Gene’s guide to writing estimates that make you money
Our CEO, Gene Cortes has been in the auto body industry since the early 1970’s. From working as an insurance adjuster to owning his own shop for the last 30 years, Gene has a wealth of knowledge and experience that he loves to share with other shop owners. Here’s a recent chat with Gene where he gives his top tips on writing profitable estimates:
Whenever a shop owner tells me, “I’m busy but I’m not sure if I’m really making money,” I immediately ask them a few questions about their estimates:
First, are you writing your own estimates? What I mean by this is, are you writing estimates on the repair before an insurance adjuster looks at it or are you simply going by the one they gave you? If your answer is the latter, you’re probably not making as much as you could on the job. Insurance companies typically low ball the estimates and it is often not enough to repair the vehicle to the highest quality standards. And if you go by their estimate alone, you’re likely spending more on labor hours and materials and barely making a profit or just breaking even.
Secondly, are you writing supplements? Analyze the original estimate and make sure everything is covered. If you discover additional damage and find that more labor and parts are needed, generate a second estimate – the supplement – and communicate this to the insurance company, or the customer if they are not going through insurance.
And speaking of supplements, are you dismantling the vehicle to find additional damage related to the accident? This is incredibly important as many times the damage can be unseen to the naked eye and will be found in the undercarriage or other hidden parts of the vehicle. In my experience, a shop can increase its sales by 10-15% simply by writing supplements. And you can track this in MyShop Traffic by running a report that shows exactly what you’ve collected in supplements.
How are you estimating your paint and materials costs? I highly recommend you use a formula provided by your paint company or a tool like a refinishing materials calculator to help you create accurate estimates by providing paint-specific materials costs according to paint code, method, color, type and refinish labor time. To see how profitable you’ve been on a job, you can run a job costing report in MyShop Traffic and get a detailed breakdown.
Are you getting paid for computer resets? This typically takes about 1 – 2 hours of labor and is recommended after any accident, so be sure to add it as a line item on your estimate.
And finally, are you charging for towing and storage on total losses, dismantling, putting the vehicle on the lift for an adjuster and/or other admin work? These can also be revenue generating sales for your shop if you charge for those services.
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