Who hasn’t wished for a crystal ball to see what’s coming next?
For many years, you could spot the changes in our industry with a telescope. They were mostly slow-rolling and gradual as they swept into the industry. Unicoupe bodies, isocyanate catalysts, clearcoated paints, passive restraints and mixed metal panels all changed our business for sure but worked their way into the body shop over many years.
The recent past has been an avalanche of collision repair changes. The complexity of vehicle construction, the explosion of electronic nannies and ever more stringent insurance company repair standards now sweep into our industry in months, not years.
Sadly, the future still remains a mystery to us but the past is perfectly clear. And with the benefit of 20-20 hindsight, the woulda-coulda-shouda changes are now evident.
In lieu of a crystal ball but with the wisdom of time, we wondered what advice experienced shop owners would offer a newcomer. What is it you wished you knew when you started out? What heads-up would you give those joining our industry today? Those are the questions I asked 11 shop owners across the country. Their responses run the gamut from repair skills to financial expertise to claims procedures, but one common thread that stood out in neon during my calls was their commitment to formal training.
I’ll tell you a little about each of the body shop owners or managers I spoke with, and you can see what their advice is along with their photo – words of wisdom from those who have earned their way to success in 2017. Listen up.
Know Your Economics
Jim Pfau is the general manager of Alan’s Collision in Philadelphia. He had a background on the service side in several dealerships when the body shop manager passed away from a heart attack. “How hard could it be?” he figured. His first thought back then was that the body and paint techs didn’t get paid for all the things they were doing to complete the repair. Secondly, he discovered that tracking and improving shop KPIs is critical to profitability in any labor-driven service business. P&M profits, cycle time and touch time are among the indicators he consistently tracks.
“I really misjudged getting paid for the things we do to restore a vehicle back to pre-loss condition,” said Pfau. “I could have done better on the economics of running a collision repair center. Since the profit margin is so tight, I’ve developed tools to track our KPIs.”
Bill Stone owns A & B Collision in Clear Lake, Calif. He has been in the business since the early 1980s when he drove over the Golden Gate twice a day to have steady work in a body shop far from home. As he got into the business-end of collision repair in the early 1990s, he recognized the critical importance of financial training along with repair training. He took the original nine-part I-CAR series to improve his repair skills and currently attends all the business skills classes available. He says they’re lucky to have grown steadily, and clearly, he still likes his job.
“The only thing that I would tell my former self is to be more proactive in educating myself on the business end of collision repair,” said Stone. “Other than that, I’ve loved this trade from day one. I started as a clean-up kid at 18, traveled over 100 miles a day to work and back, and starting pay at that time was $5 an hour. I love getting up every day to go to work and meet the challenges of the collision repair business.”
Training, Training, Training
Gary Wano is the vice president, operations at GW & Son Auto Body in Oklahoma City. He’s a second-generation owner, and their shop has grown to 33 employees. They opened the door on March 4th, 1985 with all used equipment in 1,200 square feet. We talked about two big events: the unibody car, which required the most expensive equipment investment ever, and base-clear finishes, which ended the plastic sheeting and box fan paint booths of yore. Those changes took 25 years; change now is almost immediate. Aluminum, carbon fiber and megapixel plastics are all lightweight options designed to meet 2025 CAFE standards; training is required to repair them properly. Their shop is currently certified by Mercedes, Jaguar, Volvo and Tesla, among others.
“The industry is not where it was 30 years ago,” said Wano. “Back then, with a minimal investment and a willingness to work hard, an operator had a chance to succeed. Who would have thought today’s body shop owner would juggle the hats of IT specialist, software magician, equipment procurement expert, human resource guru, MBA and therapist – all while studying the new vehicle technologies that are each liable to change the outcome of all the previous juggling.
“The days of technicians with decades of experience are coming to an end. It would have been nice to know that ‘training coordinator’ is now, or will soon become, yet another hat to wear. Preparing a budget to cover monthly technical training is quickly becoming the norm. To be honest, I kind of miss the simple days when we scribbled a few notes, used an adding machine to calculate, ordered a part or two, wiped on some mud, wet down the floor to paint, and were home almost every night for dinner and never worked a weekend. To be successful in this industry is not for the faint of heart!”
Doing It Right
Mark Mallek owns Mark of Excellence Body Works in St. George, Utah. His family had a dairy farm and a trucking company. Way back, he restored the cars of their choice for each of his sons in his spare time. He subbed out some of the restoration work and thought for that kind of money, he would learn to do it himself. He’s a graduate of the school of hard knocks and found his niche restoring cars and building customs.
“I wish I would have known how long it takes to totally restore a car,” said Mallek. “True restorations have to be right in three areas: the body work, the interior and the drivetrain. The hours and hours of labor, energy and love required to make it show-worthy were many more than I predicted.”
A Skilled Profession
Ron Reichen has three Precision Body & Paint locations in Oregon. He says he has bodyman in his DNA. He has been at it for 42 years and is still discouraged by the disparity in labor rates for body and mechanical repair. He pays a guy $85 an hour to repair his lawnmower but can only charge $54 for his trained technicians’ work. He contends you can’t fix a car by using KPIs (percent of use, percent aftermarket, percent paint and materials). Some real, live-trained person must actually do the work. His analogy was the insurance company arguing with the doctor: “We’ll only pay for three stitches when you need seven.”
“Newcomers should know that our industry is no longer simply a trade, it’s a skilled profession,” said Reichen. “We need to offer benefit and incentive packages commensurate with the required technicians’ skill sets. To do that, we need labor rates more competitive with other mechanical repair businesses. We have to repair the vehicle safely for the client, not repair to a rigid set of KPIs for the insurance carrier.”
Educate the Customer
Leonard “Bam Bam” Heathcott owns Body Line Collision in Lawton, Okla. Twenty-five years ago, he started out painting Motocross helmets for his brother’s racing friends. He painted cars for the local Cadillac dealer and opened his own shop when the opportunity presented itself. He remains frustrated that insurance carriers exert so much control over our industry.
“I wish I had known how cheaply some insurance companies’ claims are paid,” said Heathcott. “The consumer needs to do a better job of understanding their policy and what quality of parts will be installed on their vehicle. We had a new car, 178 miles, that the carrier wanted us to repair with used parts from a salvage yard in another state. That isn’t right, and the customers need someone to stand up for them. And we do that at our shop.”
Money is Made in the Office
Willie Jefferson owns L.J.’s Auto Body Shop in Little Washington, N.C. In 1977, his dad sold the hot rod he had built and bought a 30’ by 40’ building and started painting cars. His mom taped and prepped and Willie worked in the shop every day after school and Saturdays from the time he was 12 years old. He said they didn’t know anything then about running a business, just how to fix cars. He’s currently in a new 13,000-square-foot building, and business grows each year. Clearly, he has changed with the times.
“We didn’t know how to run a business, even the most elementary stuff like our cost and selling prices,” said Jefferson. “We could fix cars quickly and well, but knowing how to repair vehicle damage is not anything like running a business. I would tell the newcomer to collision repair that the money isn’t made in the shop, it’s made in the office. You need a business education and good people management skills, but mostly learn to manage by comparing your results to the industry benchmarks. It has sure worked for us.”
Steve Moppert and his brother have degrees in music (Steve) and chemistry. Although that was unlikely training for this industry, their passion for cars – especially Corvettes – led them to own three Moppert Brothers Collision Specialists locations in Pennsylvania. They started with one shop in 1976 and built a reputation for top-quality work at insurance company prices. They like what they do and have long recognized the third-party payer’s importance in their business.
“When I started out, I was an arrogant kid with a lot of ability to fix cars,” said Moppert. “I didn’t know for years that it was a three-party system: me, my customer and my insurance customer/partner. I would tell anyone starting out today to recognize that when you fix the car, both of your customers must be happy. Treating the insurer like a customer is an important part of that contract.”
Embrace Others’ Best Practices
Kurt Mueller owns Kurt’s CARSTAR Collision Center in Maryville, Ill. He took auto body classes in high school two hours a day and got his start in a two-stall garage with a shop owner who turned out to be a great mentor. In 1980, he opened his own two-stall shop with $600 and some used equipment. Today, he has 16 employees and will do more than $3 million in sales. He
attributes much of his success to the opportunity to interact with other shop owners in the network.
“When I started out, I didn’t know enough to let professional people help me,” said Mueller. “My participation with CARSTAR and their version of a 20 Group has been invaluable. Embracing and implementing best practices from other successful operators has worked great. One thing that has been true all my 37 years is that good business will result if you’re honest and ethical and treat people like you would like to be treated. It isn’t brain surgery.”
Plan for Growth
Tim Oldham owns A Superior Collision Shop in Campbell, Calif. He has been in business since the late 1980s and has expanded based on his interest in repairing exotic collisions like Ferrari and Maserati. (The shop was just Maserati certified along with 13 other brands). To meet those high standards, he has equipped a top-quality facility and extensively trained his technicians to meet their rigid requirements. He purchased the shop he had managed for 14 years once he returned from other adventures. They had been through 10 managers during his absence, and the shop was at a fire sale price. However, he had to leave that location after those many years and do it within 12 months. His advice reflects his recent hard-won successful relocation.
“Recently, we relocated after 30 years,” said Oldham. “I now comprehend why the MSOs are spending big money to buy individual existing body shops. It was very surprising how challenging, expensive and time-consuming it was to deal with everyone from the city to the contractors to the required permitting agencies. My advice is to allow more time and money to change collision shop locations than you initially plan. Whatever you expect, double it!”
Pay Attention to Regulations
Dick Merron owns Iowa Auto Rebuilders (IAR) in Waterloo, Iowa, and has been a friend (and former customer) since we attended our first ARMS seminar together in 1981. He has been both body shop and fixed ops manager at a dealership and bought out his partner in the current shop several years ago. It’s always a treat to visit a super clean, well-run facility, and IAR fills that bill. I said to everyone I interviewed when it was time for them to offer me a quote, “Imagine we’re sharing a drink at the bar and I said I’m about to enter this business, what would you tell me?” I actually have shared plenty of drinks with Dick over our 36-year friendship.
“Pay attention to the insurance companies’ many regulations,” said Merron. “They intend to regulate both the labor rate and the repair operations that they will pay for; we feel that the vehicle owner comes first and that we should be paid for all operations needed to restore their damage. We negotiate to find a happy medium for all parties. Keeping the insurance carriers coming back to our shop is key; we’ve never had an insurance company check bounce!”
The many changes in our industry will provide new opportunities for collision repair shops that are willing to pay attention, train and adapt. The folks I spoke with were all optimistic about their future success. Hopefully, you heard something meaningful from them, and their cumulative wisdom offered you some food for thought. I’m positive that the new year, the new government and new car construction will all impact our business. I remain confident that we’ll be able to quickly and safely repair whatever the future brings us; we certainly have for the 47 years I’ve been involved. Go team!