We’re Not in Business to Lose Money

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0:21Visit farmcityprorodeo.com for tickets and more information. Experience the action. Feel the history of the Farm City Pro Rodeo, August 12th through the 15th. Tired of overpaying with DirecTV? DISH offers a reliable low price every month without surprises. Get the TV you love and start watching live sports, news, and the latest movies, plus your favorite streaming apps, all in one place. Switch to DISH today and lock in the lowest price in satellite TV starting at $89.99 a month with our 2-year price guarantee.

0:55Call 888-ADD-DISH Or visit dish.com today. Welcome 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.

1:29This isn't theory. This 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.

1:57That's okay. Disney's two 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. Welcome, Anthony, to Repair Shop Reckoning. Tell us a little bit about your company and your company name. I know it's AR Custom, right? Yeah. AR Customs and Collision. Uh, we started just under 4 years ago.

2:21Like I was kind of explaining to you, my partner and I I, we both worked for some bigger shops. I worked for a local MSO for 8, 9 years, was a head ATEC. He was a head painter over at one of the local dealerships for a long time. And we just got sick of, uh, sick of making everybody else money. Wanted to do it for ourself.

2:39That's cool. So how many techs do you have? Is it just you two or do you have technicians? What do you got going on? No, we have 3 techs, 1 office staff right now. We're actually in the process of buying a bigger building, getting outta the small building we're in. So. Definitely grown over the years, just trying to keep pushing. Amen. So what kind of work do you do at your shop?

2:58Majority collision repair, but we also do custom paint, motorcycles, restorations. We do custom fabrication. We've done some pretty badass like import wide bodies, you know, we've done a whole bunch of different stuff. So we painted an airplane a couple years ago. Nice. Hey, whatever it takes. You know, my collision shop, I do the same type of thing because I don't want to be beholden to the insurance company.

3:19So what I've done is I put a trailer store, parts store in there. I do trailer repair, I do fabrication, sandblasting, same type of stuff you do because you can't make it with just the insurance companies. These guys that want to be DRPs, I don't believe— now everybody's going to flame me, but I don't believe you can make the kind of money you can doing custom stuff, fabrication, stuff like that.

3:41But you definitely have to be not afraid to charge time and materials for custom work because if not, it's a big money loser for sure. You cannot just shoot off the hip on a custom paint job or anything like that anymore, can you? No, you got to know how to get paid for what you're doing, man. And every aspect of the business, if people don't want to pay for it, we're not working on it.

4:01You know, when we were new, I'm not going to say we wouldn't take in, you know, a rust repair or shit to keep the shop moving, keep the bills paid. But we've established ourselves enough that we don't do much of that anymore. You know what I mean? Right. So how do you guys deal with, short pays on insurance companies. You make the customers pay because you, there's a lot of controversy going back and forth online.

4:22You're like, well, you can't do that, or you can do that. Let's hear your take on that. So we are getting to the point, and I know you're a fan of big old, uh, State Farm there. We're getting to a point with some companies, man, where, you know, we can't come to, we write the hell out our estimates. Let me say that first.

4:40We write everything that we need to get paid for and we write it properly. Some companies we can't get to a point where we can agree on, you know, this job's worth it for us. And we're coming to that point in our business where we are gonna start making customers pay the difference. It sucks. It's hard for a small shop like us too, but we don't have DRPs feeding us huge volume.

4:58So trying to keep those customers and then also telling 'em, hey, you might be coming outta pocket $2,000, $3,000. It's hard to do that, but we're not in business to lose money. I'm not gonna lose money to take your job in. So, yeah, that's the problem right now. Our door rate at, uh, my collision shop, we do medium and heavy too, um, is $185.32.

5:18And we promote our homes. We try to hit them at $249,000. We usually end up taking $199,000 and making the customer pay the difference. We started that about a year ago where the customer has to pay the difference. I'd say 7 out of 10 are okay with it. We got the 3 of them that they don't do it and we're like, you know, we're not the shop for you.

5:37Go ahead and take it over to the DRP and they'll go ahead and fix it. Well, they say it's going to take 8 months. Well, you know, I don't know what to tell you. Like, for instance, we had one the other day or Wednesday. Today's Friday, Wednesday. Uh, the guy didn't like it that he was going to have to pay $2,000 out of pocket.

5:53I said, well, go ahead and call the RV dealer and set it up to take it over there. You already have the check the insurance company sent you. So he said, I'm going to do that. I said, okay. He called us back about 25 minutes later and he said, they won't even have my coach in this season. They say, if you drop it off, we won't have it done until probably October.

6:12I said, well, if you want to camp this year, you're going to have to pay us or, you know, you can go ahead and wait. That's up to you. He ends up paying, you know, a lot of times now with the motorhomes and stuff we do, it's more of they have a window in Michigan where they can camp and they always seem to wreck it coming in or out of the season, you know what I mean?

6:29So they don't ever take it to us in the winter and have us fix it, right? They want us to fix it at the start of the season. Well, you're going to have to pay. Now they want it. Right. So now you kind of have a little bit of a bartering chip, you know, and we have been having a struggle with Progressive.

6:44They've really become pieces of shit lately. Really? More than usual. They're not— they won't pay any markup on sublets or anything. So we just have to tell the customer, hey, you're going to have to take your truck over to the alignment shop and stuff like that and get taken care of. Well, why do I have to drive it over there? Well, Progressive won't pay us to take it over there, so you're going to have to take it over there.

7:08And so then Progressive calls us, wants to cry about the time and stuff like that. And obviously there's other ways around. If you work with a repair shop, you get paid. Right? But I don't want to commit insurance fraud. So they kind of put you in a trick box. Like they don't want to pay markups on tires. They don't. It's getting ridiculous.

7:26Right? So Pro— I've heard that a lot, even in our area, Progressive. I will say they're one of the ones, and I don't know if it's our relationship with the local adjusters or not. I didn't know until a month ago they wouldn't pay markup on sublet because our bottom line, which is, I'm gonna be honest with you, that's what I focus with.

7:40I don't give a fuck what your line items say. I don't care if you paid for what I wrote, cuz I'm not working off your estimate anyways. As long as I, if I write $10 grand and you come to $10 grand or you're within a couple hundred bucks, I don't care how you write your estimate. I don't care if it's one line item for $9,800.

7:56That's all we really focus on. So we were getting paid what we wanted to. I wasn't even paying attention to their sheet, to be honest with you. I just found out about a month ago that the supervisor in the area told me that they don't pay markup on Zillow. But I'm like, oh. We've been getting it somehow. Right. Well, and that's the thing with, with them.

8:15We stopped too, because here's the problem we're running into. These adjusters, and I've said this before on these podcasts, these adjusters are not qualified to even be writing estimates. Okay. And everybody says, why do you keep calling them adjusters or appraisers? Because that's what old guys call them, adjusters. That's what they do. They adjust your bill the fuck down, right? Yeah. Yeah.

8:35They adjust it down. It's never up. Right, right. So what we realized was, um, we stopped even looking at their sheets. We write our own estimate when it shows up. There's our price. This is what we're gonna do. We don't give a shit what you have to say about it. And like you said, we don't write up, we don't do our work off their sheet.

8:54We write off what we, we're the ones that are qualified. We're the ones that own the shop. You're an insurance adjuster. Okay. Yes, you're paying the bill. Once again, we don't give a shit how you come to the conclusion of the price. Like you said, if it's short, like we had one the other day, it was $5,000. Our estimate was like $4,900 and some change.

9:10They came in at $3,100. We called the customer and said, hey, you have to pay your deductible and the difference. And we've had two last week, they came to the table with the money. But you cannot be— you have to be to the point in your business as a body shop where you could afford to lose that job. And a lot of these companies, these body shops, can't afford to lose a job, so they end up bending a knee and losing money.

9:34And this is where your numbers, like you said, come in very important. Okay. If you don't know how much something costs you, how can you go off the insurance adjuster coming out there and giving you an estimate and saying, here's what we're going to pay you to do the job. Your door rate's $105. We're going to pay you $62.50. Well, wait a second.

9:50My guy costs me $68 with all his benefits and stuff like that. His lowest cost. I'm going to already lose money. Then you're going to give me 20% markup or 30% markup. On the, on the jobs, on the parts or dealer list, whatever you want, whatever insurance company you're working with, you end up losing money. You'd be better off not even doing that job and sitting on a bucket.

10:12That's what people don't understand. You could lose $200, $300 doing a job. Right. But they're more worried about getting the job in, which I, I understand it. Like I said, coming from a shop that started with, you know, we started on 3 credit cards and we pulled a bunch of money outta a 401, man. So we didn't start with a whole, bunch of money behind us.

10:31So I understand where that's coming from. And you do have to get to a point where you can kind of, you can start pushing back. You can, you know what I mean? You can let those jobs go. Cause like you said, what's, what's the use if I'm losing money? The Farm City Pro Rodeo has raised the bar again. $60,000 in added money per man, solidifying Hermiston's place as a top 15 paying rodeo in the PRCA.

10:53New this year, Saturday night's performance will be a true championship round, guaranteeing you get to see the best of the best in one place on one night. Tickets go on sale June 1st and they will go fast. Visit farmcityprorodeo.com for tickets and more information. Experience the action, feel the history of the Farm City Pro Rodeo, August 12th through the 15th. Yeah, so when you guys do custom paint jobs, you guys do hot rods, what kind of custom stuff do you do?

11:21We do it all, man. We have a frame, and I want to say it's an '82 AMC Jeep out back, frame-off resto. You know, frame went out for powder coating, got epoxy, whole new tub kit. We do it all. We do everything. So a job like that, how do you bill on that job? So, you know, a lot of these guys online, you sound like you got it together.

11:43A lot of these guys online with these custom shops, they lose money hand over fist because they really don't know how to bill. They're more in love with doing the job than they are with actually getting the money in. So why don't you go walk us through how you build that out and how do you talk to your customers and all that?

12:01So you'll come in, you know, we'll go over kind of your preliminary plan. Obviously you get into something like that, that plan changes 500 times throughout it. You know, there's new parts added, things don't work. We'll write a preliminary estimate, you know, rough estimate. Here you go. You're starting at, $30 grand. But every time we work on this car, we clock in and we clock out, and we are very responsible with it.

12:24If you clock out for lunch or you're clocking out for lunch, or, you know, you go for a cigarette break, you're clocked out for 15 minutes. We're not overcharging the customer, but we're getting paid for every minute that we're on that vehicle at our rate. So that's kind of, you know, we and I, we learned from doing side work back in our little 20 by 20 garage.

12:43When we quote a job like that at $25 grand and then we're, you know, 5 months into working on this thing, we're like, fuck, this is a $40,000 job, man. We cut our own throat on this. We were lucky enough to learn that in a shop where we didn't have overhead and people to pay. So yeah, it's very interesting. Once you start put the pen to paper, you start realizing how much this shit is costing you and then you start putting employees in the mix, a building, insurance, da da da da, benefits.

13:09It starts to get expensive real quick. And that's what most guys don't realize, what their loaded cost is. They say, Well, they pay a guy $45 an hour. That means that's how much it costs me. They're not taking into consideration tax, vacation, medical insurance, days off, sick days, you name it. It's all built into that. And then, you know, they lose money on the particular jobs, you know.

13:29So why don't you give us some pointers on how you guys deal with the insurance companies a little bit more in depth? Because I always like to hear everybody how everybody else does it, because it kind of gives everybody else ideas. You know, when you get different shop owners on here talking about it, right? One of the main things, man, and it depends where you are, know your insurance laws in your state is one of the top fucking things I can say.

13:52Use those against the insurance company. But I mean, you got to also kind of play devil's advocate there. If you're going to use them against them, make sure you're following them too, because they can fuck you just as easy as you're trying to fuck the insurance company with them. That's main one there. And then another, like I kind of said to you, stop focusing on, you know, if they pay these line items and shit.

14:14I see that all the time on the internet and, you know, and we'll do these iCar classes and just in discussion with other shop owners, they worry too much about what the insurance company's line items say and they fight, you know, for days to get these line items paid. Fight for that bottom dollar. You know, if you know your bottom dollar on this job, you wrote $12,000 and that's what you need to make money.

14:34Stick to that bottom dollar. I don't care how you pay it. This is what you need to pay. Right. No, that's a very good point. And we do the same thing. I really don't care what they write because a lot of times they don't even know what the fuck they're doing. You know, they want you to, you know, you know, they want you to bump a quarter or that needs to be replaced.

14:53I mean, it looks like Swiss cheese. Like one of my trucks got hit by hail damage. It had like 300 and some frickin' hail dents on it. They wanted to put a PDR guy in my shop for 2 days to save theirself money. I'm like, you've lost your fucking mind. Yeah. Wasting your stall space that you could be producing more time out, more hours out of, more revenue.

15:12Yep. Right. But it seems to me a lot of these body shop owners, not all of 'em, cuz there's obviously some good operators, really have a struggle of figuring this all out. And I was kind of shocked that how much money they don't make when you sit there and you listen to these guys talk online and how they're scared of the insurance company.

15:29They don't wanna make the almighty insurance company mad cuz they're a DRP. So the DRP sits there, just controls the shit out of them. It's nuts. Well, so even with DRP, that's kind of, and I know you hate DRPs. I'm not against them. If you find a good company, their stipulations aren't bad. If they can give you the volume, people say they can't get paid from them.

15:50Oh, they give you this list of things that they don't pay. You're right. They do. They say they only pay these amount of times and this certain stuff. From working with an MSO shop for, like I said, 8, 9 years. There's a gray area there. And if you know how to write an estimate, there's a lot of shit you can get paid for still, as long as you know how to write a proper estimate and you know how to repair the vehicle.

16:10Kind of going to what you were saying, these insurance adjusters don't know how the fuck to repair a vehicle. They don't know how to write an estimate. So, you know what I mean? If you know how to write an estimate, even with certain DRPs, some of them are complete bullshit. They want everything for free, all these discounts. You gotta know how to write an estimate, man.

16:27Educating yourself in your business is huge. Absolutely. So you were a technician for 9 years. Why don't you talk about some of the times and how you did some of this stuff? Because I always like when the adjusters come in and they're like, well, that's a softball-sized dent and you know, it's gonna take, you know, 2 hours. And then you're like, well, there's no fucking way I'm gonna be able to fix that in 2 hours where it's at and all that stuff.

16:46And, uh, how do you get around all that stuff? And how did you deal with the commission and all that stuff as a tech? As a tech, I got, To the point where I started mapping out my repair. You know, if I wanted 17 hours on a quarter panel, I taught myself how to use CCC and I would look my damn self at the part cost, the replacement cost, then you have your adjacent panels and all that extra bullshit.

17:11And I would learn, you know, if I got 18 hours repair on this, I'm still saving you, the insurance company, what, a grand, $1,500. I need 18 hours to repair this, or you can replace it. I'm not going to repair it. And that's how I would word it, you know, to my estimators. And it usually worked out pretty, you know, I'm getting 23, 24 hours to repair a quarter panel as a technician.

17:31You're good. You know, I'm repairing that in a day. It's primed and over to paint. So I made damn good money on it, you know what I mean? And I've carried that over definitely into the business, learning how to map these things out and show these guys like, hey, I'm recreating, you know, 3 body lines and it's, you got this concave in here.

17:48Yeah, it's a little more work, but you know, if it gets you paid. It's funny you say that, cuz next week's episode is going to be on how to write a repair order to get max pay, maximum pay for the technician. Because I believe a lot of these technicians that are sitting there crying on flat rate now, flat rate has its problems, don't get me wrong.

18:07I switched away from it. But a lot of these guys, even when flat rate can work for 'em in the shop, they don't know how to write an estimate. They sit there and they look at the book time and go, oh, I only get paid $1.7 when they don't realize that the bolts that are rusty and stripped out, the bolts or heads are all messed up, their Torx bits are stripped and stuff like that's going to take all this extra time.

18:26If they just knew how to write it all up to get paid for their time, they would make more money. But they never— they were never trained to do this. And kind of like you have to have a guy like you or me when I was younger or my son that could sit there and look at a job and goes, there's no way I could do this in an hour and a half.

18:41It's going to be 3 or 4 hours for me to do it. Let me go ahead and write it up. Now it's even better with AI because you can tell AI, write this up, make it sound complicated. This is what I want to do. These are the problems. And AI will write it up and say, oh, by the way, write it for Progressive with their language or State Farm for their language.

18:57It'll do it now. It's kind of crazy. Yeah. You could actually, you could use the AI even to talk to warranty companies. This is a warranty company I'm dealing with. Here's the estimate, write the verbiage under the guidelines of this particular warranty company. It will. It's a game changer. I use AI a lot too, man. I will jump on ChatGPT for all kinds of shit.

19:21So that's awesome. Yeah, it's pretty crazy how the stuff you can get it to do. We, all of our technicians, I took a class a while ago. I write my own GPTs, so I actually program them to write estimates a certain way. Punctuation, proper spelling, automotive or truck, you know, and I write it so it doesn't change. And everybody at my shops, both shops, we write with AI now.

19:43Talk about a game changer, because if you don't like what it writes, you could be like, change line 4. I don't want it to say this. I want it to say that. I want it to be longer. Go ahead and put all the dry times in this and that. Build it all in. So it's going to take X amount of time. It'll sit there and justify all your time for you, which goes back to what you said, what you said.

20:03But Command, you know, because let's face it, not most body men or mechanics are ever going to win a spelling bee. So if you write it, if you write it all up with AI, it's a lot more professional, you know? Yeah. No, that's another thing too, man. Like I see, again, it just goes back to knowing how to write an estimate when you have shit all over the place and it doesn't correspond.

20:24Like, well, you know, if we're replacing a quarter panel and I have a bunch of miscellaneous, instead of putting a whole bunch of miscellaneous shit at the bottom that an insurance adjuster can just go down to the bottom and start crossing shit off, I attach them, you know, if we have weld damage adjacent panels. That's on the panel I'm sectioning. It's right under that in that category.

20:41It may— it just makes it easier to substantiate that. That's another big part of it. If you can't substantiate why you need something, of course they're not going to fucking pay you for it. No, I agree with that. And then, you know, how do you get them to pay for your paint material? So you guys itemize it all? So we'll, we let it go in the beginning.

20:59I don't really— again, I don't care about their material rate. Doesn't matter to me. When we get to the end of the job, we'll usually, we'll send a final supplement usually for ADAS calibrations and, you know, handling, driving time, whichever. And we'll put a paint materials invoice on there. I will say we have just switched paint lines and I don't know if you've seen what's going on with, uh, PPG in the market lately or Sherwin-Williams recent, you know, their profit and loss that they put out where they're, they're doing great.

21:28PPG's not doing so hot. We switched over to Sherwin. So we're killing it with materials lately and we end up billing the insurance companies again and getting more money out of them. So I'll, you know, I'll mark it up 300%, 400% and send them an invoice over. I've already made money out of the bullshit rate that they paid. I still want more money on it because you guys don't want to pay shit to begin with.

21:48I'm in business to make money. I deserve to make money. So we'll send over a final supplement for some paint materials and ADAS calibrations at the end and we get it, I would say, probably 80% of the time. Might not be everything that we ask for as far as paint materials, but we get pretty damn close. Yeah, there's a big fight about ADAS calibration.

22:07Insurance company was just like, they could not fucking believe here comes ADAS and they got to pay for it. And some of these ADAS calibrations could be thousands of dollars. So that, that made them mad. But you put the word safety in there. What can you do? This is manufacturer's recommended safety procedure and we can't deviate from that. I'm sorry, Mr. State Farm.

22:26Or Jake from State Farm, you know, and you're right, that did help. The other thing is, it's funny you say that because I sprayed Genesis back when I had my crane company. I did Genesis. I like Genesis better than PPG for the crane decks because we used to get paint shearing with black paint. With the PPG stuff, you would drop it on there, it would actually break the paint and shear off.

22:45Genesis didn't do that. So I sprayed PPG for our Genesis for a long time. The problem then is it got really expensive. And here comes PPG, right? Cutting, cutting costs to get in the door. But now it seems that one of my, my son-in-law, he sprays Sherwin-Williams. They're going way up in price too. They just had a big, huge price increase. The Farm City Pro Rodeo has raised the bar again.

23:12$60,000 in added money per event, solidifying Hermiston's place as a top 15 paying rodeo in the PRC. New this year, Saturday night's performance will be a true championship round, guaranteeing you get to see the best of the best in one place on one night. Tickets go on sale June 1st and they will go fast. Visit farmcityprorodeo.com for tickets and more information. Experience the action.

23:34Feel the history of the Farm City Pro Rodeo, August 12th through the 15th. So we actually, uh, so this kind of leads back. We're, we're both technicians, right? Blue collar guys. I don't know fucking numbers, man. New to, new to owning a business. My partner and I are actually paying for coaching right now. It's through, uh, it's through ATI. They're, they're owned by the same company that owns, I wanna say they own one of the bigger MSOs, which is kind of, it's crazy, but nonetheless, they teach you a lot.

24:02You learn a lot about things you shouldn't be getting paid for, you know. Also part of that is huge discounts. So Sherwin, I think we're getting 64% off list from them. There isn't a tint on our bank that costs more than $400 is where, you know, PPG, we were spraying NXT. I think a gallon of black tint, it's just black, was $800.

24:23No shit. Some of the pearls, you're talking $1,000 for a little bottle of pearl. So that's another— knowing your numbers is fucking huge, man. If you don't know what it costs you to paint a car aside from what you're getting paid, you're going to lose money quick. Yeah, I got mine down to the paint booth cycle times because paint booth natural gas is so expensive around these paint booths.

24:46You know, you can't frickin fire up your paint booth to paint one fender anymore. It just costs you too much money. You get a $3,000 natural gas bill, you know. So I do a lot of coaching too. I don't have any body shops. I do medium and truck, medium and heavy truck shops. Teaching these guys to read their, know their numbers and stuff like that has changed.

25:04I've changed a lot of guys' lives just because they know how to bill and write an estimate to be profitable. Like you're saying, you know, the things that you took for granted that you never even thought about. All of a sudden your coach is like, hey, what about this? Hey, you're like, oh shit, what about it? You know, then you start realizing all the little holes in the ship sink it just as fast as one big hole.

25:27If you don't know, you're like, the one thing we didn't know, I'm not scared to admit it, fucking breakeven number. We didn't even know what our breakeven was. So if I don't have enough work coming in to even touch that breakeven, And I don't know that, you know, maybe I could have scheduled 3 more jobs and actually made some money this month.

25:44Instead, I'm not making anything. Yeah, it's kind of crazy when you start putting it all down to, you know, on the paper what your break-evens are and all that stuff and, you know, where you need to be and what you need to take home. You know, I did a study a while ago and most body shops don't even pull 10% net. I'm sure there's obviously some heavy hitters.

26:05For sure, no doubt about it. But I guess it's a 10% net if your GM is, is your, in the, in the, in the billions, right? A 10% net if you're a guy our size, well, it's not that much to, to take home for the owner. So yeah. Yeah. When you have 500, 600 locations, 10% net's wonderful. You know, you got, you're doing $200 million a year making 10% on it.

26:26That's awesome. Right. And we do, you know, $2 or $3 million a year or $1 million a year. 10% isn't shit. That's a, I could have made more back as an ATEC, you know? Right. What, what state are you in again? New York State. Okay. So you have all the insurance rules where you have, they only have so much time to write the estimate and you could just do whatever you want, or not do whatever you want, but you could write the estimate and do it right.

26:49And they have to pay. Yep. So we have a, again, we're going to Progressive here. We have a Progressive outside. It's actually, uh, a friend of ours. He made the claim last Sunday, so they have 6 business days to come out and appraise the damage originally. They're well over that. We've already started tearing the vehicle down. We're gonna write our supplement, or our estimate, I should say, and send it in.

27:11That's our repair bill. They can still negotiate on, you know, New York words it weird. They can still try and negotiate on parts. They cannot negotiate on operations needed for the repair, and they can still negotiate judgment times. But basically what I write is needed to be repaired. Is what it is. So it still gives them some leeway, but it's better than some states where you're kind of just at the insurance company's mercy, you know what I mean?

27:37Like us, we don't have— we have pretty shitty in Michigan. We have pretty shitty laws. I mean, we're a blue state just like you guys are. So the frickin, you know, the— they— everybody's stealing. How's that? Everybody's stealing. The government, you know, on all levels. So everybody's— insurance companies lobbying to them too. So I mean, what do you— who are you fighting?

27:58You're fighting the insurance company and your own fucking government. Where's it going to get you? Exactly. So you just kind of, kind of the one thing I absolutely hate is, you know, for a while there, you know, these insurance guys, you would have an adjuster you could get a relationship with and he would trust you and you would trust him. He knew you were a good person, blah, blah, blah, blah, blah.

28:16Well, then all of a sudden they fired all these guys and just start mixing them up. So no relationships are made. That makes it tough because, you know, several times we've had these people, we just had a Progressive one. The girl came out, wrote the estimate. She wrote a third of what the truck needed. I mean, it was a new 2025 Sierra.

28:35That was a— yeah, it was a Sierra. That was a Chevy. And she wanted us to frickin get a used core support. You can't put a used core support on that. So we had to call them back out and have a big fight about them. You had to buy new for the weldments and stuff like that. They didn't even know, you know, we had to fight with that.

28:51So that takes an extra week. In the meantime, going back and forth, these people in our state, You know, the job was there 3 weeks longer than it needed to be because these idiots don't even know how to write an estimate. They're not qualified, but they're gonna sit there and tell you how to fix something. Then they wanna pay pay time on a used part.

29:08Yeah, that goes back to what I was saying. When I write estimates, man, I will have— cool tool for everyone to use if anyone's, anyone ends up watching is the DEG web. Whatever, if you're in CCC, if you're in Mitchell, if you're Autodex, it will pull all of the P pages for whatever you are in. I always have P pages open while I'm writing, especially, you know, if I'm writing a progressive, they're Mitchell for the most part.

29:32I write NCCC and I have the Mitchell P pages open on the other side, and I'm looking at what their rules are in their system so I can use 'em against them to make sure I get paid properly. And then using your position statements, man, you know, I'm not gonna fight for OM parts on a 10-year-old car, you know what I mean?

29:49Unless it is absolutely required. But we got brand new cars in here that, you know, actually I just did one the other day. I want to say it's a 2020 Audi A3. They wrote for an LKQ bumper on this thing. It has blind spot monitors, has park sensors. Pulled the OEM position statement telling me that they're not paid. They don't want you using salvage parts on anything with ADAS systems involved in it.

30:14Or, you know, welded on panels, no salvage parts, same thing. I sent that over in a line note. It was actually a GEICO, put it in the line notes for them. We will not be ordering LKQ. The only thing approved for this repair is an OEM replacement unless GEICO wants to offer a guarantee for any instance that an accident or something, you know, there's any harm to this customer basically is how it went.

30:3820 minutes later we get it back. They approved the OEM cover. It was like an $1,800 cover as opposed to their $600 LKQ cover. So it's, you gotta, you gotta know what you're doing, man. You gotta know, you have to be articulate in the way you speak to these people. It's a little more extra work, but it gets you paid. No, you're 100% right.

30:58We, we go through the same type of stuff with motorhomes and stuff like that. The thing that helps us a lot, there's really no programs for medium trucks yet, or heavy truck or motorhomes. So you have, it's basically a matter of opinion. Like we had one that got hit by a deer. It was an E450. So they built the cab and then on the sides there's, you know, there's 3 foot where they start building the body.

31:21The deer hit right there. The insurance guy wanted us to section it. Like, how do you section Phylon, which is basically, it's got a texture to it, right? It's fiberglass reinforced. How do I cut a section of this out to patch it back in there and mud it and everything and sand it? It's going to stick out like a sore thumb. So we had to have them come out and have a big old argument with them.

31:41Well, we end up pulling off Forest River's website the repairs. We had to dig in and dig in and dig in with ChatGPT. It found the repair procedure and pulled it up and used it against them. You cannot repair blah, blah, blah, blah. And we— they end up buying it. But you're right, the problem with that is it takes— could take you 2 or 3 hours longer to do an estimate.

32:01But as long as you get paid in the end, it's worth it, right? Right. Yeah. I mean, uh, in this business, your estimators are not a, you know, they're, they're an expense to the company really. If you're really looking at it, they're not a production employee. They're not making you money technically. They are. We all know they are. But if you're gonna, you know, if I'm gonna be paying you as an expense, I would much rather you spend the extra 2 hours and make sure we get paid $10,000 on this vehicle for one, so we can make money.

32:27Two, because we're fucking liable for it. So if we don't fix this thing correctly, We can get sued, the technician can get— everyone involved can get sued and be brought up in a lawsuit. So yeah, that goes back to, I don't care what the insurance company says needs to happen. You need to know how the vehicle needs to be repaired so you can get paid and so you're not getting fucking sued for it.

32:45No, I would agree. And I put them, uh, I actually started a line on my P&L sheet. I call them support staff. So they're not a cost of goods employee, they're a direct cost, but I call 'em support staff. That way I kind of track them and kind of roll it into cost of goods. I'm sure your coach explained that to you, but, uh, mm-hmm.

33:01Yeah. You know, a, a good year, you gotta You gotta have a good estimator in this business. You know, sometimes, believe it or not, I get my manager, me, and one of the technicians up there, sit there and talk about some of these estimates we do because everybody has a different opinion and everybody has a different angle, you know? And that's helped us too, really, really tighten up our estimates.

33:20When you get 3 of these guys up there looking, we get a motor home, we go out and look at it, then we sit down and look at the pictures. Look, let's talk about step by step, you know, different opinions bring different things to the table. We've done that a lot too. And being a small shop, Motor City, I, I have 3 guys.

33:35Guys and a manager at the start of the week, we go through every job, all of us. We touch every job and talk about every job. That way everybody's always on the same page of these jobs. That way if an adjuster shows up, anybody shows up and one of us isn't there, the other people are well aware of what's going on with that job.

33:51And that's helped us out a lot too. Yeah. Stories. I've always had an idea of having the technicians, you know, I've, I've wanted to instill it. Having the technicians write the estimate as they're working on, you know, tearing it down. But then we, we were talking about it earlier, you know, some of these guys are, they're getting up there in age. They don't even know how to use a damn computer, let alone write an estimate.

34:14They know how to repair a vehicle. They don't know how to write an estimate. So, but I've always thought, like I said, just from my personal perspective, I was repairing these things. I know how they need to be repaired. I know what works. I know what's not gonna work. If you could get a good team of technicians that were willing to do it too, I feel like that would work out really well.

34:34I've always wanted to try it and never really been able to get it going. You know what I mean? Uh, we actually do at my shop. We do not have CCC or any body estimating program because it's useless for us. We use, uh, Shopware, which is a mechanical program. My guys write their own estimates. They put the parts in there with zero cost.

34:54Or if it's repair links, they can go through and pick 'em up off the diagram, shoot 'em into the repair order, write all their own labor times and stuff like that. So when we get it to estimate it, we have pictures and everything in there. So my guys do do that. It takes a little bit longer, but you get a good technician like you, you could put all the different stuff in there that usually gets missed.

35:14Here's a problem I find in the, in, um, you're, you know, you know what you're doing, but you're an owner-operator, right? And you were a technician. You get some of these estimators up there, they don't ever want to get out of their chair. You've, you've ran into these guys when you're— they don't get out of their fucking chair, right? So if they don't communicate with you, they don't walk out there and go, hey, what about this?

35:33Or go out there and walk and look at a job and go, let's just go over this job and talk about it. They don't do that. It shorts your technicians, shorts your shop, shorts everybody. Then you have 15 supplements, right? And the job takes way longer versus we go out. Like I said, we talk about these jobs. With the technician and he writes, he wrote it up.

35:51We go out there and talk about it. Then we go in the office and all of us talk about it. Yes, it takes a little bit more time on the front end, but our estimate is way more comprehensive. Yeah. And like I said, you're getting paid for everything you need to do to the job instead of like where you got a guy that doesn't wanna get out of his chair and go write the estimate, you know, now we gotta reassemble it.

36:12Well, he didn't get out of his chair and go look at it. So the technician missed, you know, a bumper stay and a fucking fog lamp. Then the, the estimator didn't go look at it, so he didn't catch it. Now we're putting this job together. It's gotta go Friday and it's Wednesday and I gotta order 2 more parts. So now it's crunch time.

36:27You know what I mean? Yeah. One thing I started doing, I don't know if you guys do it, some of these insurance companies will not pay for a tow bill. They will not have, have a, a markup on a tow bill. I make the insurance comp— the tow company call the insurance company. You get paid. We don't get paid on them either.

36:45And our coaches told us, you know, oh, I got shops that are getting paid markup on tow bills. I go, well, I don't see how, man, because I have never been able to get— well, I get markup on everything. We've actually been getting 33% markup from a lot of companies, which, you know, that's another thing. Oh, we don't get more than 25%.

37:03We get 33% on a ton of fucking things. So, so do we. But the tow bill is— I kind of like that idea. I might have to steal that from you because I'm sick of paying for, you know, I'm putting my money out there. I'm not getting anything back for it. Why am I? We want to get the job. That's the problem.

37:19Again, when you're a smaller shop, I want to pay for that tow to lock that job in and fucking make the sale. But I also don't want to loan out $1,000 for a tow and it sits down. Now I'm waiting on $1,000 for, you know, 3, 4 weeks and I'm not getting paid. I'm not getting anything for it. Why would I? Why am I doing that?

37:36A bank doesn't loan you $1,000 and not want interest on it. I tried to talk to Progressive about that. I said, listen, I have to pay the tow company. I have to pay my accounts payable lady to deal with the paperwork. I said, I mean, I'm losing money on your tow bill because of the stamp alone. They're like, it's only a dollar.

37:53I go, if it's only a dollar, send me a dollar. Well, we can't authorize that. Yeah, it's only a fucking dollar, but it's my dollar, right? And dollars turn into fricking $5, $10, $20, like with these insurance companies. 100 claims this year, you know what I mean? That's $100 in stamps that I lost. Getting your toes taken care of. Right. And, you know, one thing we do also, we do— we do storage.

38:13And, you know, here's the storage non-negotiable. And we get some pretty big storage bills, too. $10,000, $12,000, $13,000, $14,000. Then the motherfuckers have the balls to come up and go, yeah, I know. Well, you know, we left it there for 90 days. You know, can you give me a deal? I said, no. Yeah. I said, if you pay me today, it's this price.

38:31But tomorrow, remember, it's $100 more. Tick tock. And I laugh at them like, fuck them. You know what I mean? They sit there and get me. Yeah. Another thing I did, I took up Google Maps. If I have to run a truck to another repair shop, you know, mechanical shop, I look up the Google Maps and I do the mileage there and back with 2 guys and I fucking write that too in my line items, what Google Maps says, and do that rate too, but by the hourly mechanical rate.

38:59And luckily I own a mechanical shop, so You know, that helps. Cause like I had that GM car truck I sent over and needed a control arm and they did it. We did it and everything and marked it up and gave them the bill. And they said, well, they should have put an aftermarket one on. And my, my response back to that is I can't tell a guy how to run his mechanical shop.

39:22I took it there. He said, needs a control arm. Here's the pictures of it being bent. I'm not telling him what to mark it up. I, I have no jurisdiction over the mechanical shop. So they kind of go with that, you know? Yeah, we have a, so they don't want to pay, we're not a mechanical shop. It's actually something we're in talks of doing, becoming a mechanically registered shop so we can charge those rates.

39:43Cuz I'm sure, you know, insurance companies see $145 mechanical rate, which is low. So we're, I mean, I'm doing you a favor just offering you that, to be honest with you. Right. But they don't wanna pay that, you know, we're changing out a whole, whole front left suspension, like everything in the suspension. They don't want to pay it. So on our estimates, I'll put a note.

40:01If our mechanical rate's not met, vehicle will be subject to sublet and transfer towing costs, whichever it's going to be, transportation, towing. 9 times out of 10, that estimate comes back with our mechanical rate on it and no arguments. And if it doesn't, I call a tow truck, I have it sent over, and then I'll send it to a dealership at that point.

40:19I'm not using a mechanical shop. I'm going to fuck you all the way. I'm going to send it to the dealership and let them charge you $3,000 to change out a spring. A control arm and do an alignment. Yep. I agree. And how can you deal with, how can you argue with the dealership? Cause they're the end-all be-all, Mr. Progressive, you know, Jake from State Farm.

40:37No, I agree with that. And you know, I, I, this whole storage thing, you know, the restocking of parts when they get to a total, all that shit, I have no, you have to get paid for what you do. And that's the problem. A lot of these people, like you said, are broke. So they kind of bow down and that's what's ruining the industry.

40:53And you see, you're starting to see it a lot more now that the MSOs have bought the Gerbers and stuff like that. Some of these jobs that you're seeing that these— like, we— I seen one last week where they put wood to hold a bumper cover together and put screws through it and mudded over it. Do you see that kind of shit going on online?

41:12But I see it all the time online. You get these guys overseas that are hacking cars. It's one thing overseas. I don't think they can get parts over there, but, you know, they do it here too. So then we're dealing as a small shop. I have to nurture customers cuz they think we're all hacks, you know what I mean? They see stuff like that or they've been screwed by a shop.

41:32So now I have to, I, we have to sell ourselves even more as opposed to, you know, big guy over here has State Farm or Progressive or whoever feeding the work to 'em. You know, they make it so convenient that customer doesn't even want to argue with them, but they want to question me or the small shops on every little thing we're doing.

41:51Yeah, I like it when they make you lay out your clips. You know, some of these insurance companies want you to lay out your clips and stuff like that. You're like, are you fucking kidding me? Like, this time all takes time and time, but they— time is— they just think time is free. That's the problem. And then at the end of the day, they have a bottom line of, you know, these guys come in and they have a bottom line too.

42:11Like, we got in a big argument with that core support, you know, they want to put a used one in there. We're like, it needs a new one. And then they're like— I'm like, not to mention You gave us no paint time. What if this reconditioned LK cube cart comes in red and it's a black truck? You don't want to freaking pay me to paint it.

42:27Like, you, you know, I called the customer. I'm like, listen, this is a brand new truck. They will not put brand new parts on it because it was a late 2024 actually. And, uh, you want to pay the difference with GM parts? No, I'm good. Okay. At that point, you kind of let yourself out of liability if they don't want to pay to paint the used parts, the core supports or something, they're red.

42:48That's not on you, right? It's ridiculous. Yeah, it kind of still is on you. You know, like I said, we get into it where these older cars, I'm not going to fight tooth and nail and argue for hours about OEM parts replacement. Most of the time the customer doesn't give a shit anyways, but you're still liable for it. You know, if that customer goes and gets in an accident.

43:08So you got to weigh that, you know what I mean? If they go get in an accident and you put an aftermarket fender on, I don't know if they want to and they get hurt in that accident, they can come after you and say that aftermarket fender is why I got hurt. And now you got— maybe they don't win, but now I got to go to court.

43:23Now I got to fight it anyways and spend the money to fight it just because I didn't, you know, at least if you fight it, if you have documentation where you're emailing the insurance company and you're fighting to get that part and they still deny it, I mean, maybe you have a leg to stand on, but you know what I mean? You would not believe— I probably should have printed a pack.

43:43You would not believe our packages when we get done with the job. Like, we had a Mack we got done with, and when we had that, that was a heavy hit, that Sierra or that Chevy truck. Our packets are this thick with emails back and forth, pictures. We document everything and we documented that one particular one before we went to pull the P-sheets out and stuff.

44:04We went back and forth like, hey, you want us to use this used core support, blah, blah, blah, blah. You know, what color is it? We're not gonna be responsible. I, you have the email calling the customer, hey, they don't want us to paint this thing. What if it comes in red? Your truck's black. We have all that stuff going back and forth and we put that with the package.

44:22Then when we're all done with the job, we obviously we store the paperwork, right? And we also have it digitally for what you're talking about, the back and forth with the safety stuff and them denying stuff. 'Cause at least maybe If you do go end up going to court, you can say, I tried, I can't fight it. But I always talk about the collision industry.

44:42The insurance company tells you where to get it, how much to pay for it. And by the way, you're warrantying it too. It's like, it, it's horrible. Right. And then they're writing again, improper repairs that, you know, I, I don't think I've ever seen one insurance adjuster pull an OEM position statement unless they're trying to not pay you for something. You know what I mean?

45:04They won't pull it to make sure the repair's correct. They'll pull an OEM position statement to take money outta your pocket though. Yeah. I look up all the time just to see what, what these CEOs, these insurance companies make. They make money hand over fist. Like I talk about State Farm, start State Farm's telling everybody, hey, your homeowners and your auto rates have to go up because parts are more, labor's more, materials are more for your houses, blah, blah, blah, blah.

45:28Then on the other side of their mouth, they're sending all of us collision shop owners Hey, wages are outta control for what we're paying the body shops. We're cutting you guys back per hour what we're paying. How can you say one thing and then on the other hand say, no, it's, it's just, they're crooks. We went from, I wanna say about 6, 7 months ago, and I don't know if you've seen this, I know you're doing heavy stuff.

45:51We were getting, we left it alone. So our door rate is 75 body, 75 paint, and then 55 paint materials. They were paying us $68 an hour paint and body, and I want to say it was $45 paint materials. I wasn't arguing with anything. You know, they were coming pretty fucking close to what we were writing at our door rate. 4 or 5 months goes by.

46:12You know, we know the one adjuster. There's only one local one that comes in. Yeah. Now we're down to $60. I'm like, what are you talking about? You can't go backwards. You set a precedent of paying me $68 an hour. Oh yeah. And technically in New York State they can, which we didn't know at the time. So they went back to 60 and I believe 40 paint materials.

46:32Now they've gone back to 58 body and paint and 38 paint materials in a matter of— I think it's been 7, 8 months. We were trying to fight it really hard for a minute and then I'm like, dude, New York, the law doesn't have your back. You know, the government doesn't have your back on it. They allow them to do this. I'm like, how long are we gonna spend?

46:52We had probably 22 open complaints against State Farm regarding that labor rate. Wow. Yeah. Wow. In, in today's world, like how much, what, I wanna back up. I forgot to ask you what happened with PPG? Cause I have not heard anything. As far as our shop or just in general? You said PPG had a problem and then we went to Sherwin-Williams. I never heard anything.

47:16Yeah, they, I think they reported that their fourth quarter Fourth quarter or first quarter, I'd have to look it up. Their sales were down by like, it was pretty big for, I mean, it was like 10% or 9%. You know, most places that's not that big, but when you look at how big PPG is, that's huge. So, and I think it's just that their cost is absurd.

47:37I mean, I like Spring NXT and we didn't have many problems with it, but it's just insanely expensive, man. I was looking over some old invoices today. I'm going over our new Sherwin We just started with Sherwin a couple of months ago, so I was going over our new AP list, kind of seeing where we stacked up price-wise, you know what I mean?

47:55Some of the tints, like I said, for PPG, man, you're talking $1,500 for one tint for some of them. And then, you know, Sherwin, I don't have one tint on that bank. It doesn't matter what it is, over $400. So they're kind of pricing themselves out of the game at this point. Yeah, maybe they should fucking sell one of their NASCARs. Yeah.

48:18You know, because, you know, PPG was, you know, they were going around giving paint benches, all kinds of paint computer stuff, like all that shit. And they used to make you sign an agreement. They put all new shit in and we never even signed the agreement. About a year ago, they came in and put all new computer stuff in, everything. Never signed anything.

48:36I mean, kind of have to to keep business when you're, you know, you're— fuck, man, you got to be 200% more expensive than at least Sherwin. I don't know. I know there's other pricey brands, a lot of them are pricey and we get a pretty aggressive discount. But as far as I know, at least in our area, Sherwin is pushing some insane discounts.

48:54So we had, right after our switch, we had our PPG local rep come in. He stopped in and spoke with my partner, kind of saw what was going on, you know, why we were switching. He explained it to him and that was that. Couple of weeks later he came back in and when I tell you this guy looked like he was gonna lay a fucking egg in my front office.

49:12He was trying to figure out how we were getting the prices we're getting, just a thousand questions about why we switched and how Sherwin-Williams was making it happen. So he was sweating some bullets. I don't, I don't know if they're doing that all over, but. Well, you know, that's what, that's what ends up, that's capitalism, you know, at the end of the day.

49:30I mean, Sherwin-Williams, if you ask me, they're, they have a good product. I've never had a problem with Genesis or anything. The paint lays great. We're using their 7K, which is It's hardened base coat, which is awesome. You know, we're in a, we lay salt up here in New York State all winter long. So your bumpers are getting bumpers, hoods, fenders getting peppered with salt.

49:48So that's good for stone chips. Yeah. And we haven't had any color match issues. We're having a mottling issue with PPG. Um, a lot of coarse silvers, a lot of mottling with them. We've had really not one issue with this Sherwin line, man. And it's like I said, we're making money hand over fist on materials now, as opposed to before I had to submit a paint materials invoice and try and get paid on it to make any money.

50:14Hmm. I'm gonna have to look into that Sherwin-Williams. I know one of my customers that does industrial equipment buys a lot of Sherwin-Williams stuff, so I'm gonna have to talk to my son-in-law and see about the rep, see if they come out and look, because you got me interested in that now, you know, because I'm kind of— I was looking at material lists the other day.

50:30I mean, tape alone is insane. I mean, are you getting all your sundries and stuff from them? You get a pretty good deal on tape and all that? Yep. So I, right before we started this, I was actually going through that AP list. I didn't get too far into it. Some of 'em are the same. Some of 'em are a little cheaper.

50:46A couple of 'em are a little more. The main thing was the paint though. I mean, for probably our first year we were doing okay and then we're like 2 years in, we're a smaller shop. I mean, we did close to a million last year, which isn't huge, but We're getting $6,000, $7,000 material bills every month. I'm like, dude, I've worked for a production shop.

51:04We should not be fucking paying this much for materials. And then we'd get it knocked down and it would somehow come right back and just climb right back up. Since we've switched to Sherwin across the board, I want to say we're staying pretty consistent around the $4,000 mark every month. It's not, you know, if we have a busy month, it might go up or a slow month, it's down a little bit, but we're pretty consistent.

51:25And like I said, we're making money on paint materials now. So it's, it's a huge difference. Yeah. So, I mean, you're going to get to the point like, you know, like I am where I'm just like, you know, you do so much different stuff. You could just say, hey, the insurance company's going to pay me $5,000 for this job. You need to pay me, you know, or pay me my job.

51:43My estimate's $5,000. They want to pay $3,000. You're going to come to the table with the other $2,000. And if they come to the table with the other $2,000, great. If not, well, you kind of let them walk out the door because, you know, You got to make money. Mm-hmm. That's the bottom line. You know, like I said, so. All right. Anything else we should cover that I have forgotten?

52:04No, man. I think we hit most of it there. Yeah. This was an interesting thing. Now I'm going to have to go beat up my PPG guy because— Yeah, right. You know, that's why I like doing these podcasts from different— with different people. Everybody has a different, you know, outlook on stuff. And like you said, you know, all of a sudden, Sherwin-Williams, maybe they're coming into the market, just lowering, lowballing everybody to get the, to get the work, you know.

52:26But in the meantime, you can make way more money, right? Right. So we have, because of the program we're a part of for our coaching too, Sherwin offers us like an exclusive. They will not increase the price for the lifetime of us being with them more than 3% per year, which anyone in this business, not PPG, went up to what, 14%? This year alone.

52:48Yep. They're all— they all go up every year. They can't raise our prices more than 3% a year the entire time we're with Sherwin-Williams. Wow. Which is huge. Yeah. Yeah. Because I mean, that's your biggest expenses, paint materials right now. And most people don't even take into consideration the materials. That's just a part of doing business. No, tape is expensive. Paper is expensive.

53:08Plastic is expensive. Bondo spreaders are expensive. Like now. Razor blades, everything. They just expect like we're supposed to buy it and roll it into the what, the $12 they pay us an hour from the insurance company. Doesn't work that way. You want to pay me these bullshit rates. You know, I'm telling you, it takes me $75 an hour to run my business, make money, cover my materials.

53:29You want to pay me $55 an hour and you don't want to pay me for the materials when I bill you for them because it's all included. Fuck you. Amen. Well, Anthony, it was great talking to you and we're going to be having this one will be out next Friday. So we'll go ahead and tag you and tag you in it and everything.

53:45Great talking to you. You have a good day, huh? Yeah, you too, man. All right. Take care. Take it easy, guys. All right. That's going to do it for this episode of Repair Shop Reckoning. If this helped you, please make sure to subscribe so you don't miss what's coming next. We drop real conversations, real systems, and real solutions every week. We'll see you back here next time on Repair Shop Reckoning.