Shop's profits up after manager revises employees, workflow and estimates
JACKSONVILLE, N.C. – This past year a lot of outward factors in our struggling economy could have had a negative impact on profits at the 18-bay body shop Craig Whited manages at Marine Chevrolet in Jacksonville, N.C. But when the going gets tough, Whited takes control and he has succeeded in overcoming outward factors by looking inward, especially at the way the shop’s employees are organized, at workflow and at providing estimates to customers.
“My gross profit is up 18 percent this year,” he says. “Internally a lot of things have changed with us as to how we operate. I came here three years ago and this shop was red and now it’s black. We were on suspension with several insurers when I came on, but now we’re a top performer. We’ve turned that around through quality of workmanship and CSI, which is now 97 percent.”
One of the first things Whited did to turn those figures around was implement a team approach for the shop’s employees. He eliminated the shop’s estimator positions and replaced them with managers who work more or less on their own. One manages a team of four body men and a painter, and the other manages three body men and a painter.
“Instead of having a production manager and an estimator, it’s one writer, x amount of body men and x amount of painters,” Whited explains. “They’re one team and you keep them flowing. Each writer only deals with the customers for those three guys. One writer, three body men and one painter. It simplifies the whole process.”
Whited notes that the team approach only works with high caliber employees, and he utilizes his resources in order to find them. Those resources include insurance adjusters.
“I’ve hired techs from shops that I know the insurance adjusters like,” says Whited. “I ask them, ‘Who do you like working with? Who makes it easy?’ Human nature is to want to work with someone who makes your job easier. It’s about people selection. If you hire mediocre people you get mediocre results. I’ve managed to recruit technicians from other shops that were key selections, not just hiring a body from running an ad.”
Whited hired three new technicians in 2008 and he plans to hire more in 2009. He’d like to modify the current team structure by adding technicians to the paint department and a few more in the body shop also at the 7,500 square-foot facility. The shop’s 18 working bays include 12 body stalls, two paint booths and four prep decks.
But even the best teams need to stay organized, busy and utilized to the fullest extent, and Whited has been implementing a way to do just that.
“My goal is to get to one stall per technician in ’09 and that’s going to require more organizing for parts storage and utilizing every square foot we’ve got,” he says. “You can only work on one car at a time and several shops have several stalls per technician and it’s dead real estate. I have 12 stalls and eight body men so several stalls sit idle and the goal is to get to one technician to every stall.”
Because many technicians will generally work on two or three vehicles at a time. Whited says it’s a new mindset for them to think about working on one car at a time. He says they look at it like he’s taking money away from them, but he explains that they are just changing the way they work.
“One of my technicians has been here 18 years and he’s always been a 50-55 hour-a-week tech with two stalls and I told him I’m putting him down to one stall and the very next week he put in 74 hours. I get 30 more hours a week now from him. I go from 50 hours a week out of two stalls to 140 hours a week out of two stalls. Thirty more hours a week over a year is a lot more money for him and his family.”
In addition to expanding his workforce, Whited plans on adding some equipment to the paint department in 2009, including adding a prep deck and possibly another booth.
“We’re also thinking about buying a lift for teardowns to decrease supplements,” he says. “About 10 percent of what I do are tow-ins and you can tear those down. We’ve got a covered awning outside and we’re thinking about putting a lift out there.”
He’s also looking into getting a new paint facility or adding some square footage to the existing one. That’s something the business is going to need as the volume of work at the body shop continues to increase. Whited has been able to keep work volume on the rise with a very simple modification to the way the shop provides estimates to customers.
“We write estimates by appointment only and that has increased my closing ratio to about 92 percent,” says Whited. “We get a new estimate every 30 minutes all throughout the day. Almost nine out of 10 people that walk in the door commit to that repair. There’s people I call tire kickers who get an estimate and then keep the insurance check. Last year we started tracing closing ratios and I looked into it and discovered that walk-in estimates had low closing. Now we tell them we do this by appointment only. In every other business it’s that way, I don’t know why it isn’t in body shops. You cant’ walk into the doctor’s or dentist’s office and be seen – you have to make an appointment. All those people that want an estimate right now don’t come any more and we don’t waste all that time anymore. I’d say a good 35 percent of my writers’ time was wasted before.”
With so many factors in his control, there’s one element Whited sees that is out of his control – one that he feels will affect his business in 2009.
“The banks’ willingness to lend money is going to play a huge part in the auto market,” he says. “Which comes first, the car sales or the repairs? Without cars sales there are no more repairs. The banks have got to let go of the money and open lending to what it used to be, even the B and C buyer. Until that happens I don’t think anything’s going to change in the auto market.”
