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The Tale of One Shop Continues…

….with Paul and Teresa Slate

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In recent months, we’ve visited with Paul
and Teresa Slate, new body shop owners in Tennessee who agreed
to share their experiences – both positive and negative – with
us. In this issue’s update, we read from Teresa and Paul’s November,
December and January journal entries.

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November

– As it turns out, our endeavor to use a temporary
service for a cleanup person is no longer necessary. Our 17-year-old
son, who is a junior in high school, will be with us full time
because we’ve decided to complete his education through home schooling.
Teresa, a former teacher, feels very confident with her ability
to perform this task, therefore allowing David to work at the
shop – which is what the three of us favor. He arrives at 7 a.m.
each morning to pull cars out of the shop (all vehicles are stored
inside at night) and clean the office. He then goes to an additional
office upstairs to do his school work. In the afternoon, we have
him to detail cars, run errands and help with answering the phone.
Our 19-year-old son comes to the shop after college classes and
takes care of shop cleanup. So far, this arrangement is going
great.

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– We use an accountant, who has been with
the business for 21 years prior to our becoming owners, to do
our monthly profit/loss reports. Even though our present computer
program has provisions for calculating our own monthly reports,
we felt it was important for the first few years to retain the
supervision of an accountant who was familiar with the business.
Each month when we receive our report, it’s been hard for us to
understand some calculations due to lack of familiarity with owning
our own business. It has also been hard for us to maintain communication
with the accountant regarding questions and answers, so we’ve
mutually decided to meet for lunch once a month, with the completed
report, to discuss any questionable issues. This will help us
to feel more confident with our business’s financial position
and the accountant to feel more confident with our business
understanding.

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– We enjoyed NACE, as usual, but the best
part was meeting so many people from BodyShop Business and running
into people who recognized our names from the articles in the
magazine. One lady even remembered our dog’s name. We also saw
several people who had been on the first BodyShop Business cruise
with us last March. It was fun to share [tales about] events [that
took place] in our shops over the last year.

– Our new paint booth is proving to be a great
investment; the fast-curing cycle has increased throughput and
improved paint quality. The painter has been working here for
20 years and has never painted in a heated, downdraft booth. We
threatened to get him sunglasses to subdue the improved lighting.

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– We’re changing paint brands and suppliers
this month, which is a result of much investigating and testing.
This change will provide a host of services we weren’t getting
in the past. Our paint-material cost will be reduced, and the
paint company has a regional lab here in Nashville that provides
classes, ranging from paint prep to shop management. Additional
services include shop-layout and efficiency studies, as well as
shop cost and finance analysis that compares us to national averages.
Several paint companies are offering similar programs, but this
company has a local lab and has proven successful in the past.

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December

– Christmas at the shop is always fun. We
decorate, of course, and receive dozens of cards that we put up
around the office. Suppliers are always bringing us things to
eat, so we open up the goodies on the desktop for all everyone
to enjoy. On Christmas Eve, we close early to have a lunch for
our employees and their families. At that time, we give each employee
a small present to show our appreciation.

– Teresa recently visited a local body shop,
which turns out about three to four times the volume we do, to
get ideas about office and shop procedures. Not everything she
observes is helpful, but one item – a new job costing format –
has helped us acquire more accurate figures on our percent of
profit for each vehicle repaired. It appears to be very worthwhile
time spent.

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– We’ve been working diligently on a cost
analysis of our shop, trying to get it in line with industry standards.
Knowing what it costs you to open your doors each day certainly
helps put your goals in perspective. When we bought the business,
we maintained the pay scale of the previous owners, but we’ve
since discovered they were paying above the local averages for
body techs and highly above the local averages for painters. Therefore,
to make our operations cost effective, we’ve changed our body
techs and painter to a flat rate per estimate hour. This didn’t
lower the body techs pay, but it did lower the painters pay. This
created tension at first, but we hope he’ll understand why it’s
necessary to help increase our profitability. We also changed
paint suppliers this month to a local company that offers numerous
courses to help our painter work smarter – therefore, working
at the same rate, he’ll still be able to earn the same pay.

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– We’re very pleased with our new paint supplier.
The owner has quickly become a good friend and is determined to
help us, not only to lower our paint-materials cost, but to help
us increase profitability. The paint company also has a local
lab for painter trainees and programs designed to analyze our
cost versus expenses to help us find weak areas in our operations.
They also help us resolve any problems that may be hindering our
shop’s growth or profit and have technicians available to help
us with any paint problems.

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– During the first week of December, our 19-year-old
son informed us that he didn’t intend to return to college. He
wants to paint, and he plans to manage the shop with his brother
in the future. Of course, we told him we expected him to take
all paint courses offered through our paint supplier, all I-CAR
courses and all body shop management courses. He readily agreed
and has already attended one paint class. He’s presently working
as our painter’s helper, and we feel our painter will be a good
trainer and example for him.

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January

– We sent four employees to I-CAR Collision
2000 classes in January and have committed to send two employees
through all the I-CAR classes offered. This would achieve our
goal of becoming an I-CAR Gold shop. However, we were very disappointed
to learn that the local I-CAR instructor canceled all future classes
because he was too busy. At present, we don’t know when or who
will resume local I-CAR classes.

– We had an outstanding SCRS session in January
at Nashville’s new $130-million arena. Our guest speaker was Marv
Rather from Yuma, Ariz., and his topic was, "Writing More
Effective Estimates." It was a great all-day event with about
300 in attendance. We are SCRS members and would encourage all
body shops to be.

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– Our new paint supplier and paint company
are performing very well for us. We’ve reduced our paint cost
by about 25 percent because we’re using a high-solids paint and
a new computer that allows us to mix smaller quantities of paint.
Our new paint company is in the process of doing a three-phase
shop analysis, and we’ve received the results of phase one and
are evaluating the data.

– We’re working on improving our body labor
hours through tracking and incentive programs. We continue to
enjoy a healthy backlog of about two weeks of work.

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Next time, the Slates receive training
on updated management software, try different advertising avenues
and wrestle with old-building and equipment problems.

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