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Eliminating Sublet Delays

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It was the same situation, every day. A wrecked car would come in and in addition to the body repairs needed, the vehicle also required mechanical work. That meant that an employee at Ron Perretta’s shop, Professionals Auto Body in Duncansville, Pa., would have to call Professionals’ other location in Altoona, where the business’s tow truck driver was located. The driver would load up the vehicle and take it to the mechanical repair facility that Perretta had a sublet agreement with.

And there it would sit, Perretta says, sometimes for up to two or three days, before the work was finally complete and his tow truck driver could pick it up.

“The costs of running cars back and forth was ridiculous. The customer is relying on us to get them back in a timely manner. That got frustrating for us,” he says. “To run that truck and the driver was expensive. And everything was a big fight with the insurance company trying to get them to pay for that transportation.”

That’s why, in 2007, Perretta decided he had enough—of the delays, of the costs and of the arguing—and he started making plans to open a mechanical repair facility that would act as a sister company to his 36-year-old collision business.

THE BACKGROUND

Perretta started his collision business, Professionals Auto Body, 36 years ago as a 19-year-old tech school graduate. Since then, he’s grown the business into a thriving two-shop operation that revolves around his business values of integrity, safety, compassion, service excellence, leadership, collaboration, innovation, empowerment and respect.

Beyond putting the customer first, Perretta has made it a point to master the hiring process, using 24/7 job posting and an apprentice program for growing talent, which has resulted in the average employee staying with his company for 15 years.

Perretta has also always been a firm believer in marketing and markets his shop in a variety of mediums, including TV, radio, online and newspaper. He even founded a production company in recent years and has a full-time graphic designer on staff to assist with the related tasks.

The efforts have paid off and not only has Perretta built a successful company, he was also named Small Business Person of the Year by the Blair County Chamber of Commerce in 2016.

THE PROBLEM

Since he started his business, Perretta says his ultimate goal was always to create an “automotive mall,” a one-stop shop on his property that would be able to address any automotive need. Perretta cites his mission statement, “deliver superior collision repairs and service with compassion and passion,” as the impetus for the idea.

“My philosophy is a pretty simple philosophy: Nobody has to worry about BS-ing a customer because my standards are at a place where they don’t have to do that,” he says. “That’s why a lot of these people have been with me a long time because I want everything above board.”

However, the mechanical repairs that were frequently needed on customer vehicles weren’t always being performed in the superior manner Perretta demanded.

“The vehicles are getting more complicated,” he says. “Finding a good, reliable mechanical shop was difficult.” But even after finding a reputable shop, he says the delays that occurred from subletting out the work were too much. And what’s more, customers blamed those delays on Perretta’s shop, not the mechanical shop performing the work.

“Once you got a vehicle to a mechanical shop, then you had so many delays because you weren’t made a priority,” Perretta says. “That’s frustrating.”

THE SOLUTION

Rather than simply add one mechanical technician in a bay in the collision repair facility, Perretta decided to build a separate facility that would act as a sister company to Professionals Auto Body.

“As things got more complicated, trying to make our collision technicians have to know everything isn’t even possible,” he says. “They can’t be a jack of all trades. It comes down to specialization in my eyes.

With a 3.5-acre property at his Duncansville facility (which is a 15,000-square-foot, 14-employee operation), Perretta knew he had the space to start creating his vision of an automotive mall. And with a thriving collision repair business, he knew he had an existing customer base he could tap into, both for mechanical work needed at the time of the collision repair and for ongoing maintenance. Plus, he says at the time, many dealerships around him were closing and there was a need for more mechanical shops. Perretta says he knew he could market well to those customers and grow the business quickly.

Perretta spent two years planning the facility before opening it in 2009, working with a contractor to build the 2,000-square-foot facility on his Duncansville property, ultimately spending $500,000 to get the it up and running. To help him build the business, he hired an acquaintance who had his own mechanical shop for 20 years to act as the manager. Perretta says he relied heavily on him when making hiring decisions and purchasing equipment.

He also took advantage of the dealerships closing and made it a point to hire their top technicians. He says he looked for pre-existing skills but also looked for technicians who could become part of his culture, which he has honed over the years and become an expert at finding great fits. He put the techs to work in his collision facility until the mechanical facility opened. He says doing so allowed the shop to transition slowly over the course of two years and get a handle on the work before officially opening the new facility.

Perretta wanted to start small and focus initially on just the collision repair customers in need of mechanical work. He hired two full-time technicians and one part-time helper, a service advisor and a manager to run the mechanical repair shop, named KarPro. He invested in two lifts, scan tools for Ford, Chevrolet, Chrysler, Mercedes, BMW, Lexus and Toyota, a suspension alignment machine, computers for diagnostics and a tire changer balancer. Overall, he said he spent a couple hundred thousand dollars on equipment.

One year prior to opening, Perretta started marketing internally to his collision customers as a way to build up his customer base. Upon opening, Perretta started by offering each collision customer who came in a free oil change at the mechanical facility as a way to familiarize them with the staff and the services provided. He also advertised on TV, radio and newspapers and utilized social media to show off the facility, which he helped design to be clean, organized and professional.

“My locations are phenomenal locations,” he says. “They’re maintained all the time. When we did the mechanical facility, it’s not normal looking. You wouldn’t have a problem walking into my facility. It’s not your average body shop or mechanical shop. People care about that kind of thing.”

THE AFTERMATH

Perretta says the mechanical facility did even better than he expected, growing at a steady annual rate of 28 percent and now sitting at $600,000 in 2015. In fact, the business grew so much that he invested another $500,000 in the facility in 2015 to double the size to 4,000 square feet. During that expansion, he added three techs and a CSR, an additional three lifts, a larger alignment machine to handle trucks, a second tire changer and wheel balancer, 100-gallon oil tanks so the techs could use pumps instead of quarts of oil, a parts room, and a larger front office. He also had all vacuum and exhausts systems, reels to change oil, water and air lines dropped from the ceilings to make it convenient for each of the technicians. Perretta says that it took him four years to recoup the cost of the initial investment and he expects to recoup the second investment in a year or so. Both Professionals and KarPro expanded their hours to be open later on weekdays and half the day on Saturday.

“It’s only because the business is growing so fast,” he says. “I think people are aware that trying to find a good mechanic is like trying to find a good collision center. We’re very reputable. We’ve been around a long time. People in the market trust us. We think that’s going to continue to go on and that business will continue to grow.”

Besides diversifying his business, the other benefit of opening the facility has been the effect it’s had on the collision repair business. The delays previously associated with subletting out the mechanical work are gone, and KarPro is able to prioritize the collision work that comes through. That means the staff is able to more quickly get the vehicles through the shop.

The mechanical facility has worked so well, Perretta says, that he is now considering adding more services: He has opened a towing and a glass company on the same property and he is looking into vehicle accessories and housing the offices of a rental car company.

“That property is large enough to be able to do that,” he says. “That’s our intention; for the person to come onto that property and have any kind of automotive work done.”

THE TAKEAWAY

Bottom line, Perretta says he doesn’t like subletting work. Thanks to the success of the mechanical repair facility, he says he’s making it a bigger priority than ever to keep everything under one roof.

“It’s convenient for the customer,” he says. “It just makes it better for us, for our staff. That’s the name of the game today.”

By keeping everything in-house, he’s able to not only streamline the repairs, but also keep a closer eye on those repairs and ensure that damage or delays aren’t incurred.

“With the glass companies, they were damaging paint, damaging interiors and the wrong glass,” he says. “We had to wait for them. Once again, that’s when I decided that we need to be in control of all the services we do.”

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