 |
So Tell Me Why you are Doing your Body Shop Work for Nothing?
Author: Willard Michlin  | Posted: 26-10-2007 | Comments: 0 | Views: 129 | Rating: (136)  (?) 
In my 15 years as a body shop broker, I have visited many hundreds of body shops across the state. Almost 100% of the owners complain, if they are being honest with me that they work too hard for two little money. We talk about them wanting to sell the business to some other poor sucker who will then also complain about not making enough money.
When we start talking about the reasons they include:
1) The market prices are too low to make a profit.
2) They do not have enough volume of business.
3) They need to get some DRP contracts; then they would be doing great,
4) They have no time to go out and look for business.
5) Rents are too high.
6) Labor is too high.
7) I cannot find good body men and painters.
When we talk about, why they want to get out of the business? They give me these explanations:
§ I am sick of the business.
§ I am loosing money.
§ I am burned out.
When we take all of this into account and get to the bottom of the problem of all the complaints we come down to the real problem:
The insurance companies have controlled the prices paid to body shops be intimidating the owners to take the business--on the insurance company’s terms, or there are 10 other shops that will.
This makes sense when we are referring to shops that have DRP contracts with the insurance companies but what about the shops that do not?
The problem they are having is:
Non DRP shops keep their prices low because they think their next door neighbor will take the business for less and that the insurance companies will be unhappy with them and never send them business or give them a DRP contract, in the future.
These situations results in: no one making money. Not the DRP shops or the non-DRP shops. Even when the insurance companies tried owning their own body shop they could not make a profit, at the prices they force the body shops to take.
I hope I have summed up the problem, distinctly enough.
The industry is in fear of the insurance companies, but in truth the insurance companies’ power rests with the body shop owners not the insurance companies. The power is not with the large DRP body shops as all small owners believe but it belongs with the non-DRP body shop owners who are not bound to any agreements with the insurance companies. It is the medium and small body shops with no DRP agreements that can change the industry for everyone.
GIVE ME LIBERTY OR GIVE ME DEATH!
Over 200 years ago, a third of our nation, said that they were tired of taxation without representation, and they went to war against the strongest nation in the world, England.
They risked their lives and their property for what they believed. To fight the strongest power in the auto industry you do not have to risk your lives and you will not even be risking your fortune. It only requires that you stand up and say, “Enough is enough,” If what I say excites you, please read on. I have a plan.
If not, please stop reading; put this article down. Tomorrow when you go to work pull out your most recent profit and loss statement, and read it very closely. Calculate what will happens to any profit that is shown, when your costs, including rent, go up another 10%, in the next year or two. Then make an estimate as to how rapidly the insurance companies are going to respond to your request that they let you raise your rates. Then go tell your wife and kids that they had all better get a job and support dear old dad.
“I AM MAD AS HELL, AND I AM NOT GOING TO TAKE IT ANY MORE!”
Any plan has to workable. By that I mean that if you expect everyone in the industry to work together in trust, against the common enemy, you’re dreaming: it will not work. There will always a Benedict Arnold, who will take the opportunity to steal the business away from his “friends” while they are working to raise the industry rates. This plan does not rely on trust, but it does take co-operation. No company puts the businesses they already have at risk, in order to forward the goal of the group to raise rates.
THE BATTLE PLAN
The big body shop owners are the leaders of the association and industry. They are the generals in this war. They can participate in some of the encounters but must depend on the independents for the direct attacks. The big boys must organize and instruct the troops.
This can be started anywhere. It can be done in one area at a time or preferably it will be done in multiple areas, at the same time. Here is the plan:
1. All the local body shop owners are invited to an association meeting or a meeting at one of the bigger body shops. All attendees are asked to participate and to encourage others to do the same.
2. Everyone raises his or her posted rate to something above $50.00. We do not want everyone to raise the rates to the same price; this is collusion and price fixing. Each shop can pick their price. It should not make sense to be below $50.00 per hour
3. The posted rate is only charged for non-DRP work, which helps the little shops a lot and the big boys on some jobs. It doesn’t change any prices for clients under DRP contracts but it sure makes a difference on any other work that comes in the door.
4. When the insurance companies do their survey of posted rates, in an area, they will find them at above the $50.00 benchmark.
5. When a non-DRP shop has a client with insurance, he can demand and force the insurance company to pay the posted rate for that area. The adjusters can kick and scream but they legally must pay the average posted rate for that area. That is why it is critical to get everyone, large and small, to change their posted rate.
6. The little body shops can continue to charge what ever they want below the posted rate, but they must at least raise the posted rate. This is the only action required of every body shop. Just change their posted rate. No other agreements are required.
7. Over a period of time, everyone will start demanding the posted rates from the insurance companies. This will happen while the DRP contracts are still sitting at lower rates. The next thing that will happen without any agreement from body shop members is that some will drop their DRP contracts so as to be able to collect the posted rate. The remaining will start complaining to the insurance companies and threaten to quit.
8. At some point the insurance companies will raise the DRP rate, and everyone will be better off.
9. The following year, the association members can discuss the need to raise the posted rate again. Of course each person must make their own decision as to how much they want to raise the posted rate to. Collusion is a crime.
Well I have laid out the whole plan. It will work. The insurance companies will bring in the German Hessians troops* under some other name, as they did in the revolutionary war, but if we remember the battle cry we will win. “I am mad as hell, and I am not going to take it any more!”
HessiansAmerican Revolutionary War, Landgrave Frederick II of Hesse-Kassel (a principality in northern Hesse) and other German leaders hired out thousands of conscripted subjects as auxiliaries to Great Britain to fight against the American revolutionaries. About 30,000 of these mercenaries were hired, and they came to be called Hessians, because 16,992 of the total 30,067 men came from Hesse-Kassel. Some were direct subjects of King George III; he ruled them as the Elector of Hanover. Other soldiers were sent by Count William of Hesse-Hanau; Duke Charles I of Brunswick-Lüneburg; Prince Frederick of Waldeck; Margrave Karl Alexander of Ansbach; and Prince Frederick Augustus of Anhalt-Zerbst."
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/business-articles/so-tell-me-why-you-are-doing-your-body-shop-work-for-nothing-245782.html
About the Author:Willard Michlin is an Investor, Business Broker, California Real Estate Broker, Accountant, Financial Distress Consultant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at Broker@kismetbusinessbrokers.com See other articles by Willard at http://www.kismetbusinessbrokers.com
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
Body Shop - is This a Good Time to Sell?
By: Willard Michlin | 27/07/2007 | Business
Have you ever asked yourself the question? “Is this a good time to sell my business?” That is a question every business owner asks himself, every time he has a bad day. I once received e-mail from the editor of the Auto Body News, asking me that key question. “What is happening in the market today? Is this a good time to sell? ” My quick answer was “These are very interesting times.”
Selling Your Business - A Tool To Reduce Capital Gains Taxes
By: Dave Kauppi | 10/02/2006 | Finance
When you sell your business, wouldn't it be nice to pay Uncle Sam as little as possible. This article discusses a method to greatly reduce and delay capital gains and depreciation recapture on the sale of your business.
14 Rules Of Business Referral Etiquette
By: David. A. Goldsmith | 02/07/2007 | Business
One of the key roles of management is to build business through relationships. A common way to build relationships is through referrals: with, for and through banks, attorneys, employees, peers, and anyone else who has something that someone else wants or needs. The better you are at managing the referral,...
To Sell a Business or Not Sell a Business A Crossroads Decision
By: Dave Kauppi | 23/01/2008 | Sales
Thinking of taking your company to the next level with a major capital investment or hiring additional sales resources? These are decisions that can impact your company's future. It might be time to consider the alternative of selling your business.
Car Insurance Agent: Play Special Role In Online Deals
By: David Faulkner | 09/10/2007 | Finance
Acquiring the right car insurance for your needs can be a complicated business. There are so many online policies available with different premiums, deductibles, coverage, and limits that it is very easy to get confused while trying to absorb all of that information. This is why many people choose to...
Everything you Wanted to Know About Buying a Body Shop
By: Willard Michlin | 27/07/2007 | Business
So you think you want to buy a body shop? A body shop can be a great investment if you have the skills necessary to make it work, and are willing to do the business actions necessary to bring in the business and keep the business profitable. I would like to help you work out if you really want to buy a body shop and, if you do, what kind of shop would be best for you.
An Intelligent Technology Company Acquisiton - A Case Study
By: Dave Kauppi | 21/02/2006 | Finance
Some pundits estimate that about 70% of company acquisitions do not produce the returns anticipated by the buying company. Let's look at a case study of how a strategic seller and a strategic buyer came together to create a winning M&A transaction.
Succession Done Right The First Time Around
By: David. A. Goldsmith | 02/07/2007 | Business
In an ideal world, a CEO selects and preps a successor. He shows up at his retirement party, collects the gold watch, and heads for a life of bliss on teeing grounds and putting greens. His replacement hops onto the throne, transitions smoothly, and everyone lives happily ever after....
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
How do you handle NOISY neighboors? I live next ...
By: rodray | 02-04-2008
How do you handle NOISY neighboors? I live next door to a auto body shop in a residential surburbian neighboorhood. Loud noise and fumes @ any hour of the week: 24/7. There's no set time. I'd rather live next to a legal shop, where I know they have set hours. HELP!
Self-employed health insurance options?
By: gabstero | 09-02-2008
What health insurance is recommended for a person that thinks of going full time into his/her own business (self-employed)? Thanks.
Insurance for Unemployment
By: boondock | 28-01-2008
article is good in firmly stating that there are private insurance companies covering involuntary unemployment. Can you tell a few companies that provide such an insurance?
Difference between body lotion and body butter?
By: Mrs.H0711 | 21-01-2008
What?s the difference between body lotion and body butter? Is one better for dry skin?
Q&A Powered by: 
Latest Business Articles
Water Damage & Solano County Flooding
By: Mark Decherd | 26/07/2008
If you live in Solano County, it's imperative that you are aware of the flood potential and understand the risks. The wet months run from November through April. During these months, you are more likely to experience flooding.
Is it Time to "reset" Your Business?
By: Linda Feinholz | 26/07/2008
When is 'too much to do' finally enough? I mean enough to have you reach out and slap your personal and business 'reset' button? Do you ever feel like you're buried under overwhelm? Sometimes prioritizing the to do list isn't what needs to be done.
15 Ways to Improve Your Closing Ratios and Sales Presentations
By: Katrina Sawa | 26/07/2008
It is not enough to do launching effective marketing campaigns to obtain new customers and to continually market to your existing database for more referrals and repeat business. In addition, you must be able to ask for and close the sale. Otherwise, it is a waste of time and money!
In Searching for Cost Reducitons, Look at Total Cash Flow Costs Rather Than Accounting Costs
By: Donald Mitchell | 26/07/2008
If you are a privately held company, look to reduce overall cash costs when considering alternative cost reductions, rather than the impact of reported earnings.
The More Trust, the More Time to Succeed
By: Andrew Cox | 26/07/2008
Bill Oncken, in his book Managing Management Time, says that the more trust you have with your "universe " of people, the more time you have to do the things that lead to success. Trust is hard to earn. Once lost it's hard to regain. It's the most precious asset in any relationship - at any level - at any time. Read on to see how a successful Division President builds trust.
10 Tips on the Issues With Selling Professionals
By: Drew Stevens | 26/07/2008
The world of professional selling is rich with information related to selling skills, sales training and techniques to assist professionals. However, after much rhetoric and information I am finding something completely different...a problem with selling professionals.
India - the Next Economic Powerhouse
By: Paul Hata | 25/07/2008
India is one of the fastest-growing countries in Asia. In 2006, India recorded a 1.2% of world trade share overall. The stat was picked out from WTO. The growth is mainly due to the liberalization that took place in India way back in 1991. Ever since then, there's no looking back.
Customer Service Toolkit
By: Drew Stevens | 25/07/2008
All businesses make money, yet those that are customer focused are more profitable.
More from Willard Michlin
Saving Money by Spending Wisely
By: Willard Michlin | 05/10/2007 | Business
Why is it that the older and richer people become, the more conservative they are with their money? Have you ever done or know someone who has made an investment that promised a 10% interest or profit per month? ...
All good investment will tell their clients “If a deal is too good to be true, it probably is.” Professionals ...
Money Does Talk!
By: Willard Michlin | 05/10/2007 | Business
When buying something, you can buy in one of two markets. The first is buying on terms in the retail market and the second is buying in the wholesale cash market. This can be illustrated by referring to the biggest purchase we all make in our lifetime - Real Estate.
In recent years, when you are buying a house it is easy to get financing of the first mortgage, so the seller is not forced to finance the whole sale. What I mean is ...
Best Long-term Investment in Today's Market?
By: Willard Michlin | 05/10/2007 | Business
The stock market is very unstable at this time going up and down while interest rates are so low you want to be a borrower and not a lender. Would you like some suggestions on how can you get the most out of low interest rates while being assured your principal will not disappear while you are trying to make some money?
Fraud in Real Estate, are you Being Victimized? - Part II
By: Willard Michlin | 28/09/2007 | Business
The phone range and Peter was on the other end of the line. "Willard, I have a friend of mine that has a real estate problem." I said, "Send him over." Two hours later, Jerry sat in front of me terribly upset. Three years earlier, he had been talked into buying a 4 unit building in partnership with Smooth Talker ...
Business Brokering - Why Use a Broker?
By: Willard Michlin | 28/09/2007 | Business
The buying and selling of businesses is an involved subject. Simply stated, we are talking about connecting up buyers and sellers for the mutual benefit of both...
It has been said in the legal profession, “an attorney that represents himself has a fool for a client.” After years of being a broker I can see why that is true. When representing myself in any negotiation I find myself at a great disadvantage.
Building a Sales Force That Pays for Itself
By: Willard Michlin | 28/09/2007 | Business
The elements involved in building a sales force, especially one that pays for itself and also adds value to any business, are many and varied. The whole purpose and direction of a sales manager needs to be directed to creating a sales force that causes the employing company to expand through increasing sales. This is done by the following general steps:
Liquidated Damages & Arbitration/mediation Clauses in Purchase Contracts
By: Willard Michlin | 21/09/2007 | Business
In many purchase contracts today there are two special clauses that must be initialed individually to be included in the contract. If both the buyer and seller do not initial the clauses they are not part of the contract...
I have found that many people do not fully understand what the liabilities are of agreeing to this clause. Let’s take it in three steps; what is the clause for? When does it go into affect? What are the ramifications of signing this clause?
Finding the Right Listing Broker to Sell your Business
By: Willard Michlin | 21/09/2007 | Business
What makes Kismet Business Brokers different from every other Business Broker in town? It is the way we advertise our listings. Let me explain. Kismet has developed a marketing strategy that has been applauded by other brokers and is incredible. It took 5 years of research and testing to get it right. Other brokers have not, even now been willing to take the time and money to institute this system.
|
|
Business 
