starting a collision center presented by:. concept overview what is your justification for starting...
TRANSCRIPT
Starting a Collision Center
Presented by:
Concept Overview
What is your justification for starting a Collision Center?
What will your collision center do that is, Better, Faster, or at a Lower Cost than your competitors?
This is normally laid out in the overview section of your business plan.
Overview
Example:
This facility is designed to utilize assembly line production concepts, and hourly paid technicians combined with quarterly production bonuses. Specialty teams in each area of the repair process include a team leader, craftsmen, skilled technicians, semi-skilled technicians and apprentices.
Concept Overview
Concept Overview
Facility staffed and equipped to handle 3,000 to 4,000 plus repair orders per year.
Organization with reputation and integrity that will facilitate becoming a direct repair shop for all major insurance companies in the market.
Capable of delivering quality repairs sufficient to maintain customer satisfaction levels of 95% plus.
Target Performance Parameters
Turn light repairs around in 1-2 weeks
Turn medium repairs around in 2-3 weeks
Turn heavy repairs around in 4-6 weeks
Concept OverviewTarget Performance Parameters
A properly configured facility operated with the most advanced collision shop management techniques can produce significant additional benefits, including:
Concept Overview
Lower cost labor through the use of hourly technicians.
Lower acquisition cost for supplies and materials through increased buying power.
Facility Benefits
Increased production capacity through increased proficiency.
Improved facility utilization through the use of assembly line concepts.
Economy of scale in support staff and office administration.
Concept Overview
Facility Benefits
Concept Overview
Insurance companies write the checks for 89% of all collision repair work performed in the industry.
Target Market
Concept Overview
They both want the process to be convenient.
They both want the vehicle repaired to pre-collision condition or better.
In many respects the insurance industry and the vehicle owner have similar interests:
Target Market
Concept Overview
They both do not want to bring the vehicle back for warranty repairs or to install trim items.
They both want to have the least amount of down time possible.
They both do not want a conflict with the repair facility.
Target Market
Sales Process
Greet Customers Handle customer concerns about the
insurance company Keep customer appraised of repair progress
Customer Service Representatives (CSR’s) Job Duties
This plan will employ a customer service representative with each estimator. These CSR’s will be responsible to:
Assisting estimator(s) with ordering parts, writing repair orders, obtaining supplement authorizations, and booking completed jobs.
Informing each dealership when one of their customers is at the collision shop, the progress of the repairs and the customer rating/satisfaction with the completed repairs.
Sales Process
Customer Service Representatives (CSR’s) (cont’)
Write good, quality estimates Coordinate with all the different
insurance companies Work with insurance appraisers and
adjusters Coordinate appointments and time
promises with the production manager Act as final quality control checker
Sales Process
Estimators’ Job Duties
Upon completion of the repairs, the estimator will be responsible for performing a final walk-around and drive inspection to assure the vehicle is restored to pre-accident condition.
Sales Process Estimators (cont’)
Facility Plan Current market share potential dictates
a facility that can employ 17 to 25 technicians operating at 170% proficiency. With plans to grow market share, we will need to design a facility that is capable of employing 25 to 30 technicians. This will require a 25,000 square foot facility based upon our current design.
E&A’s experience is that a U-shaped facility with offices in the center and repair stalls around the center offices works best in a high production facility.
Facility Plan
Facility Plan Location
A properly located, designed and laid out facility will enhance image and reduce advertising costs over the long-term.
Business Plan ObjectivesShort-Term
By developing from the ground up a properly structured administrative staff, streamlining work flow, and state-of-the-art work distribution methods, you should be able to have a facility that generates a higher net operating profit on sales and achieves a more significant return on investment.
Control the customer buying cycle. We envision a sales system that assigns estimators to dealership sales reps. The estimators will be responsible for keeping the designated sales person informed of the customer’s vehicle progress.
Business Plan ObjectivesShort-Term
Having an asset that can be easily valued. With a collision shop operation included in the dealers’ financial statements, it is extremely difficult to place a value on this operation. It is envisioned that having a separate stand-alone facility will provide the owners an asset that is much easier to value.
Business Plan Objectives
Short-Term
Long-Term Control the major share of the
collision repair market. Market studies indicate that the repair market is approximately an $8-$9 million market. Currently, dealers are getting about 46% of this business. The plan is to build a facility that is capable of producing $6-$7 million in annual sales. Ultimately, this business should be built to have sufficient capacity to achieve a 75% market share at full potential.
Business Plan Objectives
Improve the customer’s perception of a collision repair and the dealership that referred him/her to your shop. Your shop is not just another collision shop. It will truly be state-of-the-art in every aspect, from location, reception area, production areas, management and support space, to work procedures and methods.
Long-TermBusiness Plan Objectives
There are several items/issues that are not addressed in this plan. They include:
How to address union/labor issues both transitional and on-going
Skills assessments and other processes to judge and move people from existing operations
Parts supply alternatives
Other Issues
Other business adjunct opportunities
1. Accessories
2. Service Insurance company relations
1. Potential pilots
2. On-going marketed activity
Other Issues
On-going support and measurement provided by E&A
Reporting issues among vehicle market groups…any?
Level of original equipment parts usage and other policies
Other Issues
Defining the Repair Process
Customer Service Rep Customer Service Rep
Customer Calls Customer Drives In
Listen & Learn Friendly Meeting &
Greeting
Verify Needs Restate
Customer Concerns
Verify Needs Restate
Customer Concerns
Listen & Learn
Determine If They Were Referred by A
Dealer Or Other Source
Log Customers Name In Referral
Source Log
Arrange Appointment
For An Estimator
Get All Pertinent Info Logged On Appointment Log
Give Directions To
The Shop
Offer To Fax A Map
Call 4 Hours Before
Appointment Time & reconfirm
Verify Who Will Pay For The Work If
Estimate Is Approved
Give To Estimator To Write Estimate
Review Estimate With Customer
Sell Features, Advantages &
Benefits
Obtain Power of Attorney From Customer To Repair Vehicle
Estimate Write-up and Approval
Repair Process
Production Manager
Compare Estimate And R/O To
Vehicle
Have The Correct Parts Been Ordered?
Send Info To Parts To Reorder
PartsLocate
Manufacturer's Paint Code
Expedite Parts
Reorder
Remove Parts To Be Replaced So Repairs Can Be
Made
Send Paint Code To Paint
Dept.
Send New Est. Date Of Parts
Arrival To Control
Contact Customer If Finish Date
Changes
Place Removed Parts On Parts Storage Rack & Load All Replacement Parts On
Same Rack
Any Additional Parts Needed That Are Not On The R/O Or Est.
Transfer Vehicle To Next Dept. In
Repair Progress
Send To Frame If Needed
Notify Production Manager Of
Transfer
Appraisers Start Supplement
Notify Insurance Co Of Supplemental Being
Started
No Yes
Yes
No
Defining the Repair Process
Dismantle Department
Departmental Responsibilities
Compare R/O Estimate,
Reports And Supplements
To Vehicle
Were All Repairs Completed To The
Highest Quality
No Yes
Determine What Section Was
Responsible And Reject Vehicle To
That Dept. Followed By A
Report
Check All Fluids Make Adjustments
Drive Vehicle
Notify Production Manager
Check Promise Time And Notify Estimator
Perform Final Check List, Sign Q/C Report And Pass
Vehicle
Send All Reports, Check Lists, Supplements & R/O To Control To
Close Repair
Park Vehicle In Designated
Area
Notify Production Manager Of
Closing
Estimator Notify Customer Of New Completion Time
Notify Dealership That Their customers
Vehicle Is Complete
Quality Control Review
Defining the Repair ProcessDepartmental Responsibilities
QUALITY CONTROL CHECK LIST
VEHICLE IDENTIFICATION NUMBER ______________________________ REPAIR ORDER NUMBER____________ MANUFACTURERS PAINT CODE_______________ DATE R/O OPENED___________ DATE CLOSED_____________ ESTIMATED ARRIVAL OF PARTS________________ START REPAIR DATE_____________ TARGET FINISH DATE AND TIME_____________ SUPPLEMENT AUTH. NUMBER__________________________ PINSTRIPE COLORS AND NUMBER______________________ PASSED/FAILED
Defining the Repair Process
Quality Control ChecklistDISMANTLE SECTION
Initials __________ Ensure that the R/O and vehicle match. ___________ Wash vehicles underside and exterior if needed. ___________ Fill in the information at the top of this check list. ___________ Retrieve the new and salvage carts for this vehicle from the
parts department. ___________ Compare parts list to the vehicle damage and verify. ___________ Notify the paint department. with the manufacturers paint
code and color via e-mail. ___________ Notify the appraisers department. if a need for a supplement is required via e-mail. ___________ Ensure that all the required parts and panels were removed,
placed in their proper bins, to facilitate the repair of the vehicle.
_______________________________ Section team leaders signature of quality controlled compliance
FRAME SECTION Initials ___________ Ensure that the last section has done the required repair. ___________ Is frame repair needed? Yes ______ No ______ ___________ Ensure that the R/O and vehicle match. ___________ Computer software package number. ___________________ ___________ Ensure that the estimators were notified of any additional
repairs. ___________ Ensure that before and after measurements are attached to
the R/O.
Quality Control ChecklistSHEET METAL SECTION
Initials ___________ Ensure that the R/O and vehicle matches. ___________ Ensure that all the parts that were installed match. ___________ Ensure that the proper part cut ins were completed. ___________ Were all of the repairs and replacements completed. ___________ Is the filler finished to 180 grit standards or better. ___________ Does the filler adhere to the proper appearance. __________________________________ Section team leader signature of quality control compliance.
PRE PAINT SECTION
___________ Were all prior repairs conducted to give the appearance that the vehicle was not damaged.
___________ When repairs are fine sanded, are they free of all
imperfections. ___________ Did all panels that are to be refinished receive a solvent wash. ___________ Are all primered and sealed areas free of imperfections. ___________ Is the vehicle masked properly. ___________ Are all repaired areas covered with a primer or sealer. ___________ Is the vehicle ready for refinishing. __________________________________ Section team leaders signature of
quality control compliance.
Quality Control ChecklistREFINISHING SECTION
Initials ___________ Check the R/O to the vehicle to insure that they match. ___________ Are all the repair areas covered with primer or sealer. ___________ Is the vehicle covered properly to refinish. ___________ Are all repairs free of imperfections. ___________ Have you found the pre-mixed amount of paint and is it
enough to refinish the repairs. ___________ Is the refinishing of the vehicle complete and free of
imperfections. ___________ Have you disposed of the hazardous waste properly. ___________ Has the vehicle been put into the booth. __________________________________ Section team leader signature of quality control compliance.
DETAIL SECTION
Initials ___________ Check the R/O to the vehicle to insure that they match. ___________ Have you repaired any and all imperfection in the finish. ___________ Has the masking been disposed of properly. ___________ Have all the lights been checked and are they operating
properly. ___________ Have all moldings and decals been installed. ___________ Is vehicle ready to transfer to the next section of repair. __________________________________ Section team leader signature of quality control compliance
Quality Control ChecklistMECHANICAL SECTION
Initials ___________ Check the R/O to the vehicle to ensure that they match. ___________ Have you made all repairs and adjustments that are required. ___________ Check the engine oil add if needed. How many pts. ________ ___________ Check the power steering fluid make the adjustments. How
many pts. _______ ___________ Check the automatic transmission oil add if needed. How
many pts. _______ ___________ Check the brake fluid make the required adjustments. ___________ Check the air in the tires; make the proper adjustments. ___________ Check vehicle inspection has it or will it run out soon, contact
control if so.
WASH SECTION
___________ Is the vehicle clean inside and out. ___________ Have all warranties and flyers been placed in the vehicle. ___________ Have all fluids been checked (use mechanics section check
list). ___________ Is the vehicle ready for the final inspection and for delivery to
the customer. __________________________________ Section team leaders signature of quality control compliance.
Quality Control ChecklistFINAL OUT QUALITY CONTROL CHECK LIST
R/O # __________________________ VIN # ________________________________________________ SUPPLEMENT # ______________________________________ DATE AND TIME _____________________________________ ALL ITEMS ON THE LIST WILL BE CHECKED AND ENSURE THAT THEY OPERATE OR PERFORM AS REQUIRED Initials when checked ____ Engine oil ____ Transmission oil ____ Power steering oil ____ Washer fluid ____ Radiator fluid ____ Tire pressure ____ Brake fluid ____ All doors, hoods, deck lids, lift backs, locks, and windows operate
correctly ____ All lights operate and are adjusted correctly ____ Interior is clean and free of all dirt and glass particles ____ Exterior is clean and free of all repair dust and compounds ____ All repairs were completed ____ All repairs and finishes are free of imperfections ____ All warranties and flyers are located in the vehicle ____ All appropriate sections have completed their inspections ____ All glass is clean ____ Vehicle gives the appearance of having not been damaged ____ Finish color matches the original finish ____ All reports have been attached to the R/O ____ All supplements have been sent back to the estimators ____ Notified the production manager as to the vehicle being completed
and ready for delivery Inspectors Name __________________________________________ Clock # ___________________________________________ Date / Time ___________________________________________ Notes and recommendations ________________________________________________________________
Organizational Structure
Collision Center
D ism an tle Team
F ram e Team
M eta l Team
P ain t Team
P ain t Team L ead er
M eta l Team L ead er
F ram eTeam L ead er
D ism an tleTeam L ead er
D eta il TeamQ u a lity C on tro l
P rod u c tion M an ag er
R ecep tion is t
C u s tom er S erviceR ep resen ta tive
C u s tom er S erviceR ep resen ta tive
E s tim ato r S a les M an ag er
P ayab les A d m in is tra to r
O ffice M an ag er
G en era lM an ag er
Organizational StructureManagement Staff Structure
Base Salary Incentive Total Potential Compensation
General Manager $60,000 $40,000 $100,000 Production Dept. Production Manager $35,000 $7,000 $42,000 Sales Dept. Sales Estimate Rep. $30,000 $5,000 $35,000 CSR $21,000 $4,000 $50,000 Quality Control Mgr. Detail Trim Techs Parts Manager Parts Dispatch Office Admin. Office Manager $30,000 $0 $30,000 Receptionist/Operator $21,000 $0 $21,000 Payables Admin $25,000 $0 $25,000
R/Os per week
R/Os per year
Avg. Revenue per R/O
Total Weekly Sales
Total Annual Sales
Start-up 60 3,120 $1,500 $90,000 $4,680,000 70 3,640 $1,500 $105,000 $5,460,000
Potential 80 4,160 $1,500 $120,000 $6,240,000 90 4,680 $1,500 $135,000 $7,020,000 100 5,200 $1,500 $150,000 $7,800,000 110 5,720 $1,500 $165,000 $8,580,000
Organizational StructureTechnician Needs Assessment
Annual Labor Revenues
Techs @ 150% Efficiency
Techs @ 170% Efficiency
Techs @ 200% Efficiency
Start-up $2,199,600 20 17 15 $2,566,200 23 20 17
Potential $2,932,800 26 23 20 $3,299,400 30 26 22 $3,666,000 33 29 25 $4,032,600 36 32 27
Technician Needs Assessment (cont’)
Organizational Structure
Capital Cost AnalysisOffice Department Description Model Quantity Cost per Unit Total Cost
Computer System-Client Server Design with 20 work stations Custom Built to Spec 1 35,000.00$ 35,000.00$
Estimation Software ADP / Mitchell / CCC 1 7,000.00$ 7,000.00$
Management Operating Software Mitchell / ADP / CCT 1 10,500.00$ 10,500.00$
Fax Machines Canon 5 400.00$ 2,000.00$
Telephone System ATT 1 25,000.00$ 25,000.00$
Digital Camera Kodak 2 500.00$ 1,000.00$
Office Software Microsoft 1 800.00$ 800.00$
Manager's Office Furniture Desk and Credenza 1 1,200.00$ 1,200.00$
Mid-Level Manager's Office Furniture Office Cube 10 10,000.00$ 100,000.00$
File Storage 5 Drawer Lateral Files 10 350.00$ 3,500.00$
Photo Copier Xerox 2 4,500.00$ 9,000.00$
Business Forms Local Production 1 5,000.00$ 5,000.00$
Document Retrieval System Canon 1 7,500.00$ 7,500.00$
Sub Total 207,500.00$
Safety Department Description Model Quantity Cost per Unit Total Cost
Eye Wash Stations 5 $350.00 $1,750.00
Capital Cost AnalysisFire Extinguishers 20 $165.00 $3,300.00
Safety Signage 1 $550.00 $550.00
Sub Total $5,600.00
Dismantle DepartmentPortable Lifts 4 $1,500.00 $6,000.00
Hydraulic Jacks Blackhawk 2 $250.00 $500.00
Jack Stands (Pairs) Blackhawk 2 $35.00 $70.00
Parts Carts IDEA 30 $350.00 $10,500.00
Air Impacts Ingersoll Rand 3 $235.00 $705.00
Air Ratchets Ingersoll Rand 3 $164.00 $492.00
Air Chisels Ingersoll Rand 3 $68.00 $204.00
Air Hose Reels with 35 Feet Hose 3 $350.00 $1,050.00
Pressure Washer Steam Jenny 1 $1,200.00 $1,200.00
Technician Tool Boxes Snap-on,MAC, MATCO 2 $3,500.00 $7,000.00
Sub Total $27,721.00
Frame Department Description Model Quantity Cost per Unit Total Cost
360 Degree, three station, full size frame World Rack 4000l oralignment station, drive through Chief S-21 Series 30 2 $37,500.00 $75,000.00
Laser Frame Measurement System Genesis II / Shark 1 $29,500.00 $29,500.00
Capital Cost AnalysisAir Impacts Ingersoll-Rand 3 $235.00 $705.00
Air Ratchets Ingersoll-Rand 3 $164.00 $492.00
Air Chisels Ingersoll-Rand 3 $68.00 $204.00
Air Riveter Ingersoll-Rand 3 $300.00 $900.00
Work Bench Stations Shure 4 $250.00 $1,000.00
Mig Welders Miller 110V/150Amp 2 $1,500.00 $3,000.00
Oxy/Acetylene Torch Set Harris 2 $290.00 $580.00
Torch Carts Marquette 2 $150.00 $300.00
Bench Grinder Bld 2 $200.00 $400.00
Air Hose Reels with 35 Foot Hose 5 $350.00 $1,750.00
Technician Tool Boxes Snap-on, MAC, Matco 3 $3,500.00 $10,500.00
Sub Total $124,331.00
Metal Department Description Model Quantity Cost per Unit Total Cost
Central Vacumn System Various 2 $14,000.00 $28,000.00
Portable Lifts Dover Industries 6 $1,800.00 $10,800.00
Hydraulic Jacks Blackhawk 4 $250.00 $1,000.00
Mig Welders Miller 110V/150Amp 2 $1,500.00 $3,000.00
Jack Stands (pairs) Blackhawk 4 $35.00 $140.00
Capital Cost AnalysisAir Chisels Ingersoll-Rand 4 $68.00 $272.00
Work Bench Stations Shure 4 $250.00 $1,000.00
Air Hose Reels with 35 Foot Hose 4 $350.00 $1,400.00
Bench Grinders 4 $200.00 $800.00
4 Ton Porta-Power Blackhawk 1 $185.00 $185.00
10 Ton Porta-Power Blackhawk 1 $290.00 $290.00
DA Sanders Ingersoll Rand 6 $235.00 $1,410.00
Board Files Ingersoll Rand 6 $270.00 $1,620.00
Lock Clamp Sets 5 $225.00 $1,125.00
7" Grinders Milwaukee 4 $225.00 $900.00
4.5" Grinders Milwaukee 4 $76.00 $304.00
Air Cut Off Tools Ingersoll Rand 4 $65.00 $260.00
Spot Weld Drills Ingersoll Rand 4 $395.00 $1,580.00
Heat Guns Milwaukee 4 $90.00 $360.00
Technician Tool Boxes Snap-on, MAC, Matco 4 $3,500.00 $14,000.00
433,598.00$ Sub Total $68,446.00
Capital Cost AnalysisRefinish Preparation Area Description Model Quantity Cost per Unit Total Cost
Prep Stations-2-Bay Design, Drive Through Accudraft 2 $41,000.00 $82,000.00
Masking Machines 4 $170.00 $680.00
HVLP Primer Guns SATA 3 $375.00 $1,125.00
Fresh Air Systems SATA 3 $556.00 $1,668.00
Portable Infrared Dryers IRT Systems 3 $3,300.00 $9,900.00
Anti static Guns 3 $200.00 $600.00
Safety Cans 4 $65.00 $260.00
Air Hose Reels with 35 Feet Hose 8 $350.00 $2,800.00
Work Bench Stations Shure 6 $250.00 $1,500.00
DA Sanders Ingersoll Rand 5 $235.00 $1,175.00
Paint Technician Boxes Snap-on, MAC, Matco 4 $2,000.00 $8,000.00
Sub Total $109,708.00
Capital Cost Analysis
Paint Department Description Model Quantity Cost per Unit Total Cost Spraybake/Nova/Vera/
Down Draft Spray/Bake Blow Therm/Accudraft 2 $53,000.00 $106,000.00
Paint Mixing Room Built into building 4 $0.00 $0.00
Air Hose System 4 $200.00 $800.00
HVLP Spray Guns SATA Jet-90 4 $385.00 $1,540.00
Fresh Air Systems SATA 4 $556.00 $2,224.00
Portable Infrared Dryers IRT Systems 4 $3,300.00 $13,200.00
Roller Jacks Go-Jack 16 $190.00 $3,040.00
Smart Head Scale 1 $5,000.00 $5,000.00
Paint Mixing System and Racks 1 $9,000.00 $9,000.00
Paint System Software (Shopwatch) 1 $12,500.00 $12,500.00
Paint Computer Work Station As per Office System 1 $2,000.00 $2,000.00
Solvent Recycler 2 $2,500.00 $5,000.00
Primer Gun Washers 1 $1,200.00 $1,200.00
Work Bench Stations Shure 4 $250.00 $1,000.00
Base Gun Washer 1 $1,200.00 $1,200.00
Clear Gun Washer 1 $1,200.00 $1,200.00
Paint Technician Tool Boxes Snap-on, MAC, Matco 4 $2,000.00 $8,000.00
Sub Total $172,904.00
Capital Cost Analysis
Trim and Detail Area Description Model Quantity Cost per Unit Total Cost
Variable Speed Buffers Milwaukee 2 $225.00 $450.00
Pressure Washer Star 1500 PSI 1 $900.00 $900.00
Safety Cans 4 $65.00 $260.00
Air Hose Reels with 35 Feet Hose 6 $350.00 $2,100.00
Tools Carts 4 $75.00 $300.00
Work Bench Stations 4 $250.00 $1,000.00
Shop Vacuums 2 $225.00 $450.00
Technician Tool Boxes Snap-on,MAC,Matco 4 $2,500.00 $10,000.00
Sub Total $15,460.00
Capital Cost AnalysisMechanical Shop Description Model Quantity Cost per Unit Total Cost
4 Wheel Alignment Rack and Computer Bear 1 $17,500.00 $17,500.00
Rim Clamp Tire Machine Coates 1 $3,500.00 $3,500.00
Wheel Balancer Coates 1 $2,500.00 $2,500.00
R-134/R-12 A/C Evac/Recharge Station RTI 1 $4,500.00 $4,500.00
Anti-Freeze Recycler RTI 1 $3,500.00 $3,500.00
Air Hose Reels with 35 Feet Hose 4 $350.00 $1,400.00
Tool Carts 6 $75.00 $450.00
Work Bench Stations Shure 4 $250.00 $1,000.00
Bench Grinders 4 $200.00 $800.00
Air Impacts Ingersoll Rand 2 $235.00 $470.00
Air Chisels Ingersoll Rand 4 $68.00 $272.00
Air Cut Off Tools Ingersoll Rand 4 $65.00 $260.00
Mig Welders Miller 110V 150Amp 0 $1,500.00 $0.00
Oxy Acetlyene Torch Set Harris 0 $290.00 $0.00
Vise 6" 4 $125.00 $500.00
Strut Compressor 2 $225.00 $450.00
Diagnostic Tools Various 2 $4,750.00 $9,500.00
Technician Tool Boxes Snap-on,MAC,Matco 4 $5,000.00 $20,000.00
Sub Total $97,522.00
Capital Cost Analysis
Air System Description Model Quantity Cost per Unit Total Cost
Rotary Air Compressor Quincey 25 HP 2 $5,400.00 $10,800.00
Air Dryers 2 $2,500.00 $5,000.00
Piping and Fittings Misc. 0 $0.00 $0.00
Sub Total $15,800.00
Total $844,992.00
Facility Layout & Design
Processes have been broken down into: Dismantle and estimate validation Frame measuring and repair Metal replacement and alignment Paint prep Final paint Trim-out Detail and final quality control
Overview
Facility Layout & Design
This facility is unique in that the technicians do not own their tools and they do not have pre-assigned work stalls. Our technicians work in groups comprised of varying skill levels assigned to a single vehicle.
Overview
Facility Layout & Design
A highly skilled craftsman is assigned to each group and oversees each group’s work. Groups move from vehicle to vehicle in their pre-assigned work areas as needed.
Overview
Facility Layout & Design
This concept provides high productivity by eliminating wasted time and high efficiency by having the same technicians performing the same types of repairs over and over.
Overview
All of the offices, restrooms, storage areas, and customer spaces are located in the center of the facility to allow easy access.
Mechanical repair is located in the rear of the building and is separated by walls to keep airborne contaminates associated with mechanical repairs from contaminating the painting process.
Parts are located in the rear of the building and are designed to provide ease of access to both the metal repairs, technicians and the paint and detail technicians.
Facility Layout & Design
Architectural Design
Estimating and customer delivery is located in the front of the building.
Also, the facility is designed to incorporate an insulated shop ceiling so that the entire facility can be heated and air-conditioned. Overhead doors are located strategically down each side of the building so that vehicles can be taken in or out of the assembly line during each stage of the repair as needed.
Facility Layout & Design
Architectural Design
Operating Statement Assumptions
The following Pro-forma is solely designed to build a framework for analysis. Certain assumptions are hypothetical and have yet to be subjected to proper verification methodology. This will occur when the business plan is developed.
Total Sales Projected volume based upon target of 50% market share
and 70% market share. This allows you to see 1st year versus full potential.
Labor Sales Calculated from Repair Collision Component Analysis.
Labor is projected at 47% of average repair order. Labor Cost Calculated from Production Staff Structure @ 150%
Efficiency assumes everyone starts at minimum salaries and assuming full incentive payout.
Parts Sales Calculated from Repair Order Component Analysis. Parts
are projected at 42% of average repair order. Parts Cost Assumptions of minimum achievable margins of 34%.
Available margins may exceed this amount but may also be reduced through negotiation in insurance contracts.
Paint & Material Sales Calculated from Repair Order Analysis. Projected at 5%
of average repair order. Paint & Material sales generally run at $20.00 per paint hour labor. Due to the practice of splitting paint hours into both paint with materials as well as paint with no materials and the practice of capping total materials insurance companies, we have assumed an 80% capture rate or approximately $16.00 per paint hour.
Paint & Material Cost Projected based upon E&A guideline of 65% Sublet Sales Calculated at 5% of labor sales
Operating Statement Assumptions
Sublet Cost Based upon current Insurance Company guidelines for allowable markup for sublet operations of 25%.
Support Personnel Expense
Brought over from Management Staff Structure, assuming all incentives paid.
Vehicle Expense Calculated for vehicles assigned to General
Manager only. Expenses @ $0.30 per mile, 1500 miles per vehicle.
Technician Benefits Projected at 19.5% of Technician payroll Office Supplies Projected at 1.0% of Sales Support Personnel Benefits Projected at 19.5% of payroll cost Advertising Projected at 1.5% of Sales Computer Software Expense
Based upon 3 database updates at a cost of $400.00 per vendor per month.
Building Maintenance Based upon 1.0% of building value. Assume
$1,250,000 building value. Telephone Expense Projected at flat $1,675.00 per month Rent/Lease Expense Assumption of $1.25mm building and $.4mm land
value with a 10% rent factor. Equipment Lease Expenses
Projected at 7 years, 0% residual @ 9.0% on total of equipment purchased. Note: this might be lower based upon equipment assumed from current dealership operations.
Electricity Based upon experience from comparable sized
building in another market. Gas Based upon experience from comparable sized
building in another market. General Liability Insurance Based upon blind quote from local insurance
agency. Depreciation Based upon an estimate of $126,000 in owned
assets.
Business Plan Pro Forma 50% Market Share 70% Market Share Total Sales $4,200,000 $5,900,000
Total Labor Sales 100% $1,974,000 47% 100% $2,773,000 47% Technician Labor Cost 35% $690,900 30% $831,900 Labor Gross 65% $1,283,100 70% $1,941,100
Total Parts Sales 100% $1,764,000 42% 100% $2,478,000 42% Total Parts Cost 66% $1,164,240 66% $1,635,480 Total Parts Gross 34% $599,760 34% $842,520
Paint & Material Sales 100% $210,000 5% 100% $295,000 5% Paint & Material Cost 55% $115,500 55% $162,250 Paint & Material Gross 45% $94,500 45% $132,750
Sublet Sales 100% $210,000 5% 100% $295,000 5% Sublet Cost 75% $157,500 75% $221,250 Sublet Gross 25% $52,500 25% $73,750 Total Gross Profit $2,029,860 48.33% $2,990,120 50.68%
Operating Expenses Support Personnel $303,000 14.9% $445,528 15% Technician Benefits $90,399 4.5% $179,407 6.00% Support Personnel Benefits $66,398 3.3% $86,713 2.90% Vehicle Expense 34,151 1.68% $50,832 1.70% Office Supplies 20,089 1.0% $29,901 1.00% Advertising 30,133 1.5% $44,852 1.50% Computer Software Expense 15,066 0.7% $15,549 0.52% Building Maintenance 12,500 0.6% $12,858 0.43% General Liability Insurance 15,066 0.7% $22,426 0.75% Gas 5,022 0.2% $7,475 0.25% Electricity 20,089 1.0% $23,921 0.80% Telephone $20,089 1.0% $23,921 0.80% Total Semi Fixed Expense $632,002 31% $943,383 32%
Bldg. Rent / Lease $165,900 3.95% $165,200 2.80% Equipment Lease $64,702 3.20% $64,900 1.10%
Depreciation Expense $12,600 0.30% $12,980 0.22% Total Fixed Expense $243,202 7.45% $243,080 4.12%
Total Expenses $3,650,441 86.92% $5,094,650 86.35% Net Profit Before Taxes $549,559 13.08% $805,350 13.65%
Add Depreciation $12,600 $12,980
Cash Flow $562,159 13.38% $818,330 13.87%
Financial Analysis Estimated Capital Investment
Leased Equipment as per list $718,922
Owned Equipment as per list $126,000
25,000 Sq. Ft. Building @ $50.00 / Sq. Ft. $1,250,000 Land 4 Acres @ $100,000 / Acre $400,000
Total Capital Investment $2,494,922
Return on Investment 30%
Gross Margin 48.33%
Net Margin 12.71%
Gross Profit Per Technician $96,600
Net Profit Per Technician $25,422
Gross Profit Per Employee $72,495
Net Profit Per Employee $19,066
Business Plan Review
1. Concept Overview
• Sales Process
• Facility Plan
• Business Plan Objectives
• Other Issues
Business Plan Review
2. Defining the Repair Process
• Repair Process Flowchart
• Departmental Responsibilities
• Quality Control Checklist
Business Plan Review
3. Organizational Structure
• Organizational Structure
• Technician Needs Assessment
4. Capital Costs
• Equipment Description
• Equipment Budget
Business Plan Review 5. Facility Layout & Design
• Overview
• Architectural Design
6. Pro Forma Operating Budget
7. Financial Analysis
8. Notes
For More Information Contact Edwards & Associates at:
5615 Harrisburg Industrial Park Dr.
Charlotte, NC 28075
(Phone): (800) 979-9904
(Fax): (704) 454-5213
Or
Email:[email protected]