The Business Partner You Never Wanted: You Do the Work, They Control the Outcome

0:00Welcome to Repair Shop Reckoning: From Chaos to Control. Because too many shops today are running on chaos. Phones ringing, technicians frustrated, front counters overwhelmed, owners buried in problems with nobody to call. Kevin Brown has spent over 30 years in the trenches learning how to take that chaos and turn it into control. Shop owner, operator, consultant, leader. Through industry shifts, insurance games, bad hires, great hires, and lessons learned the hard way, This isn't theory.

0:29This isn't corporate training fluff. This is real shop experience, unfiltered. On this show, Kevin breaks down what actually works: running profitable shops, front counter control, training technicians, negotiating with insurance companies, building systems that make your shop run instead of burn, and the mistakes that quietly bankrupt shop owners every single day. No corporate scripts, no sugarcoating. And yeah, somebody might get offended. That's okay.

0:58Disney's 2 doors down. But if you want the truth about this industry, buckle up. This is Repair Shop Reckoning, from chaos to control. Let's get started. All right, welcome back to Repair Shop Reckoning. Today we're switching gears. We're going to talk about collision again, and I want to give you guys the itinerary because I stay organized better when I have it on paper.

1:22All right, we're going to talk about CAPA, we're going to talk about profit calculators, we're going to talk about the insurance companies and all these beautiful estimating programs that the shops use. All right, so let's go ahead and get started. Today we are going to talk about CAPA tells the story of their seals, means the aftermarket part on your customer's cars. Quality insurance companies, then they mandate the part in CDC audits in Mitchell.

1:51And they price the part, right? So I got a gentleman, a call from a gentleman today that's pretty against the insurance companies, and hopefully he's going to come on my podcast next week. But he took me to some websites. He's like, go to this website, scroll down and look at the board members. And I'm like, okay, just what the fuck are we doing here?

2:10Well, so we pulled up the actual board members list for Kappa Parts, which I was kind of found interesting. Okay. So we get the insurance companies that are— and we have Allstate, Farmers, GEICO, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, and USSA. All the insurance companies sit on this board for these parts, right? Wow. And then the distributors, 2 seats on the board, there's LKQ and Parts Authority.

2:40Then the big MSOs are Caliber, Classic Collision, Crash Champions, and Gerber Collision and Glass are on the board also. And then you get Center for Automotive Safety, uh, and then you get Intertek, uh, they run a certification program. Did you guys know you could buy these CAPA-certified stickers by the case? There's a website out there that you could actually buy CAPA-certified stickers.

3:07That's crazy. So I'm like, this is fucking weird. Like, okay, I never even took it into consideration, you know, they're saying that these parts are you know, like OEM service parts. Well, I don't necessarily believe that, and anybody who's been in our business doesn't necessarily believe that because we still have to shim. They're different. Do we have to bend, tweak? They're just not the same parts.

3:32Yeah. So it makes you start thinking, you know, okay, you got 9 carriers, 2 aftermarket giants, 4 PE or public MSOs, a chairman who came out of Farmers ADP, Crash Champions seat filled by former former CEO of a GEICO, uh, the chief legal officer. That is not shop owner standards. That's not, you know, body shop standards. That's claims cost committee. Think about it.

3:57These are the guys that are picking the parts. They're controlling the cost. So you honestly believe that these parts are the same or like quality as OEM parts? No way. And the insurance companies and all these guys are getting together Do you think hypothetically that they're going out to the vendors and going, yeah, we have all these standards, we did all the testing and all this stuff like that.

4:21Do you think they might go with the cheapest part and then put a sticker on it? I think it's pretty good odds. I think it's pretty good odds too, you know, but I have no proof obviously. Right. Cause I'm not on the board. Okay. So the seal, seal, it says, I went through and I looked all this up guys. And, you know, I wanted to, a lot of you guys probably know this, but this is just stuff we're going to talk about on the podcast, right?

4:42The seal, seal is a legal tool first and a quality tool second. What does that mean? Most policies promise like-kind and quality or pre-loss condition that may be used to be— I'm just not going to read all that bullshit, right? Yeah. What CAPA tests: fit, finish, material, and corrosion. What it does not test: a part in full vehicle crash, radar, camera tolerance, how it behaves in its next wreck.

5:16Meaning like, they— all these cars and stuff are tested. I'd imagine crash— that's where crash test dummies and stuff came from, like that. So it makes you wonder like, okay, are these parts like they're saying? They're not tested for a wreck. No. It's one of those things I don't even think about that kind of thing. But as you say that, it's like, oh, wait a minute.

5:35Yeah. And you know, there's guys going to be flaming me on here saying I'm sure the guys get paid by the insurance companies and stuff like that. But all of us that own body shops know when we get CAPA-certified parts, they're usually pieces of shit. Tell me when you've got an awesome, wonderful CAPA-certified part that you don't even— you don't have to do anything to to make it fit.

5:54Like, fit and finish is always a problem, okay? It's no different than the CAPA-certified truck hoods. They're fucking horrible. They don't even fit. You spend more time shimming and doing this and doing that to get it to fit than you would just be putting an OEM hood on. You'd spend no time with the labor. You would transfer parts and pop it on.

6:10It would fit, right? But they're saying this is like you know, this is CAPA certified like OEM, which is— it's just not. And this is a cost-saving tool for the insurance companies. Think about it. They're taking all of us, they're going, you got to put this part on, it's CAPA certified, you have to do this, you have to do that. And they're literally setting the parts prices.

6:31And then you get LKQ and, and, you know, this other company, I forget the name of it because I don't really use them, talking about, you know, selling this shit. Well, it's CAPA certified. Well, it almost seems like it's exploited to me, you know. And I went out here and asked all the, you know, the body techs out here, what do you think?

6:46They're fucking pieces of shit, you know. They're not, they're not like OE quality. They're just not. So, you know, certified is better than junk. Certified is not OEM. The industry uses the word certified the same way casinos use the word, word fair, you know. Safe Harbor, the real— that's the real product. Once the seal's on the box, the carrier can specify the cheap part and say they kept their promise.

7:12Like once again, you know, you go back to CAPA certified, like think about this. The insurance companies insure people against crash, right? Now on the other hand, the insurance companies are getting together with all the board on the board and they're talking about parts and they're CAPA certifying them. Once again, do you honestly believe that they buy, if, if they put a bid out, And they have one part they put a bid out on, and one guy's $2, one guy's $4, one guy's $6, one guy's $8.

7:42Who do you think gets it? The cheapest guy, because they can still put the sticker on A or D. It's still CAPA certified, right? And then they tell us we have to put it on the car, blah blah blah blah, this is what we're approving on the estimate. So we buy it and it fails, and they say, well, you have to warranty it.

8:02Well, because if— and I'm, I, I'm being educated on this, but you think about it, like, they're in this business, they're all on the board, they're making money in this company with the parts, right? So they're getting costs down cheap enough to where they can profit over here and then also profit over here on the insurance company because they bought a cheap part.

8:21Yeah, pretty much. Or save money on the insurance, saving money, not profiting, making money, not making money. But yeah, I mean, think about it. If So we'll just say a core support was OEM $300. They would have to put their 25, 30% on that for the shop, right? The shop is allowed to mark it up so much. And here's another thing, the insurance company tells you how much they're going to pay because body shop owners have been pussies their whole lives and they don't push back.

8:47Yep. Which I think that, you know, there has to be a happy medium. You can't kill the insurance company and rape them, but you have to stay in business, right? So they have a, have this core support OE is $300, but they do a CAPA, they do an audit and they get the, you know, the, the battery, the audit battery material or bill of materials list, finish fit corrosion tests and all that.

9:09And they say, okay, how much can you build this part for them? And you know, the people in China say, well, $150. So they go, okay, this is now, all right, give us this part number, give us this manufacturer. This is a CAPA certified part. They'll do whatever testing, testing, their loose testing on it, slap a CAPA-certified part on it. Look what just happened.

9:31So Jason Tracy's Collisions says, hey, the core support's $300 from Ford. They say, oh no, there's a CAPA-certified part right here for $150. So even with marking it up to 25 to 30%, look how much money the insurance company just saved. Yep. Plus the board members profited. Absolutely. Because you know goddamn well There's some back. Absolutely. Come with me and we'll go ahead and hook you up on the backside.

9:57Yep. Do you honestly think money's not changing hands to get bids? Makes you wonder. Absolutely. They are literally— the insurance companies literally have their hand in it all. You know what I mean? You know what is oversold? This is the quote: as safe as the original. What we actually test is comparability to a service part and an undamaged car in the lab, gap flush.

10:26We're talking finishes, material, and coating. They do not crash test the whole repaired vehicle. They don't crash— they don't do any, any kind of engineering testing on the parts, stress tests or anything on the parts. Do you really, really, really think, even if they say they did— I'm sure there's guys out there— do you really think they test these parts? No. No.

10:46You know, I think the sticker is the Think about it. Who's going to fight them on it? If the insurance company who gives you the approved parts cap list, who's fighting them? Who's fighting them? No one. No one. They really can't. I know this is like a really, in my mind, this is like really hard. If you start thinking about it, it's almost like a spider web.

11:09Yeah. If you really stop and think about it, it's like a spider web because they kind of have their hands in everything. We haven't even got to the shop management program part of this. Whole particular situation here. Well, when— before we went on, you know, I was like, oh my God, this sounds like so deep state in the collision industry. Like, you look at the board members and it traces this trail back to all the players in the insurance company.

11:27Like, yeah, wow. The certified parts are all certified by the freaking big dogs of the insurance companies. You know, I wonder how many of these have engineering degrees or, or stuff like that, or they just kind of came up with it. I think came out in the '80s, maybe, the CAPA program. So you can't tell me this CAPA program has not evolved looser and looser.

11:47I'm sure maybe possibly it started out as a very square, good program till everybody decided, well, we can make more money by doing this and might make more money by doing this and squeezing it out and killing the little guys, the little shops. And that's exactly what's going on, you know? And I'm not going to act like I'm some CAPA fucking pro or anything like that because I did not research it a ton today because I got that call from that guy.

12:08We started talking about what the collision insurance companies are doing to all these guys and he was part and parcel with like the State Farm thing and all that. So like I had this much time to research this because I'm going to try to get him on next week. And this guy had so much information. I'm like, we might have to have you on twice.

12:26We might have to like do an hour or 2-hour taping to have part 1 and 2. That's how much information this guy had. This guy knew names and he knew this. And I was like, holy shit. Like, and he was turning me on to this, you know, all these people that push back and all of a sudden their shops are blacklisted by the insurance company.

12:43And you know, Progressive, uh, has been steering people away from me because I won't play other fucking games. Yeah. You know, so, and I already sent him a warning. We haven't heard back from him yet, and I have not dealt with that yet too. But I'm gonna report him to Michigan, in Michigan, to the Attorney General. Like, you can't do that. It's just freaking bullshit, you know, tactics you're using on shops.

13:03So, but I love how you had the one guy that, uh, when I was here that one day, it was a few months ago, where you wouldn't let him sit down, and then you just said that he sent you guys, he already made all your concessions and everything. Yeah. So after that big huge fight with that, uh, third-party adjuster. We had sent him an estimate and he sent it back and he said, hey, we got you exactly what you asked for.

13:21The insurance company made a one-time concession. Yeah, if they did it once, they'll do it again. Yep. So they actually approved the whole job at the price we asked. And he— but we pushed back on that guy and we had that uncomfortable conversation with that guy that led into— I want to clarify something to people too while we're talking about parts. For the people who paid attention, thank you.

13:43For the dumbasses that just spew bullshit, you're fucking retarded. Let me explain. When I said we do not give out receipts to the insurance companies, okay, yeah, meaning I do not give my parts invoice and show my costs to the insurance company. Yes, that was the smart guys understood that. The dumb fucks would say, well, I know, I can't believe you don't give your customers Uh, a receipt.

14:10A receipt and an invoice are 2 different things, people. For the people who don't know, let me explain it to the people that are fucking retarded. We do a job for a customer, we give them a warranty, we give them an itemized list with pictures and everything. This is what we did, this is what the insurance company paid us to do, or this is your part, whatever.

14:27After they get an invoice from us— and some of our invoices are substantial, 20 pages, pictures through the whole process the whole 9 yards, right? That's an invoice, paid invoice to the customer. Yeah. We give that to them. Hey, this is what we did to your truck, right? Yes. That's an invoice. A parts invoice, I'm being invoiced by the parts house for my cost of the parts when I buy them.

14:52That's what I do not give the insurance companies. Okay. So how do I not give the insurance companies my parts invoices? Because how does that prove that I did the work. Okay, I'm a freaking business. Okay, I don't have to prove— like, we have a great track record. How do I not say— I'm not going to sit there and give them every invoice on supplements and stuff like that.

15:13I'll give them the old part. Yeah, here it is, we put it on. You want to take the fucking door apart, you can see we put a door operator or whatever in it, right? Yeah, but I'm not giving you my cost invoices. So what I start doing is I write the estimate, I send it to the insurance company, They say, I need the receipts.

15:28I said, there's the fucking price of the parts right there. That's what you're going to pay. Well, we need your invoices. You don't need shit. I don't go to Walmart, guys. And a lot of guys brought this. I don't go to Walmart and they give me the invoice after I— or the little ticket after I pay for my groceries. I say, okay, now flow.

15:45Yeah, go out back and get me all the costs and all these things I just wanted to buy. I want to make sure you're not overcharging me. I'm going to— I'm going to mark these up at 25% because I think that's what's fair. Right. That's what the insurance companies try to do. So these people that are sitting here justifying, you know, what they're saying to me, like, okay, well, you're crooked, you're a scammer, you're a thief, you're this— you're the guys that are going out of business.

16:07Yeah. Okay. I've taken on a few body shop clients, and I'm going to tell you guys right now what I'm finding is once I break down all the numbers, you guys are making 7 to 8% on paint. You are going out of business. The insurance companies are doing this to you on purpose. So there's a couple of things. You're not organized enough to send them, uh, you know, some of your paint invoices and stuff like that.

16:29How you would do it, hey, here's the final invoice on my letterhead and stuff like that, or on my invoice, this is what the supplement is. Okay. And start fighting with them. And you have to prep your customers at the very beginning. Hey, this could possibly happen and you're going to possibly have to pay. You know, right now, before I walked into this office, You know, because we're talking about parts, um, we had a truck for a tree company that got hit.

16:54It's a Chevy, uh, truck with a dump on it. It's a boom truck. And the dealer wouldn't— it was set at the dealer for a month. They decided they can't do it, it's too big. So it got towed to us. We wrote the estimate. I think the dealer— the dealer didn't write the estimate, but the insurance guy that came out, the adjuster came out, and I believe he wrote the estimate for 7,000 or 10,000, one or another.

17:19When we got done, got done writing, it's like 29,000 or even more than that, I think, because they missed so much shit. Yeah, yeah. So we send it to SnapSheet, CrapSheet. We get a guy that calls us back a few minutes ago, hey, I need more pictures. Jim's like, come on out and get them. Guys like, that's not how we work. Jim's like, oh, you want me to work for free?

17:40Right away we start pushing back on them. We don't fucking even give him a minute. So we're already like, boom, right back on him. Guy's like, well, you know, I need these pictures. Okay. Jim's like, what do you need exact pictures of? Well, I don't know. Well, Jim's like, well, I don't know because I had to redo your estimate. It was so— so I didn't do the estimate.

17:59No shit. The guy who did the estimate shouldn't be doing the estimate. It sucks so bad. So tell me what pictures you need of the parts. So I don't know. Why don't you go talk to your supervisor and send me an email exactly what you want? Because you get one time with your admin fees, I go out and take pictures for you.

18:16Is that me being an asshole or Jim being an asshole? No, that's being cognitive of our time. Yeah. The problem is the one thing that you cannot get back in life in a workday is time. Wasted time constitutes— it goes right down the path to wasted dollars. Yep. Okay, there's gonna be something else you'd be doing getting paid. These insurance companies by design waste your fucking time because Corporate America is so disjointed, so unorganized, and they can't even follow their own standard operating procedures.

18:45They want to waste your time. And most of you body shop owners don't even think about it. You just go out there fat, dumb, and happy. Oh, fucking take pictures, then get on their little bullshit portal, try to upload them of this, that, and the other thing, and it won't work. How much fucking time you wasted, fucking— right? Yeah. So back to, we have to freaking manage our time, and we have to manage the parts pricing and stuff like that, or we're going to go out of business.

19:07So Now, you know, it's evolved during the years. Now we have CAPA, which has been around since the '80s from what I can tell, right? Now we have to deal with this bullshit. Like, I can tell you right now, on an Edge, we had a CAPA-certified freaking set of fans fail like twice. And finally I'm like, fuck it, buy a Ford OE at our cost and put it in, okay?

19:27Because the insurance company's like, well, we can't pay. You bought the part, you have warranty, go after the supplier. Okay, we can, but the supplier is going to give us the fucking piece of shit part again and we're going to put it in again. At what point don't you stop loss it? Yeah, right. We had the guy, the technician, pull it in, take it apart, replace it one time.

19:46Okay, a couple months later, a month or two later, I remember it quits again. We call out KQ, they send us another CAPA-certified part. Okay, we're like, fuck this, send it back, try to get our money back, fight with them, go buy a Ford OE one. We never, never had a thing back. Okay, but who won? They won. They won because they told us where to buy the part.

20:06Yep. What they were going to pay us for the part, right? Most of your shops, we fight with these people what they're going to pay us for the part. And then it comes to warranty, we have to warranty it and we have to eat it. And all they did is sat in a boardroom and decided they're going to freaking have Beijing fucking China or wherever, whatever company, Sunglu, build this piece of shit fan for pennies on a dollar.

20:29So they're saving a ton of money. Think about how much money they're saving over this and then making again because they're on the board and they're probably getting cash out, you're right. Like, there, there's incentives to be on that board, right? It's like, holy shit, you know. So, you know, I just was like, it's kind of crazy that this kind of, you know, happens, you know.

20:50You know, they force the part, they stiff the labor. That's what I just literally talked about, you know. Um, so they force us what parts to do, and now here comes the other part of it. Here comes the shop management programs they have. They're not even shop management programs, they're called estimating programs. Imagine that, right? So, you know, they win twice on the same part.

21:15Let's, let's clarify that, right? Let's— they're winning twice on the same part. They got the board, they got the up So they're winning twice. They're double dipping. They're no different than Visa and MasterCard on their parts. Think about it. Jason Tracy walks into Garrett Auto and Truck, pays for his car with his MasterCard. You get charged interest if you don't pay that bill.

21:32And guess who else gets charged? Me. Yeah, they're hitting us on both ends. Yeah. So you get smart as a business owner and go, well, fuck, I want to add 3%, 3.5% to recoup this. They're like, whoa, whoa, whoa. Visa and MasterCard guidelines say you're only allowed to charge 3%, you can't profit off us. Yeah, we're a, we're a convenience for you.

21:56Are you fucking kidding me? Your convenience? Are you like— right, so we have CCC, we have Mitchell and AutoTax, and I know there's some, a few other ones. Um, they have OEM parts in there a lot of times, but they also have aftermarket drop-down lines and stuff like that. But they still drop a cap-a-bumper on the estimate at OE time or less.

22:18Then the fit, the fight test, uh, grind, shim, recore, corrosion recalibration bullshit has to happen with these parts, right? So they give you OE time to do these parts, but you're dealing with a bullshit piece, a bullshit part. Let me give you guys an example. When, uh, I used to do antique motorcycles in my barn, yeah, and I would do the Honda Trail 70s and We had a company, um, they're big on the web now.

22:46I haven't used them in so long I forgot the name of them, but if you look them up, they sell all these antique Honda parts. Um, fuck, what's the name? I can see the logo, but whatever. So before COVID I could buy a set of handlebars and buy all these nice parts, and they would have some Honda— you could get some of the Honda repop.

23:04Like, Honda started making these CT70 and Z50 parts again Because these bikes were getting popular. Guys my age, the bike they had when they were a kid, everybody started redoing them. Then COVID, everybody had excess money, right? Yeah. So everybody started buying these parts, right? Well, what I noticed was when I was rebuilding these parts before— these bikes before COVID happened, if I had all my parts and everything, I could put a bike from a bare frame back together in about 8 hours.

23:31If I started at 8 o'clock in the morning, about taking lunch and everything in my barn, at 4 o'clock I could be getting ready to test drive the bike. Okay, that was with the quality parts, right? Yeah. What I noticed was during COVID the parts became harder and harder to get. Then they're out of stock for a while, and then they all got back in stock.

23:48But all of a sudden, the motorcycles are taking me 14, 15, 16 hours, double the time, because all of a sudden I'm grinding handlebars because the holes aren't lining up. Like, the fender holes were stamped wrong. Like, all kinds of shit. Like, the factories went— like, this company, the parts The good parts got so expensive, the company said, well, let's leave these prices alone, but give them the shitty parts.

24:09And you could notice like the chrome in certain spots would be low. It was just, you could totally tell it was shit, right? Yeah. That's what's going on here. If you get an OE fricking bumper, OE core support, blah, blah, blah, blah, blah. And then they're like, yeah, slap a kappa in there. Think how much more labor you're fucking doing. So then what they decide to do, you start crying and they say, well, that's not a problem.

24:32We're going to go ahead and raise your labor, what we pay you, but they fucking lower the times they're paying you. So essentially they're saying, yeah, we're paying you more hourly, but we're lowering it down. So it's still the same. And that's a trick that they've been doing forever. And now they're doing it in the mechanical world too. They're literally lowering all these labor times.

24:53And we've noticed, and I've had guys say to me, they've noticed it in all day and stuff. They're like, wait a second, that used to be a 2.3 job. Now it's like, 1.9 or 2. They inch it down. They inch it down. Now they're doing the mechanical world because some of these insurance companies, you know, I— you take this car over here, you go pay mechanical rates because it needs, you know, whatever at my other shop.

25:12You take it to the other shop. Now the insurance companies realize, well, maybe these other shops, when we're taking them there, we need to lower their labor rate so we can save money there too. So not even paying the right amount of time anymore. Like, I'd be willing to bet you if you could find like the same books— well, it used to be really hard to do if you really stop and think about it, because back in the day when I started this business, we used to use Motor Manual.

25:37There'd be literally a guy around driving around in a van with fucking manuals. It looked like the Yellow Pages. I'd be like, hey, you know, I need a 2001 to 2003 GM wiring diagram book or whatever. He'd Come in, there's $150, and you give them that. And then every year they give you a new labor guide. Well, you could literally go back and audit, right?

25:58Yeah. How easy is it if you're the insurance company and you're in bed with AllData, Auditex, and all these people, and you're like, you're in the CAPA group, you got all the guys in the CAPA group talking, you don't think that anytime ever these guys talk about labor rates? Or there's another board we could, we could look up, I'm sure of it.

26:17That these guys deal with labor rates. Yeah. How do they freaking— how do they curb inflation and everything just keeps going up and up and up? Oh, hey Jason, you know, we're going to go ahead and pay you $70 an hour. You know, we really care. We really want to keep you in business. And you look, you're like, wait a fucking second.

26:32That used to be a 0.5 job. Now it's a 0.2 job. So they give you more money here, but they're paying you less time to do it. So they're almost like, it's almost pennies on the dollar difference. Oh yeah. They're backing. Yeah. It's like, uh, in the car industry, they get you focused on the payment versus the overall price. They just pitch you at the payment, you know, you don't know the price in the back end.

26:50Yeah, because they always say, what do you want your payment to be? That's fucking irrelevant. Oh yeah, anybody that says I want my payment to be $399, I want all the warranties, they're like, oh, bring baby girl in here to the finance office, she's already said yes to everything, right? Yeah, because they literally— how tiring is it if you guys really stop and think about it?

27:07How tiring is it when you go in the finance office? That's by design. Yeah, it's no different than questioning somebody as a cop and you lock you in the room, they don't give you something the drink and they don't let you piss and they don't— they just keep hammering until you get it right. Yeah, that's no different. Well, this will only be $3 more on your payment.

27:22This will only be $4 more. So think about what's going on now with the insurance companies pushing back on these people all the time, and these guys are running low on money because they don't know how to do it in the first place. So basically they're like, fuck it, right? There's never very many body shops that are so organized they actually freaking try to push back on every little thing.

27:44Here's my final supplement, here's this, here's that. You know, shit gets lost. Absolutely. And they're just so unorganized because a lot of these guys can't keep help nowadays because they can't pay the help. There's just a lot of stuff going on. So you maybe got the owner-operator out there trying to do estimating and do this. Now here's another facet of it. This is where I always say that I believe repair shop owners for mechanical repair some of them, not all of them, have a little bit better handle on it because our programs have profit calculators in them.

28:16So I know CCC and a couple of these do have profit calculators in it, but let me ask you estimators that are on commission at the big MSOs or the dealerships and that, do you guys stop when you do an estimate and go, oh shit, Where's my matrix that my boss made where these jobs should be? Because I, my shop, I have a price range where the markup should be and where there should be overall profit on a job, right?

28:40Yeah. How many do you think, how many times do you think these estimators stop and they look at it and go, okay, yep, I need to be right there. And they pull up the profit calculator if that program even has it. It doesn't. I know Mitchell's was a little bit weird when I had Mitchell here for a little bit. Mitchell kind of tells you after the fact.

29:02Oh, it kind of like built it in. It was really fucking weird. It was obscure, right? If you look at Shopware, TechMetric, ShopMonkey, Mitchell's F12, when you build an estimate, you can hit F12, you put your costs in there, you have your loaded mechanic costs in there, you'll know how much you're making on that job. So you could go up and down, right?

29:18So think about this. Think about a customer coming in and going, I'm here for front brakes. Here's the estimate, Jason the estimator, Jason the estimator. Puts it in and they do the job and then they leave and they maybe paint went up or something went up and the insurance company, they didn't audit the insurance estimate or anything like that. Maybe they did a few things they added on as a supplement.

29:43We did really good, right? They don't even know until it hits the back end after a month or two when they have a picture on their P&L sheet. Where are we at? Where's our cost of goods? And a lot of— with body shops, I urge you guys to have paint in one line on your cost of goods, your parts on another line, and your tape, your supplies on another line, so you can see what you're making on each one of them, where your problem is.

30:08If you lump paint, supplies, and parts all into one, you're not going to be able to break the paint out and not know what you're getting for the paint. And a lot of these guys I see with the P&L, their accountants don't know this, so they're clumping everything together to parts. So we don't even know what their overall gross profit is on parts because we got paint in there dragging it down.

30:25So when I started pulling it all out and figuring out paint and stuff like that, I'm like, oh my God, these guys are making nothing on paint. It's almost like a handling fee. So think about this. They're saying, you know, paint's going up 3, 4, 5, 6, 7, 8%, right? What if you don't notice it? Because a lot of these guys have said to me that the paint keeps going up, but they don't even bring it make it aware, make them aware of it.

30:49So when we get, we use a shop management program here. We use Shopware for our collision work. We put, we literally call the parts prices or we go on RepairLink and we pick the parts out and put them on and we do our own pricing on that stuff with the repair operation. I understand that if you have CCC and all that, it makes it a lot easier just to go and pick and click parts.

31:11But the problem is guys, yes, it does blend times and all that. I get it. But that's designed to fucking chisel it down to nothing. Shopware, I open it up, hit start repair order, it sits there, it looks at you like, okay, garbage in, garbage out. So I put good stuff in, good stuff comes out, and I know exactly where I'm at.

31:29Yeah, I know how to mark up my paint. I know how to mark up— I have paint, when I put paint in, I put a percentage of that goes to materials. So I have that calculated. When I go to sandblasting, I put fuel charges on it by a percentage. Like, I break that all down. The CCC and all them do that, but they do that at the detriment of you.

31:49Yeah, right. Because if you think about it, you're literally signing into the insurance company's estimating program and doing an estimate in the insurance company's program. Who sets all the prices in the insurance company's program? The insurance company. Right. So we have to be very careful. Like I tell people, If I literally, if I had a body shop, and I got a couple of them right now, if I had a body shop that did only cars, I would have an AI that would audit every repair order.

32:25Like I would say, okay, they gave me the estimate, the insurance company gave me the estimate. Here it is. What am I missing here? And here's the price on all my parts. Here's the price on all my— What am I actually making? It would tell you. You'd be horrified. Yeah. I'd be willing to bet you, you guys are making, if you're lucky, if everything goes really, really, really good, you're lucky to make 20% on a job.

32:47Wow. I mean, that's kind of the way they have it set up. I mean, we took, uh, the last Progressive job we did was, uh, a pickup truck and we did it very meticulously by their estimate. I put everything in and then we checked it. It was like, I could probably go pull it up, but I should have pulled it up. But It was 20%, 23%.

33:05Now think about that, guys. There's no room for error there. It's got to be perfect. Absolutely. It's got to be perfect or you're making less than that. Then what happens if, you know, the paint went up? You know what I mean? Yes, I understand. So what we do when our paint supplies and everything come in, right away we pull up our shopware.

33:27It would say, okay, ES400, whatever. We pull it up, Same price. Check it off every time it comes in. We check the pricing on all of our paint materials every time. So you're not guessing where you're at? Yeah, that's the problem. Like, the insurance company's like, don't worry, bro, we got you. Yeah, like, literally they're setting an estimate. Here you go, this is what we're going to pay.

33:44And a lot of these guys are like, oh, fuck it. Oh well, they're putting blind faith into it. Like, yeah, oh, they're not going to rip me off. Yeah, so that's literally what they freaking do, you know what I mean? So, um, I sit there and I look at this shit and I'm just like, come on, guys. Let me see here. So the first squeeze is the parts, right?

34:01They squeeze the shop first on the parts. Then they move on to the labor part of it. You know, they move in. Here's— I said, give me some scenarios of what they've done over the years. It's out on the web. You know, a lot of the guys that are sweet operators know all this shit, right? They've been in the business. But for the guys who don't, I'm saying this, right?

34:22So, you know, they announced the labor rate increase. It looks generous. Then they cut the hours. They blend. Blend is gone. R&I becomes included. Frame shortened. ADAS spot. One thing where they're really struggling right now, they don't know how to fuck people on ADAS. Oh, because ADAS is a big deal and they don't know how to deal with it yet. The insurance companies are having a fucking fit about ADAS right now.

34:45So now they're talking about, you know, I've heard some of these forums are like, these guys drive a car to the ADAS shop or whatever, and they won't even pay them any uptime. They'll pay them the drive time. They'll do this and do that. So now guys are like, fuck it, we'll get it towed. It's a safety issue. So what I do at my shop, it's just got to go to the other shop.

35:01And I'm like, like they told me that, uh, uh, that truck that we didn't make any money on hardly, um, it needed alignment and needed the air conditioning done. And they're like, well, you have to take— we don't pay anything on sublet markup. Progressive doesn't. So I'm like, that's fine. I said, I'll send you the tow bill. What do you mean? I said, well, we can't drive it.

35:17We It's not aligned. We put a knuckle on it, we put a rack in it, tie rods and stuff like that. It can't be driven. That's a safety issue. So we'll go ahead and call the tow company. Then all of a sudden they get butthurt, but fuck them, right? Absolutely. So then I'm like, okay. And then that truck, for instance, we charge for everything.

35:35That truck had to be picked up and towed into the shop by a tow truck because we can't get in the truck. The whole fucking front end smashed, right? I make my guys videotape it. I make them start the video with a timer on it and a stopwatch. I make the tow— see the tow truck pull up. We see them hook it up.

35:52We see them back in the shop. I have 2 guys standing there guiding them in and all this stuff. And then we freaking send them the video with the timestamps and everything and say, this is what you owe also to get in the building. So we get paid for every little thing. Does that sound stupid? Yes, but not really if you think about how many times a year you do that, guys.

36:08And what if you're a flat rate tech? You should be getting paid to do that. You get paid on commission. They— a commission in the body world, right? Yeah. So you get— when the job's done, you get your piece of the pie. You should get some of the commission off of some of the stuff you're doing. It's a lot of time. It's— and again, to your point, you're never getting that time back.

36:26Yeah, exactly. So, so, so receipts, you know. So here you go. CCCS itself does not set prevailing labor rates. Carriers still quote CC data like scripture, right? A huge share of jobs need supplements because the first estimate was, you know, on the whatever bullshit. But, you know, the other thing is too, guys, we like— I'll give you an example. Box trucks, panels, that takes 2 guys.

36:57You need to start thinking about if I have to write an estimate to put a box panel on, being realistic, realistic, that's going to be 3.7 hours. Yeah. Because I got 2 guys. I got one guy inside and one guy outside. The insurance companies know this. They're not stupid. So, you know, there has to be some stuff. Like how many times, how much do you guys put test drives and stuff?

37:20We get post-scan, pre-scan and all that. But what about test drives? After the job is all done, you just put a whole freaking car back together. Don't you think you should get paid to drive it for half an hour to make sure it's good? Absolutely. Why should that be free? Why should it be free? It's not like the employee, however he's paid, gets punches out.

37:36Hey boss, I just got done with this 25-hour job. I'm gonna go spend half an hour more driving it for free. All right, Bobby, punch out. We don't want to fuck State Farm. You know, Jake's a swell guy, right? So you need to buy more khakis, right? You just got to get paid, right? So you should be trying to push that thing in, and the insurance company says no.

37:55Well, I'll start fighting with them. Say, well, I'll release the car when you pay me or we come to some kind of agreement. And they do not like guys like me because I'm giving you guys all these ideas. Maybe some of my ideas are stupid, but I'm telling you right now, we're 10 for 10 on our last, on our last jobs since we've changed up even harsher than we are.

38:11We're not rude to these guys, but we tell them when they say, well, that's our policy. See, funny is our policy is just the opposite. So I'm supposed to respect your policy? And the guys will get on this post and everything. Well, the insurance company is the customer. No, the insurance company insured my customer. Yes. Okay. So somehow or another, I got to keep my customer from getting screwed.

38:34And that's what the bottom line is. Because think about this. They want to have 100% of the authority with none of the risk. What do I mean by that? Think about this. If you're a manager and I say, Jason, you are in charge 100% of these employees unless you do something I don't like. Yeah, right. Yeah, you have authority with— what do you have?

38:56You have a responsibility with no authority. Yep. So we're responsible for fixing these cars and all that, but who has all the authority? The insurance. The insurance company. Who's taking all the risk? The shops. Who's picking the parts where we buy the parts? We probably— the insurance company. You guys see the picture here? Who's fulfilling the warranty? Yeah, who's fulfilling the warranty?

39:13We are. We're taking all the risks, we're paying all the costs, and they're telling us we're in charge of you. This is how much you're only allowed to charge because we think that's a good thing. Us CEOs that make $4 million or $5 million, whatever millions of dollars they make a year, we're telling these guys what to do with their marching orders.

39:29And that's what they need to do. If you really stop and think about it. Absolutely. It's really a fucking— it's a rigged system. It's no different than like the casino. Oh, you ever know anybody that goes to the casino all the time and that you ever notice that, you know, they have a gambling problem, but they always fucking win? They always— they're always up.

39:46They're always up. Yeah. Went to Motor City this week, fucking cleaned them out. Like, okay, so let me tell you something. That casino didn't get big, big and beautiful. They don't give you free pop and all that shit because they're losing fucking money. Yeah, they're not passing out free drinks because they're losing money, right? So that's the thing. It's like the insurance companies, you know.

40:09Think about the insurance companies. All they have to do is come up with some bullshit thing where we have to raise a raise rates on the insurers, and then they look at the shops and go— like State Farm send you a letter and go, we're lowering the labor rates. How in the fuck can they get away with lowering the labor rates when everything in America, everything in the world has gone up?

40:29It's well documented that the inflation is up, right? The only thing that has not gone up is our tech labor wages. How the fuck does that even— how does that even happen? In the repair business, we raise our labor rate depending on what happens that year, $2, $3. A year, right? They're wanting to shrink it. Nothing's going down. Nothing's going down. Like, what are we doing here, guys?

40:54And I know this is a lot of regurgitation, but it's like we have to say this every 3 months to get people to start calling us and going, hey, this is really messed up. Yeah. Hey, this is really messed up. Like, well, and it's cool when guys like that reach out. That is, you know, he's making waves. Yeah. And that apparently they've really put the wood to him.

41:10So, well, you know, it'd be interesting to have him on. So here's the kicker, okay? 2025 and '26, I did want to bring this up. The shops reported actual rate cuts. State Farm got named the most examples, like $74 to $65 an hour. So they were at $60, $74, and they readjusted it because rates just got way out of hand in COVID.

41:33Okay, 1 in 4 shops in a crash survey said at least one carrier was paying less than they paid in January of the same year. So these insurance companies are literally picking the parts. Now they're lowering the labor rate, what they pay. It's like, but the problem is like, do you honestly think, okay, here's an example of what's going on around us.

41:59These big dealer groups are buying little dealer groups. Yeah. Like, for instance, I know that, um, who closed their body shop? I believe Sellers used to have a body shop, but I believe when Fox Group bought them, they closed the body shop. I know the dealership my brother works at, they closed the body shop. These big, huge dealer groups close the body shop.

42:25Why is that, you think? Because they can't make no money. Screwed. Yeah. Yeah, right. So the body shop was the dumping ground for these older guys that say, oh, we need something to lose money at, so we'll lose it over here in the body shop. But now they're getting rid of these body shops when they buy these huge dealers, buy these little dealer groups.

42:42They're kicking their body shops, closing them, letting people go after years and years and years, just kicking them to the curb. You can't tell me that the big dogs don't know that the body shops are fucked. Oh, absolutely. You know, now I will say You know, we read stories and stuff a lot of the time now that some of these bodies— there's crooked body shops out there too that just are fucking crooked to the point where— but there's everywhere, there's crooked people in every business, every business, right?

43:07There's crooked shops. I mean, how many times do you see on freaking Rob Wojciech? I can remember the one, uh, I don't remember where it was, it was down, uh, down towards the city, but they caught the guy with a hidden camera squirting oil on a timing belt and saying, oh, it looks like your crank seal is bad. This was years ago, and they're like, there's nothing wrong with it.

43:25This is what you did, you know? Yeah, they would take oil cans. I remember one, uh, that the guy would take a little oil can, stick it up in the shock, and spray the shocks and the struts and be like, oh look, your shocks, your struts are leaking. Like, there's crooked mechanics. My point is there's crooked everybody. HVAC, 5,000%, everything's crooked, right?

43:42I'm not saying 100% of collision shops are crooked. Yep. But you know, them guys kind of give everybody else a bad name, but How can you outcrook the crook? Okay, the insurance companies are the crooks. Okay, if anybody doesn't understand that the insurance companies are here for the same reason we are, to make money. The thing is, they're making money on an unimaginable scale.

44:04So how do you fight the unimaginable scale? How do you fight somebody that's got billions of dollars when you have hundreds of dollars? Even hundreds of thousands is nothing if you look up the time difference from a million to a billion in minutes. Yeah. Okay, then look it up from hundreds of thousands to millions. That's actually closer. Yeah, but billions, you're in a whole different world.

44:24They could crush you. They could literally buy your shop and close it and you would never— erase you off the earth and it wouldn't even fucking matter. Leave it. They wouldn't even— it wouldn't even matter to them. You know, they tried for years ago. I remember State Farm had claim centers. You would drive your car in there, they write you an estimate.

44:42Huh? Yeah, that didn't stay open very long. They built a whole building on Novi Road and stuff like that. That didn't last long. Wow. I mean, but how can you literally do— you could do like, okay, I pulled in, somebody ran into my fender with a shopping cart. Some piece of shit adjuster that went through a little itty-bitty program could say, okay, this dent's bigger than a fist, it's this many hours and stuff like that.

45:02But you— they would— they were trying to have cars towed in that were like wrecked. So there's no adjuster that works for State Farm that's gonna go lay in the snow and crawl underneath it and go over it. So what they do is they pen whip it, and then they say, okay, here you go. They give it to the shop, they give the estimate, you know, the insured a $1,500 estimate.

45:22It gets here to the shop here, it gets towed in, we do a good estimate teardown. All of a sudden it's $9,000. Then the negotiation starts. Well, we don't wanna do this, we don't wanna do that, we don't wanna do that. I had State Farm not want to blend a nose on a Corvette. Jim's son, they backed into it and they didn't wanna pay for a blend.

45:41Wow. And we fought and they, they didn't want to pay for, uh, we had to take the, um, emblem off because it had a PPF on it. They didn't want to pay for the emblem. He ended up having to pay for money out of his pocket. Wow. To get his car fixed the right way. Wow. This is the kind of— you insure a Corvette, you think you're gonna get— if something happens, it's gonna be taken care of.

46:00They deny shit nowadays like it's a fucking job. I'd be willing to— okay, so this brings me to my next thing. Yeah, yeah, right. Yeah. This brings me to the next thing. So they don't expect shops to use profit calculators. They pretty much tell the shops, hey, we're going to go ahead and set the markups, right? You can't tell me that these adjusters don't have a dashboard where they got to keep their numbers.

46:21They have to keep their claims. You cannot tell me they don't. No. This is conjecture on my part. They have KPIs. Exactly. Yeah. Don't you think? 5,000%. But they don't want us doing it. Yeah. It's like, this just made me just flash randomly. Have you ever seen the movie The Incredibles? Where he's at the beginning, he's like the, uh, the Mr. Incredible or whatever is at the insurance and he's like turning down the old ladies and like the boss, he's like trying to slip her like extra stuff and the boss is like over him.

46:47That's their job is to, to lower the rate. Right. So it's kind of interesting to see all this going on and, you know, people don't pay attention to this. And I, and I think honestly from what I've seen, the shop owners don't have a grasp, good grasp on their numbers. So therefore they don't really know what's going on. Yeah. You know, there's always that, you know, that whole thing where, you know, the customer gets a check, we write the estimate, the customer gets a check.

47:12Yeah, it's not that bad. We'll go ahead in the shop, waste time. That's where we came up with estimate fees. Hey, if you get an estimate done on your truck here and you want to take the truck and take the estimate with you, it's $199. If the truck is here, you don't have to pay, right? But if You bring the truck back for the work after we get it all handled, we'll take the $199 off.

47:32Well, you're going to charge me for an estimate? And I had one of the guys at the dealership around me go, man, I don't really agree with how you do charge people for estimates at Motor City. I said, I don't fucking care what you agree with. Why would you even tell me? Yeah. He's like, well, you know, we don't charge for estimates here.

47:47I go, no, but you charge diag. You're a repair shop, so you don't fucking go out there and go, yeah, we'll check all your wiring out for free. Yeah. I go, that's a different— that's a diag. I'm talking free estimates, right? A free estimate, there's no such thing because no matter what, it still takes time. Because what I was running into, Jim was doing 4 and 5 estimates a day sometimes.

48:05Uh, okay, then we would send the email to the customer, we'd never hear from again. So we would spend anywhere from 20 to 45 minutes on an estimate only to ship it and not get anything out of it. So we had to stop-loss it. Yeah. So how we did is like, okay, it's $199 for an estimate. If you get the work done here, we'll take it off the If not, you pay us and you get your estimate.

48:25Because if they're paying us for the estimate and that you could always tell they're— they just want to go get the fucking money. Yep, yep. You know, so it's cheaper somewhere else, they take it there. Yeah, I got a guy that came in with a box truck and he had a— oh, the insurance claim, getting the insurance money. That's what you're talking about.

48:43Do you— yeah, did you hear that one where he just scraped the floor a little bit? No. So, okay, so they were loading a truck in a loading dock, this piece of shit truck. I mean The whole front of it, the cap is broken. And you can see, like, when we got in the back of the truck, the corner of it, it's got water of the box.

48:58It's water, right? So he comes in, you know, typical dude. Hey, uh, they destroyed my truck and they're gonna have to fix it. I'm like, okay, what? Jim's like— I wasn't there. Jim's like, what do you— what are you talking about? Well, they came in somehow or another, came in and I don't know if it was the angle or whatever, but it put like 3 scrapes, probably an 8th inch deep in the wood.

49:26Like, literally, you could have took dirt and rubbed it over it and you would never seen the scrapes. Wow. That's how minimal they were. Yeah. So this guy's like, listen, they're gonna have to replace the floor because if they replace these 3 boards, they're gonna be different, uh, height because the boards in the truck have shrunk, which I agree with. She's like, so it needs a whole new floor.

49:46I'm like, well, we can cut them out, but we can't really write it for a whole floor. That'd be— well, they're gonna have to pay. We're like, dude, there's 3 scrapes. Like, they're not gonna— the truck is leaking water. I said, well, so me and— so I came in, Jim's like, what do you think of this job? So I look at the pictures, I'm like, are you kidding me?

50:05He's like, no. And I go, call the fucking guy. So he calls him, I'm like, yeah. He's like, well, you know, the wood, and you know, my friend, you know They have to pay. They destroy it, they pay. I go, I agree. I said, uh, we could write you an estimate. It's $199.32. Okay. I said, but just so you know, in order for us to do this job, we have to fix the water leaks.

50:22We can't have water leaking on a brand new floor and swelling the wood up. How can we warranty that? Well, I don't want to. I don't, I, I, I, that's fine. It's not a big deal leaking water. Jim's like, it's not a big deal leaking water, but the scrapes really aren't that big of a deal. Guys like, yeah, they gotta fix it, they messed it up.

50:42We're like, okay sir, thank you. We never signed him up and we never heard back from him. So you have to have a little bit of discernment at certain situations. You don't want to rip anybody off. Like, let's face facts here, guys, that guy was just looking for a fucking check. Yep. So we don't get involved in that. But I will come in if a guy's truck is smashed, like I said, and you know, we have to call Morgan or Forest River or Supreme Mickey Whatever, we'll be like, yes, we have to call them.

51:08It's a, it's a process. So this is going to cover our time and we'll give them a legit estimate. And if they don't do it, we got paid to do the estimate. Ideally, we like them to do the job, but overall they pay us. At least you got something right. You know, and that's one thing that I think that is getting better now.

51:26People are really starting to charge good storage fees and admin fees and stuff like that for these insurance companies. And I think that's right. Okay, you guys, you can get time for covering windows with plastic. You can get time for floor dry if they're leaking. There's a lot of things you guys can do. You need to keep doing. We need to keep pushing back on these insurance companies for that.

51:44So the moral of the story is, if you really stop and think about it, when you have service advisor training in the auto repair world, we teach these guys margins, right? Yep. How many of you estimators have a boss in the dealerships or wherever where they say, hey, we're going to do this estimate. You need to go ahead and mark all the parts up to 58%, 50%, whatever, 60%.

52:08That doesn't— that conversation never, never happens. The insurance companies, they pretty much just take what the insurance company gives them. So think about this. What has happened to the auto repair as a whole? It's gone up. Collision repair, mechanical repair, everything's gone up, right? So if everything's gone up, the insurance companies had to figure out how to keep everything down because they don't want to start spending more money because the bigger the bills, the bigger the percentages are, right?

52:33Yep. So they've had to figure out how to chisel it to keep them down. So it's a constant fight. They have divisions, these insurance companies, that do cost analysis. Oh yeah. Where can we screw them there? No markups on tires. Progressive, we don't— you can't get a markup on a tire. What the fuck do you mean you can't get a markup on a tire?

52:50What do you mean? Yeah. They do all kinds of shit like that. They push it. And, you know, um, insur— you know, it's just my thing is like, we don't even like— well, obviously Progressive doesn't— we don't have any more Progressive jobs. They pretty much steering everybody away from us, which sounds good. Yeah, you know, but the problem is a lot of these, um— and what's happening now, several of my body shop clients now, the MSOs are moving into town and they're taking all these guys' work because the MSO looks at it and goes, well, You know, he said he'll do it for what the insurance company wrote.

53:21And I'm kind of wondering, if you really stop and think about it, you have the CAPA board. Yeah. That's all the CEOs and the big dogs in the insurance companies, right? You have all the big dogs in the MSOs over in the other column. Do you ever think there might be some, hey, we're going to go ahead and pay you guys a little bit more hourly rate.

53:42We're going to give you a little bit more money. On this, a little bit more money on that, and we're going to start cutting. You don't think we have 2 different rates is my point. Yeah. The little mom-and-pops get this rate and the MSOs, because they're the big dogs, we can steer everybody, we'll go ahead and hook you up. Absolutely. And what I've— when I've talked to people, they say that the MSOs don't seem to nickel and dime as bad as the little guys, which I'll tell you what, guys, there has to be a lot of good shops out there, collision shops that guys know how to run and make money, no doubt about it.

54:11But what about the guys who don't and they lose money and they just, they're, they just get rid of them? Yeah. Like I see it, like I can see it in these guys' books. I'm like, holy shit, you guys are in really bad shape. Well, and you talk about how, like when we were talking about yesterday, how the numbers can be so off where somebody thinks that they're at a 19% net and they're actually negative.

54:30Yes. I go into these books a lot of times, guys, and sometimes it takes me like 4 or 5 days even using AI because I use AI in some of it. But a lot of times what I'll do is I'll put it out into CSV spreadsheets and I'll go through the spreadsheets manually and I'll be like, okay, this is what I think, just to keep my mind sharp.

54:45Then I'll dump it back into AI. I'm like, okay, this is what I see. They're like, yep, pretty much this, this, and this. Oh, you missed this. Or, oh, I didn't even think of that. Like, so we go back and forth, right? And then I tell it after I'm all done, I say, okay, I only need factual information. Yeah, you know what I mean?

55:00So I know. So then I double-check myself again, right? And some of these guys, when I pull all their numbers out and stuff, I'm like, okay, I started out at 19%. Wait a second, he's lost money. He's losing money right now. Then I'm like, where is he losing money? Then I look at his cost of goods sold because think about it. In the repair world, I can go into the front-end program.

55:17I can go into TechMetric Shop or Mitchell and all them and say, okay, where are my percentages at? Right? Well, the only way we can in a body shop, most of it, we have to do it on the back end. So it's too late. Think about this. We have to have a guideline over here Because the problem is, think about this, guys.

55:36We'll go back to the middle of the P&L sheet. This is simple as this. We mitigate damage by, we say, okay, this is how much I need a day to run my shop. Then I do all my mathematical formulas, my labor, my overhead, and everything. I put my parts markup and all this stuff. And I say, okay, Jason Tracy, you have to make 40% on each job or whatever, right?

55:58I give you a range. Yeah. Right? That in turn takes care of the top of my other P&L sheet. So then it goes to the middle, we go down the middle, and at the bottom of that P&L sheet comes what? My net, what I actually get to keep out of the money, right? It's not money you have in the bank, it's accounting of everything that happened, right?

56:16The problem is we are setting ourselves up over here. I got to pay Jason Tracy, good. I got to pay Pat, I got to pay Jim, I got to pay Jake, I got to pay Jonathan, I got to pay Kevin, I got to pay overhead and all this. Hey, Jake from State Farm, what are you going to pay me? And he's like, well, I'm only going to give you 25%.

56:34I can't pay you on this. I can't pay you that. So they're literally setting you for failure. Yeah. They're setting you— if your overhead is too high here, you're screwed. There ain't nothing you can do. Yeah. Think about this. In a repair shop, if I start realizing like, okay, this, this, uh, is shrinking here, I have to figure out what's going on.

56:53Like if I give everybody raises, right? Yep. I gotta lay, I usually do raises once a year when I do labor rates. I say, okay, I'm gonna give so-and-so a raise, so I have to go up with my labor rate. Right? Yep. That's kind of how I do it. Because the numbers, there's a reason behind it. It's not just, uh, picking a dot number and saying, oh, that feels good.

57:09Mm-hmm. You, there's a science behind it. Right. So I absolutely 100% say, okay, I'm gonna give everybody raises. This is how much my, my labor's gonna go up. So I have to figure out if I wanna keep my margins the same, I have to raise my labor rate. To offset that, right? So everything goes up at once, right? I can't go like this in my labor and leave everything half.

57:26What if I go up with my labor and don't raise my, my what I'm charging people? What happens at the other end? It goes down, right? I'm literally taking money off the bottom end. Absolutely right. So, and that's what these guys say, well, I'm just going to hire another estimator or another, another office person or another this. That's a direct cost. A direct cost is somebody that's not going to be a production person that I call them support staff.

57:47Okay, you could have too many support staff. Yep. I know a shop right now, it's my client's, got too much support staff. I go, you got 4 technicians and 8 people fucking supporting them. Whoa. You don't fucking need it. No. Like, you keep putting layers on thinking, oh, it's going to make the whole place more efficient. No. What it's doing is taking money right out of your pocket every time you add one of these guys if they're not producing.

58:06And they probably— most of them, they probably don't know what they're doing. Those 8 support staff, yeah, it's like a Chinese fire drill. It's like, holy shit, boys. But, you know, so you go back to the freaking— you're literally set up to fail by the insurance companies because they're setting your prices. Because in the auto repair— and I'm in a different— where I do motorhomes, bigger trucks, and shit like that, so there's a little bit more room for me because what we do is highly skilled.

58:31I'm not saying fixing cars isn't highly skilled, but a lot of people don't want to work on trucks. There's not a lot of people around here doing what you're doing, correct? So, but think about like A lot of these people don't even write their own estimates. So what we do at our shop, guys, this is what I realize we should do. When something shows up, we write the— we get an approval for an estimate from the client.

58:51We write the estimate. Yeah. The reason why is we figure if this is a good solid estimate we write, they're going to come out with— they can't come out with some bullshit. Versus we write a solid estimate, right? And we give it to the insurance adjuster. He's going to look at knowing we already had eyes on this, right? If he comes out and does a bullshit estimate first, maybe he sets that estimate at $3,000, right?

59:16Our estimate's $10,000. You're now trying to justify that gap, right? So what we do is we set the freaking precedence right off the rip. Yeah. And we get the customer to approve the estimate in our business, the RVs and stuff like that. Then we do— then we set the— because if he sets it at $3,000 and it's actual $10,000, he makes it look like Oh, you want me to raise that far?

59:35And now you're getting $5,000 if he goes up, right? And right now, guys, just so you know, um, we're 10 for 10 as far as the people that are paying the difference. I know a lot of you guys talk about it online. We actually do it, and we've had— we're 10 for 10 right now. Uh, we had one fight that was a guy at the motorhome and Progressive.

59:52Danny got mad, and Danny Boy got mad, but whatever. But right now we're 3 months out. Like, we don't have to— we could stop taking in work today, and we, we went over the list today Um, we have all the way probably to end of November easy. Wow. Yeah. Wow. Yeah. And still there'd be still stuff left over. So it's not like— so when my point is, when you can get that good and when you get your cash flow and stuff like that, and here's another tip, guys, you need to get paid by these people when they start the job.

1:00:26Take half of it down if they're getting the insurance check. And the insurance company sends them a 2-party check. They need to bring you the 2-party check. You can keep it. But what we do is we take it and we take half down. Yeah. Why wouldn't you? Well, a lot of people won't. A lot of people are scared. So I take a lot of these bigger, huge jobs that there's going to be a ton of parts and stuff like that.

1:00:49I tell people you need to pay 100% upfront. They say, well, we're not— we don't feel comfortable with that. I said, well, we don't feel comfortable with not. So we have to come to a minimum. So what I do usually, a lot of times now we can get the insurance, we can get a direction of payment and the check comes right to us.

1:01:05I don't put it in our checking account. I put all of our job checks in our savings account. And as the jobs come out, I take this money out of the savings account as I need it to pay for them jobs. So I always have a big savings account and I don't have all my money spent through my checking account. So I kind of can gauge where my money's going versus a lot of you guys in your shops, you just keep putting the money on, keep putting the money on, and then you get slow and you spend, spend, spend, spend.

1:01:32Then all of a sudden you're looking at a job over there that you got paid for that owes $4,000 worth of parts. You don't have $4,000 for the parts. Yep. So what I do is I put everything in the savings account and as I get big, huge jobs, like I just got a job that was $40 grand and I told the people, you need— it's like $42 grand.

1:01:48I said, you guys need to give us half down. And we're probably not gonna start on that job for probably 3 weeks or 4 weeks. So they're gonna bring me a check, I'll put it in their savings account and I'll know exactly where the money is. Yeah. You know what I'm saying? Yep. And that's, I think that kind of keeps you healthy in this business.

1:02:04Yeah. The repair business is so much different cuz think about it, you know, you, you do a $10,000 job in the repair business, you can have that done maybe 2 or 3 days. You're maybe 3, 4 weeks on a job that size or more in the collision world. So you gotta be very, very careful with your money. So, and then once again, guys, you got the insurance company over here telling you what you are not gonna do and what you're gonna do.

1:02:26It makes it tough. And I brought up that client with the 19%. They thought they were making a 19% margin and they were actually negative because like, if you're thinking, okay, I'll do these jobs, it's not a big deal, I'm up anyway. So I'm— but if you're actually then losing money, you're losing more money. Yeah. Like that adds up quick. These little numbers add up quick.

1:02:43Yeah. Well, they say, what do they say? One big hole, Well, a bunch of little holes will sink a ship just as fast as one big hole. Yep. Okay. And I challenge all you body shop owners, start asking your estimators, how much are we making on this job? Not just the parts, guys. How much is that tech costing you? Okay. Think about this.

1:03:01How can you be really making any money unless you guys are so efficient that you're doing fricking 3 for 1? You know what I'm saying? Like you got, I just, The problem is, like, right now we have to pay our techs— if you want to keep them, our body techs— a decent wage, right? Like, right now I laugh when Progressive wants to pay me $64 an hour.

1:03:22My one guy makes like $50-some dollars an hour. Like, most of that, that is going to go to one person. One person. It's not going to go to overhead or anything. So, and then you're going to give me a measly 25%, or you're going to give me a one-time concession of 30%? Fuck off. Like, you can't even stay in business that way.

1:03:39But a lot of these guys don't realize that You know, they're thinking, well, I pay Jason $20 an hour. Well, not really. You need to put 25% on that. And that's what you really pay Jason. Yeah. Okay. That's just for your taxes and everything. Then let's start talking about vacations, days off, paid holidays, you know, 401 match. Okay. You can get right up there.

1:03:55I think my one guy all loaded up right now, my highest guy is $68.50 an hour. Wow. Yeah. Okay. So how the fuck can I do $64 worth of labor an hour? No way. I'm losing money. Yep. So I don't even do them jobs anymore. And, and guys, guess what? Do I sound arrogant? Like I've gotten to the point where I can do what jobs I want and I don't do the bullshit jobs?

1:04:13Yes. I send them to guys like you guys who won't— not all of you, but the guys who won't freaking know how much the shit's making. So my challenge to everybody is go ahead and ask your, uh, ask your estimator how much you're making on these jobs. They can't tell you because they probably never used— even if it did have a profit calculator, they're not used to, they're not accustomed to using it.

1:04:32Yep. Right? Yeah. They have no idea. They have no idea. It's like, how do you— you just don't know what you just don't know. And so the insurance company is okay with that. Think about it. Do you really think that the profit calculator is hidden for a reason? Do you think they just said, ah, oh shit, we didn't do a profit calculator.

1:04:52Put it over there on that tab. No, no, they didn't say, you know, because if you look at my Shopware or TechMetric or something, as you're building the box, the percentages are going up, labor percentage and overall. So you could literally watch it, right? Not in the body world, boys. You don't need to know you're losing money. We got you. Cause you know, big brother, State Farm, GEICO, Progressive, whatever thing.

1:05:11Don't worry. We got you. We got you like a good neighbor. Right? Like seriously, like they don't, they, they prey on ignorance and you guys, here's the thing, being ignorant and being dumb is 2 different things, right? Dumb. You're just fucking dumb. Ignorant. You just don't know a certain topic, right? You're not educated on it. So my thing is, if you're an estimator and you're on commission, you're trying to get a bonus for your sales and stuff like that.

1:05:35Once you educate yourself on where you should be and where you can push the envelope and where you can't, you would think, yeah, but I, I just don't see these guys doing that. And you know, the thing is about it, they say, oh, you know, the auto repair industry is broken. The collision industry makes that fucking auto repair look like a golden boy.

1:05:55You listen to what I tell you. Yeah. You know, I kind of butchered the CAPA thing, but people got my fucking point, okay? Like I said, I'm no CAPA fucking expert, but the bottom line is there's a board of guys that are on the insurance companies setting up the fucking prices, and MSO guys over there talking, then they got a couple fluffers in there, you know what I mean?

1:06:12Like, but the bottom line of this whole podcast is, guys, I hope I get a point. They're squeezing you here, and once they squeeze you here on the parts, they come on over here and they squeeze you onto labor. I guess who wins? They win. They win. You don't even know what shit costs you. Yeah. So we could help you with that, but it's not an easy process.

1:06:31Like going, 'cause a lot of these guys don't even have QuickBooks. I don't even know how they even do it. Like I literally went into the one, um, collision software, Autotex. I looked at them like, what in the hell? Like, it's horrible. Like I get, but the navigation's hard. Everything's hard in the collision world. They say CCC is the easiest to use, but it seems like they make everything harder to find for people.

1:06:55So they're just like, fuck it, here, just put the insurance company. And I know for a while there, and I, I can't speak to this because I don't use it, that they would actually put these assignments in your CCC. So if the insurance company wrote the estimate, it would populate, I believe, in your program. People can correct me if I'm wrong. I don't care.

1:07:10I don't know. I just kind of— I remember them talking about that. You would get an assignment from Allstate, it would just pop up. Yes, something would be done. You'd call the customer. Yeah, bring it in. We got your estimate. They would do it. Oh my God. Yeah. Then, you know, we didn't even talk about DRPs because that's how fucking useless they are.

1:07:25But guys say they kill it at DRPs and make a killing on it. And, you know, with all this final closing of this, I remember back in the day when I worked at Hal's Auto Clinic, A&M Collision was across the, across the parking lot. And they had an adjuster named Don Moss. I'm sure he's dead by now. He was old then, but Don Moss always getting, was getting badass shit put on his Mustang and all kinds of shit.

1:07:47He worked for, I believe, Allstate. And, uh, he was always getting cool shit put on his Mustang. It was always getting billed to A&M Collision. Huh. He was the adjuster that was their assigned adjuster. So guess what happened with the insurance companies? They realized he's getting kickbacks. Yeah. So all of a sudden they start doing musical chairs with these adjusters and moving around constantly.

1:08:09So you never have a relationship with these people. Yeah. So then COVID comes along and they're like, here's the perfect example to get rid of, or perfect timing to get rid of all these fucking guys that know what they're doing. Let's lay them all off, cut our wages in half and hire them. And right now I heard through the grapevine, State Farm is trying to fricking, they're literally cutting people's benefits, cutting people's pay, cutting everything to get these people to quit because they're reorganizing right now.

1:08:35So they're getting people to quit by doing shitty stuff to them. As employees. Yeah, guys, I am telling you right now, a lot of people don't like me. I don't give a fuck. Just so you know, I like what I do. I like having shops and everything like this. You have to fight with what's yours nowadays. Corporate America is eating us alive.

1:08:55Think about this. Anytime corporate America comes into a space and these corporations take over the billing and stuff like that, they kill the business. Kill the business. And they raise— the only good thing these fucking people do for us is they raise the prices through the roof. Yep. Because they do care about the money. Yeah, except at Collision, right? Well, because they're making— they're double dipping.

1:09:16Yeah, so it's, it's insane. And think about it, what do— like, do you think Donald Trump, Barack Obama, any of these people really give a fuck when they make a change up in Washington on it, on healthcare or whatever? I call it the street level. Down here on the street level, we feel it, right? Yeah, absolutely. They don't fucking feel it. So these CEOs on the boards with the Kappa parts and doing the labor and stuff like that.

1:09:38The only thing they're doing is fucking killing it. They're just killing all the little shops to get rid of all the techs. Think about it. Then all the techs go retire or they go to the MSOs. So after a while they literally have a monopoly, but they're— you ever— when's the last time we ever got a corporation getting in trouble by the FCC or the— was it the— not the FCC, the other one.

1:10:01Uh, the Attorney General for monopoly. The last one I can remember is Microsoft. Yeah. Okay. What about Apple? Think about this. There's only 2 cell phone operating systems. Yeah. The 2 are Android and iOS, right? Yeah. Do you remember there used to be Windows? There used to be Linux. There used to be all this crazy shit. Okay. You can't tell me these 2 don't have a monopoly, right?

1:10:21Do you remember how popular, how prevalent Motorola was in the phone space? Yeah. Now they're gone. Now they're gone. Yeah. He's completely gone. That's so crazy. They were the badass radios, you know. You know, you had, uh, Nextel, you had all of these guys, but they're all gone, right? Yeah. And made that strong— this is all by design. If you really stop and think about these corporations are pushing everything to corporate America and the greed.

1:10:46Well, and then look, even like the carriers itself, they went from— you talked about this in the last episode— Nextel and then Sprint, and then Sprint bought, uh, T-Mobile. T-Mobile bought Sprint. Yeah, so they absorbed Sprint. So like all these companies are eating each other and just making— now you have what, Verizon, AT&T, and T-Mobile. T-Mobile, right? So just all getting— you're getting smaller and smaller.

1:11:07At some point AT&T will be bought by one of those two. AT&T is the biggest piece of shit around. They used to be decent, they're horrible now. Yeah, here's another thing that corporate America didn't realize, that they realized one day. Do you remember back when, um, Cellular One was out? When you would go buy a cell phone, it would come with a thick battery, a thin battery, a case, a charger, everything, right?

1:11:25Yeah. Then they realized, oh, wait a second, we can sell all this shit separate, right? And then they're like, well, we don't really want to sell batteries and stuff like that because then people can take the batteries out of their phones, we can't track them. And so they sealed the batteries. And then remember the SIM cards? Well, like, now it's sealed, now it's digital.

1:11:41It's just like they just keep locking it down. Yeah, you know, and I think technology is great, but think about what I said back then. How much easier would it have been back in the day to see if the insurance companies were lowering the prices on the labor guys when you had the books sitting right there, right? Yep. They could do it with a stroke of a fucking pen.

1:12:00If you really stop and think about it, and I'm not saying this is true, but what if they just had a dashboard they call C&C&C? They're like, hey, we got something going on here. We're losing a little bit of money. Can you go ahead and knock everything down 1/10? Think about knocking 1/10 off of everything. Think about knocking 18 minutes off of every fucking operation, how much money they could save paying out.

1:12:19And think about this. Do you really think these guys that even don't even know how much stuff is costing them are going to realize? Do you think they're going to miss 1 or 2 tenths? No, no. But think about how big that would be. Yeah. So they're squeezing on the parts, they're squeezing on the labor operations, they're squeezing on sublets now. So we keep getting paid less, but our costs keep going up.

1:12:42Okay. We didn't call. I didn't call Green Oaks Town. Should I pay my tax bill today? I didn't call and go, yo, hey, Just so you know, State Farm only pays me $64 versus $70 or whatever. Can you do something? You'd be lucky to even get them on the phone. Absolutely. Absolutely. So, you know, I hope you guys like this. Um, you know, I really, really, really wish that you guys would just know your numbers and start pushing back on the insurance companies a little bit, just to kind of see where you're at.

1:13:10My suggestion, you guys, send me some of your receipts. Reach out to me, 248-417-9910, and send me some of your receipts. Call me, we'll talk. Let's start figuring out how much you're really making on these jobs. I think you're going to be horrified. Horrified. Okay, and if you're a dealership, I don't really give a shit because the powers that be have already decided what you're going to make on the job.

1:13:32So I don't really care, and you shouldn't care, right? But if you're an independent operator that have a body shop that is struggling Give me a call and we'll start organizing your P&L sheets and stuff like this so you can actually see what you're making. And remember what I told you guys, bust out paint in its own line so you see what your cost is and what you're selling it for, so you see what your profit is on it, because you'll be shocked how much money you're losing on paint.

1:13:55That's the number one thing I see people losing on is paint. And the other ones, tape, sandpaper, and stuff like that, the insurance companies don't want to pay. They say, well, that's cost of doing business. You've seen the the fucking price of a roll of masking tape nowadays, and it's not the price of doing business. How about I just fucking not tape it?

1:14:11We'll just paint her up. If she's got some blue that ran over the black, not my fucking problem. You didn't want to pay for the tape. Like tape, paper, plastic, all this shit. Razor blades, sandpaper, it's just expensive. It's cost of goods. Yeah, so you guys have to freaking charge for it. Yep. And a lot of times they're like, oh, we put it in our PPG paint program at 20% of the paint cost as the sundries.

1:14:31They What fucking ever. Because guess what, guys? Unless you're keeping track of it, you're screwed. You know, we just did a huge crane job. We kept track of the sandpaper and we counted it just to see how much we were doing. Shocking. How much sandpaper? We used 12 freaking rolls of sandpaper. Holy shit, right? Just on the freaking boom and on the one apparatus.

1:14:50Okay, so you think about the price of that. So now we know that size crane takes X amount. There's nobody that does stupid shit like that like I do. No, I consider that running a business. And, and like, we keep track of our times on these jobs. And like, we got one right now, we stripped it all down, there's all kinds of holes and rust.

1:15:05We're like, okay, we're at our allowed hours, let's call the customer and say we found all this rust, come on down, let's go over this stuff. Where are we going to go with this? It's going to cost you extra more money. Okay, that's just the way you guys should be doing it. You guys can't say, well, you know, I got paid 5 hours on this job, you know, it took me 8, but this job over there paid, you know, 2 hours and took me half an hour.

1:15:26I get But what happens if you try to get paid for everything you did? Yeah. And the jobs that you consider that you did real good on, you just consider them to add it to the pile so you can make more money. That's what you kind of have to do. You don't have to be crooked, but charge for every dime and it's going to change your outlook in your bank account.

1:15:47You know, that's the bottom line. Start charging storage if they're not here. If they don't pick a car up, start charging for deposits to help your cash flow. If you can get people to pay you upfront or sign the check over to you, to put in your bank account, get that word track going like we do. Hey, there's a lot of parts have to be bought for this truck.

1:16:01Like we had an Isuzu truck. I think there's $12,000 worth of parts. And they're like, yeah, well, you know, we'll go ahead and pay you when we're done. Like, that's not how it works. You're going to pay me half of the fucking bill. That way it's going to cover my man's labor and my parts and everything else. And then my profit and some of the other costs can go on the second half.

1:16:18Well, we're not, we're not comfortable doing that. Our policy is we pay for the job when it's done. We can inspect it. Well, our policy is we don't order parts till we get paid half down. So We need to talk about this. And that's what we do. Then we put it in the savings account and we pay for it when it comes up.

1:16:32We always have the money. And I think that's key because I know we've run into a couple situations talking to different shops and stuff where they're getting the half down and then they're spending the money as opposed to putting— and then you're creating a constant issue. Yeah. Robbing Peter to pay Paul. And you know what I find, guys, just so you know, as owners, as you start getting that money in your savings account, that number gets up, to maybe quite a bit of money.

1:16:55We won't say a range, but all of a sudden you start watching, okay, can I just leave that money there and take what I need for just this? Yes. Yeah. And then you had the littler jobs kind of feeding your everyday money, right? So this is staying here. Okay, I need $10,000 out of the $100,000 I have here. Boom. Right? I get another deposit, I put back in, there's $100,000, I pay the bill.

1:17:15Like, so what I do is I protect that money. And then at the end of the year, when I have all these jobs done and I close the year out, I can look and say, okay, I did really good. I have $80,000 saved. Could I use that for taxes? Could I write myself a bonus? Could I give my guys Christmas bonuses? Whatever.

1:17:32Then you're not scrambling in December. So what you should do is put that money in your savings account and kind of act like it's not there. If you have to grab it, grab it. But if you don't, you don't. Yeah, that's what I always tell guys, like, leave it there. If you need it, it's there. But act like it's not there. And you know, you'd be surprised.

1:17:47You end up at the end of the year, like right now during the summer, I usually save up quite a bit of money at the truck shop because usually what ends up happening in that business come around November, about deer hunt season in Michigan, people start to get weird, right? Everybody's going up north and then here comes Thanksgiving, right? So halfway through November, it gets a little bit spooky.

1:18:06Yep. Not for us. We usually have a big old fat savings account, right? Then here comes after, think about it, then here comes December, everybody's got holidays on their mind, right? We got holiday parties going on, blah, blah, blah, blah, blah. Then depending where Christmas Eve and Christmas Day fall, a lot of times people take from Christmas Eve off or the day before Christmas Eve all the way to January 1st, January 2nd or 3rd, right?

1:18:29Depending what— so you got a— so you think about it, you cut a whole month out of the year. So if you have that money sitting in your savings account, you're writing Christmas bonuses, You have payroll through the end of the year, your tax money's there, you're good, right? Your quarterlies are paid, like everything's good. But what happens if you put all that money in your checking account and during the year you're like, little for you, Bobby, little for me, I'm gonna take a draw, I'm gonna buy a four-wheeler, I'm gonna do this, I'm gonna do that.

1:18:54And then come December, you're like, I have no money. Oh fuck, this is really stressful. I hate the holidays. How many times have you heard that over the years for people? I hate, fucking hate December. Yep, because they're stressed. Because they're stressed because of money. Money fucking dries up quick, and these shops eat money. Okay, here's another thing, guys. You guys don't even know how much it's costing you to run your shop in a day, a week, a month, a year.

1:19:17I can pretty much tell you all my clients how much it's costing. When I tell them, they're like, holy fucking shit. I'm like, yeah, you're telling me you're doing $110,000 a month, right? Well, on a really good month. I go, yeah, your break-even is $98,000. They're like, holy fuck. I'll go, one bad month, you're fucking losing money. And guess what? Last month you lost 12 grand.

1:19:36That's the kind of shit that people need to do. So we went all the way from parts, all the way through labor, through crushing it. But what does it always come back to? The numbers. Yeah. If you don't know your numbers, you're just fucking out there. Just— it's like being a leader. If you're not leading your people, if you're not leading your people, you're just taking a walk, right?

1:19:52Yep. If you're not a leader, you're just taking a walk. It, it's like Leaders, great leaders, I agree with some great leaders are born, but great leaders have to freaking understand what's going on in their business. Absolutely. And we were talking about that. I was talking to my original boss in the auto repair business and we were talking about me doing consulting.

1:20:11He's like, holy fuck, you have a lot of clients. He's like, you're fixing a lot of shops. I'm like, yeah. I go, consulting is hard, but it's enjoyable for me. He's like, yeah, but you live, eat, and breathe this shit. He's like, I'm a successful shop owner. I don't wanna fuck talk to people. I retired at 56. I'm fucking done. He's done.

1:20:28Yeah, I said, I like it, so I don't mind talking about it. He's like, but the one thing you have, Kevin, you have wisdom because you were a tech, then you freaking were a shop owner, didn't really know what he's doing, then you struggled your way through being a shop owner, now you're consulting people. So you actually have all the experience. And I'm like, I don't know everything.

1:20:44He's like, yeah, but you know 90% more than most people. He said, if you don't know, you'll fucking figure it out. That's how you are. You've always been a hustler. Yeah. And my point to that is some of these guys don't even give a fuck. They don't even care about their numbers. They might be okay with their numbers if they knew them.

1:21:00They don't even— it's like, fuck it, I don't even know where to start. And that's where the first thing is, picking up the phone. I talked to several people. I got a few last week, new clients, and it's just like we're going through the walking wounded and stuff like that. And I'm figuring out that I'm like, okay, your parts markup is good.

1:21:15You're doing a good job selling parts, but you do realize you only did 9 hours labor last week. Not like, okay, you have 2 techs and you have 5 people you're trying to feed off 2 techs, and 1 tech only did 9 hours, you know. Um, so what happened here? Well, we did this, we did— well, you got to get paid for that.

1:21:31We have to figure out a way to get you paid for going to do this. Absolutely. And these guys just don't— they just— one of the most precious commodities you have is your time. Yeah. And a lot of guys just say, oh, fuck it, it doesn't matter. Well, yeah, it does, because that's where you make most of your money. Is, you know, getting paid for your time.

1:21:47I mean, you can imagine us sitting in here and just getting absolutely nothing out of this. Oh my God, we would have quit a long time. We would have quit a long time ago. Yeah, but we're changing lives. We are literally changing lives in our industry. And, you know, I got a lot of collision people reaching out to me, you know. And I will tell you, Jason, that I'm way better at running a truck repair shop, mechanical shop, than I am running collision shop.

1:22:09But look at this, I'm kicking everybody's ass in the collision world too. Just because I'm so on it all the time. Like, if I don't know it, I figure it out. Yep. It's— you, you— how much have you learned through this, all this? It's, it's, uh, it's— I've said this a lot recently in the last several weeks of coaching one-on-one with the, with the clients, of like, holy shit, like going through the process.

1:22:29And, and it's, it's really eye-opening going through the coaching and just answering the phones, right? Because it's just one piece of the enchilada. It's, it's the opening piece, but the reason why it all works is because like you have control in your whole entire business. And that's what I'm telling our clients is like, it doesn't matter how great you even answer the phone.

1:22:49If, if you're, you're fucking it up once they come in the door or your techs are fucking it up, or you don't have a process, or you don't have belief that you're, that, that, that you have the best guys, it's messed up. If you're not recording the calls or writing up the, the repair order, right? You're, you're leaving your— you're leaving gaps and holes in your business.

1:23:08And, and I've learned so much just from these conversations with you and then observing it that I'm talking to so many guys like, oh, red flag, red flag, here's a red flag here, oh, red flag here. It's all over the place. Yeah. And you're doing an absolute fantastic job at training these guys. I mean, I get nothing but great reviews and we got their numbers going up.

1:23:24They're selling through better, you know. And the number one thing that I will tell people, there's number one, you have to be clear and concise and frickin not confuse people in your selling. Confused people do not buy stuff. Number 2, you have to be in 100% control of your business all the time and you have to believe in what you're selling. Believe it.

1:23:39And you know, the thing is about it, you know me long enough to know what I say is what I fucking believe. There's no like— and people like you get people all the time on our post going, he's full of shit. He doesn't do this. I fucking do it. The problem is they could see themselves doing it. They don't have the balls.

1:23:54Yeah. And you have to have— you have to have the balls, but you have to have the money to do it. You have to make the money. To fucking— to be able to do the things we do, right? It made me laugh at one of our clients in our conversations in the last few days, like, yeah, you know, Kevin told me I had to screw on my balls.

1:24:15But you know what, can you name anybody— and be truthful— can you name anybody's shop that we've taken over to help who has not improved immensely? Has anybody gone backwards? No one's gone backwards. And that's like including all the people that you've had to like push up the hill, like get on them, right? Yeah, I yell at them sometimes. I'm like, this is fucking bullshit.

1:24:34Like, I am not wasting my time. You're— yeah, you pay me, you don't fucking own me. I'm not going to sit here and snow blow you. Fucking— this is what's going on. If you can't handle it, I don't know what to tell you. Yep. So that's kind of where it's at with all this. But you know, guys, go ask your estimators, how much are we making on these jobs?

1:24:49What is your target, guys? Or are you just letting the State Farm or all the insurance companies set your prices and then we have to pray to God on