By Tony Netherly
Definition of One: A single thing or unit, smallest whole number, lowest mathematical power.
How many times have we made these statements or had these thoughts?
— Insurance companies are controlling more of my business every day.
— I only make a profit on some jobs.
— How many cuts can I take?
— Most of the time I think my business is running me.
— There are only a few things I can control these days.
— There isn’t anything I can do.
If you own or manage a Collision Repair Facility in today’s economy I am sure that at least some of the above statements have passed through your mind, or come from your lips in some variation, if not verbatim. I have said on more than one occasion that the Collision industry is at least a decade behind the insurance industry, as well as many other industries. We were very slow to adopt information management technology; therefore, having not measured the past has left us short in preparing for the future. Have you heard or made this statement? “We never did it that way before.” As a result, those who are scrambling to catch up have turned to some of the improvement processes that other industries have developed and adopted. Whether you are trying to standardize procedures, reduce waste, or eliminate bottlenecks there is ONE goal: Net Profit.
The one person who can affect the efficiency and profitability of every other person in the Collision shop is the estimator. As I encourage estimators to improve the sheets they write, I hear the same old clichés, “I will lose the job to Joe down the street.” I know severity is a real issue, but most of us haven’t written a competitive estimate in several years. “They [Insurance Companies] won’t pay me for that.” They pay every day for many items that we may not even be aware of. “I don’t have time to nickel and dime every sheet that I write.” I will ask, can you afford not to? The Power of One can be applied to any shop, small or large. The Power of One is a simple, singular thought process that asks each employee in the business, what is the one thing they can do to make the shop more profitable? Could you motivate each employee to help you market the business by helping bring one more job to the door each month? Could all the office staff become sales representatives and improve the closing ratio? What happens to profitability if the estimator adds one tenth to every operation? I am not talking about padding the sheet, but trying to remember those little operations that you do without being paid. Can I add one hour to the estimate legitimately? Can the parts person get the parts one day sooner, or the right part one percent more often? Can the production manager have one more car staged for the first available tech? Most of us would answer the majority of these questions with “most likely” or “probably.”
The success or failure of any Collision Shop in the area of profitability rests on the shoulders of whoever is handling the process of tracking the repair of the vehicle and creating the paper trail called the “Final Bill.” If it is not on the estimate, which usually becomes the final bill after some adjustment, it stands a good chance of falling through the cracks. In a large facility, sometimes the volume monster takes over and the small things are still left on the table. If the estimator omits items, quite often they are never regained. When the technician gets the job, all you want him to think about is repairing the vehicle.
Let’s first look at the simplest procedure we can do. Add one tenth to every operation. I am not talking about altering book time, but looking for what is missing; clearing a jam, aiming a lamp, R&I a molding, etc. The average RO usually consists of three body operations and at least one paint operation. That would equal at least 4 tenths of an hour.
Second, consider finding one operation that you are doing on most repairs that you are not collecting on. We all are accustomed to adding the common “give me” items, like car bags and hazardous waste. These are simple items that someone asked for and got paid for, because they are real items. These are usually simple items that can be performed by an hourly employee who is doing some other important task, like holding up a broom. Therefore, if you collect you win.
Third, make sure you are selecting the options for the vehicle. It may take a few minutes, but quite often pays for some operations, such as increase due to power options or drive train operations. Another consideration is using the estimate as an opportunity to set the stage for supplements, like noting that paint is a pearl or poor hiding color. Another might be noting some quick measurements to justify more pull time.
Last of all, never work off someone else’s estimate. Anyone who can surf the net has enough computer skills to be trained to key in an estimate. You will easily recoup their pay and see bonus dollars for your business.
“The Power of One is Profit.” •
Tony has worked in the collision industry for over 32 years. Starting as a technician and working up to manager as well as spending time as an estimator and vocational instructor have given Tony a wide-angled look at the industry.
Tony is also Tennessee’s busiest I-CAR Instructor and the Executive Director for the Tennessee Collision Repair Association. You can contact Tony at 731-394-5628 or E-mail Tony at tony.nethery@yahoo.com
