The quality of information dispensed in this two intense days of real-life enlightenment enabled its intended purpose of encouraging attendees to re-analyze the way they conduct business. The purpose was to provide the pertinent information that empowers individual shops to take back control of their business from outside entities.
Over the past years CCRE has presented their Conference and Seminar Series, somewhat like the 3M ARMS (Automotive Repair Management System) seminars of years ago, updated to 21st century situations, helping shop owners and managers learn how to conduct business profitably and ethically in spite of other entities’ imposed cost and service-cutting policies.
How Did We Get Here And Where Are We Going? was the foundational power-point presentation taught by CCRE president and long-time collision shop owner Tony Lombardozzi. Speaking from decades of personal experience, Lombardozzi convincingly reasoned that collision repairers must understand how this industry arrived at its present ever-encompassing morass of seeking to snuff out shop profitability, before we can find our way out. Times have changed, and shops that will remain in business will be those that meet their obligations and the expectations of their true customer – the vehicle owner. He also discussed billing in dollars as opposed to hours and the fact that no third party should control your business practices.
Making Materials A Profit Center was the seminar presented by CCRE sponsor-member Bob Collins of Wreck Check Assessments of Boston, with years of experience in profitably managing collision shops. Collins convincingly detailed how distant from reality is the antiquated dollars-times-paint hours “multiplier” system that most all shops still use in an ever-failing attempt to account for paint and materials. The many thousands of dollars of reimbursement that shops let slip through the cracks by using the “multiplier calculation system” only inspires insurers to further deflate the number of hours involved in refinishing operations (“blend-in-panel” being one such).
Using numerous quotes from paint manufacturers warning that paint-related prices will continue to increase as much as 12-25% per year, being tied to the price of oil, Collins made a very strong case for accurately “cost accounting” (actual costs of materials plus “markup to which you are entitled) the paint and materials used in each operation, also explaining the differences between the three most common commercially available paint and materials cost-accounting software available (PaintEx, Mitchell, and ComputerLogic). Collins also showed attendees how to determine accurate kit pricing for major panels being replaced, saving time during cost-accounting.
Job Costing, team-taught by CCRE Board member Steve Behrndt and wife Barb showed the foolishness of shops that have no idea whether they are profitable or not in each repair. The Behrndts explained the differences between Gross Profit and Gross Sales, True Costs vs. Operating Costs, how to determine your Shop and Employee True Labor Rates if billing in hours, the pros and cons of Automated Job Costing, and how to know your True Costs of Repair.
Advantages of job costing include tracking the labor tasks performed by every employee, tracking all part invoices to assure being paid for every part used, and that agreed parts discounts from vendors are received, accounting for sublet parts, materials and procedures, proper mark-up, verifying that sales tax is input properly, and that items not used are returned for credit promptly.
Legal Issues In The Collision Repair Industry was conducted by Attorney Erica Eversman, J.D. of Vehicle Information Services, Inc. Proficient in collision and insurer practices, Eversman began by illustrating the profitless futility of shops’ taking part in relations with insurers in which “LKQ,” imitation, and such parts are leveraged against shops’ best interests. These relationships also mandate shops to contact so-called insurer supplement “hotlines,” often to be put off, sometimes for days or weeks for insurers’ okay. This insurer tactic is intended to force more shops to participate in DRPs.
Several informative hours of roundtable discussion finished off this seminar with legal advice supplied by attorney Eversman and attendees’ legal questions answered.
Perhaps one of the best parts of the experience, though, was conversing during meals and before and after hours with so many other dedicated shop owners brought together to further our common goal of serving our true customers better while remaining independent and profitable. And all this without a single insurance representative present to intimidate or repress discussion.