How to Run an Auto Body Repair Shop – The Independent Shop
When I began my body shop, after I found a space to rent, I began searching for alignment machines, frame machines, paint booths, paint suppliers, and part vendors. Because I was independent, much of my original equipment was leased with a one-dollar buy-out option at the end of the lease. Paint suppliers will help you in two ways. If they find you credit worthy, they often will provide a paint booth if you sign a long-term contract along with discounted paint prices. As far as parts vendors, again, you will have to be approved by their credit department for both aftermarket and manufacturer parts.
You will also need to make connections with insurance adjusters and find out how you can be a member their recommended repair facility list. No matter what insurance reps may tell you, every person has the right to obtain three estimates to repair their vehicle and these estimates do not have to be from franchised auto body shops. If a customer chooses your shop, the insurance company will have to comply with their choice. This is the way to start gaining customers, but keep in mind; it’s often your staff and your final product that will get you more business. Almost every auto insurance company has a website where you can apply to become one of their recommended shops. Some of the reasons you may be denied are:
- Inadequate or antiquated equipment
- No ASE certified paint or body technicians
- Not enough business liability insurance
- Your willingness to work with the insurance company and choose aftermarket parts per the estimate.
- No formal estimating system
- No formal accounting system
- No lifetime/limited warranty
- No free estimates
All of these can be remedied for the independent repair shop owner. Your paint or equipment suppliers are your best bet in getting you on board with top technicians, the right equipment, and even the right estimating system.
As far as an accounting system, while your estimating software company will tell you they offer the best one, they are often costly to the independent. As an owner of an independent shop, I searched and reviewed many demos until I found Combined Computer Technology or CCT. They provide everything you need along with software support at affordable prices. It was also a system my accountant found easy to work with.
While you are gaining a customer base and making insurance contacts, take the time to create a brochure that explains everything about your company including how you will work on any make or model, that you offer free estimates, that you are willing to work with all insurance companies, the paint system you utilize, and if you and your technicians are ASE certified in auto body and paint repair. A good brochure, which you can make on your own using a word processing system, should include an accident record guide with recommendations on what to do if a person is in an accident. These brochures are essential as your first advertising tool. Provide them to everyone you know, ask for referrals, and place them on windshields at shopping malls and grocery stores.
You will also need to run your business like a business. Be constant with your hours of operation and your employees are just those—employees so don’t create close friendships. Often, if an employee is not performing, it’s harder to fire a “friend."
Learn about how to manage your cash and use cash flow forecasting. Work with your bank to open a line of credit to utilize when times are slow. Make timely employer 941 tax deposits and file required quarterly reports where necessary.
Finally, your customer service must shine and you need to network with people and other businesses in your community. Consider joining your chamber of commerce for additional advertising. Owning and running an independent auto body and paint facility may give you the freedom you want and is less expensive to start, however, a franchised facility does offer national recognition and other benefits.
Please click on Page 3 to find out how to open and run a franchised auto body repair business.