About Audatex
Audatex is the leading global claims solutions provider serving the automotive industry. Active today across six continents, Audatex provides world-class claims solutions that help customers automate their processes; managing millions of claims each year efficiently and effectively, and resolving billions in claims settlements. Beyond a leading presence in automotive claims, our growing footprint also extends into the property, automotive related financial services and medical claims solutions markets. As part of the Solera group of companies, Audatex, Sidexa, Informex, ABZ, Hollander and IMS draw on unique global experience to develop and deliver the latest technologies, market intelligence and best practices on a local level. For more information, please refer to the Company's website at www.audatex.us.
Small Body Shops OK with Cash For Clunkers
Web-Est, LLC, a collision estimating repair software provider, recently completed a survey asking small collision repair shops what they thought about the governments "Cash for Clunkers" program. The results provided some interesting views of how the industry might be affected.
"Now that our government has spent $2.6 billion to help car makers, the results are now in; just under 700,000 new vehicles are on the road. We thought this would be a good time to ask our customers what they think." Said Eric Seidel, President/CEO of Web-Est, LLC. "While most feel it's too early to see any meaningful change, the feedback offers a range of thoughts on the subject." Seidel continued.
Auto Shop Owner Shot Dead over $800 repair bill in Georgia
San Diego Body shops, mechanics may take weeks to get parts
Update: New Location for Shops Meet to Discuss Possible Class Action
About 60 shops have signed up to attend a meeting with attorneys in Sacramento, CA, on Nov. 12 to discuss a possible class action lawsuit against State Farm Insurance. Gene Crozat of G & C Auto Body said the meeting is designed to help shops "evaluate whether State Farm has been steering customers away from their shops, and to evaluate whether they have potentially viable claims against State Farm." For more information about the November 12 meeting, contact Peter Bizaca, (707) 591-3365.
Autobody News to Exhibit at NACE
Please come by our booth at NACE (#2250) to discuss your shop, the industry, and any suggestions you have for coverage in the paper.
SPECIAL GUESTS:
Thursday, 1:00 PM Lee Amaradio, CRA President. Come by and talk with Lee about the industry and CRA in California.
BASF Announces Schedule Change for SEMA Events
BASF Automotive Refinish Solutions will exhibit hot cars, cool colors and automotive design stars at the 2009 Specialty Equipment Market Association (SEMA) Show at the Las Vegas Convention Center, booth 21442.
Oct 09 Southwest Full Issue
Southwestern Nov 09 Contents
2010 Ford F-150 Named 2009 ‘Truck of Texas’ 8
2010 Jeep ‘Compact SUV of Texas’ 1
40MPG.org Blogs About Changing OEM Attitudes 33
AASA ‘Snapshot of the Auto Industry’ in 2009 20
AB 1200 Signed Off, SB 827 Signed ‘On’ 39
AkzoNobel’s New Self-Healing Clearcoat 24
Alice, TX, Shop Robbed 14
Assured Performance Pilots GM Parts Rebate 23
Auto Repair Shops For Sale in Austin Metro Area 22
Autobody News’ First Annual ‘Productivity Tools’ Roundup 12
AutoClaims Direct Has New Subrogation Plan 4
Autoland Scientech Designs Top-Tier Automotive Diagnostic Systems 19
Big R Show Panel Will Test Engine Failure Analysis 22
CAUSEY - Body Shop Alert: Scam Artists Still Want to Steal Your Money! 7
Collision Hub’s Webinar Sponsored by I-CAR 26
DuPont Designs More Than 100 Auto Products 20
DuPont Integrates Performance Coatings Services 4
DuPont Picks New Managers For New Services Division 4
ESPERSEN - Trailer Hitches on 2007 Explorer®, Mountaineer®, and Sport Trac® 36
EVANS - A Smaller Project Can Be Time or Budget Killer Without Precautions 32
Ford Approves Sherwin-Williams’ AWX Waterborne 35
Ford’s Largest Recall 22
FRANKLIN - The Big Divide—Affordable Marketing Data and Administration 26
GM OKs AkzoNobel’s Sikkens & Lesonal 18
HEY TOBY - Parts-Handling SOPs A Good Start on Implementing Lean 6
Hodges’ Blue Ribbon 4
Honda Names DuPont Supplier of the Year 38
Hybrid Happenings from Hybrid Owners of America 30
I-CAR Ed Foundation and NATEF Drawing 23
I-CAR Offers In-Shop Welding Qualification 18
I-CAR Technology Showcase at NACE/CARS 11
I-CAR/NATEF Hold 2nd Welder Drawing 23
LKQ Acquires Greenleaf Auto Recyclers 25
Massachusets Appraisers Appointee Resigns 25
Mitchell ClaimTools Digital Camera and Photo Management System 28
Mitchell to Feature New ‘Shop Workspace’ at NACE 2009 14
NATA has ALLDATA Pricing Incentives 4
NaviGates Provides Link to Whole Gates Product Database 20
Unique Oct 09 Southwestern Contents
The Following Articles Appear only in Southwestern Edition
Don Chalmers Ford, NM, Saves Big by Recycling 3
El Paso Hailstorm Losses Exceed $150M 8
Ford Parts Managers SOUTHWEST Credit Smart Plans 16
Fraud Committee Fights for HB 148 1
Has A Quiet Earthquake Already Begun? 4
Katrina Insurance Scam in Louisiana 8
Longview TX Shop Has Stolen Truck Recovered 33
Louisiana Insurance Agency Suspended 4
Oct 09 Southwest Contents
The Following Articles Appear only in Southwestern Edition
Don Chalmers Ford, NM, Saves Big by Recycling 3
El Paso Hailstorm Losses Exceed $150M 8
Ford Parts Managers SOUTHWEST Credit Smart Plans 16
Fraud Committee Fights for HB 148 1
Has A Quiet Earthquake Already Begun? 4
Katrina Insurance Scam in Louisiana 8
Longview TX Shop Has Stolen Truck Recovered 33
Louisiana Insurance Agency Suspended 4
New Vehicle Sales to Bottom ‘09, Peak ’14 3
West Texas Dealerships Go Waterborne 32
Oct 09 Western Full Issue
Nov 09 Western Contents
2010 Ford F-150 Named 2009 ‘Truck of Texas’ 34
40MPG.org Blogs About Changing OEM Attitudes 38
AASA ‘Snapshot of the Auto Industry’ in 2009 34
AB 1200 Signed Off, SB 827 Signed ‘On’ 10
AB 1200: CRA Looks Forward to the Rest of the Story 10
AkzoNobel’s New Self-Healing Clearcoat 8
Alice, TX, Shop Robbed 25
Allstate Will Track KPIs for Glass Shops & Providers 49
Assured Performance Pilots GM Parts Rebate 50
Autobody News’ First Annual ‘Productivity Tools’ Roundup 20
AutoClaims Direct Has New Subrogation Plan 8
Autoland Scientech Designs Top-Tier Automotive Diagnostic Systems 30
Big R Show Panel Will Test Engine Failure Analysis 35
CAA 4th Qtr Board of Directors Meeting 25
CAA Sees Agencies Stepping Up Enforcement 8
California Vehicle Arson Fraud Up 25% in 2008 35
CARSTAR CEO Dick Cross Aligns the Stars at Annual Conference 40
CAUSEY - Body Shop Alert: Scam Artists Still Want to Steal Your Money! 48
Chrysler To Split Dodge Into Two Entities 58
Collision Hub’s Webinar Sponsored by I-CAR 24
Congress Considers Dealer Watchdog 56
Deer Vehicle Collisions Up 18% Over 5 Years. 45
Dent Fix Develops Cutting-Edge Body Tech Tools and Equipment 26
DuPont Designs More Than 100 Auto Products 34
DuPont Integrates Performance Coatings Services 4
DuPont Picks New Managers For New Services Division 4
ESPERSEN - Trailer Hitches on 2007 Explorer®, Mountaineer®, and Sport Trac® 57
Unique Western Oct 09 Contents
The following articles appear only in Western edition
A Profile of the Evolving Collision Repair Marketplace (ORIGINAL TEXT in PDF) 50
Arco’s Auto Body is Emilio Arco Jr.’s Collision & Mechanical Dream 36
Arizona Veterans Look Forward to Donated “Recycled” Rides 41
BASF Hosts Chip Foose at Buena Park Custom Colors Event 42
CAA Santa Clara 2009 Trade Faire 10
CRA President Amaradio Writes to Body Shop Owners 48
"Fed’s I-215 Widening in San Bernardino, CA" 47
Fix USA Has New President-COO 39
Floor Mats Implicated in San Diego Fatal Lexus Crash 3
Oct 09 Western Contents
"$92,000 Stimulus Give-Away at NACE/CARS 9
2009 AASA Japanese Parts Catalog Program (JPCP) 35
A Profile of the Evolving Collision Repair Marketplace (ORIGINAL TEXT in PDF) 50
Add-On Education Expands Overall Event Offerings 14
AkzoNobel Hosts Business Forum with OEM Collision 14
Amaradio - Careful Decision Making 47
AMI & ASA Announce Scholarship Recipient 18
AMI Offers ‘Struggling Businesses’ Training 44
Arco’s Auto Body is Emilio Arco Jr.’s Collision & Mechanical Dream 36
Arizona Veterans Look Forward to Donated “Recycled” Rides 41
Audatex Has New Managing Director 40
Auto Body Employee Killed in Oil Barrel Explosion 4
Auto Glass Expo at NACE: Repair and Replacement 48
Automakers Support Ban on Texting Drivers 24
Automotive Video Has New Mode $06 Training 35
AutoNation CEO “Never Been More Optimistic” 39
Bar’s Products Gives to 152 Collision Schools 34
BASF Hosts Chip Foose at Buena Park Custom Colors Event 42
Bendix Brakes Wants Auto Tech “Passion” 34
Body Tech Fights off Grizzly Armed Only with an Arrow 4
Book About Ford to be Made into 2010 Movie 28
CAA Santa Clara 2009 Trade Faire 10
Collision Coverage Historical Trends 46
Colorado Shop Owner Killed Cycling 4
CRA President Amaradio Writes to Body Shop Owners 48
Customer Loyalty Studies: Implications for the Future 31
"Customer Profitability Analysis: Protect Winners, Fix Losers" 34
"Database Enhancement Gateway Logs Over 1,600 Enquiries" 11
DSI Standard Bus Has New Consortium Support 35
Evans - Working Closely With Your Customer 49
"Fed’s I-215 Widening in San Bernardino, CA" 47
Fix USA Has New President-COO 39
Floor Mats Implicated in San Diego Fatal Lexus Crash 3
Ford CEO Mulally to Keynote at CES 28
Ford Motor Company: Making All the Right Moves 26
Ford Parts Managers Credit Smart Plans and Better Cars 29
Ford’s New Diesel Boosts 2011 Super Duty 30
Experienced Auto Technician Wanted iin Longview, Texas
Fix Auto Anaheim looking for Estimator
Company: Fix Auto Collision Anaheim
Contact: John Carter
Homepage: fixauto.com
Phone: 714-517-0527
Fax: 714-774-4184
Address: 1331 S Auto Center Drive
City, State Zip: anaheim California 92806
Email:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
SEMA Show--- Floor Tour With Tire Rack? The Recession Effect? Who's Lean and Green?
Matt Edmonds, vice president of Tire Rack www.tirerack.com, America’s largest independent tire tester and direct source for tires, wheels and performance accessories will be at the upcoming SEMA Show in Las Vegas to gauge and evaluate the pulse of the industry as a whole on Monday Nov. 2nd – Thursday Nov. 5th. As a result of the worst recession in decades, several major tire manufacturers are unable to attend this year’s show as you know. What does this mean for the industry as a whole and what’s new at the show despite several manufacturers not in attendance?
Autoland Scientech Designs Top-Tier Automotive Diagnostic Systems
Richard Zenteno, the Marketing Director for the Americas for Autoland Scientech U.S.A., has recently seen a movement throughout the country in which body shops are incorporating diagnostics along with mechanical repair and adding it to their menu of capabilities, he said. The reasons for this new trend are many, Zenteno explained.
To read this article in PDF format with photos CLICK HERE
Ben Johnson, Diagnostics Expert, Joins ALLDATA
ALLDATA has announced the appointment of Ben Johnson as senior product marketing manager. His immediate responsibilities will include the company's core product, ALLDATA Repair, as well as development of new diagnostic tools, enabling greater efficiencies for automotive service professionals.
Ford Intensifies Focus on Electrification Strategy as Nancy Gioia Takes a Global Leadership Role
-- Ford Motor Company has named Nancy Gioia to the new position of director of Global Electrification as the company accelerates its electric vehicle strategy
Attorney Todd Tracy Urges Full Access for Toyota Accident Victims
GM Sales Up in October
A top General Motors Co. sales analyst says the automaker is likely to post its first year-over-year monthly sales gain in October.
Texas Auto Insurance Rates Decline 14.2% in 2009
The median six-month auto insurance rate in Texas has decreased more than 14 percent since the beginning of 2009 to reach $744.00, according to InsuranceRates .com(TM).
Oklahoma Tax Commission Allows EV Tax Credit
The Oklahoma Tax Commission has ruled that all GEM electric vehicle models are now eligible for the Qualified Electric Motor Vehicle Property Income Tax Credit. The October 7, 2009 qualification letter issued to Global Electric Motorcars validates the availability of the 50% of vehicle cost income tax credit for GEM car buyers.
First Annual ‘Productivity Tools’ Roundup
Today’s autobody shop owner has a great many options when selecting tools that will increase the productivity of his/her business. From tools such as management software, add-ons for the estimating software in use at that business, or camera systems that improve the digital documentation for each repair, shop owners can spend a great deal of time comparing options and searching for the productivity tools that best meets the needs of his/her business.
Kentucky ASC Surveys Shops on Insurers
The Automotive Service Council of Kentucky is conducting a survey of collision repair shops in the state to determine how they would grade insurers on how well each insurer’s policies, attitude and payment practices help ensure quality repairs and customer service for Kentucky motorists.
3M donates Over 300 3M Dynamic Mixing Systems
3M donated 319 3M Dynamic Mixing Systems, valued at $300,000, to the I-CAR Education Foundation. The company and foundation will arrange to have the systems distributed to career and technical schools and colleges that offer collision repair and automotive refinishing training programs.
ChiltonPRO.com Now Features Animations and Videos
Chilton, part of Cengage Learning and an established leader in reference sources for automotive professionals and Do-It-Yourself (DIY) automotive enthusiasts, today announced that its professional automotive repair information system, ChiltonPRO, now includes videos and animations that demonstrate system operation, repair techniques and safety precautions to improve and simplify vehicle repair and maintenance jobs.
Mitchell ClaimTools Digital Camera and Photo Management System
Photo documentation and the process for sorting, storing and managing photos for insurers as well as documenting pre-existing damage and other conditions before and during a repair can be a very frustrating and time-consuming process. As Autobody News talked with shop owners and managers about the productivity tools they found most helpful in their business several mentioned, with excitement and enthusiasm, a company called ClaimTools™, which has very recently been acquired by Mitchell International.
Oct Service, Diagnostic, and Mechanical Contents
Estrella Ranch Collision Center, Avondale. AZ
Lloyd’s Collision in Santee, CA, Puts Some Diverse Work Through an Eight-man Shop
Nevada Shop Files Suit Against Mitchell in California Court
In a potentially far-reaching case, Tim and Steve Waldren, of Paramount Autobody Shop, Inc. in Reno, NV, have brought suit against Mitchell International, a division of The Aurora Capital Group, a Los Angeles-based investment firm, in California Superior Court. The Waldrens filed their suit at the urging of their father, Phil, who passed away recently but was a staunch defender of family, shop, and industry. Phil Waldren was also a former State Farm employee.
New Federal Environmental Regulations for Auto Body Shops
As the title implies, the Environmental Protection Agency (EPA) has recently adopted rules which directly affect autobody shops across the nation. These new rules, designated as National Emission Standards for Hazardous Air Pollutants (NESHAP), Subpart HHHHHH (6H), are in addition to any current state or local permits, exemptions or authorizations you may have. If you don’t have any existing state or local permits, that’s another issue altogether and these new rules will likely draw attention to that situation as increased scrutiny is directed toward your industry due to 6H implementation. It should be noted that 6H is part of a larger body of regulations applicable to minor or “area sources” as defined by the EPA. Should your shop be a major source, which is possible but unlikely, then 6H does not apply.
KY State Anti-Steering Bill
The Automotive Service Councils of Kentucky is backing a sweeping piece of legislation, pre-filed this fall for that state's 2010 legislative session, establishing new restrictions on insurer steering, claims payment and damage appraisals. The bill (BR 70), introduced by Republican Senator Gary Tapp, requires an insurer to immediately inform insureds or claimants when they file a claim that they have the right to use the shop of their choice. Under the bill, the insurer may not request or require that the appraisal or repairs be made by a specific shop. Once a consumer has chosen a shop, the bill adds, "any attempt to change or restrict (their) decision shall cease." It specifically prohibits "deceptive referral practices," defined as "any trade practice by which a consumer's choice is changed, swayed or limited...by misleading statements, omissions, threats, deceptions, promises or inducements." The bill also would prohibit an insurer from limiting the amount it pays for repairs "on the basis that the repair would have cost less if it had been made at a particular (shop) specified by the insurer." In an effort to curtail "desk audits," the bill also would require anyone (other than the original preparer) changing or agreeing to changes of an appraisal or estimate to physically inspect the vehicle. Penalties for violation can include a fine of up to $250, imprisonment for up to 90 days, and forfeiture of any state insurance license.
Space-Age Safety: Ford, Auburn Explore How GPS Satellites Could Help Prevent Auto Accidents
- Joint advanced research by Ford Motor Company and Auburn University shows that global positioning system (GPS) satellites could potentially monitor a vehicle's motion and communicate with in-car safety systems to help prevent accidents
- Virtual reality tests show that GPS satellites can precisely monitor a vehicle's motion, which could improve the speed and effectiveness of electronic stability control systems. The joint research is now moving into the prototype phase
- The research team will present initial research findings at the Institute of Electrical and Electronics Engineers' International Conference on Systems, Man and Cybernetics in San Antonio, Texas, Oct. 11-14
- Ford scientists in Dearborn, Mich., are working with researchers at Auburn University's GPS and Vehicle Dynamics laboratory in Auburn, Ala., as part of ongoing research with universities across the country focused on safety and sustainability
CCAR-GreenLink Features New EPA Training Video on "Paint Rule"
CCAR-GreenLink®, the National Environmental Compliance Assistance Center for Auto Repair, is now featuring a new training video prepared by the U.S. Environmental Protection Agency [EPA] on emissions regulations impacting collision repair operations across the U.S. [These regulations are also known collective as the “Paint Rule.”]
The video is available in streaming format, along with other related resources, at www.ccar-greenlink.org/paintrule.html.
ALLDATA Donates to I-CAR Education Foundation's Collision Repair Education
ALLDATA has announced its support of the I-CAR Education Foundation by making a donation to the Collision Repair Education Campaign. The funds, which total over $7,400, will go towards grants and scholarships to be distributed to the schools across North America. ALLDATA contributes a portion of each ALLDATA Collision sale from facilities that have achieved the I-CAR Gold Class designation to the I-CAR Education Foundation.
New Federal Environmental Regulations for Autobody Shops
Deadlines are Looming
The Environmental Protection Agency (EPA) has recently adopted rules which directly affect autobody shops across the nation. These new rules, designated as National Emission Standards for Hazardous Air Pollutants (NESHAP), Subpart HHHHHH (6H), are in addition to any current state or local permits, exemptions or authorizations you may have. If you don’t have any existing state or local permits, that’s another issue altogether and these new rules will likely draw attention to that situation as increased scrutiny is directed toward your industry due to 6H implementation. It should be noted that 6H is part of a larger body of regulations applicable to minor or “area sources” as defined by the EPA. Should your shop be a major source, which is possible but unlikely, then 6H does not apply.
Oct 09 NACE CARS AAPEX SEMA Contents
"$92,000 Stimulus Give-Away at NACE/CARS 9
Add-On Education Expands Overall Event Offerings 14
AMI & ASA Announce Scholarship Recipient 18
AMI Offers ‘Struggling Businesses’ Training 44
Arizona Veterans Look Forward to Donated “Recycled” Rides 41
Auto Glass Expo at NACE: Repair and Replacement 48
Customer Loyalty Studies: Implications for the Future 31
"Customer Profitability Analysis: Protect Winners, Fix Losers" 34
AAA Study Finds Most Motorists Drive Under Severe Conditions, Do Not Realize It
AAA has always advised motorists to follow the automobile manufacturer's recommended maintenance schedule to improve the reliability and longevity of their vehicles. However, owner's manuals usually contain two different maintenance schedules -- one for normal service and one for severe service, depending on how the vehicle is driven. In a recent study, AAA found more than half of all motorists follow the wrong maintenance schedule.
A Profile of the Evolving Collision Repair Marketplace
The following represents the results of our third annual white paper on trends, market share and size of the collision repair industry relative to collision repairers that generate greater than $20 million annually in auto collision repair revenue. There are many collision repair businesses of significant size processing under $20 million annually throughout the United States today; however, our focus is on the $20 million and larger independent and dealership collision repair segments.
Vehicle Searches by Police—Supreme Court Tightens the Rules
Arizona v. Gant, (2009), is a United States Supreme Court decision which held that the Fourth Amendment to the United States Constitution requires law enforcement officers to demonstrate an actual and continuing threat to their safety posed by an arrestee, or a need to preserve evidence related to the crime of arrest from tampering by the arrestee, in order to justify a warrantless vehicular search incident to arrest conducted after the vehicle’s recent occupants have been arrested and secured.
AB 1200: CRA Looks Forward to the Rest of the Story
AB 1200 was passed by the Legislature and signed by the Governor at the last possible minute on Oct. 11. We were hoping for a different outcome, however, it is not the end of the world. The insurers presented this bill as consumer protection necessary to allow consumers to make an informed choice regarding collision repairs covered under insurance policies and it would be done in a specific truthful non-deceptive manner. This is their language and we as an association are prepared to hold them to that standard.
California Assembly Bill 1200 'Pro Steering Bill' Signed into Law
After luke-warm opposition from California body shops, and disappointment from the two auto body associations, AB1200 was signed into law by the governor on the last possible day, Oct. 11.
CAA says California Agencies Stepping Up Enforcement
The California Autobody Association (CAA) has been in contact with various regulatory agencies and recently attended a meeting concerning inspections of auto body shops in Sacramento and San Jose by the Economic and Employment
Gerber Collision & Glass Opens New Location in Anthem, Arizona
The Boyd Group Inc. (“Boyd Group”) has acquired Advanced Auto Body’s Anthem, Arizona location, which will now operate under the Gerber Collision & Glass trade name. This acquisition was completed on October 6, 2009. The new location is approximately 16,200 square feet in size, and is well located to help serve consumers and insurance clients in the growing north suburban Phoenix market.
Manuel's Auto Body Owner in Bakersfield Needs Bone Marrow Transplant
Rachel Oroz says bravely that she has leukemia, leukemia doesn't have her. You would never know from her big smile, dedicated work ethic and positive attitude, that she even has leukemia.
Causey --- Body Shop Alert: Scam Artists Still Want to Steal Your Money!
Dear Mike,
I just came across your March article about body shop TTY scams. We are a small body shop operating in Massachusetts and we too have received these calls. The first came in spring, the same story about an Escalade that was in an accident in Arizona that the owner wanted towed to Massachusetts for repair. (Big alarms start sounding! We try hard to send out good work but come on. There has to be 5,000 body shops between here and Arizona, get real!)
Yoswick --- It Pays To Understand What Your Business Is Worth
So while you’re working to keep your company profitable and paying those dividends, it also pays to think longer term, in order to do the things that will build the value of your business.
And whether you’re planning (long-term or short-term) for retirement, want to give a son a daughter some equity ownership in the business, are ready to sell or are just curious about your own net worth, it’s good to understand how to calculate what your business is worth right now.
No doubt you can think of several different ways to go about determining a value for any of the vehicles in your shop right now. Determining the value of a business is similar in that there are dozens of ways to approach it. And even experts will tell you that business valuation is almost as much art as science.
But here’s an example of one method of determining the value of a business (see Chart A). ABC Autobody has assets totaling $500,000. The owner’s salary, bonuses and profit total $59,000. When half of the depreciation expense on equipment, and all of the interest expense on loans is added to this $59,000, the owner’s “cash flow” totals $70,000.
A portion of this cash flow is assigned to cover the cost of carrying the shop’s assets. Let’s say the current interest rate is 10 percent. Then $50,000 (10 percent of the $500,000 in assets) is deducted from the cash flow and viewed as satisfying the return on the investment in assets. Any cash flow over that amount is considered excess.
Deduct $50,000 from the ABC Autobody owner’s cash flow, and there will be $20,000 in excess earnings. This amount is then multiplied by a number between one and six (based on such criteria as stability and growth potential of the company) to get the value of ABC Autobody’s cash flow.
Let’s say ABC Autobody’s track record indicates that it is about average in terms of risk and desirability. Its excess earnings ($20,000) could be multiplied by a factor of 3.5. This figure is then added to the value of the assets to get the total price. For ABC Autobody, this means $70,000 is added to its $500,000 in assets. The total value of ABC Autobody: $570,000.
Or you can use the method the owner of XYZ Collision used to determine the value of the business (see Chart B). Write down the net profit of your business for the past five years. Figure a “weighted average” by multiplying your 2008 profit by five, your 2007 profit by four, your 2006 profit by three, your 2005 profit by two and your 2004 profit by one. Add these five numbers and divide by 15 for your average yearly earnings.
Then divide your average yearly earnings by an appropriate rate of return (usually between 20 and 30 percent for businesses with average “risk factors”). XYZ Collision, for example, found its weighted average yearly earnings was $90,000. Divided by a 30 percent rate of return placed the value of XYZ Collision at $300,000.
Perhaps the most common valuation tool, which is similar to the first example, goes by the acronym “EBITDA” (earnings before interest, taxes, depreciation and amortization). Once EBITDA is calculated, it is increased by a multiple, usually between 2 and 6.
A buyer might recalculate your EBITDA after reviewing your company’s financials. A buyer with multiple shops, for example, won’t have the salary expense of an owner onsite, which could boost your business’ EBITDA. Or if the buyer expects to offer better employee benefits than you offer, that would lower the EBITDA.
Getting a Professional Appraisal
If your interest in the value of your business is more than just idle curiosity, it may be time to hire a professional. When choosing a business appraiser, ask about their training, certification and experience with the industry. One option: Calling the American Society of Appraisers (www.appraisers.org, 800- ASA-VALU), or the National Association of Certified Valuation Analysts (www.nacva.com, 800-677-2009), for a referral.Remember that a business appraiser will help you determine a value for the business but isn’t likely to be involved in the sale process. A business broker can help you buy or sell a business, and may be able to help you determine an appropriate selling price, but might not have formal training or certification in business valuations. A broker’s valuation also may be influenced based on their interest in selling the business.
The cost of a professional business appraisal will be based on which of three types of reports you want. The most comprehensive reports can easily cost $12,000 to $18,000. At the other end of the spectrum is a verbal report, in which the appraiser provides a valuation but no written report. Probably of most use to shop owners is the “limited-scope report,” in which the appraiser provides a valuation letter and often some supporting documentation. Costs for this type of report generally start around $3,000.
The appraiser is likely to ask for a variety of documents including financial statements and tax returns for the past five years, incorporation papers, any buy-sell agreements, and accounts receivable and payable aging reports. He or she will likely want to tour your shop to get a feel for the age and condition of the facility and equipment, the training level of your employees, how closely the success of the business is tied to you or a key employee, etc.
Make sure you end up with a good understanding of any business valuation. And keep in mind that while it’s foolish to blindly accept what a broker or appraiser tells you your business is worth, part of the reason so many businesses fail to sell in a reasonable amount of time is that many business owners don’t accept what a competent appraiser can demonstrate is a reasonable price for the business.
Chart A: Method No. 1
$________ owner’s salary, bonuses
plus
$________ 1/2 depreciation expense on equipment
plus
$________ all interest paid on loans
=
$________ TOTAL CASH FLOW (line A)
$________ total assets (equipment, furniture, inventory, cash, tools, etc.) (line B)
times
_______% current interest rate
=
$________ RETURN ON INVESTMENT IN ASSETS (line C)
$________ line A (above)
minus
$________ line B (above)
=
$________ excess earnings (line D)
Multiply line D by the number that best describes your business…
1 or 2... low stability, low growth potential
3 or 4... average stability, average growth potential
5 or 6... high stability, high growth potential
…and write that total on line E (below)
$________ Line E
plus
$________ Line B
=
$________ BUSINESS VALUE
--------------------------------------------------
Chart B: Method No. 2
Net profit for…
2004 $__________ x 1 = $__________
2005 $__________ x 2 = $__________
2006 $__________ x 3 = $__________
2007 $__________ x 4 = $__________
2008 $__________ x 5 = $__________
(total of above 5 numbers) $__________
divided by... 15
= weighted average profit $__________
divided by... 20-30% (.2 or .3)
= BUSINESS VALUE $__________
Improving your company’s value
Whether you plan to sell your business soon or decades from now, here are some things you can do to improve its value.Accretive value. Owning multiple shops can often make your business worth more than the sum of its parts. If you own one shop worth $1 million, and buy a second one also worth $1 million, the sum of the two might actually be worth $3 million because of how you are positioned in the market. But it can work the other way too: A weak shop can pull down the value of your other shop.
Capacity. A buyer will want the ability for the business to grow. So if you are running your business at its peak capacity and have maxed out your property, that’s great for you but may decrease its value to a potential buyer.
Debt and other encumbrances. While having debt isn’t necessarily a negative when it comes to the value of your business, it can have an impact. A Small Business Administration (SBA) loan, for all its advantages, can scuttle a sale because it generally must be paid back in full at the time of the sale.
Trending. About the time your business is growing and doing well – and you decide maybe you should stick with it – is actually the time it has the most value to sell. Anyone buying your business is likely to review your financials for the last three years, but the most recent information – especially the last 6-12 months – are the most important. So timing can be critical.
Barriers to market. Zoning laws that would limit others from operating a shop in your area can obviously drive the value of your business up. On the other hand, grandfather clauses or zoning overlays may be good for you now but may restrict a future owner’s options, driving the value down.
Accurate financial records. Most businesses are operated to minimize reported earnings. To a buyer, this may make it seem like the business is overpriced. Your books should directly reflect what you’re doing in business.
Yoswick --- Recruiting and retaining employees – Even in a down economy
In a tough economy, shop owners are usually more concerned about attracting work than they are recruiting employees.
But many business and personnel experts say a focus on employee recruitment and retention is every bit as important in times of stagnation or decline as it is for businesses growing rapidly.
Why? Unlike in boom times, there’s a much larger pool of available workers. If your business has job openings – or employees who might not be the best fit once the economy rebounds – now may be the ideal time to seek out new talent.
McClune --- CAA Releases CAPA Aftermarket Survey Results
Survey findings dispute insurer’s claim of quality equal to original parts
In a recent article published by the Los Angeles Times regarding AB 1200, insurers “...called criticism of the possible use of after-market parts, which are not made by the car’s manufacturer, a ‘red herring’ because such parts are ‘at least as high in quality as the original parts.’ ” This statement was made in response to concerns that AB 1200 will allow insurers to legally “steer” claimants to their network shops, and by contract, most network shops are required to use cheaper aftermarket (i.e., imitation) parts whenever possible.
White --- Dealing with a Business Slowdown
In the current economy you have two basic choices. You can agree with the naysayers and believe that there will be a couple years of recession to ride out, it is going to get worse, and there is nothing you can do—or you can decide to ignore the recession and take positive steps to maintain and grow your business. That’s right, I said ignore the recession… let me explain why.
When you started your business how many people told you it wouldn’t work, you shouldn’t do it? Did you listen to them? NO! You rolled up your sleeves and built a business of which you are very proud. It’s time for you to revisit the basics.
1. Metrics
a. Know Your Metrics
A metric is an indicator of how your business is progressing. Some great indicators are number of calls, invoice count (car or unit count), sales, gross profit, hours per repair order, parts to labor ratio and customer satisfaction.
b. Monitoring Your Metrics
Monitor your metrics more frequently and review your progress more often than usual. Think of it as zooming in on the detail. Look at things by the week instead of the month or by the month instead of the quarter. Don’t wait for the results to play out, look early and often to allow for proactive course corrections to keep your business on target.
2. Customer Service
Now more than ever, provide excellent customer service. Who determines the level of your service? Your customer does! Ask them how you are doing and what can you do even better to help them during this difficult time. And then respond accordingly within reason to meet their concerns. By all means let all customers that gave you feedback know what changes you are making to help them out.
3. Employees
We are seeing more and more questions about employee engagement during this economic downturn. People are nervous, scared and unsure right now, including your employees. It is your job to keep your employees positive, helpful, focused on the customer and results oriented. No matter how hard you plan, layoffs may be necessary but don’t make the mistake of laying people off too soon. Remember that this recession will end and people are hard to find, especially trained people who know your business. Instead entertain the idea of temporarily cutting back on wages and/or reducing hours per week with the entire staff (including you).
4. Be Profitable
Make sure your business model is a profitable one now! Too many times we start coaching a client to find that their business is geared up for a level of business they haven’t yet achieved causing them to make at best minimal profit and more likely lose money. Don’t grow to profit…be profitable now! Review your business model and staffing to ensure profitability at your current level of business. Then develop a plan to increase your volume and add staffing as volume requires.
5. Cash Flow
Cash is king! Make sure you’re not spending more than is coming in. Take your fixed costs (expenses plus technician wages if paid hourly or salary) and divide the amount by the number of days open in the month. This is your daily breakeven amount. You need to generate at least that amount in gross profit every day to stay positive. It won’t take long when you dip below your breakeven amount to start losing capital and, if unchanged, possibly going under.
6. Marketing
“Good times, bad times, there will always be advertising. In good times people want to advertise; in bad times they have to.”
—Bruce Barton (1886–1967)
The first expense cut is typically the marketing or advertising budget. This is the worst place to cut back. In the short term there is no adverse effect, in the long term it is disastrous. We recommend reviewing where the marketing budget is being spent and measuring the results. Every piece of marketing should include a call to action; small businesses shouldn’t be trying to build a brand. Marketing that isn’t bringing in an acceptable return should be reworked or scrapped in favor of other avenues. Your marketing budget should be 8% of sales minus rent to maintain your current volume of business and 10% of sales minus rent to grow your business.
7. Think Outside the Box
Don’t follow the herd mentality and wait for outside circumstances to change your business. After speaking with customers, use their feedback to improve your operation (within reason of course). Separate yourself from your competition, making it a no-brainer knowing where to bring a vehicle for repairs. Is a dealer closing in your area? Prepare an ad that positions you as the repair solution for that particular carline. Is an independent closing? Call the owner and offer to purchase his customer list and develop a letter together you can send to his customers. Create non-competing strategic alliances. Is there a business that you frequent that has customers that would value what you have to offer? Would your customers value what he has to offer? Develop a letter that he sends to his customers recommending you with some type of offer extended. Return the favor by sending a letter recommending him to your customers.
Look at other industries for ideas that can add value and help build your business. The best advice that I can pass along to you is that you should develop a plan with a crystal clear desired result and then ACT on it! Don’t get stuck on working the original plan until it produces the results. The plan may need to be modified along the way to get the desired result. But the result stays the same. Waiting until you have the “perfect” plan is not possible and ill-advised. You will never think of everything. As Dwight D. Eisenhower said, “The plan is useless, but planning is essential.”
8. Attitude
Attitude is so important, especially now. It is vital to your business that you stay positive. Be realistic but don’t let fear take hold. With steadfast determination you will get through this current season of challenge and come out on the other side stronger. You need to feed your attitude daily by reading books on positive attitude.
9. Get Help
There are times when a business owner can’t see the forest through the trees. A business coach can be a great investment providing an objective viewpoint, help ground the owner focusing him on what is important and developing next action steps. This process allows you to determine your goals and needs and then build an action plan for getting to your desired results.
Rick White is a managing member of One Eighty Business Solutions (180BIZ), a Virginia based coaching and business solutions provider to the automotive and truck repair industries. For more information, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call (540) 833-2014.
Momber -- Win Customers And Influence People With Some Website Extras
Web sites can be a very powerful tool to help customers say YES to your businesses. More and more people make buying decisions as a result of research done on the Internet.
You don’t have to look beyond the attention given to automotive spending by companies like Google to see how important web presence is to automotive-related consumer spending. Automotive was, by far, Google’s best performing category in the third quarter of 2009, largely on the back of the government’s “Cash for Clunkers” program.
Nikesh Arora, Google’s president of global sales operations and business development, said he still believes U.S. auto spending is poised for growth, largely because of the age of U.S. fleet and the shift of dollars to the web.
But many collision shops still don’t have a Web site at all, which is a huge mistake, says former shop owner David Moore, founder and president of CollisionBuilder.com, a Web site design firm. According to Moore, more than 80 percent of consumers between the ages of 33 and 54 research online before they buy a product or service, so if you have no online presence you could be missing opportunities.
“They don’t realize how vital a Web site is,” Moore says. “I consider the Web site to be the foundation of any good marketing program.”
If you own a colision repair shop and plan to be in business 5 years from now, you need to invest time creating or reviewing your business website. You should also check out business websites outside of the collision repair industry because you’ll get fresh ideas.
Also, just because the web is a relatively new tool, doesn’t mean you don’t need to remember time-tested basic principles of marketing. Dale Carnegie’s How to Win Friends and Influence People is one of the bestselling self-help books ever and is just as useful today as it was when it was first published in 1936. It has sold 15 million copies globally. Cargengie’s book and courses teach basic common sense techniques to help people win friends and influence others. The same techniques apply to the web today. Your website can use the same simple and common sense approach to make it easy for potential customers to say YES to your collision repair shop.
Few people take the time to research a collision repair shop in advance. Your web site must gain the trust of visitors, quickly and easily. How might you get some great ideas and exposure at the same time?
Look around. High school students are very web savvy these days. Invite some students and their teachers to help you. Give them a tour of your shop explaining the entire process of repairing a car. Show them your equipment and how it works. Explain how the procedures your shop takes to be environmentally friendly. Explain the challenges with aftermarket parts vs OEM parts. Explain the challenges you encounter with insurance companies. Invite the students to bring their high tech cameras and video recording technology so they can then share the information with others so as to allow input from lots of people. Most high schools have a student newspaper and of course they would be invited to cover the event.
You might invite the students to find a worthy cause to help in this project. Possibly there is someone in the community such as a wife and family of a veteran in Afghanistan and they have a car in need of repair. Possibly there is someone in the local community that is experiencing a financial hardship and their car needs some dents fixed and a paint job. If you invite some enthusiastic young people to get involved in a project that will help someone in their local community, there will be payback.
Figure out a way for everyone to win. As the project progresses post the progress on your site. Include lots of photos of those helping you. With a little imagination and enthusiasm you can see how someone can take an idea like this and position themselves very favorably in the community. Doing so will result in terrific exposure for your business. Your employees will be excited and proud to be part of the experience.
Some good sites I’ve come across that might serve as examples are the following: Joe’s Collision, Body Work & Detailing in Dallas, TX has a great looking site. One look at it gives an immediate impression of high quality professional work. It’s easy to read. It’s got a great colors and powerful testimonials with very professional photos. Check it out at www.joescollisionanddetailing.com.
Len’s Auto Body in Oceanside, CA, has an impressive site with logos from equipment manufactures as well as I-CAR and ASE giving visitors a feeling that it’s a shop that can be trusted to do high quality work. When a visitor clicks on “Shop Tour” a slide presentation begins and shows a variety of photos of his shop and equipment. He also includes a photo of his custom PT Cruiser advertising his shop which is another very creative method of gaining additional consistent exposure. He’s taking advantage of the popularity of that vehicle plus the custom paint job to draw attention to his business. His web site is a nice clean easy to use site that creates a favorable impression to visitors. Visit his site at www.lensautobody.com.
Daland Body Shop of South San Francisco is another excellent example. This website also has a video that begins playing as soon as the site is clicked on. I tend to favor site that use the video technology. Video is the next best thing to an owner telling a potential customer the selling points. The thing is though a video never has a bad day, it’s never tired and it’s available to give that same enthusiastic and professional message 24 hours a day. Visit this site at: http://daland-autobody.com
Don’t overlook the importance of appealing directly to female customers. There’s good evidence that women are in the majority of collision repair customers. Certainly they control the largest share of a family’s budget. There are companies that cater directly to shops by helping to make them more female friendly, such as AskPatty.com, which brands sites as female friendly. See http://femalefriendlydealer.askpatty.com/?d=Js_Auto_Body, for example.
“Up until now, like many automotive businesses, we thought the obvious goal was to ensure that women were treated the same as men. Through the AskPatty program, we’ve learned that treating women the same as men does not necessarily yield the [best] experience for women. This may not sound profound, but with an increased awareness of what elements women seek in a positive automotive servicing experience, our service centers are better prepared to meet and exceed the expectations of our female customers” stated Mark Kim, Operations Manager, J’s Auto Body, in Lanham, MD.
With just a little imagination it’s easy to see how a project like this could be a lot of fun for everyone involved. Above all, don’t be afraid to experiment.
Evans --- A Smaller Project Can Be Time or Budget Killer Without Precautions
I had what I thought was a small project, but it turned out to be harder than expected. Tom Foster is a buddy and a serious bike builder who’s been around for a couple of decades. He’s got a bike called an EVO HD Bushido that he’s building, and he came to me do the body and paint work.
To read the full article as a PDF with photos CLICK HERE
We started with the rear fender and the tank, but Tom came to me with a specific concept. This bike’s going to the 18th annual Yokohama hot rod custom show and put on by Mooneyes, a specialty equipment manufacturer in Santa Fe Springs, CA. I started with the bare metal tank and fender. Using an etching primer (DP 402 versus the DP 90) which is black and the 880 reducer (which isn’t really compliant anymore in LA or Orange County for production shops). As a custom builder/painter, not a collision shop, I have a little bit that I can use up.
I grind it down with 36 grit sand paper, sculpture with 3M bondoTM and use a cheese grater to sculpt it to get more of a smooth gas fill so we’re not going to have any recesses or anything where the gas lid goes. I’ll mask that off with some tape and bondo over it and sculpture the tank leaving that hole with the masking tape. That allows me to get a nice flush finish to the primer stage. I’ll keep the bondo and the masking tape in that area. Instead of having a hole as an obstacle, it will give me more of a surface to work with. I’ll take it flush to the metal ring. I’ll start with the 36 bit sand paper and I’ll sculpture it. For the first time I used a “soft sanders” sanding block with the 5 in. kit which is part number 0701.
They have 6 or so different blocks with different radii. That helps you get the job done quicker. I was really impressed with the way these blocks worked on this product because with a round peanut tank and few edges, everything is a radius, so finding the right block to sculpture that matters. A straight flat block is going to have “teeter-tottering” problems, creating flat areas. Use the block in a circular motion. I use these blocks all the way through from 36 grit to 1500 sandpaper. If you can block the product all the way through you are going to get a better product in the end. You can find out more at www.soft-sanders.com.
After 36 grit I get rid of the scratches with 80 grit. I’ll seal it again before I add my PCL primer. That’s just in case any bare metal is sticking through the primer. I put on about a quart of PCL primer, equal to 4 coats. I put a high build of primer on because it’s like spraying bondo out of a gun. I use a 1.9 tip on my SATA spray gun when I apply this primer, with no filters. You want to strain it before you spray it to get out all the lumps and dirt. The primer is too thick to have a strainer or filter inside the gun.
After primer, I do a light guide coat, then an 80 grit and back to using those soft sanders. When I don’t have any of those high or lows, I’m comfortable with the radius at this point. I’ve already sculptured the tank, now I’m getting it down to a 400 wet sand. After 80 grit, I go to 150 grit and in between those grits you always want to use a guide coat, to show scratch marks. When your guide coat is gone you are ready to go to the next size sand paper. After the 150, guide coat it again, then the 400 wet, then the base coat.
On this project I’m going to use a black base by House of Kolor. I make up a stand to get underneath and around the tank without having to set it on a table. I always have tanks suspended for access to the whole tank. It gives you a better finish. I put on 3 coats of black, then let it dry for about 12 hours. Then give it some fine line tape so we can put panels on this tank. I’ll map out one side and make sure the customer is good with it, then I’ll make a template so I can reverse it to the other side. With a panel you want to get the whole side of a tank so it’s symmetrical on both sides. After taping out that panel, I lay down about two coats of the Iron silver to cover the black and give me some deep sparkle. I’m going to apply about 3 coats of Brandywine on both sides. I’m going to put an inner clear over the whole tank and the Brandywine, so the candy won’t run off or move. I’m using an inner clear SG100 protective coat. After the SG100, three coats of Tran Star clear go on. Then let it dry 12 hours.
The next day I sand with 800 grit to get rid of the panel lip so it’s smoother. Bob Iverson is coming in to put a dolphin gray pin stripe around it. I’m going to put the Japanese flag inside this panel using a silver leaf. We want an “industrial” spin on it and surround it with a gray pinstripe. After Bob gets his part done, it goes back in the booth and hit with three more coats of clear. Before pin striping we sanded the tank with 800 grit. I’ll sand the clear coat with 800 grit between all coats.
These tanks take a lot of different steps. After 3 more coats of clear, and the pin striping and the seal relief is on, we’re going to sand it with 800 grit, then the SG100. The goal here is getting a real deep look. We’re trying to do something different.
I take the SG100 and some black dye, drop it in the SG100. It’s a dye made by DeBeers, part number 1-097. When I mix it up it’s almost like tinting the tank. I put two caps of this into the SG100 (depending on how dark you want it, you car add more) into a quart of SG100. Mix it up thoroughly with a stir stick; make sure it’s dark enough. It’s better to put more dye into it, than less, because you’ll use fewer coats. The object is to put about 3-4 coats on. After your first coat is on you may need to darken it, so add another cap until you’re happy. With four coats of candy on, one coat of SG100, over the dyed SG100. That will protect it from running.
After letting the dye sit for 15 minutes, do three more coats of clear. By now it’s nice and smooth, use 800 grit, then 1000, 1200, and 1500 grit, then a 3-step buffing process. After buffing you should be ready to deliver the tank. At one point the customer was here as I was applying the tint, so he could visually direct what he likes, which is better than trying to guess.
I lost a little bit of my focus and grabbed the wrong gun. When I apply the tint I always use my clear gun for which I use for nothing but clear, but I accidentally picked up my base gun to apply the tint, so I was adding a black candy. I sprayed this out and unintentionally added some silver flake into the design. Now I had a problem. The tank wasn’t right and in the light you could see this little flake and I thought I am going to have to redo this whole project. Then I realized I put a clear coat and a protective coat over every step, so all I have to do is sand through the clear to take the candy tint off until I can see the actual design. I started with 400 wet and broke through the clear, evenly sanding it off, taking my time. I was able to break through the clear without breaking through the silver leaf or any of the pin striping, protected by clear. I was thanking myself for taking the steps to protect that art while applying other colors over it. Never use a base gun to spray candy or clear coats! You’ll run into this problem. I’ve been spraying for decades but I’ll be the first to admit I sometimes trip up.
Painting is a fine line. I got thrown off a bit having the customer here and I wasn’t paying 100% attention to what I was doing. This could have cost me 3–4 days of work, and maybe another $500 or $600 out of pocket, redoing all those steps and procedures. Luckily I was able to sand it down, and back mask this design by applying the black base again to cover up the line. When you cut through the clear and into the base you have to put color on that, otherwise you’ll see the difference between the clear coat and the base coat and you get wrinkling problems.
When you put your base coat on, you have to put it on light. Watch it and make sure everything is smooth. Put on about three coats of black, then remove your masking and clear coat again. You are going to see the design, but you have to clear it, go back and re-sand it with 800 grit, get rid of your lines around the edges and then tint it. As in tinting and ‘putting your candy,’ you are ready to start where we left off. I have the customer come down again and go through the motions, get the color to where he wants it, go back with the SG100 after we put 4 coats on. He wanted it a little bit lighter this time, so we got a second chance. He wanted it to be a little more visible when the light hits it, and not so deep deep dark so that to see it you need a high intensity light. We were able to make that change, which is a good thing. So, going back, we hit it with inner clear coat, came back with 3 coats of Transtar clear and then back to the buffing and 800 grit, 1000, 1200, 1500 and then 3000. Hitting it with the 3000 allows me to not be so heavy on wheeling it out with the 3 step process with 3M which works really good. If any of you guys are having problems with your buffing, you really want to look at the product 3M has out there. It could save big time work and trouble.
To do the gas fill edge I take JB weld, after pulling that tape off, and a paint brush. I brush JB weld around that edge. That allows the edge to stay seated and stops gasoline from getting underneath the paint. I’ve seen gas get underneath paint, especially in hot weather. It will lift that paint like a balloon so you end up having bubbles and your whole tank is pretty much destroyed. That edge is really sensitive. That’s a good Rich tip. During all these steps and procedures, the job went wrong, but was able to fix it and save it.
I’d like to thank Microflex glove for safety, even when using the newer style product. I’d like to thank Soft Sanders for getting me there quicker, which saved me time. In the long run I ended up having to go and rework some stuff. Then Chicago Pneumatic Tools which allowed me to have all the right pneumatic tools to get the job done. Also 3M and many other sponsors out there. Visit these sites. You might learn something useful:
www.microflex.com, www.chicagopneumatics.com, and www.soft-sanders.com.
Evans - Working Closely With Your Customer Pays Off in Satisfaction
This month we have a simple project involving a black helmet and an undecided customer who knows he wants his helmet painted but doesn’t know exactly how. This is my process of interacting with the customer from start to finish. It may help you get an idea out of your own customer’s head. My customer races super stock oval track and he wants something different, not too loud, but something cool that matches the car and has some personality.
Amaradio --- Careful Decision Making is a Lifeline in Desperate Situations
In our lives there are many choices we must make on a daily basis. Some are minor and will affect us very little, like where we eat lunch. Others could alter our lives and those around us forever. These are the decisions I want to write about; the ones that can change everything.
I have watched choices that others have made affect me personally, and I have experienced first hand the results of decisions I have made change the lives of those around me. So, as business owners, we must decide “what” to do and when to do it because decisions need to be made. Sometimes we can throw caution to the wind and just go for the gusto, while other times we must take time and cautiously consider the negative aspects of each decision.
McGee - OE Collision Information --- By the Numbers
If you saw the movie Rain Man starring Dustin Hoffman as Raymond, you may recall that Raymond was very gifted when it came to numbers. At one point in the movie, a box of toothpicks spilled. With a glance, Raymond was able to determine exactly how many toothpicks were in the box. You may also remember his skill at counting cards and doing other math calculations almost instantly in his head.
Hey Toby 18 -- Parts-Handling SOPs A Good Start on Implementing Lean
Toby's articles are best read in PDF format. CLICK HERE
The first thing I would like to start this month’s column with is an update on the shops that have started to implement the lean process. Carmat Autobody in Santa Cruz has made significant improvements in the shop’s organization, but Matt is still working on his SOPs (standard operating principles). Tom Trago of Anchor Autobody has created a tear down area with carts and he told me that he has seen a tremendous improvement on the number of supplements written (the number of supplements is down 60 percent). Tom is still working on his SOPs. Mike from Watsonville Autobody and I conducted a tear down clinic with his crew. Mike called me the other day to tell me that he had moved his boat (being stored inside the body shop) and set up a tear down area. Jeffrey Gerber of Classic Collision Centers (Los Angeles) has also conducted a tear down clinic for shops, but wants to set up his SOPs prior to starting the lean process. So with everyone waiting on me to help them with their SOPs, I decided to write out my versions. Let’s look at Parts Handling first.
The first item of discussion is what items are needed for parts handling. Again, these are my ideas, which you can add, delete or use your own methods. Item one would be a computer near the parts intake center. The parts cart also needs to be close to the parts intake center. Reason is that as the parts arrive, they will be placed on the appropriate parts cart. The last major item that is necessary is some type of parts marking device. I prefer using a price labeling gun with bright red tape. The gun is relatively inexpensive (under $100), easy to use and highly visible. With that in mind, let’s look how we are going to handle new parts.
New OEM Parts SOPs
• Parts cart will be checked that the cart has a RO number before adding new parts to it.
• Fax a complete parts order to a specified vendor. The parts vendor needs to respond within a certain time period to the availability and back order of the parts. It should also be noted when the parts will be delivered (need to know prior to placing a car into repairs).
• Production manager, owners and estimators are notified of all back orders and arrival of all parts.
• Part boxes will be opened to check for damage and correctness. The parts can be matched to the damaged parts on the cart. The boxes are resealed and a red RO sticker is placed on the part box. Larger parts are labeled with an RO sticker and placed on the cart (they can also be moved to the paint department for jambing if that is the SOP for the shop).
• Make sure that the cart is labeled with the RO Number.
Note that the bottom repair order has a note stating that the new bumper is on the top of the rack (red RO # sticker has been placed on both inside and outside of the part)
• Part boxes shop should be recycled after verification.
• When all parts have been checked in, the invoice should be noted (I use a red parts sticker on the invoice to denote that all parts on the invoice have arrived, checked and placed on the cart).
• Parts need to be posted to RO and/or the management system.
Aftermarket Parts (use above procedures plus the following additional Items)
• Check the part for CAPA sticker if specified on the estimate.
• Check the part (sheet metal) for paint transfer. Sheet metal parts need to have an E-coat and this can be determined using a clean rag with a strong solvent (lacquer thinner) and rubbing the part. If the part has been E-coated, you will not find any paint on the part. If the rag has black transfer, than the part probably has a lacquer base primer applied to it and it should be returned to the vendor.
• Aftermarket parts boxes should be retained until the part is mounted on the vehicle. If a part needs to be returned, most of the aftermarket vendors will not accept a part unless it is in its original packaging.
Used Parts (use above procedures plus the following additional Items).
• Check the part(s) for damage and/or corrosion. I would strongly recommend this be done by a body technician.
• Check the part for paint thickness (most paint manufacturers will not guarantee their paint if it is applied over 12 mills paint thickness).
• Check to make sure all parts are delivered and accounted for (front clips for example may be delivered missing some key components and the wrecking yard will send out the other parts at a later date—this can be a real time waster).
• Check mechanical parts for signs of wear (leaks and torn boots for example) and operation (door motor would be a good example).
• Check for missing items on the part (let’s say that complete deck lid with hinges is ordered and the part missing arrives missing the hinges—another phone call and a delay in starting the repairs—another big waste of time).
• Check the part to determine that it is correct part for the year specified. For example the deck lid could fit a number of years, but the latch might fit only one. To order and receive the proper latch takes time and this also be a time waster.
Sublet on Bumpers and Wheels
• Have an area designed for pick up and storage of the sublet part(s) and preferably near the parts department.
• Have vendor sign for the parts to be reconditioned. You want to make sure when the part(s) have returned, they have an RO number assigned to it.
• Get a delivery date for return and post that date to the RO. I like to have a white board that tells when the part was picked up, by whom and when it is returned.
• If the bumper is rejected off premise, make sure that the rejected core is returned to verify that the part is the same as core that the vendor supplied. An example from Greg’s Autobody; A front bumper for a Cadillac was sent out and they were notified that the bumper was not repairable, but they had another core that could be used. The reconditioned bumper was returned and painted. When the tech went to assemble the bumper, he realized that the bumper did not have holes for the fog lamps. Greg had to order a new cover and refinish it again. What a big waste of time and money. Question who is going to get stuck with bill to refinish the second bumper?
• Wheels should not be welded for reconditioning. Welded wheels should not be accepted.
Body and Paint materials will also have SOP’s, but I deferred the procedures to the next issue.
Hey Toby 17 --- Toby Tests Car-O-Liner's EVO system
Hey Toby: – I was reading your article about the Mercedes vehicles that were repaired at a non-certified repair facility [See Hey Toby! at www.autobodynews.com]. My question to you; is there any system in the market that will hold and measure without buying another frame machine? I have been told that some insurance companies do not pay for jig rentals. Is that also true?
— Mike from the Bay Area
Hey Mike – I recently wrote an article about improper repairs done on two Mercedes Benz vehicles. MB recommend that structural repairs be performed on a Celette or Car Bench (Car-O-Liner has MB certification Global, but not North America at this time). You could invest in a Celette Bench for other vehicles, but that might not meet your other needs (Honda, Volvo & Ford). To your second question, I have heard that some carriers will not reimburse the repair facility for jig rentals.
Franklin --- The Big Divide—Affordable Marketing Data and Administration
One of the greatest competitive advantages is marketing data. Marketing research companies go to great lengths to acquire demographic information, and they collect sizeable revenue from client companies. Collision repair facilities have all of the marketing information right at their fingertips, but few have adequate personnel to collect it. A well-designed customer information form asks for customer and spouse’s name and anniversary, number of children and all family birthdays and additional family vehicles. Naturally it asks for the exact referral source, insurance company or agent, dealership, commercial enterprise, family or friend, and maybe even contact phone numbers. A superior form should also ask for the customer’s business or employer plus vehicles owned by the business along with some contact numbers.
In a busy shop with only one front desk person and an estimator or two, the odds of collecting this data are nearly zero. Only a shop with a trained and dedicated data collection person will have any chance of collecting this information. Few shops would even bother collecting this data, because it is so unlikely they would have anyone on hand to use this marketing data to make the follow-up calls, e-mails and proposals.
Someone selling automobile information would see this data as a potential gold mine and jump on it with great eagerness! Here would be an opportunity to sell a policy to other family members, to insure additional family and friend vehicles, and to possibly even sell some auto policies to the car owner’s employer or employees if he or she owns a business. That same opportunity exists for the shop to invite in any of these vehicles for anything from a detail to a major collision repair. There just must be a person dedicated to the task.
The KEY to the big shop advantage is personnel! With several people on the front desk, when several customers all come in at once, complete information can be collected. Multiple phone calls can all be handled at once. A person or two can be dedicated to keeping customers informed and making follow-up calls on estimates that didn’t immediately turn into jobs. Customer satisfaction survey calls that get more real responses can be made by shop personnel instead of being farmed out to a CSI company. Referral sources like agents, brokers, dealerships and local businesses can be called and thanked and, when appropriate, sent thank you theatre tickets or restaurant meal tickets.
All of these simple administrative procedures when added together produce increased business volume making the big shop even bigger. How can the smaller, independent shop owner hope to compete with this personnel advantage? Employees are costly and few small shops can afford even a fraction of the employees big shops employ.
The first step is to realize that more administrative personnel do give a shop a competitive advantage when trained and focused effectively. Now all a shop owner has to do is work out a way to get more admin people without dramatically increasing payroll. Fortunately the present job situation makes this unexpectedly easy. Many college graduates are failing to find work and may accept part-time or even training positions. High school kids with a strong interest in cars may easily be attracted to part-time entry level car-washing and repair prep, but the others, with an interest in computers, bookkeeping, or other administrative skills, may be just as willing to have a chance to apply what they’ve learned in a collision shop office either after school or on a part time basis.
A shop can also take advantage of youth training and apprenticeship programs like those offered by the Chamber of Commerce, I-CAR, ASE, vocational schools and other programs. As unemployment grows, we’re also likely to see more federal and state assistance programs, summer programs, matching dollar programs and grants.
The KEY is to go beyond collision repair tech trainees. Very few administrative job seekers may ever think of the collision industry as a possible place for an administrative vocation, but once introduced to this friendly industry, many may stay. And with a focus on data collection that few usual people in shops possess, these administrative-oriented people may take advantage of that valuable marketing data that each and every customer can provide for the shop.
Franklin --- Price Matters
I talked with an insurance agent this past week who told me “These days everyone is shopping around for a lower price.” He tries to emphasize the quality of his company’s service as being worth a somewhat higher price, but it’s not a persuasive argument in this tight economy. He’s losing long-standing customers and new ones are harder than ever to find.
A similar phenomenon is hitting collision repair shops. Several shop owners have told me they get far fewer repairs of small dents, dings and scratches these days. People are simply driving without fixing the minor damage that used to help cash flow at many shops. During a financial downturn like this, ads and promotions offering lower pricing for quick turnaround self-pay repairs may finally be effective.
