Starting a Collision Center Presented by:. Concept Overview What is your justification for starting...

Starting a Collision Center

Presented by:

Concept Overview

What is your justification for starting a Collision Center?

What will your collision center do that is, Better, Faster, or at a Lower Cost than your competitors?

This is normally laid out in the overview section of your business plan.

Overview

Example:

This facility is designed to utilize assembly line production concepts, and hourly paid technicians combined with quarterly production bonuses. Specialty teams in each area of the repair process include a team leader, craftsmen, skilled technicians, semi-skilled technicians and apprentices.

Concept Overview

Concept Overview

Facility staffed and equipped to handle 3,000 to 4,000 plus repair orders per year.

Organization with reputation and integrity that will facilitate becoming a direct repair shop for all major insurance companies in the market.

Capable of delivering quality repairs sufficient to maintain customer satisfaction levels of 95% plus.

Target Performance Parameters

Turn light repairs around in 1-2 weeks

Turn medium repairs around in 2-3 weeks

Turn heavy repairs around in 4-6 weeks

Concept OverviewTarget Performance Parameters

A properly configured facility operated with the most advanced collision shop management techniques can produce significant additional benefits, including:

Concept Overview

Lower cost labor through the use of hourly technicians.

Lower acquisition cost for supplies and materials through increased buying power.

Facility Benefits

Increased production capacity through increased proficiency.

Improved facility utilization through the use of assembly line concepts.

Economy of scale in support staff and office administration.

Concept Overview

Facility Benefits

Concept Overview

Insurance companies write the checks for 89% of all collision repair work performed in the industry.

Target Market

Concept Overview

They both want the process to be convenient.

They both want the vehicle repaired to pre-collision condition or better.

In many respects the insurance industry and the vehicle owner have similar interests:

Target Market

Concept Overview

They both do not want to bring the vehicle back for warranty repairs or to install trim items.

They both want to have the least amount of down time possible.

They both do not want a conflict with the repair facility.

Target Market

Sales Process

Greet Customers Handle customer concerns about the

insurance company Keep customer appraised of repair progress

Customer Service Representatives (CSR’s) Job Duties

This plan will employ a customer service representative with each estimator. These CSR’s will be responsible to:

Assisting estimator(s) with ordering parts, writing repair orders, obtaining supplement authorizations, and booking completed jobs.

Informing each dealership when one of their customers is at the collision shop, the progress of the repairs and the customer rating/satisfaction with the completed repairs.

Sales Process

Customer Service Representatives (CSR’s) (cont’)

Write good, quality estimates Coordinate with all the different

insurance companies Work with insurance appraisers and

adjusters Coordinate appointments and time

promises with the production manager Act as final quality control checker

Sales Process

Estimators’ Job Duties

Upon completion of the repairs, the estimator will be responsible for performing a final walk-around and drive inspection to assure the vehicle is restored to pre-accident condition.

Sales Process Estimators (cont’)

Facility Plan Current market share potential dictates

a facility that can employ 17 to 25 technicians operating at 170% proficiency. With plans to grow market share, we will need to design a facility that is capable of employing 25 to 30 technicians. This will require a 25,000 square foot facility based upon our current design.

E&A’s experience is that a U-shaped facility with offices in the center and repair stalls around the center offices works best in a high production facility.

Facility Plan

Facility Plan Location

A properly located, designed and laid out facility will enhance image and reduce advertising costs over the long-term.

Business Plan ObjectivesShort-Term

By developing from the ground up a properly structured administrative staff, streamlining work flow, and state-of-the-art work distribution methods, you should be able to have a facility that generates a higher net operating profit on sales and achieves a more significant return on investment.

Control the customer buying cycle. We envision a sales system that assigns estimators to dealership sales reps. The estimators will be responsible for keeping the designated sales person informed of the customer’s vehicle progress.

Business Plan ObjectivesShort-Term

Having an asset that can be easily valued. With a collision shop operation included in the dealers’ financial statements, it is extremely difficult to place a value on this operation. It is envisioned that having a separate stand-alone facility will provide the owners an asset that is much easier to value.

Business Plan Objectives

Short-Term

Long-Term Control the major share of the

collision repair market. Market studies indicate that the repair market is approximately an $8-$9 million market. Currently, dealers are getting about 46% of this business. The plan is to build a facility that is capable of producing $6-$7 million in annual sales. Ultimately, this business should be built to have sufficient capacity to achieve a 75% market share at full potential.

Business Plan Objectives

Improve the customer’s perception of a collision repair and the dealership that referred him/her to your shop. Your shop is not just another collision shop. It will truly be state-of-the-art in every aspect, from location, reception area, production areas, management and support space, to work procedures and methods.

Long-TermBusiness Plan Objectives

There are several items/issues that are not addressed in this plan. They include:

How to address union/labor issues both transitional and on-going

Skills assessments and other processes to judge and move people from existing operations

Parts supply alternatives

Other Issues

Other business adjunct opportunities

1. Accessories

2. Service Insurance company relations

1. Potential pilots

2. On-going marketed activity

Other Issues

On-going support and measurement provided by E&A

Reporting issues among vehicle market groups…any?

Level of original equipment parts usage and other policies

Other Issues

Defining the Repair Process

Customer Service Rep Customer Service Rep

Customer Calls Customer Drives In

Listen & Learn Friendly Meeting &

Greeting

Verify Needs Restate

Customer Concerns

Verify Needs Restate

Customer Concerns

Listen & Learn

Determine If They Were Referred by A

Dealer Or Other Source

Log Customers Name In Referral

Source Log

Arrange Appointment

For An Estimator

Get All Pertinent Info Logged On Appointment Log

Give Directions To

The Shop

Offer To Fax A Map

Call 4 Hours Before

Appointment Time & reconfirm

Verify Who Will Pay For The Work If

Estimate Is Approved

Give To Estimator To Write Estimate

Review Estimate With Customer

Sell Features, Advantages &

Benefits

Obtain Power of Attorney From Customer To Repair Vehicle

Estimate Write-up and Approval

Repair Process

Production Manager

Compare Estimate And R/O To

Vehicle

Have The Correct Parts Been Ordered?

Send Info To Parts To Reorder

PartsLocate

Manufacturer's Paint Code

Expedite Parts

Reorder

Remove Parts To Be Replaced So Repairs Can Be

Made

Send Paint Code To Paint

Dept.

Send New Est. Date Of Parts

Arrival To Control

Contact Customer If Finish Date

Changes

Place Removed Parts On Parts Storage Rack & Load All Replacement Parts On

Same Rack

Any Additional Parts Needed That Are Not On The R/O Or Est.

Transfer Vehicle To Next Dept. In

Repair Progress

Send To Frame If Needed

Notify Production Manager Of

Transfer

Appraisers Start Supplement

Notify Insurance Co Of Supplemental Being

Started

No Yes

Yes

No


Dismantle Department

Departmental Responsibilities

Compare R/O Estimate,

Reports And Supplements

To Vehicle

Were All Repairs Completed To The

Highest Quality

No Yes

Determine What Section Was

Responsible And Reject Vehicle To

That Dept. Followed By A

Report

Check All Fluids Make Adjustments

Drive Vehicle

Notify Production Manager

Check Promise Time And Notify Estimator

Perform Final Check List, Sign Q/C Report And Pass

Vehicle

Send All Reports, Check Lists, Supplements & R/O To Control To

Close Repair

Park Vehicle In Designated

Area

Notify Production Manager Of

Closing

Estimator Notify Customer Of New Completion Time

Notify Dealership That Their customers

Vehicle Is Complete

Quality Control Review

Defining the Repair ProcessDepartmental Responsibilities

QUALITY CONTROL CHECK LIST

VEHICLE IDENTIFICATION NUMBER ______________________________ REPAIR ORDER NUMBER____________ MANUFACTURERS PAINT CODE_______________ DATE R/O OPENED___________ DATE CLOSED_____________ ESTIMATED ARRIVAL OF PARTS________________ START REPAIR DATE_____________ TARGET FINISH DATE AND TIME_____________ SUPPLEMENT AUTH. NUMBER__________________________ PINSTRIPE COLORS AND NUMBER______________________ PASSED/FAILED


Quality Control ChecklistDISMANTLE SECTION

Initials __________ Ensure that the R/O and vehicle match. ___________ Wash vehicles underside and exterior if needed. ___________ Fill in the information at the top of this check list. ___________ Retrieve the new and salvage carts for this vehicle from the

parts department. ___________ Compare parts list to the vehicle damage and verify. ___________ Notify the paint department. with the manufacturers paint

code and color via e-mail. ___________ Notify the appraisers department. if a need for a supplement is required via e-mail. ___________ Ensure that all the required parts and panels were removed,

placed in their proper bins, to facilitate the repair of the vehicle.

_______________________________ Section team leaders signature of quality controlled compliance

FRAME SECTION Initials ___________ Ensure that the last section has done the required repair. ___________ Is frame repair needed? Yes ______ No ______ ___________ Ensure that the R/O and vehicle match. ___________ Computer software package number. ___________________ ___________ Ensure that the estimators were notified of any additional

repairs. ___________ Ensure that before and after measurements are attached to

the R/O.

Quality Control ChecklistSHEET METAL SECTION

Initials ___________ Ensure that the R/O and vehicle matches. ___________ Ensure that all the parts that were installed match. ___________ Ensure that the proper part cut ins were completed. ___________ Were all of the repairs and replacements completed. ___________ Is the filler finished to 180 grit standards or better. ___________ Does the filler adhere to the proper appearance. __________________________________ Section team leader signature of quality control compliance.

PRE PAINT SECTION

___________ Were all prior repairs conducted to give the appearance that the vehicle was not damaged.

___________ When repairs are fine sanded, are they free of all

imperfections. ___________ Did all panels that are to be refinished receive a solvent wash. ___________ Are all primered and sealed areas free of imperfections. ___________ Is the vehicle masked properly. ___________ Are all repaired areas covered with a primer or sealer. ___________ Is the vehicle ready for refinishing. __________________________________ Section team leaders signature of

quality control compliance.

Quality Control ChecklistREFINISHING SECTION

Initials ___________ Check the R/O to the vehicle to insure that they match. ___________ Are all the repair areas covered with primer or sealer. ___________ Is the vehicle covered properly to refinish. ___________ Are all repairs free of imperfections. ___________ Have you found the pre-mixed amount of paint and is it

enough to refinish the repairs. ___________ Is the refinishing of the vehicle complete and free of

imperfections. ___________ Have you disposed of the hazardous waste properly. ___________ Has the vehicle been put into the booth. __________________________________ Section team leader signature of quality control compliance.

DETAIL SECTION

Initials ___________ Check the R/O to the vehicle to insure that they match. ___________ Have you repaired any and all imperfection in the finish. ___________ Has the masking been disposed of properly. ___________ Have all the lights been checked and are they operating

properly. ___________ Have all moldings and decals been installed. ___________ Is vehicle ready to transfer to the next section of repair. __________________________________ Section team leader signature of quality control compliance

Quality Control ChecklistMECHANICAL SECTION

Initials ___________ Check the R/O to the vehicle to ensure that they match. ___________ Have you made all repairs and adjustments that are required. ___________ Check the engine oil add if needed. How many pts. ________ ___________ Check the power steering fluid make the adjustments. How

many pts. _______ ___________ Check the automatic transmission oil add if needed. How

many pts. _______ ___________ Check the brake fluid make the required adjustments. ___________ Check the air in the tires; make the proper adjustments. ___________ Check vehicle inspection has it or will it run out soon, contact

control if so.

WASH SECTION

___________ Is the vehicle clean inside and out. ___________ Have all warranties and flyers been placed in the vehicle. ___________ Have all fluids been checked (use mechanics section check

list). ___________ Is the vehicle ready for the final inspection and for delivery to

the customer. __________________________________ Section team leaders signature of quality control compliance.

Quality Control ChecklistFINAL OUT QUALITY CONTROL CHECK LIST

R/O # __________________________ VIN # ________________________________________________ SUPPLEMENT # ______________________________________ DATE AND TIME _____________________________________ ALL ITEMS ON THE LIST WILL BE CHECKED AND ENSURE THAT THEY OPERATE OR PERFORM AS REQUIRED Initials when checked ____ Engine oil ____ Transmission oil ____ Power steering oil ____ Washer fluid ____ Radiator fluid ____ Tire pressure ____ Brake fluid ____ All doors, hoods, deck lids, lift backs, locks, and windows operate

correctly ____ All lights operate and are adjusted correctly ____ Interior is clean and free of all dirt and glass particles ____ Exterior is clean and free of all repair dust and compounds ____ All repairs were completed ____ All repairs and finishes are free of imperfections ____ All warranties and flyers are located in the vehicle ____ All appropriate sections have completed their inspections ____ All glass is clean ____ Vehicle gives the appearance of having not been damaged ____ Finish color matches the original finish ____ All reports have been attached to the R/O ____ All supplements have been sent back to the estimators ____ Notified the production manager as to the vehicle being completed

and ready for delivery Inspectors Name __________________________________________ Clock # ___________________________________________ Date / Time ___________________________________________ Notes and recommendations ________________________________________________________________

Organizational Structure

Collision Center

D ism an tle Team

F ram e Team

M eta l Team

P ain t Team

P ain t Team L ead er

M eta l Team L ead er

F ram eTeam L ead er

D ism an tleTeam L ead er

D eta il TeamQ u a lity C on tro l

P rod u c tion M an ag er

R ecep tion is t

C u s tom er S erviceR ep resen ta tive

C u s tom er S erviceR ep resen ta tive

E s tim ato r S a les M an ag er

P ayab les A d m in is tra to r

O ffice M an ag er

G en era lM an ag er

Organizational StructureManagement Staff Structure

Base Salary Incentive Total Potential Compensation

General Manager $60,000 $40,000 $100,000 Production Dept. Production Manager $35,000 $7,000 $42,000 Sales Dept. Sales Estimate Rep. $30,000 $5,000 $35,000 CSR $21,000 $4,000 $50,000 Quality Control Mgr. Detail Trim Techs Parts Manager Parts Dispatch Office Admin. Office Manager $30,000 $0 $30,000 Receptionist/Operator $21,000 $0 $21,000 Payables Admin $25,000 $0 $25,000

R/Os per week

R/Os per year

Avg. Revenue per R/O

Total Weekly Sales

Total Annual Sales

Start-up 60 3,120 $1,500 $90,000 $4,680,000 70 3,640 $1,500 $105,000 $5,460,000

Potential 80 4,160 $1,500 $120,000 $6,240,000 90 4,680 $1,500 $135,000 $7,020,000 100 5,200 $1,500 $150,000 $7,800,000 110 5,720 $1,500 $165,000 $8,580,000

Organizational StructureTechnician Needs Assessment

Annual Labor Revenues

Techs @ 150% Efficiency



Start-up $2,199,600 20 17 15 $2,566,200 23 20 17

Potential $2,932,800 26 23 20 $3,299,400 30 26 22 $3,666,000 33 29 25 $4,032,600 36 32 27

Technician Needs Assessment (cont’)

Organizational Structure

Capital Cost AnalysisOffice Department Description Model Quantity Cost per Unit Total Cost

Computer System-Client Server Design with 20 work stations Custom Built to Spec 1 35,000.00$ 35,000.00$

Estimation Software ADP / Mitchell / CCC 1 7,000.00$ 7,000.00$

Management Operating Software Mitchell / ADP / CCT 1 10,500.00$ 10,500.00$

Fax Machines Canon 5 400.00$ 2,000.00$

Telephone System ATT 1 25,000.00$ 25,000.00$

Digital Camera Kodak 2 500.00$ 1,000.00$

Office Software Microsoft 1 800.00$ 800.00$

Manager's Office Furniture Desk and Credenza 1 1,200.00$ 1,200.00$

Mid-Level Manager's Office Furniture Office Cube 10 10,000.00$ 100,000.00$

File Storage 5 Drawer Lateral Files 10 350.00$ 3,500.00$

Photo Copier Xerox 2 4,500.00$ 9,000.00$

Business Forms Local Production 1 5,000.00$ 5,000.00$

Document Retrieval System Canon 1 7,500.00$ 7,500.00$

Sub Total 207,500.00$

Safety Department Description Model Quantity Cost per Unit Total Cost

Eye Wash Stations 5 $350.00 $1,750.00

Capital Cost AnalysisFire Extinguishers 20 $165.00 $3,300.00

Safety Signage 1 $550.00 $550.00

Sub Total $5,600.00

Dismantle DepartmentPortable Lifts 4 $1,500.00 $6,000.00

Hydraulic Jacks Blackhawk 2 $250.00 $500.00

Jack Stands (Pairs) Blackhawk 2 $35.00 $70.00

Parts Carts IDEA 30 $350.00 $10,500.00

Air Impacts Ingersoll Rand 3 $235.00 $705.00

Air Ratchets Ingersoll Rand 3 $164.00 $492.00

Air Chisels Ingersoll Rand 3 $68.00 $204.00

Air Hose Reels with 35 Feet Hose 3 $350.00 $1,050.00

Pressure Washer Steam Jenny 1 $1,200.00 $1,200.00

Technician Tool Boxes Snap-on,MAC, MATCO 2 $3,500.00 $7,000.00

Sub Total $27,721.00

Frame Department Description Model Quantity Cost per Unit Total Cost

360 Degree, three station, full size frame World Rack 4000l oralignment station, drive through Chief S-21 Series 30 2 $37,500.00 $75,000.00

Laser Frame Measurement System Genesis II / Shark 1 $29,500.00 $29,500.00

Capital Cost AnalysisAir Impacts Ingersoll-Rand 3 $235.00 $705.00

Air Ratchets Ingersoll-Rand 3 $164.00 $492.00

Air Chisels Ingersoll-Rand 3 $68.00 $204.00

Air Riveter Ingersoll-Rand 3 $300.00 $900.00

Work Bench Stations Shure 4 $250.00 $1,000.00

Mig Welders Miller 110V/150Amp 2 $1,500.00 $3,000.00

Oxy/Acetylene Torch Set Harris 2 $290.00 $580.00

Torch Carts Marquette 2 $150.00 $300.00

Bench Grinder Bld 2 $200.00 $400.00

Air Hose Reels with 35 Foot Hose 5 $350.00 $1,750.00

Technician Tool Boxes Snap-on, MAC, Matco 3 $3,500.00 $10,500.00

Sub Total $124,331.00

Metal Department Description Model Quantity Cost per Unit Total Cost

Central Vacumn System Various 2 $14,000.00 $28,000.00

Portable Lifts Dover Industries 6 $1,800.00 $10,800.00

Hydraulic Jacks Blackhawk 4 $250.00 $1,000.00

Mig Welders Miller 110V/150Amp 2 $1,500.00 $3,000.00

Jack Stands (pairs) Blackhawk 4 $35.00 $140.00

Capital Cost AnalysisAir Chisels Ingersoll-Rand 4 $68.00 $272.00


Air Hose Reels with 35 Foot Hose 4 $350.00 $1,400.00

Bench Grinders 4 $200.00 $800.00

4 Ton Porta-Power Blackhawk 1 $185.00 $185.00

10 Ton Porta-Power Blackhawk 1 $290.00 $290.00

DA Sanders Ingersoll Rand 6 $235.00 $1,410.00

Board Files Ingersoll Rand 6 $270.00 $1,620.00

Lock Clamp Sets 5 $225.00 $1,125.00

7" Grinders Milwaukee 4 $225.00 $900.00

4.5" Grinders Milwaukee 4 $76.00 $304.00

Air Cut Off Tools Ingersoll Rand 4 $65.00 $260.00

Spot Weld Drills Ingersoll Rand 4 $395.00 $1,580.00

Heat Guns Milwaukee 4 $90.00 $360.00

Technician Tool Boxes Snap-on, MAC, Matco 4 $3,500.00 $14,000.00

433,598.00$ Sub Total $68,446.00

Capital Cost AnalysisRefinish Preparation Area Description Model Quantity Cost per Unit Total Cost

Prep Stations-2-Bay Design, Drive Through Accudraft 2 $41,000.00 $82,000.00

Masking Machines 4 $170.00 $680.00

HVLP Primer Guns SATA 3 $375.00 $1,125.00

Fresh Air Systems SATA 3 $556.00 $1,668.00

Portable Infrared Dryers IRT Systems 3 $3,300.00 $9,900.00

Anti static Guns 3 $200.00 $600.00

Safety Cans 4 $65.00 $260.00



DA Sanders Ingersoll Rand 5 $235.00 $1,175.00

Paint Technician Boxes Snap-on, MAC, Matco 4 $2,000.00 $8,000.00

Sub Total $109,708.00

Capital Cost Analysis

Paint Department Description Model Quantity Cost per Unit Total Cost Spraybake/Nova/Vera/

Down Draft Spray/Bake Blow Therm/Accudraft 2 $53,000.00 $106,000.00

Paint Mixing Room Built into building 4 $0.00 $0.00

Air Hose System 4 $200.00 $800.00

HVLP Spray Guns SATA Jet-90 4 $385.00 $1,540.00

Fresh Air Systems SATA 4 $556.00 $2,224.00

Portable Infrared Dryers IRT Systems 4 $3,300.00 $13,200.00

Roller Jacks Go-Jack 16 $190.00 $3,040.00

Smart Head Scale 1 $5,000.00 $5,000.00

Paint Mixing System and Racks 1 $9,000.00 $9,000.00

Paint System Software (Shopwatch) 1 $12,500.00 $12,500.00

Paint Computer Work Station As per Office System 1 $2,000.00 $2,000.00

Solvent Recycler 2 $2,500.00 $5,000.00

Primer Gun Washers 1 $1,200.00 $1,200.00


Base Gun Washer 1 $1,200.00 $1,200.00

Clear Gun Washer 1 $1,200.00 $1,200.00

Paint Technician Tool Boxes Snap-on, MAC, Matco 4 $2,000.00 $8,000.00

Sub Total $172,904.00


Trim and Detail Area Description Model Quantity Cost per Unit Total Cost

Variable Speed Buffers Milwaukee 2 $225.00 $450.00

Pressure Washer Star 1500 PSI 1 $900.00 $900.00

Safety Cans 4 $65.00 $260.00


Tools Carts 4 $75.00 $300.00

Work Bench Stations 4 $250.00 $1,000.00

Shop Vacuums 2 $225.00 $450.00

Technician Tool Boxes Snap-on,MAC,Matco 4 $2,500.00 $10,000.00


Capital Cost AnalysisMechanical Shop Description Model Quantity Cost per Unit Total Cost

4 Wheel Alignment Rack and Computer Bear 1 $17,500.00 $17,500.00

Rim Clamp Tire Machine Coates 1 $3,500.00 $3,500.00

Wheel Balancer Coates 1 $2,500.00 $2,500.00

R-134/R-12 A/C Evac/Recharge Station RTI 1 $4,500.00 $4,500.00

Anti-Freeze Recycler RTI 1 $3,500.00 $3,500.00


Tool Carts 6 $75.00 $450.00


Bench Grinders 4 $200.00 $800.00

Air Impacts Ingersoll Rand 2 $235.00 $470.00

Air Chisels Ingersoll Rand 4 $68.00 $272.00

Air Cut Off Tools Ingersoll Rand 4 $65.00 $260.00

Mig Welders Miller 110V 150Amp 0 $1,500.00 $0.00

Oxy Acetlyene Torch Set Harris 0 $290.00 $0.00

Vise 6" 4 $125.00 $500.00

Strut Compressor 2 $225.00 $450.00

Diagnostic Tools Various 2 $4,750.00 $9,500.00

Technician Tool Boxes Snap-on,MAC,Matco 4 $5,000.00 $20,000.00



Air System Description Model Quantity Cost per Unit Total Cost

Rotary Air Compressor Quincey 25 HP 2 $5,400.00 $10,800.00

Air Dryers 2 $2,500.00 $5,000.00

Piping and Fittings Misc. 0 $0.00 $0.00


Total $844,992.00

Facility Layout & Design

Processes have been broken down into: Dismantle and estimate validation Frame measuring and repair Metal replacement and alignment Paint prep Final paint Trim-out Detail and final quality control

Overview


This facility is unique in that the technicians do not own their tools and they do not have pre-assigned work stalls. Our technicians work in groups comprised of varying skill levels assigned to a single vehicle.

Overview


A highly skilled craftsman is assigned to each group and oversees each group’s work. Groups move from vehicle to vehicle in their pre-assigned work areas as needed.

Overview


This concept provides high productivity by eliminating wasted time and high efficiency by having the same technicians performing the same types of repairs over and over.

Overview

All of the offices, restrooms, storage areas, and customer spaces are located in the center of the facility to allow easy access.

Mechanical repair is located in the rear of the building and is separated by walls to keep airborne contaminates associated with mechanical repairs from contaminating the painting process.

Parts are located in the rear of the building and are designed to provide ease of access to both the metal repairs, technicians and the paint and detail technicians.


Architectural Design

Estimating and customer delivery is located in the front of the building.

Also, the facility is designed to incorporate an insulated shop ceiling so that the entire facility can be heated and air-conditioned. Overhead doors are located strategically down each side of the building so that vehicles can be taken in or out of the assembly line during each stage of the repair as needed.


Architectural Design

Operating Statement Assumptions

The following Pro-forma is solely designed to build a framework for analysis. Certain assumptions are hypothetical and have yet to be subjected to proper verification methodology. This will occur when the business plan is developed.

Total Sales Projected volume based upon target of 50% market share

and 70% market share. This allows you to see 1st year versus full potential.

Labor Sales Calculated from Repair Collision Component Analysis.

Labor is projected at 47% of average repair order. Labor Cost Calculated from Production Staff Structure @ 150%

Efficiency assumes everyone starts at minimum salaries and assuming full incentive payout.

Parts Sales Calculated from Repair Order Component Analysis. Parts

are projected at 42% of average repair order. Parts Cost Assumptions of minimum achievable margins of 34%.

Available margins may exceed this amount but may also be reduced through negotiation in insurance contracts.

Paint & Material Sales Calculated from Repair Order Analysis. Projected at 5%

of average repair order. Paint & Material sales generally run at $20.00 per paint hour labor. Due to the practice of splitting paint hours into both paint with materials as well as paint with no materials and the practice of capping total materials insurance companies, we have assumed an 80% capture rate or approximately $16.00 per paint hour.

Paint & Material Cost Projected based upon E&A guideline of 65% Sublet Sales Calculated at 5% of labor sales

Operating Statement Assumptions

Sublet Cost Based upon current Insurance Company guidelines for allowable markup for sublet operations of 25%.

Support Personnel Expense

Brought over from Management Staff Structure, assuming all incentives paid.

Vehicle Expense Calculated for vehicles assigned to General

Manager only. Expenses @ $0.30 per mile, 1500 miles per vehicle.

Technician Benefits Projected at 19.5% of Technician payroll Office Supplies Projected at 1.0% of Sales Support Personnel Benefits Projected at 19.5% of payroll cost Advertising Projected at 1.5% of Sales Computer Software Expense

Based upon 3 database updates at a cost of $400.00 per vendor per month.

Building Maintenance Based upon 1.0% of building value. Assume

$1,250,000 building value. Telephone Expense Projected at flat $1,675.00 per month Rent/Lease Expense Assumption of $1.25mm building and $.4mm land

value with a 10% rent factor. Equipment Lease Expenses

Projected at 7 years, 0% residual @ 9.0% on total of equipment purchased. Note: this might be lower based upon equipment assumed from current dealership operations.

Electricity Based upon experience from comparable sized

building in another market. Gas Based upon experience from comparable sized

building in another market. General Liability Insurance Based upon blind quote from local insurance

agency. Depreciation Based upon an estimate of $126,000 in owned

assets.

Business Plan Pro Forma 50% Market Share 70% Market Share Total Sales $4,200,000 $5,900,000

Total Labor Sales 100% $1,974,000 47% 100% $2,773,000 47% Technician Labor Cost 35% $690,900 30% $831,900 Labor Gross 65% $1,283,100 70% $1,941,100

Total Parts Sales 100% $1,764,000 42% 100% $2,478,000 42% Total Parts Cost 66% $1,164,240 66% $1,635,480 Total Parts Gross 34% $599,760 34% $842,520

Paint & Material Sales 100% $210,000 5% 100% $295,000 5% Paint & Material Cost 55% $115,500 55% $162,250 Paint & Material Gross 45% $94,500 45% $132,750

Sublet Sales 100% $210,000 5% 100% $295,000 5% Sublet Cost 75% $157,500 75% $221,250 Sublet Gross 25% $52,500 25% $73,750 Total Gross Profit $2,029,860 48.33% $2,990,120 50.68%

Operating Expenses Support Personnel $303,000 14.9% $445,528 15% Technician Benefits $90,399 4.5% $179,407 6.00% Support Personnel Benefits $66,398 3.3% $86,713 2.90% Vehicle Expense 34,151 1.68% $50,832 1.70% Office Supplies 20,089 1.0% $29,901 1.00% Advertising 30,133 1.5% $44,852 1.50% Computer Software Expense 15,066 0.7% $15,549 0.52% Building Maintenance 12,500 0.6% $12,858 0.43% General Liability Insurance 15,066 0.7% $22,426 0.75% Gas 5,022 0.2% $7,475 0.25% Electricity 20,089 1.0% $23,921 0.80% Telephone $20,089 1.0% $23,921 0.80% Total Semi Fixed Expense $632,002 31% $943,383 32%

Bldg. Rent / Lease $165,900 3.95% $165,200 2.80% Equipment Lease $64,702 3.20% $64,900 1.10%

Depreciation Expense $12,600 0.30% $12,980 0.22% Total Fixed Expense $243,202 7.45% $243,080 4.12%

Total Expenses $3,650,441 86.92% $5,094,650 86.35% Net Profit Before Taxes $549,559 13.08% $805,350 13.65%

Add Depreciation $12,600 $12,980

Cash Flow $562,159 13.38% $818,330 13.87%

Financial Analysis Estimated Capital Investment

Leased Equipment as per list $718,922

Owned Equipment as per list $126,000

25,000 Sq. Ft. Building @ $50.00 / Sq. Ft. $1,250,000 Land 4 Acres @ $100,000 / Acre $400,000

Total Capital Investment $2,494,922

Return on Investment 30%

Gross Margin 48.33%

Net Margin 12.71%

Gross Profit Per Technician $96,600

Net Profit Per Technician $25,422

Gross Profit Per Employee $72,495

Net Profit Per Employee $19,066

Business Plan Review

1. Concept Overview

• Sales Process

• Facility Plan

• Business Plan Objectives

• Other Issues


2. Defining the Repair Process

• Repair Process Flowchart

• Departmental Responsibilities

• Quality Control Checklist


3. Organizational Structure

• Organizational Structure

• Technician Needs Assessment

4. Capital Costs

• Equipment Description

• Equipment Budget

Business Plan Review 5. Facility Layout & Design

• Overview

• Architectural Design

6. Pro Forma Operating Budget

7. Financial Analysis

8. Notes

For More Information Contact Edwards & Associates at:

5615 Harrisburg Industrial Park Dr.

Charlotte, NC 28075

(Phone): (800) 979-9904

(Fax): (704) 454-5213

Or

Email:[email protected]

Date post:	24-Dec-2015
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Starting a Collision Center Presented by:. Concept Overview What is your justification for starting...

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