AirPro Diagnostics: Tips for Running a Family Collision Business
How should we structure our office staff, when should we hire and how do we determine who is responsible for what?
“How do I make my office flow? We’ve experienced major growth with a move to a new location, and we’ve struggled in how to structure our office staff and when to hire people on and who should be responsible for what. What is the step-by-step office flow in a $1 million-plus facility, and how does it integrate with the back shop? It would be good to know the office positions, along with brief job descriptions, and who is accountable for what and what might be the rule of thumb on when to add personnel.” — Julie Steinberg, owner/operator of North Iowa Collision Center in Clear Lake, Iowa
Question answered by: Hank Nunn
The growth of your business, and a move to a new, larger facility, is something everyone dreams of. But the reality of that move can be more of a nightmare than a dream.
I clearly remember moving my collision center from one location, where everything ran like a well-oiled machine, into a new “state-of-the-art” facility. We found that very few of the systems developed in the old shop worked in the new shop. The first few months in the shiny new facility were chaotic.
It would be great if someone had a perfect set of Standard Operating Procedures (SOPs) with job descriptions for collision repair facilities.It would be even better if those SOPs were developed for shops based on annual sales. If that were the case, you could simply pull up the SOPs for a shop with annual sales of $1 million and plug them in. That would be great, but what works for one shop with several DRPs may not work for another shop full of non-DRP business.
Highly efficient collision repair facilities share some common characteristics. First, these shops fully use their management systems. Second, they’re process driven with written procedures outlining how different things are done. Third, these highly efficient facilities are constantly looking for ways to improve, eliminating unnecessary activities or doing anything more than once per repair.
The answer to your question depends on a wide variety of questions. Do you have DRPs in your shop? Do you have a management system and, if so, which one? Do you have a parts person? What is the physical layout of your office? Are your estimators paid a salary or commission? That’s just scratching the surface.
That “step-by-step office flow” will be different for different shops based on sales, staffing, layout and product mix. There are “rules of thumb” for office staffing, but those rules change based on many variables.
Example: One rule of thumb for office staffing is $30,000 to $50,000 per month per office staff. With this guideline, a shop doing $100,000 per month should have two to three staff people. I’ve worked with shops that sell more than $75,000 per month per staff person. I’ve also worked with shops that have a tough time doing more than $25,000 per month per staff person. I’ve worked with estimators who can sell and process more than $200,000 per month, and I’ve worked with estimators who have a tough time processing $50,000 per month.
So, do you have a management system? If you utilize a management system to generate and maintain repair orders and manage parts and labor, you will build many of your new procedures based on the system you use and how well you use that system.
Additionally, your management system provider is a great source of information that can be used to streamline your processes. Management system providers have many tools available to customers, such as basic SOPs, that may be used to eliminate waste, such as double entry of data.
So, look for help and information from your management system provider. Many smaller shops don’t have management systems and do just fine. But you’ve moved from a smaller shop to a larger shop! If you don’t have a management system now, this may be the time to look for one!
Do you have written SOPs? Most collision repair facilities don’t have SOPs. Instead, there is a culture of, “This is how we do it here.” That may work in a smaller facility, but as the company grows, the importance of SOPs increases.
In the case of my shop’s move, we had SOPs developed and in place for our earlier location. We found that with the move, those SOPs did not work anymore. For example, in the old shop we had one estimator, one manager who also wrote estimates, an office manager and a part-time receptionist. The office was small, so staff communication was simple. Everyone could simply talk with everyone else! Our SOPs were built around that office staff and a small office.
When we moved into the new facility, that staffing was overstressed! Our earlier SOPs no longer worked as additional people were needed to process the volume. Since the office was bigger, we couldn’t communicate as we did in the old place. The answer for us was to update the SOPs to reflect the larger facility and to develop new processes as required.
If you have SOPs from the old shop, don’t toss them out! Look for ways to improve them and change them as needed.
No SOPs? Start generating them. Since your question is based on office flow, let me suggest a process to improve the flow. Understand that your facility and office is unique. There is no “cookie cutter” solution to your problems. It’s up to you and your team to develop solutions.
Begin by documenting how your office team currently does things. How are customers greeted and who greets them? Are you using a qualification form or process at the initial customer contact? Who completes that form? Does the receptionist load the initial customer information into the estimating system or does the estimator do that? Who generates the RO? Who orders parts, how and when? Who schedules estimates and repairs? How are these activities scheduled? Is there a system for keeping customers informed? How, when and by who?
Once you have the current processes listed, begin to write simple process steps, usually as an outline, to standardize individual processes. For example:
Initial Customer Interaction:
- Reception person smiles and greets all initial customer within 20 seconds
- Reception person interacts with customer and completes a customer information form (CIF)
- Reception person introduces customer to estimator and reviews key points from the CIF
This process seems simple, but as you get involved, it gets more complicated. In the example above, someone will ask, “What if the reception person is at lunch?” So you decide on a process to be used when that person is at lunch and add that to your SOP.
Involve your team! Let your estimator document their individual process steps. The office manager can document their steps, and the reception person can document what they do. Working as a team, you take much of the load off your shoulders, and the new processes you develop will have a much higher chance of success than if you develop processes and tell the team that they need to do it your way.
Look for steps that are done multiple times by multiple people. Those things are waste and should be systematically eliminated from your process. Find ways to systematically eliminate the “Well, it depends” from process steps. “Well, sometimes I complete the customer information form, sometimes the estimator does it and sometimes we don’t do it at all. It depends” is not acceptable.
Those high-efficiency facilities mentioned above are process-driven facilities that don’t do things twice. When a customer walks in the door, there’s no question who greets the customer, who completes the customer information form, and how the estimate and RO are generated. Those facilities tear down vehicles prior to damage analysis whenever possible to eliminate supplements and multiple parts orders.
Help Is Available
How do you get from wherever you are now to that high-efficiency facility? There is help available. Look to your management system provider for assistance as that tool, properly used, will greatly assist in streamlining your office flow. Look to your paint company as they have training available, SOP examples and consultants on hand who can assist in improving your office flow. Look for 20 groups, which are groups of non-competing shop owners and managers who gather to share ideas and learn from each other. You’re not the first to face these problems, and many answers may be found by networking with other shop owners who have already been down that road.