The collision repair industry continues to evolve, and successful shop owners are finding ways to adjust and change their business to adapt.
A recent “rountable” of US shop owners shared the lessons about changes they’ve made in their business in the past couple of years, and how those changes have worked out.
Kena Dacus, co-owner with her husband Chris of Dacus Auto Body in Kansas, says 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 says. “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.”
So 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 says. “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 says 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 says 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 advanced driver assistance systems (ADAS) calibration center. All three of his shops – two of which are a couple miles apart, and the third is about 45 minutes away – now feed cars into that center.
Rather than doing that work under the Mountain View name, Daniel set up another corporate identity for it.
“A certain insurance company says they would only pay [a certain amount] for calibrations if I did them under the Mountain View label,” Daniel says. “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.”
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 says of his 5-employee shop in Wisconsin.
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 a local technical college “to help give back to the industry a little bit.”
“I also recently had our website revamped, and I’m in talks right now with [a company] that specializes in body shop marketing and online presence.”
Scheduled estimates, collecting ‘co-pays’
Micah Strom, co-owner of Modern Collision Repair in Washington state, says it’s now been just over a year since he switched to a 4-day workweek.
“It helps with employee retention and acquisition, and our customer base loves it, the fact we’re giving employees more time off,” he says. “We also shut down for lunch like a doctor’s office, with everyone having lunch from Noon to 12:30 p.m. It’s much easier than staggering lunches. It’s sort of like our being completely closed on Fridays. 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 says 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 says. “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 says. “A couple years ago, we started collecting the short-pays from the customer [for shop charged not paid for by their insurer]. 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.”
Differentiation through certification
Third-generation shop owner Evan Opeka of Opeka Auto Repair says the market where his three shops are located in Pennsylvania is highly competitive, with a lot of large and regional multi-shop operations.
“So we have positioned ourselves to aim towards the higher-end automaker certifications to kind of separate us from the market and be able to get paid the way we want to get paid,” Opeka says. “So we’ve been working on certifications for Lucid and BMW and Jaguar Land Rover. Chasing down the higher-end certifications is definitely helping us make a name for ourselves. Beyond that, we’re really focusing on getting [post-repairs] safety checks done for vehicles to the OEM specifications. We just want to make sure we do the highest quality repair we can do. We’ve also been honing in our parts staging process to increase efficiency for our technicians, because they are paid hourly plus commission. It’s been going really well and made a positive impact.”