By our guest writer Bob Winfrey

I am writing this to help some of you guys improve your estimating processes to help you catch those jobs that we seem to pass paper on and they never seem to return. Alot of the time when insurers do not inspect a drivable car they tell the customer to go get three estimates. Well 9 times out of 10 unless that customer is sold on you and your shop, they are going to go with the cheapest of the estimates. Sometimes it is hard to manage customer's expectations as far as price. Some people hear over a thousand dollars and shock sets in! With higher deductibles, peoples fear of turning in claims and a tight economy some people are just trying to get the claim money and not fix the car!

In order to avoid being the highest estimate you have to be a little creative. You don't want to miss anything important and look like you do not know what you are doing. I have found a few little tricks that can help you and I am going to share them here.

This works well for drive up estimates, tow ins are a different situation.
I always ask if they have an insurance estimate or an estimate from another shop. If they have an insurance estimate I explain that we have to work off of their estimate to get started since they are paying the claim. I usually know what my competitor's write so it is not critical I see the estimate, it is nice to know the total price. If I can't get near the total of the other shop I will definitely ask to see it to see what they missed and explain that to the client. I know some people are hoping the shop will be cheaper than the Insurer, but that is really tough in today's economy. If you can beat an Insurer's estimate you are usually selling yourself short unless you are a shade tree body shop.

You also need to manage your customers expectations, are they ok with used parts or aftermarket? Sometimes on a few year old car it can be saved from being a total loss that way. If they are adamant about OEM parts on an older car it is going to be a tough battle. I usually tell them to read their policy and it may exclude OEM parts or require used or aftermarket. I will write what they want but sometimes that will definitely make you the highest estimate.

If there is obvious unibody damage you make a note on the estimate that there is possible structural damage and the vehicle will need to be measured to identify the degree of damage. This way you are not guessing and this will usually knock several hundred dollars off of the estimate.  The same thing works on suspension damage, hood hinges, trunk hinges and some scratches and scuffs.

We do not write sand and buff on a drive up estimate although we do write tint color and blend, explaining to the customer why we have to tint and blend color. There are hundreds of variants for some colors and we explain location of assembly has a lot to do with which variant color we have to use.

Some of you may or may not know of me but I am a 33 year veteran of the auto body trade. I have a ton of I-Car certifications; I am ASE Master certified and too many others to list. I currently own my own shop and teach I-Car part time. I also do diminished value claims and have made myself available as an expert witness.

If you would like to contribute to Web-Est blogs by writing an article of your own, please feel free to contact JR Seidel at jr@web-est.com

In 2000, I went to a Body shop Owner Association meeting in Cincinnati, Ohio. At this meeting, a colleague of mine was discussing repairing versus replacing parts in the collision process. He had some figures from 1980 showing that 50% of a shops income resulted from body labor, 20% of the income from parts sales, and income from paint at 20% (with the remaining 10% from miscellaneous items like towing, storage, etc). He compared it to a then recent study that showed body shops in 2000 were receiving 50% of their income from parts and only 20% from actual repair labor. Most of the shop-owners were quick to agree with the numbers. Some shop owner attributed the inversion in percentages to the dwindling number of available, qualified body techs. Some added that the vehicles were becoming more difficult to make a quality repair due to subtle nuances in the "lines" of a vehicle. And still more decided that it was a financial benefit to "hang and paint" instead of repair due to work flow and turn time in the production facility. Now, in 2011, I thought it might be interesting to talk with some shop owners and see what the numbers looked like today.

I talk with hundreds of shops every week. The topic generally focuses around the Web-Est products but often will tangent to the industry as a whole. So I started asking some more specific questions regarding repair versus replace. Who makes the decision? What factors are considered when choosing? When is one process more acceptable than another? One could argue that a smaller shop may do more "hang and paint" because often they employee "combo" technicians and have to balance their skilled resources evenly to turn vehicles. Clearly, it is a faster process which leads to faster push through. Conversely, a larger, production-type facility that employees more body technicians might look to utilize its labor pool to gain the repair dollar, running the assembly line process that bigger production shops are known for. But perhaps a larger shop, in order to meet the volume it needs to stay profitable, might do more "hang and paint" then the smaller shop. So deciding which path to go down can be a complicated one, especially when one starts weighing in some of the factors for deciding. Is the vehicle as safe having had the parts repaired instead of replaced? Could there be a potential liability to the shop? Are OEM warranties affected in this vehicle by using repair processes? Are insurance companies pressuring the shop for faster turn time, less rental and lower overall collision costs? All of these factors (and good number more) can all add up to difficult decisions. On top of all of them is the fact that the body shop must make a profit in order to survive.

After speaking with one shop owner, I think he summed up what a lot of other owners are worried about. He stated that "he employs various tools to tell him if he is more profitable repairing instead of replacing (or vice versa), yet he still has to ultimately worry about long term success of his business. Does he gear up for current trends of replacing parts? Right now, with the economy still not back to normal, OEM manufacturers are not afraid of slashing their parts prices to get a sale." Likewise, many shops have told me that OEM suppliers are coming to within 5% of aftermarket costs (and at times matching them) just to make sure they sell parts. Shop owners recognize that costs have dropped considerably and begin replacing more parts than repairing and taking the profit on the parts side. But when there is a need to repair, are the technicians still retaining the skill sets to do it correctly? Finding a body technician that still is able to turn the quality work that a technician could turn fifteen years ago has become more difficult than ever. In fact, when I ask shop owners and managers what the hardest space to fill in the shop is, they all say good, qualified body techs. There are just too few of them in the market today. Those that are here are generally spoken for at facilities. If they are any good at all, the owners of these shops strive to keep them busy and keep them on staff. But what happens if the industry begins to move back towards repair instead of replacing parts? Where are the body techs going to come from?

The depletion of qualified techs has been happening for a while. Getting entry level techs from the trade schools and high-school vocational programs has become more difficult as they have cut back or dropped these programs all together since kids are not enrolling in those classes as they once did. Shops are left to either send their technicians to I-Car and similar training programs or invest the time internally to teach the trade. Either represents significant costs to the shop owner. It takes time to teach those skills. Yet it is a cost that a shop owner must invest in.

Shop owners need to continue to follow trends and try and make the best profit margins where they can. Currently they are being asked to hang more and repair fewer panels. Go with the tide as much as it will carry you but keep working with your young body techs. Support the mentoring of entry level techs. Invest in your future with a little more time in training internally as to insure that master techs will always be available when your shop needs them. Those skilled technicians might not be needed to repair a panel today, but like so many other industries, ours has the potential to swing the pendulum the other way and we may very well see the need for those master body technicians as much as we used to in the past.

If you are going to go through any kind of auto body shop profit training, you need to realize just how big of an impact your staff has on the amount of money you make. Your staff provides the face of your company. They are the people your customers interact with on a regular basis. In addition to that, the staff you put in place has an enormous impact on the productivity of your business. As the owner, you know you can't do it all. If you try to, it'll always be a one man show and your results will reflect it. Bringing people on board to help out will take your business a long way. Thus the better the staff you have, the more money you can make in the end. Here are some thoughts to ponder when analyzing how to grow your staff:

Be selective about who you bring in. I'm sure it's a tempting thing to hire the first guy that comes through the door if you're busy and need the hands, but that's a recipe for disaster. This is your business. It's your baby. Take the time to verify the credentials and certifications they list, don't just assume. You also want to spend the extra time reaching out to the personal references they list. A shop owner in Texas shared with me his experience with a guy he brought in. He accepted a guy's application once who had tons of experience. Graduated from a nearby tech school, spent years working with bigger shops around town. He thought he wouldn't have to spend much time training him. So he took him in to help with the work flow. He later found out from his previous employer that he was struggling with a drug addiction, but it wasn't discovered until after the damage was done to his business. Be selective and do your due diligence on the guys you bring in.

Train your guys as an investment. Jason Stahl of Body Shop Business shares his experience with Doug Keilian of Auto Kraft in Lincoln, Nebraska. Responding to the problem of training guys then watching them leave to his competitors, Keilian says he has no issue with it at all. "To see young guys advance with skills and talents because they don't need you anymore is satisfying because you know you had an impact on them and will still be having an impact in the industry, even though you're not reaping the rewards directly anymore." Clearly, Keilian takes on the task of training his team as an investment in them as men, in the industry itself, but also in his own reputation and the reputation of his shop. The benefits of that effort on his part plays itself out in other areas: employee satisfaction, quality of work provided, customer experience, etc. All of these things will positively effect both your customer retention rate and your customer referrals. Train your guys as a marketing investment.

Keeping business goals in mind when gauging their performance.  Create benchmarks for your guys to measure their performance.  Reward good staff members when they do a good job. Terminate those who are habitually hindering your business. The whole goal in doing this will be to keep your auto body operations running smoothly and to bring in customers. You need to cater to your customers as much as possible, and if that means making adjustments to your staff, so be it.

What are some experiences you as a shop owner and/or manager have had when it comes to your staff? What are some good/bad experiences you've had? What are some things you've learned when it comes to training your team?

There is a lot that goes on with auto body operations, more than most people realize when they first get in the business. One component that is important to master early on is the art of negotiation. You have to negotiate deals for all of the parts that you get into the shop, and the better deal you can get, the more money you make when you turn around and sell the product. You may also have to use negotiation in trying to get the most work out of your customers. No matter what the case may be, learning how to properly negotiate will be vital to your profits in this industry.

When it comes to auto body operations involving the negotiation of parts, you should already have in your head what the maximum amount is that you would be willing to pay for an item. Depending on how well you know the company or how much stuff you plan to order from them, you should start a little bit lower than your maximum amount so the sales people have a chance to counter offer. You can do an offer/counter offer until they drop the price into your budget range. If that never happens, find someone else to shop with.

In the event that you are trying to negotiate additional work for your customers, make sure you know around what they plan to spend for a project. If you try to break them of that too much, they will assume you are using pushy sales tactics. They may try to find another body shop as a result. Only suggest auto body operations they would logically need. Don't try to suck all their money away. People will respect you more if you are helpful, rather than pushy.

You need to be confident any time you go to negotiate your auto body operations. The more secure you are in the offer you put forth, the more likely they will be to back down. You need to know exactly what you want to spend on something and then stick to it if you don't like what they are quoting you. If you walk away from the sale entirely, a lot of times you can get the other party to come back and renegotiate. Just keep the ball in your court and you should be just fine.

You also run into negotiations regularly when you're dealing with insurance company reps or savvy customers trying to lower the cost of their own bill.  If you're opening up a shop, know that negotiating prices is a part of business and it helps to have it down pat for the good of your business.

While there is no set formula for running an auto body shop, there are some things you can do with your auto body operations to improve the chances you have for success.

Marketing- One of the first things that any body shop should do is learn proper marketing techniques to get customers to their site. This could be done online, on TV, through the mail, on the radio, or through any number of other venues you may use for your business. Take an auto body shop profit training course to see what you can do to get a fair amount of customers coming to you daily.

Customer Base- You need to understand the needs of your customers so you can respond to them. As part of your auto body operations, you should make an effort to talk to your customers on a regular basis so you can get a feel for what they like and don't like about your business. You will also make a good impression this way by being directly involved with your customers. You will create a face for the business that people will learn to trust. They will come back to you as a result of that.

Staff Training- Never stop training your staff or yourself. If there is an auto body seminar in the area, take the whole shop down to learn and develop together. If you know that there is one staff member that is lacking in certain areas, you need to dedicate some time with that person to make sure he or she lives up to the standards of the shop. Maybe even consider holding a training seminar at your own shop. Sometimes all people need is a good trainer to be the best in their profession. You could be that for someone that works for you.

Budget, Expenses- Always pay yourself last. This is a tough lesson in small business ownership, but its the truth. It's one of the biggest lessons you will learn in any profit training you go through. While it may be tempting to pay yourself first when you are low on money, you have to remember that your staff member have bills to pay too. If you cannot pay them well enough to get food on the table, they will go elsewhere. Then you will be left to handle all of your auto body operations on your own. Do what you can to keep your staff around and take the sacrifices on your own in the mean time.

What are some things you would add?  What are important ingredients to consider when it comes to owning a small business or managing an auto body shop to success?

The following interview was conducted with Terry Siegler, owner of JPS Motorsports of Doniphan, MO. We at Web-Est asked him a series of questions regarding his use of the iPhone for estimating the damage of his customer's vehicles on the road and at the shop.

How do you use your smart phone for estimating damage to vehicles?
I'll go out into the field and just write up an estimate on my phone like any other estimate being written on a PC. Because of the 3G and wireless Internet everywhere, it works all the time. I can take pictures with the phone, go to Web-Est.com to write the estimate, and download it right to my phone for the customer to see. I can then email that estimate from my device to the shop or to the customer from the road. It works so well that I actually don't even use the PC in our shop that much anymore. If a customer brings a vehicle to work on, I'll write estimate for them right there in the parking lot on my phone. It saves time for both the customer and I, rather than going in and out of the shop.

Does the size of the phone and the text on the mobile web browser cause you any issues with the readability of the estimating software and the estimate itself?
All Apple devices have a feature that permits you to magnify all the text of a page to as large as you want. As you do that, the text on the Internet page reformats to fit on your screen so you don't have to scroll left and right for every line you read. This magnifying feature is also available on just about every smart phone that's on the market. Getting accustomed to this feature is just like any new operation a shop takes on: it takes a little getting used to, but after awhile, it becomes second nature and you're able to utilize all the advantages that come with smart phone estimating.

Do you ever use a laptop for mobile collision estimating?
You certainly can, but once you master estimating with a smart phone, there's no need to. With laptops, you need an Internet connection either through someone elses wireless Internet connection, or you need a wireless card. A smart phone like the iPhone has the wireless capabilities, but it also has 3G and sometimes 4G Internet that can operate without a wireless connection. As a matter of fact, we only use our PC for printing and for when the customer is in the office. Other than that, we use our smart phone for estimating, which is about 90% of the time.

Does conducting smart phone estimating give you an edge over your competition with your customers?
Absolutely! Alot of times, in my community, the question is "Who can get you the best estimate the quickest?" The smart phone capabilities, coupled with the Internet technology of Web-Est Collision Estimating, gives us the opportunity to write estimates at the location of car accidents, vehicle break-downs and anything else that would prevent a customer from bringing it to our shop. The software is the biggest thing. It enables us to stay ahead of our competitors by being able to give estimates at up-to-the minute speed. Other estimating providers have no way to compete with that.

How helpful is Web-Est Collision Estimating Software to your mobile estimating operations?
Using Web-Est is a crucial aspect to doing smart phone estimating. It can't be done otherwise. I don't know of another estimating company that has the technology that Web-Est has, and yes, I've used them all. Without the Internet functionalities, writing estimates on your smart phone is not possible. Web-Est is ahead of the game in Internet estimating technology and is the only one out there that can handle this new estimating platform.

Are you satisfied with your experience using Web-Est overall?
Web-est is one of the few tools out on the auto-collision market that has helped make us recession-proof. It has cut our costs significantly. It has made our operations more efficient with the Internet functionalities and mobile estimating. They're Aftermarket and LKQ parts database gives me an edge over competition that only provides OEM parts. The list goes on and on. I feel comfortable attributing alot of our success as a business and in this community to Web-Est products and services. I love this program and this company. I would recommend them to anyone in the auto collision industry.

Mr. Siegler agreed to make himself available for contact.  He can be reached at (573) 707-0260.

Last September, Web-Est conducted a survey among auto collision shops to determine the effects of the economy on their collision repair business and the auto collision industry in general. With an economic downturn seemingly leveling off, but with the unemployment rate still as high as 9%, Web-Est re-conducted a similar survey, with shops asked to share their opinion on the state of the economy. Conducted between July 7 and July 16, over 1,300 shops were invited to participate, with 70% of them identifying themselves as having 3 employees or fewer.

The most significant change in the survey compared to last September was measures by the government to help the economy, which respondents carried overwhelmingly negative views of. When asked if efforts by Congress and the federal government have helped auto collision industry (through Recovery Act/Stimulus Bill, Auto Bailout, Troubled Assets Relief Program, etc.) 87% said it has not helped the industry at all. Another important finding from the survey was individual respondent's view of their volume of business compared to the previous six months. Of the shops surveyed, 42% believe that their volume of business is worse than the last six months; while 26% believe it is about the same and 36% believing it has improved. Those who say their volume of business is worse off saw a 20% jump when compared to the survey taken in September 2009.

Please see below for all the results of the survey:

Compared to the last six months, how would you describe your current volume of business (repairs/sales)?
Frequency Analysis
Answer Percent
1. About The Same 26.00%
2. Slightly Improved 14.00%
3. Improved 16.00%
4. Greatly Improved 2.00%
5. Worse 42.00%

5How many staff members does your shop currently employ?
Frequency Analysis
Answer Percent
1. 1 28.00%
2. 2 16.00%
3. 3 26.00%
4. 4 12.00%
5. 5 10.00%
6. 6 8.00%

Does your shop conduct any internet marketing activity to bring in new business (i.e. marketing on Google, Bing or Yahoo)?
Frequency Analysis
Answer Percent
1. Yes 34.04%
2. No 65.96%

How much does your shop spend on advertising?
Frequency Analysis
Answer Percent
1. $0 8.33%
2. $0-$100 14.58%
3. $100-$200 14.58%
4. $200-$300 8.33%
5. $300-$400 6.25%
6. $400-$500 4.17%
7. $500-$600 6.25%
8. $600+ 37.50%

For those using a Direct Repair Program, are you satisfied with the work provided?
Frequency Analysis
Answer Percent
1. Yes 35.29%
2. No 64.71%

Do you think the efforts by the Congress and the federal government have helped the state of the collision repair industry? (i.e. Recovery Act/Stimulus Bill, Auto Bailout, Troubled Assets Relief Program, etc.)
Frequency Analysis
Answer Percent
1. Has helped significantly 4.08%
2. Has helped some, but not enough to directly impact the collision repair industry 8.16%
3. Has not helped the collision repair industry at all 87.76%

In your opinion, when do you thing business will improve to pre-economic conditions?
Frequency Analysis
Answer Percent
1. Has Already Returned 6.25%
2. By the End of 2010 2.08%
3. Early 2011 6.25%
4. Mid 2011 12.50%
5. Late 2011 33.33%
6. Never 39.58%

From Body Shop Business

The Senate Standing Committee on Consumer Protection and the Assembly Standing Committee on Consumer Affairs and Protection held a joint hearing June 9 to hear testimony on the proposed New York State Automotive Right to Repair Act (SB 7302 and AB 6634).

The Automotive Service Association (ASA) opposes the New York State Right to Repair Act, while the Coalition for Auto Repair Equality (CARE) supports the legislation and claims that ASA members provided "misinformation" at the hearing. New York unions, automobile manufacturers and the New York State Department of Motor Vehicles all submitted comments in opposition to the Right to Repair Act, ASA noted.

Donny Seyfer, ASA board member, Seyfer Automotive, Wheat Ridge, Colo., answered questions from the committee regarding service information requests and the National Automotive Service Task Force (NASTF). ASA says it has made several presentations to members and staff of the New York legislature in recent years regarding service information availability.

"I don't have problems of not having information because I only work on brands that I know I can repair," Seyfer told the committee.

CARE Executive Director Sandy Bass-Cors countered that without support from Right to Repair legislation, independent repairers' options could be severely limited.

"Unfortunately, that leaves independent repairers at the continued mercy of the car companies which may decide to eliminate certain brands or merge, leaving the independent repairers with even fewer vehicles to repair," Bass-Cors said. "Mr. Seyfer's statement sounds as if there are brands that he can't repair and therefore has 'settled' for repairing only a few models while telling the New York legislators that repair information is not a problem."

Matthew Godlewski, vice president of government affairs for the Alliance of Automobile Manufacturers (AAM) noted that Right to Repair hasn't been successful in the past in other states or at the federal level.

"Congress and the states have repeatedly said 'No' to the Right to Repair Act," he said.

CARE countered in a press release that no state has rejected the legislation outright, and it has been reintroduced in Congress.

The New York legislature has not scheduled any further action on the Right to Repair Act for this year.

ASA says it's working with New York state policymakers to establish service information training sessions in the state later this year.

In addition to being debated in New York, Massachusetts State Senate already passed the measure, with arguments against the legislation saying that it provides "a way for generic auto parts makers like Auto Zone and Pep Boys to get information that will allow them to reverse-engineer parts and manufacture them generically."

Do you think Congressional and State legislation would provide independent repair shops with the right solution to the problem of information access, as C.A.R.E. argues?  Does the legislation go far enough in providing a solution?  Or would legislation be unsuccessful as A.S.A. and A.S.M. argue?  Would the legislation provide auto parts makers with information they shouldn't have?

What are your thoughts regarding this matter?

As the economy begins to show signs of improvement, but unemployment still remaining high, we at Web-Est would like to know your opinion regarding the state of the auto collision industry.  Do you think the economic conditions of the auto collision industry are improving or are they worsening?  Click here to take the survey.

There are a number of different aspects that go into making a business operate more efficiently. Efficient operation of any business is important, but considering auto body technicians always have more work than time...its critical.  How you train employees to work and how you focus on customers will be the focus of this post.

One important aspect of having your business run efficiently is the way in which your employees work. If you have a larger shop with a large team of employees, you may be able to have them specialize in a particular area. Specialization will allow them to focus on a specific task for the majority of the time, making them work more quickly and make fewer mistakes. They will also be able to provide more information and assistance to customers with questions, and having an "engine specialist," for example, makes your business seem more professional from the customer's perspective.  At the same time, some shops choose not to go this direction with employee training, which might be common for smaller shops. In this case, body shops opt to train their employees to be "jacks-of-all-trades," where all the employees are experts and perform the work as it comes.  Going this route keeps you're employees busy with work, and can prevent jobs and issues from falling through cracks.  Quite frankly, implement whatever works best for your employees, your volume of work and your business model. Having an efficient system that permits work to flow in and out quickly and properly is key.

You can also optimize your auto body shop by having a tightly run office. The front office is the place in your business that will make the greatest impression on your clients, and having it be clean, tidy, and well staffed is important. If possible, have someone present in the office at all times, in order to answer phones, provide customer support, and deal with paperwork. Having a customer service representative shows that your business is invested in its customers, and dedicated to ensuring that they are satisfied with the service they receive.

The way in which you deal with customers and the way in which your employees function are the primary aspects of determining how efficient your business will run. Customer relations are a crucial aspect of developing impressions in their mind about your business, which have a direct impact on their decision to refer you to their friends, which thus means more business for you.  Equally important in developing that customer's impression is how quickly the work was done and how the quality of that work is.  By optimizing your business to be as efficient as possible, you will increase the amount of business you receive and enhance your relationships with customers.