The automotive industry has reached a fork in the road: one path leads to reinvention and success, while the other maintains the current status quo. Business leaders will only have a brief window of opportunity to reimagine their core operations. To ensure their survival and success now and in the future, it’s time for automotive industry players to act.

– McKinsey & Company

– Reimagining the auto industry’s future: It’s now or never


The vehicle owner or the Insurance Company?

The reality is that you can do a perfect job and make the vehicle owner ecstatic, but still they may never return – and not because of anything you did. Because it is possible that the insurer just referred another shop.

DRP programs are great because the insurer sends you new customers – so good that you may feel you no longer need to market or sell each and every job! Just process the claim and keep the insurance company happy.

But DRP programs are a double-edged sword, because while they supply you with the customer, you may have stopped developing your own customer base.

The Insurer is King, But the Owner is the Crown Prince

The grim reality is, as a collision shop owner, keeping both the insurer and the vehicle owner happy is critical to long term success. If you lose a customer, it’s one job. If you lose an insurance account, it could be millions of dollars.

The insurer chooses many of your customers because of the agreements you’ve chosen to enter into. However, the owner is key when there is a problem, delay or any liability. It is important that your business focus on both.

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Keep both the insurer and vehicle owner happy in order to grow your business. Recognize that you walk a fine line between both and need a healthy relationship with both groups.

Make sure your marketing includes reputation management, lead generation, and relationship management with both the insurers you work with and your own unique customer base.


The value of your business matters!

Maximizing your value can impact everything from:

1- After-tax income for you (the owner); and

2- Your ability to borrow or raise funds to expand your business; and

3- Your ability to acquire other body shops or to merge with another; and

4- Your exit value should you ever decide to sell

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Body shops and the commercial auto repair industry at large pull in billions annually but often run with staggering operational costs from labor, parts, and general overhead. A body shop’s ability to keep revenue up is a means of survival but healthy profit margins are the basis of growth. To run a successful body shop, owners must keep a close eye on the several dozen avenues in which money both comes in and out of their shop.

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The value of your business when selling is determined by the operating profitability and the type of buyer you engage with.