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Anybody own a collision/autobody shop?


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I have 2 mechanic shops now and I want to implement body work bc the second location has a perfect area for painting.

 

I have no experience with auto body but I hear that the margins are much better.

 

Anyone have any advice on doing body work? What equipment I need and how to price things out. Do you guys think auto body work is worth it?

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If you look at the margins from a percentage aspect then margins are lower in the bodyshop. I realize you don't pay bills with percentages, you pay with dollars. The dollars are higher because the average ticket value is much higher. I have both a mechanic shop and a collision shop. I would choose my mechanic shop over the collision shop any day. I have been in the collision business for about 30 years, the last 16 as an owner. I've had my mechanic shop for 12 years. We repair on average about 70 vehicles per month with an average ticket value of $2400 in the bodyshop. our mechanic shop averages about 420 cars per month with an ARO of $257 (That number includes state inspections for $7 each which impacts ARO. We run our KPI's with inspections and without for tracking).

 

They are two very different business and it seams that its two very different set of employees. The customer transactions are much different as the collision transactions are more of an emotional transaction (someone wrecked into me, my spouse crashed it, my kids crashed it and they are all upset no matter the circumstance) and take much more time. I think some of our challenges have to do with space as we operate out of a total of 7500 Square feet for both businesses. I am currently building a brand new facility for the mechanic shop on a separate property so this should alleviate some of the daily chaos. My mechanic shop has 8 employees and the body shop has 13. I have a part time outside marketing person. My plan is to build another Mechanic shop and continue to leverage the customer database to promote both businesses. We will see many more mechanic shop customers several times per year. The average motorist only has a wreck once every 7 years so its tough to market to someone who only might need your service once every 7 years. Once we have them in our mechanic shop we become their trusted automotive person and they will typically listen to what we recommend. There is a great deal of steering of customers by the insurance carriers through carefully worded word-tracks that attempt to create doubt in the insured's mind if the shop they selected is not on their "approved" list. A shop just cannot be on every ones list. Once we let the customer know what word tracks are used they are more educated to stop the bs by carriers claim staff to steer them to a particular shop. We do participate in some of the networks.

 

It used to be a fun business with much better margins but there is so much insurer control and administrative work that it is not near as much fun. The main thing is that if you are small and you have an employee out it really hampers your production as you typically have an estimator, body tech, paint prepper, painter and detail/buffer person needed to complete one car. If anyone is out your production is severely hampered. If I have a mechanic out someone else can typically do the job and will step up. A painter isn't going to do bodywork unless it's very minor, A bodyman isn't going to paint a car. There used to be combo men that could do both both but typically they weren't that good at either and the finishes are much different today.

 

When it comes to parts procurement, it used to be we would order most parts from a dealer or another vendor so you didn't have to deal with a number of different vendors. Today we might have as much as 15 vendors per car. They general rule of thumb by most insurance carriers when it comes to choosing repair parts is Used parts first, then aftermarket, then alternative OE, then OE. OE parts are a last resort unless the car is in most cases current year model, There are a lot of junk aftermarket parts and most used parts come in damaged so there are numerous delays in the repair process. And every carrier is monitoring your cycle time and have contracted with rental car carriers to get constant updates from you. So you have a customer that you are updating, an insurance company, a rental car company all wanting status updates. Most husbands and wives don't communicate so we also ask who should we update with status. Email and text have helped tremendously as it allows us to keep the customer in the loop when requesting supplemental damage inspections form the carriers. Some are very slow to respond. Today it seems we spend much more time administratively on a claim than we spend actually repairing a car.

 

Both of my businesses have done well but I will tell you that 95% of my challenges are in the bodyshop. Part of the reason for separating the two is to have the ability to market the collision shop should I decide to exit that business. Most mechanic shop buyers want nothing to do with body shops and most bodyshop buyers want nothing to do with mechanic shops. I would be happy to share info with you by phone if you want to send me a private message.

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If you look at the margins from a percentage aspect then margins are lower in the bodyshop. I realize you don't pay bills with percentages, you pay with dollars. The dollars are higher because the average ticket value is much higher. I have both a mechanic shop and a collision shop. I would choose my mechanic shop over the collision shop any day. I have been in the collision business for about 30 years, the last 16 as an owner. I've had my mechanic shop for 12 years. We repair on average about 70 vehicles per month with an average ticket value of $2400 in the bodyshop. our mechanic shop averages about 420 cars per month with an ARO of $257 (That number includes state inspections for $7 each which impacts ARO. We run our KPI's with inspections and without for tracking).

 

They are two very different business and it seams that its two very different set of employees. The customer transactions are much different as the collision transactions are more of an emotional transaction (someone wrecked into me, my spouse crashed it, my kids crashed it and they are all upset no matter the circumstance) and take much more time. I think some of our challenges have to do with space as we operate out of a total of 7500 Square feet for both businesses. I am currently building a brand new facility for the mechanic shop on a separate property so this should alleviate some of the daily chaos. My mechanic shop has 8 employees and the body shop has 13. I have a part time outside marketing person. My plan is to build another Mechanic shop and continue to leverage the customer database to promote both businesses. We will see many more mechanic shop customers several times per year. The average motorist only has a wreck once every 7 years so its tough to market to someone who only might need your service once every 7 years. Once we have them in our mechanic shop we become their trusted automotive person and they will typically listen to what we recommend. There is a great deal of steering of customers by the insurance carriers through carefully worded word-tracks that attempt to create doubt in the insured's mind if the shop they selected is not on their "approved" list. A shop just cannot be on every ones list. Once we let the customer know what word tracks are used they are more educated to stop the bs by carriers claim staff to steer them to a particular shop. We do participate in some of the networks.

 

It used to be a fun business with much better margins but there is so much insurer control and administrative work that it is not near as much fun. The main thing is that if you are small and you have an employee out it really hampers your production as you typically have an estimator, body tech, paint prepper, painter and detail/buffer person needed to complete one car. If anyone is out your production is severely hampered. If I have a mechanic out someone else can typically do the job and will step up. A painter isn't going to do bodywork unless it's very minor, A bodyman isn't going to paint a car. There used to be combo men that could do both both but typically they weren't that good at either and the finishes are much different today.

 

When it comes to parts procurement, it used to be we would order most parts from a dealer or another vendor so you didn't have to deal with a number of different vendors. Today we might have as much as 15 vendors per car. They general rule of thumb by most insurance carriers when it comes to choosing repair parts is Used parts first, then aftermarket, then alternative OE, then OE. OE parts are a last resort unless the car is in most cases current year model, There are a lot of junk aftermarket parts and most used parts come in damaged so there are numerous delays in the repair process. And every carrier is monitoring your cycle time and have contracted with rental car carriers to get constant updates from you. So you have a customer that you are updating, an insurance company, a rental car company all wanting status updates. Most husbands and wives don't communicate so we also ask who should we update with status. Email and text have helped tremendously as it allows us to keep the customer in the loop when requesting supplemental damage inspections form the carriers. Some are very slow to respond. Today it seems we spend much more time administratively on a claim than we spend actually repairing a car.

 

Both of my businesses have done well but I will tell you that 95% of my challenges are in the bodyshop. Part of the reason for separating the two is to have the ability to market the collision shop should I decide to exit that business. Most mechanic shop buyers want nothing to do with body shops and most bodyshop buyers want nothing to do with mechanic shops. I would be happy to share info with you by phone if you want to send me a private message.

 

 

Great info! I am purchasing a building for my second location that comes with a body shop + paint booth sectioned off from the mechanical side. I'd love to get your opinion on how i should proceed with the business if you have some time Mark.

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Great info! I am purchasing a building for my second location that comes with a body shop + paint booth sectioned off from the mechanical side. I'd love to get your opinion on how i should proceed with the business if you have some time Mark.

Maybe we should take a trip to Texas :)

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  • 3 weeks later...

I have had numerous opportunities over the years to get involved in the collision repair business but have always begged off.  The horror stories from friends in the business and the fact that numerous well-respected body shops in town are available for purchase for very reasonable sums tells me all I need to know.  Guys I respect and admire are hanging up their spurs because, while the insurance companies have always called the shots, they have now resorted to ruthless tactics in many instances and seasoned veterans are saying "screw it, I don't need this anymore". Forced to choose between knuckling under and accepting margins that are ridiculously unfair, or resorting to cutting corners and committing fraud, they are taking a bow and walking away.

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11 hours ago, FNGJWS said:

I have had numerous opportunities over the years to get involved in the collision repair business but have always begged off.  The horror stories from friends in the business and the fact that numerous well-respected body shops in town are available for purchase for very reasonable sums tells me all I need to know.  Guys I respect and admire are hanging up their spurs because, while the insurance companies have always called the shots, they have now resorted to ruthless tactics in many instances and seasoned veterans are saying "screw it, I don't need this anymore". Forced to choose between knuckling under and accepting margins that are ridiculously unfair, or resorting to cutting corners and committing fraud, they are taking a bow and walking away.

Thanks for your input. Yea if you put it that way, it makes sense. I don't like dealing with insurance companies and to do that on a daily basis would be a nightmare 

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  • 4 years later...

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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