As the industry continues to evolve, shop owners are adapting by making change changes to their business. During a recent “collision industry roundtable,” a handful of shop owners talked about what they’ve changed within their company -- and why -- within the last year or two, and how those changes have played out.
Kena Dacus, co-owner with her husband Chris of Dacus Auto Body in McPherson, KS, said it’s been just over two years since they switched the shop’s compensation plan from commission to hourly.
“That high-production, commission environment was not really creating the culture we were looking for,” Dacus said. “Our technicians weren’t as focused on high-quality, OEM repairs [as we wanted]. And it was really difficult to recruit entry-level technicians because the technicians that we had really weren’t interested in taking time to help us grow some of this younger talent.”
They converted each technician’s prior year income into a 40-hour work week wage so none of them were going to earn less. At the same time, they shifted production into more segments, with vehicles moving through the different departments.
“When you have an entry-level technician, or even someone who has some automotive experience, but maybe not in collision, they can still be really valuable in different departments without having to be valuable in every department,” Dacus said. “We’re able to recruit mechanics now. Mechanics actually work really well in disassembly and reassembly. And what we’re finding is we don’t need a whole shop full of A-level technicians at this point. We only need a couple because we’re able to bring in some other talent, maybe even some from other industries, who can just work in one department and get really efficient there and then grow their skills.”
She said the shop has about 20 employees, and the change was not without challenges.
“For some technicians, it wasn’t the environment that they wanted to work in, so we did lose a couple,” she said of the transition. “But to be quite honest, those were the technicians that we had a hard time getting them to see the importance of following OEM procedures and doing quality work. So while it was scary to go through, I think it turned out for the best, ultimately.”
Starting a Stand-Alone Calibration Company
Mike Daniel, who owns three Mountain View Autobody Shops in New Jersey, in the past year bought another building in which to open a stand-alone ADAS calibration center. All three of his shops -- two of which are a couple miles apart, the third about 45 minutes away -- now feed cars into that center.
“I started up another LLC to do that business under,” Daniel said. “We have both DRPs and OEM certifications, so I’m fortunate to get the work through the DRPs, but fight the DRPs on the OEM side. For example, a certain insurance company said they would only pay [a certain amount] for calibrations if I did them under the Mountain View label. But for whatever reason, if I have a [separate] company that owns the calibration equipment, and we sublet the work to that company, they would pay me the invoice with mark-up. So it didn’t take a rocket scientist to figure that one out. We purchased adasThink to help us capture all the calibrations a car may need. It isn’t perfect, but at least it’s better than not having anything at all.”
Smaller Shop Sees Big Changes
Andy Grundman has been working on succession planning with his father.
“Pat’s Body Shop has been in business since 1953, and was passed along until my father took over, and he’s now passed the business on to me,” Grundman said of his five-employee shop in Wausau, WI.
He’s now working to train a new manager to handle more of the day-to-day operations at the business, and has been doing some technician training through the Wisconsin Automotive & Truck Education Association and Northcentral Technical College “to help give back to the industry a little bit.”
“We’ve also recently started using EagleMMS [for materials invoicing] and [OEC] RepairLogic [to research OEM repair procedures] to help make sure we actually get paid for what we’re doing,” Grundman said. “I also recently had our website revamped, and I’m in talks right now with Phoenix Solutions Group, which specializes in body shop marketing and online presence.”
Scheduled Estimates, Collecting Co-Pays
Micah Strom, co-owner of Modern Collision Repair in Bainbridge Island, WA, said it’s now been just over a year since he switched to a four-day workweek.
Micah Strom.
“It helps with employee retention and acquisition, and our customer base loves it, the fact we’re giving employees more time off,” he said.
As he talked about in a panel discussion at a Collision Industry Conference (CIC) earlier this year, he’s heard about different ways shops structure their four-day workweeks for employees, but he kept it simple. Employees work four 10-hour days, and the entire shop is closed on Fridays, giving everyone three-day weekends.
“When COVID started, we quit doing estimates on Fridays and basically finished up what we had in the shop, so when we decided to shut down completely on Fridays, it was actually really easy at that point,” he said in that presentation. “The customers get the cars back on Thursday, so that’s worked very well for us.”
“We also shut down for lunch like a doctor’s office, with everyone having lunch from noon to 12:30 p.m.,” Strom said. “It’s much easier than staggering lunches. If you’re trying to stagger when employees are here, someone might not know what’s going on with a file if a customer calls in. So we just decide to all be here at the same time, and all be gone at the same time.”
Strom said he started doing estimates by appointment only in 2020 when the pandemic started, but has stuck with that.
“It has worked out really well for our shop,” he said. “It gives you the time to be with the customer if they have questions. You can get everything taken care of on it rather than having them back-to-back or not knowing when the next one is showing up.”
The company has 23 employees between its collision shop, separate mechanical shop, rental car business and detail shop. Strom has chosen not to be a direct repair shop for any insurance company.
“We don’t work for them; we work for customers,” he said. “A couple years ago, we started collecting the short-pays from the customer. That starts right from the beginning, when the customer walks in with an estimate, explaining to them what the differences are between our shop and other shops that are out there, explaining to them that we actually follow the OEM procedures. I’m not going to fix a car how an insurance company wants it fixed. It all comes down to educating the customer. I haven’t really noticed any change in our capture rate from estimates to a repair.”
John Yoswick