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Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

 
Tuesday, 29 June 2021 16:27

From the Desk of Mike Anderson: Use Tech to Kick ‘Timesuckers’ Out of Your Collision Repair Shop

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I was writing an email to one of my collision repair clients recently, and used Google to try to find a different term for “waste of time.”

One of the results that popped up was “timesucker,” defined as “an activity to which one devotes a lot of time that might be better or more productively spent doing other things.” Spending time on something that doesn’t create value for you.

 

There’s actually a noun for that. Timesucker. Who'da thunk?

 

That got me thinking about some of the things in the collision repair industry that are timesuckers, taking up a lot of time for auto body shops.

 

I was emailing the client because I’d been looking at some changes I’ve found in what the average collision repair business is spending on “SGA wages.” SGA stands for sales and general administration. Those are all the folks in your business who aren’t actually working on cars.

 

Their wages are sometimes referred to as “non-productive employees,” not because they aren’t doing important work, but to separate it from the wages of technicians and those actually producing repairs.

 

I knew from working with my 20 groups and private clients that several years ago, an average collision repair facility’s SGA wages were hovering around 10% of total gross sales, on average. From what I’m seeing now, that average has increased to between 13% and 14%.

 

For example, a shop with $3 million in annual sales had been spending $300,000 in administrative wages, not including benefits; today, that number is closer to $390,000. That is a huge increase.

 

I will admit the sample size I’m using to extract this data isn’t large. But regardless of the actual numbers, it’s no secret administrative costs in the collision repair industry have risen.

 

You’re probably as aware of the reasons for that as I am. Some of it could be because insurance companies have shifted more and more of their administrative tasks over to shops, both DRP and non-DRP. Another reason: It requires more administrative time just to...


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