to make sure that is part of your plan. Do you have enough cash flow to do what you need to do as well as continue buying inventory? Remember not to short your inventory buying account to do a lot of these projects, as that will have an immediate impact on sales.

If you have a lot of improvements that will take cash to achieve it might be wise to sit down with your accountant and budget those in to make the most sense. You should already have a budget however we all know that we find ourselves with something that is not included in the budget that needs to be addressed. Never take money away from your inventory budget if it can be avoided.

Make sure that your plan is visible where you can see it daily to help keep you motivated. Don’t be afraid to make changes to your plan as you see fit. You may find that once you get started priorities change so do not paint yourself into a corner, be flexible but always keep moving forward. Be ready for set backs, they happen just don’t let them discourage you and your team. Hopefully as improvements happen your employees are more encouraged and are now finding that they can trust you and your decisions. The process can sometimes be long but hopefully each day you will see some improvement if not reevaluate your plan.

Always keep your mission in mind and do not be afraid to get your hands dirty. This is not a clean industry and rebuilding a business takes a lot of sweat equity. Hopefully within a month you should see some substantial improvements and are on the right path to success. Your plan will succeed if you put all the effort and time in it that it needs. Again there are plenty of resources available if you can afford it. Make sure you have good accounting and legal advice available and with your business acumen you can work through much of the rest yourself. The learning curve is not a steep as you think, business is business and auto recycling is just one of them. Stay on track with your plan and you will make strides every day.

Remember first and foremost that if at first you do not succeed, reevaluate and whatever you do don’t give up … keep moving forward and “Just do it.”