Did You Know? July 5th, 2021
Well, here we are, the first week of the new SGI Safe & Quality Auto Repair Program (SQARP) and it appears that we may have lost around 50 shops that were accredited under the old agreement which dates back to the 1990’s!
It is tough to see shops disappear but there is no denying that with the complexity of auto body repairs today the accreditation standards needed to be revisited and updated. As I mentioned in last week’s Did You Know? don’t be upset with SGI, they have probably done you a favor, just wait until the OEM’s start flexing their muscles on repair procedures.
Having said this there is still work to be done. In the past few years, the demands on collision shops have been monumental both in the administrative part of the business and the technical side as well. SAAR is continuing to address these concerns with SGI and our provincial government. This coming week our technical committee will meet with SGI to (hopefully) agree on a number of repair issues that the industry is currently not being paid for. Shortly before that meeting I meet with SGI to discuss a recent report by the Crown & Central Agencies Policy Committee related to a number of industry pain points. My understanding is that SGI is going to share how they plan to address these issues.
Finally, SAAR and SGI are investigating a number of initiatives to help our shops deal with the tsunami of administration tasks. We are looking at some out of the box solutions for ways to give all stakeholders what they need – cost containment, more gross profit for shops, less stress and simplified admin processes. Please be patient, SGI has to do their due diligence and this will not happen overnight.
Stay tuned, I think we are making progress!
I saw a neat article in Collision Repair Magazine that talked about a neat APP available from Sherwin Williams called Collision Core Quality. This year, SCRS released its newest list of Kool Tools and Sherwin-Williams Collision Core Quality was among those recognized by repairers as a must-have in their shops.
Paul Sgro, owner of Lee’s Garage located in West Long Branch, New Jersey, nominated the Collision Core Quality App because it has given his shop “an opportunity to be faster going through our processes and in turn giving us accountability in what we do.”
“Sherwin-Williams was at the forefront as a forward thinker to work with us,” he said.
Using a mobile device, Collision Core Quality provides peer-to-peer quality verification and validation assurance giving body shop owners and managers data insights, cost savings, improved labor utilization and ultimately, peace of mind, says the company.
Collision Core Quality is part of a comprehensive suite of solutions including six applications in all – built to connect metrics and drive labor optimization.
“With Collision Core, we’ve thought of everything you need to provide at-a-glance visibility across all key business operations, and focus on critical, unmet needs within the industry,” says Rob Mowson, Vice President of Marketing. “The goal with this platform is to empower shops and improve self-guided decision making based on real-time, factual data and deliver enterprise-wide communication. The Quality application is just the beginning.”
The app replaces paper checklists and end-of-repair quality controls with an easy-to-use mobile application that delivers in-process, time-stamped and validated information. The application enables technicians to ensure proper repair procedures are followed; and, with Collision Core Quality, the shop is able to provide the customer with a digital record of all of the vehicle’s repairs, says the company.
For a comprehensive overview of this year’s Kool Tools, check out some of the equipment in action with organizers Kye Yeung and Toby Chess in this video. And for more information on Collision Core Quality or to request a demo, click here.
Our friend Dave Luehr keeps pumping out the information you need to become a top performing shop. I am so thankful for guys like Dave that are working diligently to help people succeed in our demanding collision repair world. Check this out:
| The real villain in a body shop is not the grumpy employee ruining everyone’s day or backordered parts or any of a hundred other details swirling in your head. The real villain is chaos. If left unchecked, it will take over your shop like a plant sending roots anywhere it wants.So, what do we do? We build structure and processes in every part of the business. Whether it’s reading resumes to find a new employee or the first phone call with a customer or closing the shop at the end of the day, the real question is whether your processes were deliberately selected or if they’re in a default setting.Take a look around your shop. If there’s an area in chaos, the process is likely not working very well. Now is the time to go in and make a change. Kick chaos to the curb! |
Last week we talked about getting to know your numbers and having Benchmarks set for profitability in the four main income areas of a body shop. This week I want to take it a step further and introduce you to finding your Breakeven Number. The breakeven number, as the name suggests, is the number of dollars of goods or services that a company needs to sell in order to break even, or in other words, to suffer no financial losses but also make no profit. Once you hit this number of sales everything you sell going forward essentially drops right to your bottom line. Why is it important to know this number?I think we all know that when you keep score and report it to your stakeholders (employees) performance improves. Just as in sports, scorekeeping is an important aspect of business. I strongly suggest that you get your hands on a book called The Game of Work by Charles Coonradt to fully understand the power of scorekeeping in business. You can get it online from Amazon:https://www.amazon.com/Game-Work-Enjoy-Much-Play/dp/1883004039
To help you determine your shop’s breakeven number our good friend David Luehr has sent me a neat little Excel Spreadsheet to help you find it. In the link above, to make it simple I used annual sales of $1,000,000, average severity of $4000 = a total car count of 250 vehicles. I used our gross profit target of 40% from last week’s Business Tips, kept our expenses at 30% to get a net profit of 10%. The column on the right shows you what you need to do monthly to achieve these annual numbers. In this case you need to repair about 21 vehicles a month for total sales of $83,333 a month, your breakeven number is $62,500. In the month of July there are essentially 20 working days – who the heck is working July 2nd? Let’s say that you hit your breakeven number on the 15th working day – July 23rd – now you know that every job you do in the last week of July goes straight to your bottom line. Could you get one or two more jobs through your shop in that week knowing that 40% of each job goes directly to profit?Folks, for some of you may think this is silly but this is how you drive performance in a business – by knowing the score. Like I said, same as sports, didn’t you dig a little deeper when the score was tied 2-2 with five minutes to go in the game and the coach tapped your shoulder to get out on the playing field? Start scorekeeping this month and watch your business grow!